U.S. GOVERNMENT PRINTING OFFICE

74–831 DTP WASHINGTON : 2001

THE DEFENSE SECURITY SERVICE: HOW BIG IS

THE BACKLOG OF PERSONNEL SECURITY INVESTIGATIONS?

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

VETERANS AFFAIRS, AND INTERNATIONAL

RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

SEPTEMBER 20, 2000

Serial No. 106–267

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

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

Internet: bookstore.gpo.gov Phone: (202) 512–1800 Fax: (202) 512–2250

Mail: Stop SSOP, Washington, DC 20402–0001

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS AFFAIRS, AND INTERNATIONAL

RELATIONS

CHRISTOPHER SHAYS, Connecticut, Chairman

MARK E. SOUDER, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

DAVID M. MCINTOSH, Indiana

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

HELEN CHENOWETH-HAGE, Idaho

ROD R. BLAGOJEVICH, Illinois

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

JOHN F. TIERNEY, Massachusetts

THOMAS H. ALLEN, Maine

EDOLPHUS TOWNS, New York

BERNARD SANDERS, Vermont

(Independent)

JANICE D. SCHAKOWSKY, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

LAWRENCE J. HALLORAN, Staff Director and Counsel

J. VINCENT CHASE, Chief Investigator

JASON CHUNG, Clerk

DAVID RAPALLO, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on September 20, 2000 ..................................................................... 1

Statement of:

Leonard, J. William, Deputy Assistant Secretary of Defense for Security

and Information Operations, Command, Control, Communications and

Intelligence, Department of Defense; and General Charles

Cunningham, Director, Defense Security Services .................................... 54

Schuster, Carol R., Associate Director of National Security International

Affairs Division, U.S. General Accounting Office; and Donald Mancuso,

Acting Inspector General, Office of Inspector General, Department of

Defense .......................................................................................................... 5

Letters, statements, etc., submitted for the record by:

Cunningham, General Charles, Director, Defense Security Services, prepared statement of ........................................................................................ 72

Leonard, J. William, Deputy Assistant Secretary of Defense for Security

and Information Operations, Command, Control, Communications and

Intelligence, Department of Defense, prepared statement of .................... 58

Mancuso, Donald, Acting Inspector General, Office of Inspector General,

Department of Defense, prepared statement of ......................................... 23

Schuster, Carol R., Associate Director of National Security International

Affairs Division, U.S. General Accounting Office, prepared statement

of ..................................................................................................................... 7

Shays, Hon. Christopher, a Representative in Congress from the State

of Connecticut, prepared statement of ........................................................ 3

(1)

THE DEFENSE SECURITY SERVICE: HOW BIG

IS THE BACKLOG OF PERSONNEL SECURITY

INVESTIGATIONS?

WEDNESDAY, SEPTEMBER 20, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS

AFFAIRS, AND INTERNATIONAL RELATIONS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:05 a.m., in room

2247, Rayburn House Office Building, Hon. Christopher Shays

(chairman of the subcommittee) presiding.

Present: Representatives Shays and Biggert.

Staff present: Lawrence J. Halloran, staff director and counsel;

J. Vincent Chase, chief investigator; Alex Moore, fellow; Jason M.

Chung, clerk; David Rapallo, minority counsel; and Earley Green,

minority assistant clerk.

Mr. SHAYS. This hearing of the Committee on Government Reform Subcommittee on National Security, Veterans Affairs, and

International Relations is called to order.

Our subject this morning: Oversight of the Defense Security

Service: How big is the backlog of personnel security investigations?

Seven months ago we heard testimony on the serious risks to national security posed by a staggering backlog of background investigations and reinvestigations, a backlog then estimated to approach 900,000 individuals seeking confidential, secret and top secret clearances. The Defense Security Service [DSS], the agency responsible for screening those in the DOD, have access to national

secrets, said plans were in place to reduce the backlog to increase

the quantity and improve the quality of personnel security checks.

Today the subcommittee revisits issues raised by longstanding

deficiencies at DSS. We look for tangible progress toward repairing

a vulnerable link in our very important security shield. The time

for optimistic plans and rosy projections has long passed.

The longer the backlog festers, the greater the threat to security

and productivity at DOD.

Awaiting reinvestigation are thousands who should not be or

need not have access to classified material any longer. At the same

time, agencies are losing qualified new hires who cannot wait almost a year for DSS to complete an initial investigation. In addition, defense contractors have found themselves unable to perform

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billions of dollars worth of work because employees have not obtained routine clearances.

This frankly just boggles my mind. How big is the backlog? Incredibly even this central question still cannot be answered with

any accuracy. According to the General Accounting Office [GAO],

DOD continues to rely on episodic surveys of fragmented questionably accurate data bases to determine the extent of overdue clearances and future needs.

With only a guess at the scope of the problem, DOD can only

speculate about the dimensions, the complexity and the costs of a

longterm solution. The capability to anticipate DSS workload and

budget needs and to prioritize security investigations, will not be

in place for 2 years. Yet critical decisions are being made now

about how many cases to direct to outside contractors and the optimal capacity of the internal DSS computer system.

That DSS remains a high risk enterprise, as the Department’s

Inspector General observed, was convincingly demonstrated when

the agency’s case control management system suffered a critical

failure in July. Despite some subsequent success in stabilizing the

system and reaching productivity goals, DSS plans to eliminate the

backlog in a matter of months now appears to stretch out for years.

Over that time, DSS will require the sustained attention and

support of senior Pentagon leadership, both civilian and military.

DSS has not had that support in the past. Indifferent oversight and

outright neglect by the Office of the Assistant Secretary for Command Control Communications and Intelligence allowed DSS to degenerate. Only proactive management and unwavering budget support at the same level will restore a security function that touches

almost every aspect of DOD operations.

So there is no time to quibble over the meaning of the word ‘‘backlog’’ or indulge in the happy fiction, ‘‘failing more slowly

equals success’’ for DSS.

We look for an unguilded description of DSS recovery efforts to

date and a frank assessment of the challenges that remain. Repairing the personnel security investigation process requires an unrelenting focus on protecting national security, not public relations.

We welcome the testimony of all our witnesses this morning as

the subcommittee continues our oversight of the Defense Security

Service.

We have two panels comprised of two people at each panel. Our

first panel is Ms. Carol R. Schuster, Associate Director of National

Security International Affairs Division, U.S. General Accounting

Office; Mr. Donald Mancuso, Acting Inspector General, Office of Inspector General, Department of Defense.

[The prepared statement of Hon. Christopher Shays follows:]

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Mr. SHAYS. At this time if you would stand, I would swear you

both in.

[Witnesses sworn.]

Mr. SHAYS. Let me just say, before you both begin, in reading

and preparing for this hearing it’s fairly clear to me that we don’t

have happy news. But the purpose of this subcommittee is not to

just expose unhappy news, the purpose is to make it right. And so

I’m not looking to cast blame at anyone. I am looking to be part

of what I hope all of us are, a solution and one that comes quickly.

My view, when I read the testimony, every time I read it, I get

more outraged by the fact that we spent billions of dollars to try

to improve our defense, and this area here would do wonders to improve our national defense. So I hope that we come up with concrete solutions and some real specific discussion as to what can be

done to improve and make better this terrible situation.

Ms. Shuster.

STATEMENTS OF CAROL R. SCHUSTER, ASSOCIATE DIRECTOR

OF NATIONAL SECURITY INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL ACCOUNTING OFFICE; AND DONALD

MANCUSO, ACTING INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, DEPARTMENT OF DEFENSE

Ms. SCHUSTER. Mr. Chairman, I am pleased to be here today to

discuss GAO’s recent report related to DOD’s backlog of overdue

personnel security clearance investigations. As you have acknowledged in the past, periodic reinvestigations are an important part

of the government’s efforts to protect national security information

and lessen the Nation’s vulnerability to espionage. Completing

these investigations when due is critical because individuals retain

access to classified information, even though their clearances may

be out of date. Yet, in January 2000, DOD estimated that its backlog of overdue reinvestigations had grown to about a half million

cases or about one of every five individuals holding a clearance.

Today I would like to briefly summarize the major findings of our

August 2000 report and ask that my full statement be submitted

for the record.

Last February, when we testified before this subcommittee on

the quality and timeliness of DSS investigations, questions were

raised about the accuracy of DOD’s backlog estimate. At your request, we examined the methodologies, the deputy used to estimate

its backlog and found that DOD does not have a data base that can

provide a real time accurate estimate of the backlog. As a result,

it is variously estimated the size of the backlog on an ad hoc basis

through data calls to the services and statistical sampling methods.

Resulting estimates since 1998 have been widely divergent, ranging from 452,000 to 992,000 cases. It’s two most recent estimates

which use very different methods coincidentally achieve similar estimates of about 505,000.

The first relied on a data call that asked security managers

throughout DOD to manually count their overdue reinvestigations.

The second relied on statistical sampling to refine what it knew to

be a grossly inaccurate estimate extracted from existing data bases.

While the two most recent estimates were close, neither is particularly reliable due to their methodological limitations. For example,

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when the counting method was used, we found that because guidance was not specific, the services used different ‘‘as of’’ dates and

inconsistent methods to arrive at their estimates. Some of the

input was 6 months old or older by the time the estimate was reported. And DOD made no effort to validate methodologies or the

accuracy of the counts.

Likewise, the second estimate was also flawed in that only half

of the 1,200 individuals sampled responded to the survey and the

necessary followup was not performed to make the estimates statistically valid. And, based on the definition used, both estimates excluded as many as 94,000 overdue reinvestigations that had been

submitted to DSS for processing. The vast majority of these cases

were overdue. One estimate also excluded those holding confidential clearances.

DOD will begin testing a new joint personnel adjudication system

data base in November 2000, which it believes will allow real time

accurate counts of overdue reinvestigations. However, it will not be

fully operational until November 2001. In the meantime, an enormous amount of effort continues to be expended to manually estimate the backlog. As recently as September 11th, the Deputy Secretary of Defense made yet another data call for DOD components

to estimate the size of the backlog. This will be the seventh estimate since October 1998, yet, because the directive did not specify

methodology to follow, there’s no assurance that this estimate will

be any more reliable than the succession of estimates that have already been made.

But, I would like to end my remarks on a more positive note. We

recommended in our recent report that DOD design routine reports

showing the full extent of the backlog and develop incentives to ensure that reinvestigation requests are submitted on time. I am

pleased to report that DOD’s controller has redefined the backlog

to include all investigative workload including that awaiting processing at DSS. This will enable the department to better plan how

it will address the full extent of the backlog. Also in June, DOD

set forth a detailed phased plan for eliminating the backlog by September 30, 2002. Implementing guidance now specifies as was the

case in 1999, that security managers must either terminate or

downgrade clearances if a reinvestigation request has not been

made by this date. This should provide an important incentive for

DOD components and their security managers to submit reinvestigation requests in a timely manner and hopefully head off any future potential backlog.

Finally, DOD has acknowledged the importance of increased

oversight of this vexing national security problem, and has asked

each component to designate a senior official to monitor execution

of the phased plan for eliminating the backlog. This latter action

is responsive to an earlier GAO recommendation and should serve

to emphasize within the Department the importance of ensuring

that personnel security clearances are based on up-to-date investigations.

Mr. Chairman, this concludes my prepared remarks. I would be

happy to answer any questions that you have.

Mr. SHAYS. Thank you Ms. Schuster.

[The prepared statement of Ms. Schuster follows:]

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Mr. SHAYS. Mr. Mancuso.

Mr. MANCUSO. Mr. Chairman, thank you for the opportunity to

discuss the results of recent Inspector General audits related to the

vitally important functions of personnel security clearance investigation and adjudication. Simply put, the inability to track and

promptly complete personnel security investigations has had a devastating effect on a department’s ability to ensure that national security is protected, and that military civilian and contractor employees have the timely clearances needed to complete their jobs.

On a human level, the lack of timely clearances prevents people

from obtaining employment in DOD, and in the case of contractor

employees, causes the loss of hundreds of millions of tax dollars

paid to contractors from employees awaiting clearance. As with

most DOD management challenges, the huge scale of the program

makes it inherently difficult to administer. More than 700,000 initial investigations are needed annually as well as several hundred

thousand reinvestigations to update existing clearances.

Approximately 2.4 million DOD and contractor personnel hold

clearances at any given time. Unfortunately, as your subcommittee

hearing last February indicated, the program has serious problems

in the area of automation and resources. As GAO reported, in their

September 1999 audit, some actions taken by previous DSS management team were ill-advised and merely created new problems,

especially in quality control over investigations. The failure of

CCMS, the DSS Case Control Management System, was also a

major setback.

Finally DOD has lacked accurate information on the existing or

forecasted workload and related resource requirements for both the

investigative and adjudicative portions of the program.

Over the past 2 years, DOD managers have become more involved in the problems at DSS than they had previously, and several changes have been made beginning with the appointment of

General Cunningham in June 1999. Over the past year, DSS has

taken action to implement GAO and IG recommendations, cancel

questionable policies, outsource more work and acquire Air Force

assistance to remediate their information system.

In April 2000, I testified on the issues confronting DSS before the

Senate Armed Services Committee. Our position at that time,

which remains essentially the same today, is that the DOD plan to

quickly eliminate the backlog of overdue clearances through a combination of outsourcing and internal changes was overly optimistic.

Specifically, the plan assumed DSS could close an average of 2,500

cases per day beginning this year. In practice, however, DSS has

completed over 1,500 cases per day in the first 11 months of the

year and was unable to reduce the backlog. We also question the

workload projections believing them to be significantly understated

and cautioned that it would probably take years, not months, to

overhaul the entire personnel security program.

We specifically recommended that the Department needed to actively oversee and manage the workload at DSS in the adjudication

facilities, implement performance metrics, periodically assess and

adjust resource requirements, develop a DOD-wide security system,

improve tracking of security clearances, and closely monitor management of CCMS and JPAS, the Joint Personnel Adjudication SysVerDate 11-MAY-2000 12:08 Sep 20, 2001 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\74831.TXT HGOVREF1 PsN: HGOVREF1
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tem. All those actions remain very necessary today, and most of

them entail sustained senior management attention.

I’ll emphasize the last three of those items, beginning with our

concern over the need to prioritize security investigative case workload, which has been perhaps our most controversial recommendation. In our April 2000 report on priorities, we discussed a number

of case management issues. The principal concern is the lack of a

meaningful process for prioritizing the workload. We determined

that the resources were generally applied on a first-in/first-out

basis.

The clearance requests for important programs and higher risk

programs often languished while investigators often worked on routine cases. C3I, the Office of the Assistant Secretary of Defense

Command Control Communications and Intelligence, initially disagreed with the feasibility of developing a prioritization method but

has subsequently changed its position and has been working with

the services and DSS to comply with the recommendation. I’m still

frankly disappointed, however, with the slow progress, and am concerned that it appears so difficult to implement what is to us a

basic workload management tool.

As with many other problems facing the department, the desire

to gain consensus resulted in a time-consuming process. We believe

this delay was unnecessary and could have been avoided through

firm decisionmaking by leadership. We haven’t seen the current

plan and we are anxious to work with the C3I people on that and

share our thoughts with them and I know they indicated they welcome that coordination.

In May 2000, we issued another report in which we noted that

DSS lacked an effective means for tracking the status of security

clearance requests. DSS could not identify on a case-by-case basis

why more than 12,000 electronic requests received between July

and December 1999 did not result in investigative cases being

opened. Similarly we found more than 50,000 investigative cases

that were opened during that period without electronic requests, although using electronic requests was mandatory and was important for maintaining control and improving efficiency.

DSS and C3I agreed with our findings but noted that the necessary corrective actions depend partially on improving the CCMS

and implementing the JPAS. Because JPAS will not be operational

until at least 2002, we continue to believe that DSS should be seeking interim measures. The need for a modern system with the capabilities intended for CCMS is undeniable, but has often been the

case over the last decade with DOD information technology investments, the execution of this system acquisition project was flawed.

In retrospect DSS and its contractors badly underestimated the

technical risk and failed to test adequately to manage those risks.

We are currently auditing the system and plan to issue a draft report in the next few weeks.

As previously noted, DSS has prudently turned to the Air Force

systems acquisition management support, and indications are that

the system is being stabilized. DSS reported an average of 2,523

cases closed per day in August 2000, which is certainly a very positive sign, assuming that this high level of performance can be sustained.

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The CCMS will reach a critical milestone in 2002 when the Department must decide whether to deploy an overall enterprise system architecture for DSS. In the interim, the system must prove

that it can process an average of 2,500 cases closing per day. Various initial design inefficiencies must be resolved and additional reliability and maintainability testing is needed. In addition, DSS

should aggressively benchmark the system against other systems

performing similar functions.

We’re also conducting several other reviews involving the security and investigative and adjudication processes. These reviews

have been coordinated with GAO to prevent duplication.

So in summary, the enormous scope of the defense personnel security program makes an inherently difficult management challenge. It is important that the Department avoid piecemeal solutions such as its ill-fated attempt to address productivity and capacity at DSS by arbitrarily limiting the number of security clearance requests that DOD components were allowed to submit.

We believe that with the somewhat stronger recent support of

the Office of Secretary of Defense, DSS is making reasonable

progress in its current reengineering effort, although not as quickly

as planned earlier this year. DSS will need continued close oversight and adequate support. It is particularly important that lingering confusion about the size and definition of the backlog and

the likely investigative and adjudicative workload over the next

several years be eliminated to enable proper planning.

Thank you for considering our views on this subject and I certainly welcome questions.

[The prepared statement of Mr. Mancuso follows:]

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Mr. SHAYS. Would you, Mr. Mancuso, would you read your opening paragraph again. It’s not—which you’re more than welcome to

do. I couldn’t find the statement in your draft that you submitted.

So would you—if would you read the opening paragraph again.

Mr. MANCUSO. Simply put, the inability to track and promptly

complete personnel security investigations has had a devastating

effect on the Department’s ability to ensure that national security

is protected and that military civilian and contractor employees

have the timely clearances needed to complete their jobs. On a

human level, the lack of timely clearances prevents people from obtaining employment in DOD, and in the case of contractor employees, causes the loss of hundreds of millions of tax dollars paid to

contractors or for employees awaiting clearance.

Mr. SHAYS. This is the second hearing we’ve had, and we have

some of the same people back. We had a hearing on February 16th

entitled ‘‘Defense Security Service Oversight’’ and this is on top of

a hearing we had on the inability of the Defense Department to

even do basic audits. But devastating effect, as you describe it, is

a pretty strong wording. Ms. Shuster, would you describe it the

same way?

Ms. SCHUSTER. I have not used the word ‘‘devastating,’’ but I do

believe that it is an important impediment to our national security

when you have a half million people that have not had up-to-date

clearances. These people are continuing to handle classified information and so it does pose a major threat to our national security,

in my opinion.

Mr. SHAYS. Maybe you can just make sure we’re talking the

same language. You say 500. You point out it can be between 400

and 900, why do you choose 500? What gives you the right to do

that?

Ms. SCHUSTER. I suppose any of the estimates is probably as

valid as the next one.

Mr. SHAYS. But I’m just curious, you’re giving validity, it could

be much more than that.

Ms. SCHUSTER. It could be. The latest two estimates are the ones

that we’re using, which are coincidentally the same, but as we

pointed out, there are methodological limitations that raise questions about that. So it really does not have validity.

Mr. SHAYS. OK. Explain—if both of you would explain to me

what makes this such a difficult task? To me, let me just preface

my remarks by saying that I represent an area with a lot of IT

companies. And they point out to me Priceline.com, for instance, is

in the District, Jaywalker and others, and the people at IT firms

will point out to me, it used to be the big ate the small. But now

they say the small—the fast eat the slow. And so I know DOD is

big, but I know it’s extraordinarily slow. It doesn’t make me feel

very comfortable about other things that go on in DOD if we can’t

get a handle on this.

And so the question I have is, in your judgment, what makes it

such a difficult task, both of you? I mean, in seems to me to be

kind of like widgets in a way. I mean, you know what you got, and

you know what you got to produce and you do it.

Ms. SCHUSTER. If I could just answer that, I think Mr. Mancuso

put the right emphasis in his comment about the source of the

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problem that we have here, and that is that there were quotas

placed on the number of submissions that could be sent to DSS for

3 years from 1996 to 1999. No one was supposed to be submitting

these periodic reinvestigation requests. That led to a pent up demand. So that’s why we had this backlog.

Mr. SHAYS. Is that kind of like a deferred maintenance program?

That’s what they used to have in the State of Connecticut, and all

of a sudden the bridges fall and the roads break apart.

Ms. SCHUSTER. Right. Pay me now or pay me later kind of an approach. So because it didn’t have visibility—they were not submitted—no one really knew how many were out there. And then the

problem became apparent back in basically October 1998. There

was a joint security commission review, and then there was a Presidential budget decision in December 1998 that really brought the

problem to light. And at that particular time the backlog was estimated at 866,000. So if you were just dealing with an ongoing

steady State workload, it would be a big workload to begin with.

But when you have that many extra cases, then it just magnifies

the problem.

Mr. SHAYS. Let me—Mr. Mancuso.

Mr. MANCUSO. I think you started off, you said, well, we know

how many widgets or we know what’s coming in. That’s the real

issue, we don’t know. And DSS doesn’t know. And that’s why we

don’t know what the backlog is. It’s very hard to develop an organization that can be responsive to a level of work when you yourself

don’t know how much work is out there and the Department, unfortunately, seems to be unable to get their arms around that.

Which is why we don’t know if the backlog is 500,000 or 900,000.

So we don’t really know what’s out there. Over the years with the

downsizing of DOD, there’s been an artificial depression of the level

of resources in DSS. It’s my understanding that the cut that they

have taken over the years is dramatically more than the overall average cut in DOD. So once you lost that base of knowledge, once

you lost that base of employees, you’re playing a major game of

catch-up. So the best you can do is limit how much you’re willing

to accept. And they did that.

So one of our main proposals has been there needs to be an honest look at what is the resource need. What is out there.

Mr. SHAYS. But we had that discussion in February.

Mr. MANCUSO. And as I mentioned it was our recommendations

earlier this year, and it remains today that we feel there still needs

to be a better accounting for measurement of what are exactly the

resource needs of DSS and the adjudicative bodies as well. Because

even if DSS is corrected and is able to produce a high level of output, we already know that the adjudication facilities are swamped

and will not be able to process that output.

So for the customer, it doesn’t really matter if it’s taken a year

in DSS or a month in DSS, if they’re not going to see it because

it’s sitting in the adjudication facility. So we’re concerned. So the

Department has been putting resources in some of those areas, but

not all.

Mr. SHAYS. I will get back to that in 1 second. I would like to

take care of some housekeeping so I don’t forget it. We’re joined by

Judy Biggert, the gentlewoman from Illinois. Ask unanimous conVerDate 11-MAY-2000 12:08 Sep 20, 2001 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 C:\DOCS\74831.TXT HGOVREF1 PsN: HGOVREF1
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sent that all members of the subcommittee be permitted to place

an opening statement in the record and that the record remain

open for that for 3 days for that purpose. Without objection so ordered.

Ask unanimous consent that all witnesses be permitted to include their written statements in the record. Without objection so

ordered.

Let me ask you, then, you’ve broken it up in two parts—actually

there are three. Identifying the number, second doing the actual investigations, then the adjudication of it which in my simple mind

is just the analysis of the investigative working, the adjudication.

Mr. MANCUSO. The adjudication facilities as I understand it review the work done by the investigators and consider whether or

not to eventually forward the clearance.

Mr. SHAYS. Right.

Mr. MANCUSO. But there’s a huge glut of work that involves

clearances that are contested for some reason. The derogatory information that needs to be pursued, that requires additional time

by adjudicators and followup.

Mr. SHAYS. Where is the big bottle neck as far as you know?

Mr. MANCUSO. There’s certainly a bottle neck in both places. But

right now what we see is improvements in DSS has shown in their

ability to produce 2,500 a day.

Mr. SHAYS. One simple thing would be if they could move forward with adjudication if they in fact have already done a number

of investigations. It would seem to me if they don’t—the longer

they wait from when the investigation work was done to the adjudication makes almost the investigative work meaningless.

Mr. MANCUSO. That’s correct. That’s why we agree that the Department needs to continue to put resources there. But we don’t

feel that they’re actually doing the analysis to determine the appropriate level of resources, and, in fact, we’re just completing an

audit in that area.

Mr. SHAYS. It almost strikes me that needs to happen in tandem

with their just moving forward. In other words, there’s a basic concept, if you have a pile of paper on your desk, you don’t just keep

looking at the pile, you take one and just get it done. And the less

times you handle the paper, the more ultimately efficient you are.

But I guess what—I’m ending my time and come back, after Mrs.

Biggert is recognized, but I guess what I’m trying to understand

when I use the concept of widgets, this is not rocket science, it

doesn’t strike me. You do investigative work, you have a certain

number of people that come on and off, you do investigative work,

you also then have to analyze your investigative work and make

a decision. And we’re not talking about a lot of new scientific processes. We’re talking about really what I think of as a lot of grunt

work and just getting the job done.

Mr. MANCUSO. We are talking about increased numbers. I know

in some of our analysis we found, we looked at a single month in

the summer of 1999 compared to a month in the summer of this

year, if I recall on one facility, the difference was between 3,000

and 12,000. And the adjudication facilities for the services of the

DOD are of different sizes. But the workload changes in some of

those offices are beyond anything that could be just simply handled

41

by knowing a little more efficiency. What we feel is that a good

solid look needs to be done to try and properly project what that

workload may be, make the decision and to staff those positions,

whether on a temporary basis or longterm basis and move forward.

Some of that has been done by the Department. We feel in our

audit reports, that are out for comment, I believe, that more needs

to be done.

Mr. SHAYS. OK. I’ll come back. I’d like to recognize Mrs. Biggert.

Mrs. BIGGERT. Thank you, Mr. Chairman. In your written testimony, you state that the backlog is estimated by DOD to be

505,000 people, or that has grown to that. If all these people are— are all these people, does that mean that their security clearance

is outdated?

Ms. SCHUSTER. Yes. Anyone who’s in the periodic reinvestigation

backlog is overdue for a clearance. There are some time periods

within which they’re supposed to be updated, and all of them have

passed that time and many of them are way past that time.

Mrs. BIGGERT. So what does that mean?

Ms. SCHUSTER. It doesn’t mean too much that individual—because the individual is allowed to continue to handle national security information, even though his clearance is not up to date. That’s

what makes it so important that we solve this problem.

Mrs. BIGGERT. So if it doesn’t mean anything, then they’re probably not as worried about updating?

Ms. SCHUSTER. Right. There hasn’t been an incentive up to now

to do that. Now, as I mentioned in my earlier statement, recently

there has been a directive put out that if at the end of this 2-year

period when they’re trying to have all the backlog submitted to

DSS for investigations, their clearance has not been submitted— October 1, 2002—then they’re supposed to downgrade or terminate

the clearance. That does provide an incentive for security managers

to submit the request on time.

Mrs. BIGGERT. And then have you suggested that or talked about

putting in new computer equipment, or to help to do this so that

they can work on the backlog.

Mr. MANCUSO. There is a system and the system, until very recently, was unable to keep up with the level of manual work that

was being done, collective work that was being done to track it.

That system appears to be back online now and we’re hoping

that the system will continue in its ability, as it did last month,

to be able to track these things. By having an automated system,

working properly, the level, the number of clearances that can go

through the overall DSS review process will certainly increase.

Mrs. BIGGERT. OK.

Mr. MANCUSO. I would add, there is always some confusion when

we talk on this subject when we talk about backlog and 700,000

initials a year that come through. I think just by way of example,

we’re not just talking about someone who has a reinvestigation. I

may have a reinvestigation, and mine may be overdue, and that

may or may not be an issue to some people. But what we see are

outstanding issues—and I can give you a couple of examples. I

have a military officer that works for me, I have small number of

military officers in my civilian organization, and he’s a major in the

U.S. Army. We put him in our audit section and we need him to

42

upgrade his clearance for top secret. It has taken 13 months to do

that. And during this time we can’t use him in those areas. I can

go through any number of examples like this.

Mr. SHAYS. But that’s just astounding—if the gentlelady—that’s

just astounding. You’re saying it like it’s, you know, just a fact.

Mr. MANCUSO. It is a fact.

Mr. SHAYS. I know. But it’s not just a fact, it’s an outrage.

Mr. MANCUSO. Well, it’s a concern that we all have, and as I

pointed out in my remarks, there is a human level. Now, DSS is

sensitive to this situation.

Mr. SHAYS. So what does he do while he’s there?

Mr. MANCUSO. We have him do other work that would not involve him being involved on the particular projects that his skills

may be used for.

Mr. SHAYS. The whole point of his being there is that he have

some security to be able to do the job. So it makes you less efficient, it makes you unable to cover the things that you need to

find. I mean, the ripple effect of this is truly mind boggling. I

mean, I appreciate the gentlelady yielding, but it’s almost like

you’re used to it now, so even you are kind of that’s the way it is.

Mr. MANCUSO. I will say and want to say this very quickly in defense of the people that manage DSS, General Cunningham and

others, they’re certainly extraordinarily sympathetic to that and

they could probably tell you 100 other stories they’ve heard like

that. It is a huge problem. There are a large number of people, we

have weak systems to support it, and they’re making some management changes that we feel are appropriate. They need to learn

to prioritize better. And that’s a major concern we have that I

spoke about. They need their information systems to work. They’re

trying to get them online. They need to probably get some additional resources or reallocate resources in a few areas. I think

they’re looking at that. Those are all recommendations that we’ve

made and that GAO has made. They need to know what’s coming

in the door. So they need the cooperation of who are involved.

Mr. SHAYS. But these are basic simple kinds of questions that

you learn in high school. I mean, these are not things that take an

advanced degree.

Mr. MANCUSO. I agree. We have to personally explain to someone

to get the results and I’ll give you another example in the Defense

Criminal Investigative Service, which also works for me, they’ve

developed an expertise in computer intrusion which is a major

problem in the Defense Department. They needed one computer engineer, just one computer engineer. I believe it’s now been 17

months since we submitted the clearance request. That person has

not been hired. Now, at some point, that person may tell us, I’m

getting a job with IBM or something, and we’ll start the process

all over again. We don’t have the person on board. But I’m not

blaming DSS. I’m blaming the system, and this is a big problem.

Mr. SHAYS. Let me get back to Mrs. Biggert. But basically, you

know, it was just pointed out to me that’s basically the life-cycle

of the whole generation of a computer.

Mr. MANCUSO. That’s true.

Mr. SHAYS. It makes me very afraid for my country. Because it

is the fast that eats the slow. That truly is where we’re at. When

43

we met in February, I remember saying that we were going to have

everybody back, and the story is really worse rather than better.

It is.

Mr. MANCUSO. I think that people are in a better position now

to understand the full breadth of the problem. I think what you

heard was somewhat overly optimistic.

Mr. SHAYS. I’m sorry. We’ll get to that later. I mean——

Mr. MANCUSO. Well——

Mr. SHAYS. You can say it again. I want to give Mrs. Biggert her

time back.

Mrs. BIGGERT. This too troubles me, if you have somebody for 13

months that’s waiting for a clearance means that his talents that

he was put into that position to do are wasted for 13 months while

he’s sitting doing other work, that might be important but not as

important as having this to be accomplished.

On page 10 of the GAO with the estimates of the periodic reinvestigation backlog, just Ms. Schuster, the basis for determining

overdue investigations, and you have a table, and I’m sorry, I don’t

know what this ‘‘access’’ means.

Ms. SCHUSTER. I can explain that. There are two methods for determining whether a person’s clearance is overdue. One is eligibility, and that means if they were originally cleared at the top secret level, that’s their eligibility. In the interim, perhaps the person

no longer needs to have access to top secret information. So perhaps their clearance would only need to be updated at a secret

level. The time periods are different for those two. The time period

for top secret is every 5 years, the period for secret is every 10

years. So that’s the difference between access and eligibility.

Mrs. BIGGERT. You also state, though, that it seems that according to the DOD, that many individuals are eligible for a higher

clearance than are required to do the job. It almost sounds like do

they put the higher clearance in so that if they want to move them

up, that they have that clearance, and it wouldn’t take the 13

months then for somebody to have that clearance?

Ms. SCHUSTER. In the last couple of iterations, when they’ve tried

to estimate the size of the backlog, what they have done is tried

to emphasize access. So when they go back to the security managers and ask whether people need a clearance, they say ‘‘Do they

still need the clearance at this level or is it a different level?’’ So

now they’re trying to move to a system where they only are putting

people in for the clearance at which they have access to, not the

one that they originally got which might be higher.

Mrs. BIGGERT. OK. Is that because then they don’t have to redo

it as often?

Ms. SCHUSTER. That’s part of it. That has had the effect of lowering the number of periodic reinvestigations that are in the backlog.

I think there was a decrease from 624,000 to 505,000 by emphasizing access.

Mrs. BIGGERT. So it really wasn’t that those were taken care of,

it might have just been a reduction in the classification that they

needed?

Ms. SCHUSTER. It has to do with the definition that they used to

determine the backlog. They used the definition of access, and they

44

also used the definition of only those that have not been submitted

to DSS for processing.

Mrs. BIGGERT. So it’s not as if there’s been an improvement in

numbers, but just—— Ms. SCHUSTER. It’s definitional.

Mrs. BIGGERT. Thank you. Thank you, Mr. Chairman.

Mr. SHAYS. Let me do this, let me—I’ll exercise my right to interrupt the staff, but I’d like the staff to ask some questions, and we’ll

start with Larry Halloran, then we’ll go with you, David.

Mr. HALLORAN. I would like to explore the issue of prioritizing

cases with you if I could. It’s something that was discussed at the

February hearing that was imminent, and that it was a way to

weed out the easy stuff and the deadwood from the backlog and get

to the more critical security risk type of cases or investigations in

the backlog and get to them first. Apparently that is—we’ll hear

later that hasn’t happened yet. Can you tell us, you know why not

or what’s the challenge to their—where they stand?

Mr. MANCUSO. Well, it was only after some time after April that

the Department agreed to, in fact, implement our recommendation

and seek a priority action plan.

Mr. HALLORAN. So they oppose it’s in the first instance.

Mr. MANCUSO. They opposed it initially.

Mr. HALLORAN. Did they say why?

Mr. MANCUSO. They felt it would be very, very difficult, time consuming, and would take them away from the plan that they had

to move forward to reduce backlog. We felt it was important and

they listened to us and eventually agreed to pursue that plan.

And they’ve done that and they’ve coordinated with the services

and department agencies. But the process has taken a long time.

When you’re seeking consensus and agreement on how to prioritize,

it’s going to take a while longer than it would take to simply direct

it from the top. It’s my understanding that that process is continuing, that the Department hopes to have some sort of a process in

place in the next few months. We haven’t been briefed on that process. We welcome the opportunity and we will be, I understand, offered the opportunity to comment on it and work with them on it.

And that’s really where we are right now.

Mr. HALLORAN. As I understood your recommendation it was

that the same system of prioritizing or ranking be applied both to

the backlog and to new requests, that both be prospective and retrospective; is that correct?

Mr. MANCUSO. That would certainly be our preference.

Mr. HALLORAN. What would your comment or reaction be if the

plan they eventually shared with you was only prospective?

Mr. MANCUSO. I’ll attempt to discuss that. I think the only way

to really handle the problem is to allow the various DOD components the opportunity to prioritize what they feel is truly important

in their work, and to, therefore, fit those concerns into the plan. So

I think it should be on a broad basis and not just for a few of the

high risk programs.

Mr. SHAYS. That doesn’t happen now.

Mr. MANCUSO. Oh, no. Now it’s pretty much first come/ first

serve, other than they certainly have a list of a number of programs.

45

Mr. SHAYS. See, I can’t believe that. Intuitively, I can’t, because

there has to be certain clearances that are so important to national

security.

Mr. MANCUSO. There are certain programs that absolutely receive preference and are handled quickly. And there’s a long list of

them, I don’t know what the number is, maybe 70. It’s a large

number. But if you look at the number of people that are affected

by that compared to the numbers that we’re talking about, it’s a

fraction. So what we’re saying is it needs to cover a lot more of the

people, and it needs to allow some flexibility for the component to

truly bring on people that are important, or to update clearances

that they feel are truly important.

Mr. HALLORAN. Ms. Schuster, it would be helpful for our general

discussions if you could talk a little bit more in depth of your work

in terms of the backlog and some kind of subsets of that. I mean,

there are reinvestigations that are at DSS and overdue. They’re reinvestigations that are out there some place that are either about

to be due or overdue that haven’t been shipped in yet. There are

new investigative requests coming in. Give us a sense with the

numbers that you came across in your work as to how big each

bucket might be, or—and also, second part of the question is given

us a sense of when the Deputy Secretary puts out, one of these

data calls, I mean, who is he calling, or where are they looking?

What do they have to look at?

Ms. SCHUSTER. Let me answer the first question. This is a moving target. You’ve got things coming due all the time, and you’ve

got some cases being closed, so it’s a moving target. If it was static,

it would be a real easy problem to solve. But it’s not. So even trying to analyze the statistics is difficult. But one move in the direction that we have recommended is to get an entire estimate, as

flimsy as it might be, of the workload that is existing at DSS and

OPM, as well as the backlog of the estimated 500,000, and put it

all together. This is exactly what they have done. The plan that

they now have on the table for the next 2 years includes both of

those pieces. The things that are continuing to come in, the things

that are already on the table that haven’t been opened yet, as well

as the backlog. That total new is 2.2 million cases over the next

2 years.

Mr. HALLORAN. So that’s their estimate, the kind of universe of

work over the next 2 years, including working so-called backlog,

however, somehow defined down to nothing?

Ms. SCHUSTER. What they are trying to do is to get all the backlogged cases submitted into the investigative community over the

next 2 years. That’s what the controller’s plan is. And there’s a detailed plan that has been set forth for the 2 year period.

Mr. HALLORAN. Does the plan also have an average processing

time, that DSS goal, so we’ll know when those submitted cases will

come out the other end?

Ms. SCHUSTER. As I understand it, they are working within C3I

guide to come up with some metrics that would have expectations

for how long it should take for each kind of case. When we looked

at investigations before, they were all over the board. So there isn’t

any standard right now for how long it should take for a particular

kind of case. And there are any number of kinds of cases in this

46

2.2 million backlog. Some of them are very automated and don’t

take really very much time, and others are full field investigations

that require a whole lot of work and over 200 days to complete.

Mr. HALLORAN. Do you find the assumptions underlying that 2.2

million estimate to be fairly sound? And second part thereof, is

what external factors confound that estimate further?

Ms. SCHUSTER. The 2.2?

Mr. HALLORAN. Yes.

Ms. SCHUSTER. Well, first of all, we’ve already gone over how

flimsy the 500,000 is, so we don’t really know whether that’s a good

estimate or not. We do know how many cases are called carryover

cases—these already submitted to DSS. Over the next 2 years,

they’ve got 435,000 of those cases. Then you’ve got the backlogged

cases and then you’ve got new cases that are coming in. So all told,

we’re talking about an enormous workload here of 2.2 million cases

coming into the investigative community. As I understand it, the

spending plan for this 2-year period is just to get the cases submitted, and then it’s up to the investigative community to somehow

deal with that. And they have been trying very diligently to ramp

up to prepare for that. We haven’t really seen the influx yet. A lot

of the cases that are going to OPM really start at the beginning

of the fiscal year in October. And so, it’s really hard to tell exactly

what kind of an effect this large influx of cases is going to have

and whether the ramp-up with private contractors and reservists

and the like are going to make a dent in that.

We understand that the cases at OPM are highly automated.

They also have some longer investigations on civilians, but many

of the cases that have been shifted over to OPM are highly automated. They seem to be keeping up with those so far. But we

haven’t seen the large influx into OPM either. The real problem

seems to be, in my mind, at DSS, and whether the capacity there

will be enough to cover this large influx. I think they can submit

the cases within the 2 years, but whether they can get them investigated and adjudicated, I have questions about that.

Mr. RAPALLO. Just back very quickly on the question of

prioritization, what do you recommend, Mr. Mancuso, as sort of an

ideal system for implementing that?

Mr. MANCUSO. We didn’t propose an ideal system in our audit.

We looked at the overall issues, we analyzed it, and we said there

needs to be a prioritization system, and it needs to cover various

programs, etc., and that it needed to address the concerns of the

customers.

We did not dictate a program. We thought the Department needed to pull one together and, hopefully, to coordinate it with us. At

this point, I am not fully aware of what they will be proposing.

Again, I do welcome the opportunity to discuss it with them, and

I would hope that they would listen to our ideas and that we would

succeed in agreeing on what a good system is. But, frankly, it will

be their system. In the end, they will make the decision as to what

the system will be.

Mr. RAPALLO. There was a suggestion, I think it was DSS, for a

central requirements facility. What do you think of this idea?

Mr. MANCUSO. I am not specifically aware of that.

47

Ms. SCHUSTER. I talked to General Cunningham about that. I

think General Cunningham has the right idea in trying to get the

services to come up with a way to integrate the requirements into

the PPBS system so that they can somehow project their workload

and budget for it.

One of the problems that has occurred over the last couple of

years is they have mandated these submissions, but the money has

not been behind it. So the services have been cajoled to put in submissions, but the money has to be reprogrammed from other programs in order to cover it. That has been true for 1999, it has been

true for 2000, and it is true for 2001. They hope to put money in

the budget for 2002 to cover it, but when the money is not there

and the services choose not to reprogram the money for that purpose, then the submissions are not made. And it is going to be the

same thing this year, I am afraid, because the money is not there

this year either. They have to reprogram funds to cover it.

Mr. RAPALLO. In terms of how it would actually work, it sounds

like both of your opinions are that it can’t be just an individual program determination within their own purview. If has to be something more systemic and department-wide.

Mr. MANCUSO. I would hope that would be the case, or at least

have some flexibility to address some of the more routine, if you

can call them routine, clearances, but to address those as well as

the ones that are applied just to certain programs.

Mr. RAPALLO. One other question. Ms. Shuster, your report

talked about the lack of incentives for submitting these reinvestigations. In your oral testimony you gave an update. Could you just

describe again what the process will be, as you understand it?

Ms. SCHUSTER. As I understand it, in this recent directive from

C3I, they said if the submissions are not made by the end of fiscal

year 2002, any clearance that has not been submitted, should be

downgraded or terminated.

The other provision in that directive is that if at some point after

it has been downgraded or terminated there becomes a need for

that person to have that clearance level reinstated, then they

would be allowed to do so on the condition that they have submitted their paperwork for a reinvestigation. So there is a little wiggle

room there for them to work with.

Mr. RAPALLO. So they submit the reinvestigation; otherwise, it

will be terminated or downgraded or something?

Ms. SCHUSTER. Downgraded.

Mr. RAPALLO. Why do you have to wait until 2002 for that to

kick in?

Ms. SCHUSTER. That could happen right now, but I think they

are just allowing a little lead time. That provision was in an earlier

directive back in 1999, and it was omitted in this more recent

memo of March 2000 when they sent out that directive it wasn’t

in there. And so in our report we recommended that they reinstate

some sort of an incentive for submitting these things on time. If

they are not submitted on time, then the backlog becomes invisible

and you can’t deal with it. You can’t plan for it if you don’t know

that it is there.

Mr. RAPALLO. Thank you.

48

Mr. SHAYS. Is it possible that a number of the investigations they

do become irrelevant because the people have left?

Ms. SCHUSTER. In this latest data call where they have gone out

and tried to get a more accurate estimate of the people, they have

tried to cull out the people who are no longer employed by DOD.

What others have found before this is that some of the people that

were in the backlog actually were no longer employed by DOD.

Again, this is a weakness in the data system that they have right

now.

Mr. SHAYS. I said try. My question was very simple. My question

was, is it possible that they are doing background checks and adjudicating people that may have already left?

Ms. SCHUSTER. I don’t think that is probably the case.

Mr. SHAYS. Under what basis can you make that claim?

Ms. SCHUSTER. They have to verify residency. I don’t think—the

original application would have to be made, and it has to be a real

person there in order to make the application.

Mr. SHAYS. A person can live in the same house—I don’t understand your answer.

Ms. SCHUSTER. The starting point for the investigation is an application, and so the person would have to fill out an application

for the investigation.

Mr. SHAYS. But the application is 6 months old or 7 months old

or 8 months old or a year old.

Ms. SCHUSTER. I think General Cunningham will have to say

what the starting point is for the investigation, but I am sure one

of the very first things would be to verify that that person is still

on the role.

Mr. SHAYS. Why? Tell me. You are sure. Why are you sure?

Ms. SCHUSTER. I guess I am not entirely sure. I think General

Cunningham can answer that question.

Mr. SHAYS. Yes, but you attempted to answer it, and you gave

me a definitive answer, and I am just puzzled why you would do

that. I am beginning to be a little suspect of the system. Tell me

this, both of you. Why isn’t the system in meltdown? Tell me a reason why I shouldn’t think it is in meltdown right now?

Ms. SCHUSTER. I think they have a plan in place now at least.

The last time when we came before the committee, they did not

have a plan. Now they have a very detailed plan to have the entire

backlog submitted by the end of 2002. That is an improvement over

what they had before.

Now, whether they are able to handle the investigations in take

period, I think there are still questions about that. But at least it

will become visible. You will have them in the system and you will

be able to hopefully ramp up to handle the extra investigations.

Mr. SHAYS. Ms. Shuster, when you came before us in February,

you came here in February, was the system in extraordinarily bad

shape?

Ms. SCHUSTER. I would say that even before we completed our

work and testified with you before, DSS had made tremendous

strides in implementing our recommendations.

Mr. SHAYS. Is that the question I asked?

Ms. SCHUSTER. You asked if it was in shambles, I guess.

49

Mr. SHAYS. I want you to listen to the question, and I want you

to answer the question. When you came before us in February,

wasn’t it your testimony that the condition was in extraordinarily

bad shape?

Ms. SCHUSTER. What we testified to at that particular time was

the quality and the timeliness of the investigations that had been

done at DSS over a period of time, and we found significant weaknesses in both the quality of the investigations and the timeliness

of those investigations.

Mr. SHAYS. Didn’t you also share with this committee that we

had a very large backlog?

Ms. SCHUSTER. Yes, I believe we did. That was not the focus of

our statement, but, yes.

Mr. SHAYS. Is the backlog better or worse? Just answer the question. Then you can tell me other things if you want to.

Ms. SCHUSTER. Our analysis gets very complex. Our bottom-line

is that we believe that the periodic reinvestigation backlog has

been reduced by about 44,000. However, the pending investigations

at DSS have increased by 50,000. So you can sort of see the backlog

moving into the investigative community.

Mr. SHAYS. So it is your testimony that investigations, we have

caught up on investigations, but we still have adjudication. I am

trying to understand your answer.

Ms. SCHUSTER. What we have seen is that the backlog——

Mr. SHAYS. Which backlog are we talking about?

Ms. SCHUSTER. The periodic reinvestigation backlog that is estimated at 500,000. Counting the ones that have been added to as

new requirements for periodics and taking off the ones that have

been submitted, we think that they have cut into the backlog by

about 44,000. So we think it is an improvement in terms of the

backlog.

Mr. SHAYS. Let me ask you this question: Do we have more pending investigations now than we did then?

Ms. SCHUSTER. Yes, 50,000.

Mr. SHAYS. So the number at DSS has grown. It has not decreased.

Ms. SCHUSTER. The number has grown consistently.

Mr. SHAYS. This sounds like tremendous bureaucracy in terms of

your answer to me. The answer, it seems to me, is the number has

grown, not decreased. So we are worse off rather than better off.

Ms. SCHUSTER. The backlog number has been decreased by

44,000.

Mr. SHAYS. But what good is that if the numbers keep increasing? That seems kind of silly to me.

Ms. SCHUSTER. What you are seeing is a movement of the backlog from not——

Mr. SHAYS. If my staff said to me, the backlog—they had gotten

the backlog of the letters down, but they have more letters today,

I wouldn’t think that was an accomplishment.

Ms. SCHUSTER. The bottom line is that we are not getting the

things through the system, and interim clearances are being granted to make up for this backlog. It is just moving through the system, and I think it will move into the investigative community, and

50

then it will move into the adjudication community. So it is going

to move through the system.

Mr. SHAYS. Do we have more to investigate now than before or

less?

Ms. SCHUSTER. The backlog—— Mr. SHAYS. I didn’t say backlog.

Ms. SCHUSTER. The workload at DSS—— Mr. SHAYS. I didn’t ask adjudication, I asked investigations.

Ms. SCHUSTER. The investigations have grown from 181,000

cases a year ago at DSS to 439,000 now. So that is the whole workload of many different kinds of cases. The periodic reinvestigations

number has grown from 61,000 a year ago to 113,000 now.

Mr. SHAYS. I am talking about that they have actually investigated? That they completed?

Ms. SCHUSTER. These are pending.

Mr. SHAYS. So the pending number of investigations has grown

rather than decreased.

Ms. SCHUSTER. Correct.

Mr. SHAYS. OK. It took us a long time to get that answer.

Ms. SCHUSTER. Sorry.

Mr. SHAYS. Now, if you want to tell me I shouldn’t be concerned

with that, feel free, but I just want the answer, and the answer is

the number of investigations, pending investigations, has grown. It

has not decreased. It was pretty bad before, and you are telling me

somehow that I should feel comfortable that it is better now, even

though it has grown. And don’t tell me it is complex.

Ms. SCHUSTER. I don’t know how to answer that question, other

than the definition that they used for periodic reinvestigations has,

from our complex analysis of it, shows that number—— Mr. SHAYS. I don’t understand what you say, from your ‘‘complex

analysis.’’ What does that mean? What is your definition of a complex analysis?

Ms. SCHUSTER. Well, what makes it complex is things are going

in and coming out and opening and closing and moving.

Mr. SHAYS. You call that complex?

Ms. SCHUSTER. It was for us.

Mr. SHAYS. Mr. Mancuso, can you shed some light on this? Are

we better off today?

Mr. MANCUSO. The best light I could shine would be, because we

are the IG’s office small DOD component, 1,300 people, and we

have pending investigations, those are investigations for people we

want to hire, we have reinvestigations for people who are already

hired.

Mr. SHAYS. I understand.

Mr. MANCUSO. I believe I understand exactly what Ms. Shuster

is saying. In our case, what we would probably find is the number

of reinvestigations that we have pending is probably getting better.

Mr. SHAYS. What do you mean better?

Mr. MANCUSO. Meaning they are coming out faster and the number is going down, the ones that are in there. But the ones that

we are pushing in on the front end, the pending ones, is a larger

number, because we are funding them now, we have been ordered

by the Department to fund them, and we are pushing them out at

DSS.

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Mr. SHAYS. Turn off the light.

Mr. MANCUSO. I would assume Ms. Shuster is right, that among

DSS, as the components do that, the number of pending cases is

increasing, whereas DSS’s work is—— Mr. SHAYS. Is getting worse. Their workload is increasing.

Mr. MANCUSO. Their workload is certainly increasing.

Mr. SHAYS. So we are not better off. You are trying to tell me

that I should feel better that their productivity has increased, but

their productivity is slower than the increase in their workload.

Mr. MANCUSO. I didn’t think I told you you should feel better, sir.

I don’t feel better. I feel they have a huge problem.

Mr. SHAYS. I will take the word off, feeling better. The bottom

line is they are getting more productive, but their workload is increasing, and that we have a greater backlog, and it is—do we have

a greater backlog? Excuse me, do we have more pending cases?

Mr. MANCUSO. In the sense you are describing the term—— Mr. SHAYS. I don’t want to get into the silly argument of backlog.

The number of cases has increased to a point there are more cases

that haven’t been dealt with today than were a while ago. Basically, that is your testimony. Both of you are agreeing. So you both

understand each other, and I am happy you both understand each

other. But the bottom line is the implications of that are kind of

mind-boggling. To me, it says there are more people who are waiting to have their cases reviewed, rather than less.

Now, maybe your comment to me would be, yes, but they don’t

have to wait as long.

Mr. MANCUSO. I would also add, though, and I am sure that is

going to be in the testimony of the next panel, that if I were speaking to you earlier this year, I would be telling you that, yes, it— the backlog—is going to get bigger and bigger. They are only producing 1,400 cases a day and they need to produce 2,500 a day in

order to make a dent. What we have seen now, at least in August,

they have reached their target of 2,500 cases a day.

We predicted earlier in the year that it would take a long time

to reach 2,500 cases a day, and their belief they could average

2,500 cases a day for the whole year is too optimistic.

Mr. SHAYS. When they came to us—— Mr. MANCUSO. I would argue we should see continuing progress.

We have to monitor it, we have to measure it, we have to stay on

top of things, we have to make sure their information system stays

on line and is capable of processing those things, we have to make

sure the adjudication facilities have the resources to take the work

and finalize it and get it out. But it is fair to say that there is improvement. It is fair to say that all the indicators now are that they

are reaching a turning point.

But, yes, in answer to your question, certainly the volume of the

problem is at least as large as it was months ago.

Mr. SHAYS. I am not a particularly negative person, but the analogy I could give you is that you got a lot of water in the boat, and

it ain’t moving very quickly because there is so much water in the

boat, and it is sinking. And you are saying, well, now we are bailing out more water, but more water is coming in than we are bailing out.

So my simple mind says the boat sinks.

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Mr. MANCUSO. My simpler mind would say we are finally fixing

the hole a little bit.

Mr. SHAYS. And you want to make that based on—perhaps, because you wanted to make it based on 1 month’s basic—a month

and a half’s record.

Mr. MANCUSO. No, we are paid to be skeptics.

Mr. SHAYS. No, based on what has happened since August.

Mr. MANCUSO. I was very careful in my written statement to say

I think that it is a positive sign. We also think it has to be shown

they think they can continue to do it.

Mr. SHAYS. I didn’t say it was a positive sign that you are bailing

out more water, but what is a negative sign is more water is coming in than is going out.

Mr. MANCUSO. And that is a fact.

Mr. SHAYS. And that is a fact. All I want to do is establish facts.

I was willing to have you qualify and everything, but I just wanted

to understand that more water is coming in than is going out. But

you are happy now, and I am happy to have you say that, that you

think that maybe in the last month they proved that maybe they

can get more water out than is coming in.

You are free to say that. But I just want to understand what you

are saying. It is illogical to me—I mean, it seems logical to me to

at least understand that the system we were—we were told in February by the organization, DSS, that we would be better today

rather than worse. And we said, you will be back here, which is

something the committee sometimes does. You know, when people

make claims like that, sometimes we say, great job. Maybe I am

going to say great job to the fact they have done this. I don’t know.

But it is not going to be great job. They have done part of it.

It tells me we have a very, very serious situation. Sometimes C– SPAN covers hearings, and I think why do they cover that hearing?

And then they don’t cover this hearing, and I am thinking, this is

a hearing that the American people need to see. They need to know

that you have people that even you have said work for you and

have worked for longer than a year that haven’t yet had their

clearance, so they are not a waste to you, but they are not being

optimized. We know that contractors are spending billions of dollars because they can’t simply get the job done on time or get the

job done at all, and we know that there are probably people that

have clearances who shouldn’t have clearances, and we know there

are people who are just getting wasted.

What I see is, in my judgment, a meltdown. That is what I see.

You don’t have to see it as a meltdown, but I see it that way, because I don’t see the Secretary saying we are going to use all the

resources necessary to get the job done.

When I worked at the State level, it could take years to build a

new entrance or exit on the throughway; and then when we lost

the Mianus bridge, we had a ramp built in 2 days. Admittedly, it

wasn’t up to spec and the cars didn’t move on it as quickly, but

they literally had to get off the throughway, I–95, get off and on.

People said, my God, what are we going to do? We had to do something. They came together and got the job done.

If I hear an analogy that this is like changing a car tire while

the car is moving, I am not going to think that it is Firestone. But

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what I am going to think of is, why don’t you get two damn cars?

And you have one on the side and you get the other system working and you work them both in tandem. The only reason you

wouldn’t do that is money, and that says to me that the Department feels that this is not a problem. And yet we are wasting billions of dollars.

So I just think it is a major mess. I am happy you all think

things are going pretty well.

Ms. SCHUSTER. I would just like to correct the record, if you got

the impression that I thought things were going well, because I do

not believe things are going well. What I see is a shift in the backlog into the investigative community, and I have real questions

about whether they have the capacity to deal with it.

Mr. SHAYS. You know what? I put words in your mouth purposely to elicit the statement that now I know you believe—now,

what is your statement?

Mr. MANCUSO. Exactly, Mr. Chairman. There are significant

problems. I mean, the train—to use another analogy, the train

seems to be back on the track and moving. It could fall off tomorrow.

Mr. SHAYS. But it is going backward.

Mr. MANCUSO. It is sliding a bit backward, that is right. All I can

tell you is we looked to evaluate their progress. What we finally see

is some hint that they are moving in the right direction. It remains

to be seen how successful they will be over time.

Mr. SHAYS. Fair enough. I accept the word hint. I can live with

the word hint.

Why don’t we get on to the next panel?

Do you have a question?

Mr. RAPALLO. Just one question. Has anyone tried to evaluate— you talked about the number of new investigations that might be

submitted over the next few years at 2 million and something. Has

anyone tried to evaluate the number of cases per day DSS would

have to do so that it was decreasing that, all this backlog, and we

would be improving? Is it 2,500 or something higher than that?

Ms. SCHUSTER. I think DSS would have to answer that, but the

target they have today is 2,500 per day, which they met in August

for the first time.

Mr. SHAYS. That is a pretty basic question, though.

Ms. SCHUSTER. That is right. It is a basic question.

Mr. SHAYS. If that is the target and you feel happy about the target, but there are—but the numbers have increased, maybe this

should not be the target.

Thank you all, both of you, very much. We will get to our next

panel.

I would ask Mr. Leonard, if you remain standing, and General

Charles Cunningham, we will swear you in and get right to your

testimony.

[Witnesses sworn.]

Mr. SHAYS. Note for the record both witnesses responded in the

affirmative.

Your written testimony will appear in the testimony. You are

free to read that or basically make any statement you want. You

are also free to answer any questions that have been asked.

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I want to say to both of you that I don’t put the blame in any

one place. I think the blame belongs in Congress, the blame belongs in the Department, the blame belongs in the agency. It belongs in many places. But the bottom line is I would like to think

we are going to see a major change, so that is my motive. What

is it going to take to see a real improvement?

We first want to know how you assess the problem, and then we

will go from there.

So, Mr. Leonard, why don’t we start with you, sir?

Mr. LEONARD. Thank you very much, Mr. Chairman.

Mr. SHAYS. Let me make another comment. I will let the clock

run, because I want both of you to make whatever testimony you

need to make. We will do it in 5-minute segments.

STATEMENTS OF J. WILLIAM LEONARD, DEPUTY ASSISTANT

SECRETARY OF DEFENSE FOR SECURITY AND INFORMATION OPERATIONS, COMMAND, CONTROL, COMMUNICATIONS AND INTELLIGENCE, DEPARTMENT OF DEFENSE; AND

GENERAL CHARLES CUNNINGHAM, DIRECTOR, DEFENSE SECURITY SERVICES

Mr. LEONARD. Thank you, sir. I would like to just summarize my

statement and submit the full written statement for the record.

But right up front, let me acknowledge to you, Mr. Chairman,

that I am sitting here before you as the individual who is personally responsible and accountable from an oversight, policy and

guidance perspective to oversee a solution to this problem and to

ensure that it doesn’t happen again. In no way, shape or form do

I or anyone else associated with my organization minimize the seriousness necessary of this issue.

I am hard-pressed to identify any similar type of situation that

so permeates every aspect of DOD operations as does this issue.

Maybe finance, it may be the only other one that maybe permeates

every element so severely, and I am truly cognizant of that impact.

Also, I am sitting before you with the full knowledge that a significant part of the solution is to address shortcomings in past

oversight from my organization, especially with respect to things

such as overseeing the acquisition of a major automation system

such as CCMS. I recognize that and am very much committed personally and organizationally to ensure that we address these issues

in the months to come.

At the last hearing, the Department—at that time we were engaged in the process of developing plans and procedures and funding to implement the recommendations of an overarching integration process team that then Deputy Secretary Hamre had convened

to address and refine and resolve the PR backlog problem.

On March 31st, Dr. Hamre directed that the OIPT recommendations for eliminating the PR backlog, at least, the 505,000 cases,

and that the necessary resources identified be obligated to accomplish this objective.

This plan included removing CCMS as a choke point by vectoring

a substantial portion of DOD’s high volume, lesser scope investigations to the Office of Personnel Management [OPM], in fiscal year

2001 and 2002. It balances the DOD investigative workload with

45 percent to be retained at DSS, 40 percent vectored to OPM, and

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15 percent to DSS’s private sector providers. The plan also extended the deadline for elimination of the investigative backlog

until fiscal year 2002.

More recently, the GAO completed a report, as we just heard before, for your committee on the backlog; and we did concur with the

two recommendations contained within the report. There were

some concerns expressed with respect to the various methodologies

used to arrive at the size of the backlog, and at the same time it

was also acknowledged that a more accurate assessment would

prove quite problematic. I personally am very frustrated by our inability to achieve greater granularity and insight into the exact

scope of this issue.

However, in the near term, the problem will be resolved, at least

a long portion of it will be, when DOD fields the Joint Personnel

Adjudication System [JPAS], in fiscal year 2001, which is the migration DOD personnel security system, which will require the continuing tracking and input of an individual’s actual access requirement upon which a periodic reinvestigation is based.

DOD has agreed with GAO with respect to the fundamental need

to do a better job in this area. We have also agreed with the recommendation to administratively terminate or downgrade individual security clearances unless their PR is completed or in process

by September 30, 2002.

In addition, in June of this year, the DOD comptroller, in close

coordination with my organization, the DOD components, DSS and

OPM, issued a spend plan, which provides detailed guidance regarding the submission of PR backlog cases to both DSS and OPM

over a 24-month period beginning next month. The plan, as recommended by the OIPT, requires that all military, secret and confidential, both initial and periodic reinvestigations, be sent to OPM

for completion. This includes investigations for military recruits as

well. All contractor investigations and military top secret initial

and periodic reinvestigations will remain with DSS, as will Army

accessions investigations.

Prior to this initiative, DOD components were directed by my organization to begin submitting all civilian investigations to OPM

beginning in October of last year.

All told, the spend plan calls for the conduct of almost 2.2 million

investigations, both initial and periodic, over the next 2 years, at

a cost of over $700 million. The total number of investigations destined for OPM over the next 2 years is in excess of 800,000 at a

cost of just over $200 million. OPM has been a close and cooperative partner in these initiatives and has ramped up its resources

in order to accommodate the additional work that will begin arriving actually in less than 2 weeks time.

In addition, in August of this year, my organization issued detailed instructions to the DOD components designed to successfully

accomplish the comptroller’s spend plan. This action has the advantage of relieving pressure on CCMS, thereby allowing it to more

rapidly process incoming investigations for top secret investigations, both initial and PR, for military and contractor personnel. It

will also help ensure the expeditious completion of accession investigations in less than 75 days so that most recruits should be imVerDate 11-MAY-2000 12:08 Sep 20, 2001 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 C:\DOCS\74831.TXT HGOVREF1 PsN: HGOVREF1
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mediately eligible for a security clearance by the time they complete their basic training.

While the above initiatives should assure that all delinquent PR

investigations are initiated by the end of fiscal year 2002, it does

not complete the process. The DOD Central Adjudication Facilities

[CAFs], will require additional staffing to accomplish the significant increase in workload to ensure that the backlog of cases does

not languish while awaiting adjudication.

The Deputy Secretary of Defense has recently commissioned yet

another review of this plan to ensure that it can be accomplished

at all levels and that all impediments have been identified and addressed. As we heard, the DOD IG is currently working on a report

on the same subject, and several of our CAFs are already embarked

on plans to hire temporary adjudicators as well as to utilize reserve

personnel to ensure a smooth and timely flow of cases.

There are a number of key successes to the overall spend plan.

First, the components must provide cases and funds as scheduled.

Second, DSS and OPM must be able to meet their production goals.

Third, adjudications must be accomplished in a timely manner.

Fourth, quality must be maintained in all phases of the process. Finally, and not least, DOD must do a better job in identifying investigative and clearance requirements and incorporating them into

the planning, programming and budgeting system so as to ensure

the availability of necessary resources and to preclude a reoccurrence of a problem.

There is a little bit of good news. The defense agencies have

funded this backlog out of hide and will for the most part be current by the end of fiscal year 2000, this month.

In addition, the DOD intelligence agencies, like—— Mr. SHAYS. I don’t understand what you say. They will be current?

Mr. LEONARD. Their individuals who have security clearances in

defense agencies and in the DOD Intel agencies will be current

with respect to reinvestigations in accordance with the national

standards, 5 years for top secret, 10 years for secret.

Mr. SHAYS. Current in what way?

Mr. LEONARD. Again, they will meet the national standard. The

national standard says, if you have a top secret clearance, your investigation must have been completed within the past 5 years. If

you have a secret clearance, the investigation must have been completed within the past 10 years.

Mr. SHAYS. You mean it will have been submitted?

Mr. LEONARD. Will have been submitted, yes, sir. Submitted and

funded.

Mr. SHAYS. But not investigated and adjudicated.

Mr. LEONARD. Clearly, a number of them will be in the queue.

Mr. SHAYS. Be careful what you are saying there. Don’t play a

mind game with me here.

Mr. LEONARD. Certainly.

Mr. SHAYS. You are saying that there will be no one in the Department who is up for review whose name won’t have been

submitted—— Mr. LEONARD. In the defense agencies and in the DOD portion

of the Intel community, yes.

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Mr. SHAYS. OK.

Mr. LEONARD. In the interest of time, what I would like to do is

really then defer to the rest of my written statement and turn it

over to General Cunningham and, more importantly, answer your

questions, Mr. Chairman.

Mr. SHAYS. Great.

[The prepared statement of Mr. Leonard follows:]

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Mr. SHAYS. General Cunningham.

General CUNNINGHAM. Thank you very much, sir. I would like to

submit my statement for the record.

Sir, this is a very serious problem, and while we are working it

hard, this does not mitigate the seriousness of the backlog. We are

now able to do more work. Our system is working much more in

accordance with architecture and specification than before.

As I reported to you before, we were going to have those elements in place. They are now in place and we are conforming to

them. Steady improvement is coming not only in the system but

also through the use of private sector augmenting contractors. They

are coming up to speed. Last time I was here, I told you we were

bringing them on. They are all on, except one. Which means we

have five, lacking one, which we expect to get completely in place

within the next couple of weeks. Good progress there.

I would like to talk now a little bit about the Case Control Management System itself. A year ago, CCMS was described in a TRW

study as appropriate to be scrapped; that the future of it was highly in doubt. I reported to you before that we would bring TRW back

at an appropriate time this summer to do an outside assessment.

They are conducting that assessment now.

They gave us an interim report, and I emphasize interim report,

because they have another week or 10 days to spend with us, but

they are surprised, in a positive way, with the progress that we

have made. They complimented us on the way we have done our

interdocumentation and improved the performance and reliability

of this system. Their forecast for bringing up the system is positive.

They agree with us and with the community that this system

should likely be replaced at some print. Indeed, with all IT you

should have that on your horizon, and we expect to bring that into

our next program objective memorandum, a replacement system

into the 5-year defense plan. Nevertheless, it will be served years

before this would come to fruition.

Our field operations have——

Mr. SHAYS. Let me say, and it is not meant to be a cheap shot,

but your comment that a system is always meant to have a new

system in place, that is the competitive model in the private

workplace—— General CUNNINGHAM. Yes, sir.

Mr. SHAYS. The competitive model in the private workplace is, if

you can’t do the job, you go out of business. And if you were a business, you would be out of business. Because we haven’t been able

to do the job, and there would be a new business that would have

replaced you.

So I just make the point to you that the more I think about this,

the more incredulous I feel. Because in the private workplace, they

would simply have solved the problem much more quickly, or they

wouldn’t exist. That is the problem we have in a government

model.

So, it is interesting the analogies we are going to draw to the private workplace.

General CUNNINGHAM. Sir, your point is well taken. But if I may,

this is the system we had a year ago. The mission is security. You

don’t stop or just shift gears like that. We had to work hard to

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make this thing come into spec to the degree it could be brought.

We did that. We have done that in a reasonable fashion. But, at

the same time, we would be fools to continue to say this is the ‘‘forever system,’’ operating with the future year’s defense plan, and

not put anything else in there to replace it. That is the point I was

trying to make.

Mr. SHAYS. I understand that.

General CUNNINGHAM. In the field, and there is a lot of human

participation in this, where our agents in the field conduct their investigations, we have improved the software for them. So, if you

will, their front office, their laptop, is now working in a much more

responsive way. The results are that we did get our target of 2,500

completed investigations in August. It was not a flash in the pan.

The systemic changes that have been made, sir, if I may

continue——

Mr. SHAYS. You can continue as much as you want. I just want

to give you a sense of every 5 minutes.

General CUNNINGHAM. Thank you, sir.

We know that we have to continue to be able to do better work

and to do it faster, and mechanization is very important in this. We

know that our system is not rocket science, and indeed that we

have to take care of our people. We are doing that.

We know that we have a backlog. The backlog is serious, and,

indeed, we have had a major input. But to be able to sustain our

2,500 DMC contract is not to stay at 2,500 but to go beyond that.

We feel we will do that.

I am happy to report to you today, two-thirds through the month

of September, that the August numbers met our contract, and we

will again meet our contract this month. In fact, we hope to go a

little bit beyond. That is going to be a regular thing with us. Are

there going to be problems along the way? Sure, but we are in a

far better position to deal with them.

Let me go on to what I think gets to your point, and it is an excellent one. What are we doing about it? What is in our future and

what do we need to do better? We have had a lot of discussion

within the Department of Defense, and I am happy to report there

is considerable progress, but the discussions that you had here

with the previous witnesses highlight that you must know the requirements up front in order to work a three-part process.

We talk about investigations, feeding adjudications. However, little is said about the importance of that well-defined, scrubbed and

prioritized requirement that is the first element in this three-part

process. We talked about this briefly the last time I was here.

What I am suggesting and what Ms. Shuster alluded to is our

ongoing discussions now with the military departments and the

need to plan, program and budget for security clearances in the

same way they plan, program and budget for everything else that

they do under Title X responsibilities within the military departments. The reception to that idea has been, I think, very good; and

that, too, is not rocket science. It is practiced every day in the Department. It is simply a matter of rolling this kind of requirement

into that same process. If you know you are going to have a

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quirements that will grow with that, then you program for the

MOSs to have those security clearances when they come.

All kinds of things follow from that. You understand as you move

into budget development what is eventually going to be required,

so you can shape that. Indeed, we agree with the plan that the Department has to work this backlog, and we think it will work. But

what happens after that will be driven largely by how we plan, program and budget.

Sir, in the interests of further discussion and your limited time,

I would like to leave it at that.

Mr. SHAYS. Thank you.

[The prepared statement of General Cunningham follows:]

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Mr. SHAYS. I have a vote, and I will vote and be back. It will take

between 10 and 15 minutes. We will be in recess, and I will be

back in 10 to 15 minutes.

[Recess.]

Mr. SHAYS. Mr. Leonard and General Cunningham, what I am

going to do is ask our staff on both sides of the aisle to ask some

questions first, and then I may interrupt them and have some

questions myself.

I will first recognize Vincent Chase.

Mr. CHASE. General, Mr. Leonard, I would like to ask a series

of questions as relates to the Case Control Management System.

First of all, it is our understanding that the initial system was

approximately—the cost to acquire and implement this system was

about $100 million. Can you tell us at this point how much money

you have spent to try to upgrade the system in order to handle the

DSS workload?

General CUNNINGHAM. Yes, sir. Last year, when we knew that

work had to be done oin the system, the President’s budget in January 2000 included an additional $22 million. We are now working

that within our base.

Our approved funding from 2001 on, that we have total in the

program for CCMS, is $180 million.

Mr. CHASE. So if I understand that, in order to implement the

three phases that we have discussed and the new target architecture, it is going to be how much?

General CUNNINGHAM. OK, let me go to what it took to get the

system working, stabilized. I think that was the first part of your

question.

That was the $22.9 million. Then to go beyond the stable and approved system the future years’ defense plan, and to take it out to

the target architecture, requires an additional $94 million. That is

currently in the budget development process. That is across all

years, out to 2007. No decision, of course, has been made on that

within the Department.

Mr. CHASE. Right. So we are talking about $116 million as a

grand total, roughly $116 million.

General CUNNINGHAM. That is in the approved program, to run

all of our operations and maintenance, everything involved in the

CCMS, not just developing it.

Mr. LEONARD. Actually operating it on a day-to-day basis.

Mr. CHASE. Do you see the additional funding that is going to be

needed down the road to get the system up?

General CUNNINGHAM. To take it through to our project architecture is reflected in our POM. We see nothing in addition to that.

Now, a follow-on system that would be included, should it make

sense in our next POM, that all needs to be worked out and priced.

That needs to be done within DSS and taken through the process

in C3I and through the whole comptroller process.

Mr. CHASE. The next question has to do with OPM, and it is related to the whole Case Control Management System.

We have transferred roughly, what, 40 percent of the workload

out of DSS. A portion of that has now gone to OPM.

Mr. LEONARD. As of October 1st.

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Mr. CHASE. Before you made that decision, did you look at their

Case Control Management System? I didn’t know if they called it

that, but basically the Case Control Management System they have

got, did you look at their system?

Mr. LEONARD. For incorporation——

Mr. CHASE. To make sure they could handle the workload.

Mr. LEONARD. Yes, we did look at their system. I can’t recall the

exact numbers off the top of my head. I can get back to you on

them.

But OPM was able to clearly demonstrate to us they were at a

fraction of their capacity from a system perspective, and that in

order to ramp up, so to speak, principally what they would have

to do would be to hire data input personnel, the people part of it.

That was the most significant part of their ramp-up.

From a system capacity point of view, yes, sir, they had the capacity to absorb roughly 400,000 additional investigations a year

for the next 2 years.

Mr. CHASE. Did you consider why their system was working as

well and maybe—did you, frankly, look at their system?

Mr. SHAYS. Would the gentleman just yield? Excuse me. Hold on

1 second. I just want to make sure I understand. You said 400,000

in the next so many years. I think that is too imprecise for the

committee; 400,000 when?

Mr. LEONARD. 400,000 in—it is either several thousand above or

below—I can’t recall off the top of my head—400,000 in fiscal year

2001 and 400,000 roughly in fiscal year 2002, for a total of 800,000

roughly investigations over the next 2 years.

Mr. SHAYS. That is good.

Mr. LEONARD. I can provide the precise numbers for the record,

if you would like.

Mr. SHAYS. I just wanted to have that.

Mr. CHASE. Just a couple more questions. When you looked at

OPM’s system, did you look the at the cost of their system?

Mr. LEONARD. From what perspective? From a perspective of

incorporating——

Mr. CHASE. From a perspective of procurement and acquisition

and implementation?

Mr. LEONARD. That clearly will have to be part of the equation.

As I mentioned right up front, oversight from my organization

has had shortcomings, especially with respect to the acquisition of

a major automation system. Clearly—and I am not telling the committee they don’t know—one of first steps you need to do in that

process is to analyze your alternatives. Clearly, one of the alternatives is, rather than build it yourself, can you get it somewhere

else?

That was not done to the fullest extent in the case of CCMS. We

are committed in terms of applying a maze-like process to the future architecture, and those types of issues will be addressed up

front before the Department commits itself to a future architecture

above and beyond what is needed to accomplish the plan as laid

out in the comptroller’s memo and to ensure that DSS has the continued capacity and capability to do that portion of the work that

will be directed toward them.

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Mr. CHASE. Will that process be part of the—it was recently implemented last year. It is the General’s contract he has with the

Department of Defense. Is that process part of that council review?

Mr. LEONARD. The maze-like process? That will be a process in

accordance with the 5,000 series of directives within the Department of Defense and also under C3I’s role also as the Chief Information Officer and Clinger-Cohen Act and the appropriate OPOMB directives.

Mr. CHASE. I just want to switch gears. General, the outside consultant was developing an algorithm that was going to ferret out

the riskiest cases in the backlog. Could you give us the status of

that?

General CUNNINGHAM. Yes, sir. The algorithm to which you are

referring to was the algorithm to discern from the electronic personnel security questionnaires those investigations that were likely

to be complicated and those that were likely to be fairly simple and

clean. We were able to make a very good correlation between responses given on the EPSQ and those who lose clearances later.

That has been completed; it has been tested; it will be implemented with our 2.2 version update of our software for CCMS.

That is scheduled to take place in 30 days, and we will have that

algorithm operating.

Mr. CHASE. OK.

Mr. SHAYS. David.

Mr. RAPALLO. General Cunningham, how many cases did you

close per day as of last February when we had the hearing?

General CUNNINGHAM. Last February we closed about 1,500.

That was our first move up after implementing our first improvements into the system. Prior to that, for the duration that we had

CCMS, we averaged between 900 and 1,000 a day.

Mr. RAPALLO. You are up to now—— General CUNNINGHAM. 2,500, slightly over.

Mr. RAPALLO. So your goal last February was an average of

2,500. So you are not quite there, but you are up to the 2,500?

General CUNNINGHAM. Yes, sir. When I signed the Defense Management Council contract, which was agreed to previously, I knew

that we could not do an average for the year of 2,500. It was out

of the question. I was signing that off well into the fiscal year. I

knew the state of the system. I watched daily what we were producing and where the problems were. But that train had left the

station, and so I lived with it.

At first, it was troublesome to me to be sitting with a contract,

knowing that I couldn’t deliver. Nevertheless, after I thought about

it for a while, I said, ‘‘This will be good for you. This will give you

something to work for.’’ And it was.

We put the mark on the wall in February, some months after I

had briefed Secretary Hamre, having done a regression analysis

with what we planned to do in the system, we would hit out DML

contract no later than August. Of course, that contract kept us

moving in that direction. We improved, as I predicted, in February,

March, April, May and June.

In late June, we ran into a situation, due to manual archiving,

we overshot the system. A data base administrator working hard

in the middle of the night and let it overshoot. It overshot, it

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overwrote times, it brought us down, and it took us most of the

month of July to recover.

That is more than a hiccough. That was devastating to us because we could have hit our 2,500 in June. We would have a longer

track record. We don’t have that. We can’t cry about that.

How do you fix that? Oracle version 8.1 that we will install in

4 months does not allow that to occur. That is part of our continuing development on this system.

Mr. LEONARD. Mr. Chairman, if I could add, this was your fundamental point; and it is important to acknowledge that, even with

DSS achieving their goal of 2,500 a day, this situation is getting

worse, because, quite frankly, General Cunningham is getting

3,000 a day in every day. You don’t have to be a rocket scientist

to figure out if you are getting in 3,000 and only putting out 2,500,

the problem is getting worse. However, that in part was the fundamental reason to enter into this partnership with OPM; and in

essence what our strategy is now is we will be vectoring off the

high volume but low intensity from a scope point of view, investigations, the highly automated investigations, to OPM. Their system

can absorb this very easily.

These are the automated record checks for recruits, for example

18-year-olds, and all you need to check is, do they have an arrest

record, those types of things. By vectoring those off to OPM, that

will create an environment for General Cunningham and his folks

where, quite frankly, if they keep up—they don’t even need to keep

up with 2,500 to be able to start eating into that backlog. That’s

a very significant point.

General CUNNINGHAM. Sir, if I may complement that a little bit,

add to that, even before the OPM strategic partnership, which we

applaud, last summer we began the development of these contractors to augment from the private sector as discussed last time. The

first two that were brought on were done before I got to DSS and

were done out of Mr. Leonard’s office to go by letter contract. Those

contractors alone, are producing now a little over 100 a day themselves. They will grow to 150 a day in the near future. That’s over

and above what we were considering within this 2,500.

In addition to that, the next batch of contractors that we brought

on, of the four I described earlier, we now have three on board.

They have the capability to eventually reach 250 a day, each, and

I expect them to hit that level in about a year.

Mr. RAPALLO. I think that capacity building is really positive, but

my question relates more to how you know ‘‘how many are coming

down the pike’’ kind of thing. It seems like there are a lot of factors

that could affect that. What are some of those factors? You have

reinvestigations coming due. That’s something you’re trying to figure out now.

Mr. LEONARD. I have to sit before you here this morning to express continued frustration and dissatisfaction from a departmental perspective that we cannot to this day we cannot answer

that question with the granularity that it deserves. The reasons for

that are varied. I don’t want to belabor that. I’ll be happy to go into

any depth you’d like to.

Mr. RAPALLO. Some, you can figure out.

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Mr. LEONARD. Yes, we can figure it out in a rough order of magnitude. That’s what we have done. But the basic problem is, we

have had a culture in the department where the clearance stuck

with the person as opposed to being tied to the job. And so individuals then, once they got put in for a TS SCI clearance, somehow,

some way that stuck with them irrespective of what future assignments they might have and what have you.

General Cunningham is absolutely, positively right. What we do

as a building, day in and day out, is we plan program and budget

for what our requirements are, whether it’s ships, ammunitions,

training for pilots and what have you. The problem is, clearances

up to this point in time have been treated like a commodity, just

like a government pen. I go to the file cabinet, I reach in and pull

it out, and that’s how it had been treated in the past; and that culture in part has led us to this problem.

What we have to instill within the Department is a culture that

this is—instead, as an asset; it’s an asset no different than people,

than systems, than training, and it has to be managed as an asset.

And if you don’t manage it as an asset, you are going to be given

even more headaches from a management point of view, as we

heard from Mr. Mancuso in terms of his headaches, just as a manager in terms of effectively utilizing his personnel.

I think Ms. Schuster said, pay me now, pay me later; that lesson

has been driven home, I think in spades, to every user within the

Department. And then the recognition, if I don’t plan and program

and budget for these like I do everything else in the Department,

we are never going to get to the heart and soul of this.

The Joint Personnel Adjudication System that we’re going to

start beta testing in 2 months, that’s not the answer, but it’s a tool.

It will be a tool that will be available to the services and to the

other components to begin to instill the discipline and the management that this very valuable asset needs; and we can’t be treating

them like office supplies, like we may have in the past when you

didn’t have to manage them.

Mr. RAPALLO. Just to be fair, though, there are some circumstances where you just can’t predict when you might need

them. I can’t remember if it was the GAO report or the IG’s——

Mr. LEONARD. And there are provisions, then, to work around

that. And we have been employing those provisions to work around

that when that happens. There are risk tradeoffs. And obviously

mission requirements can’t wait for an investigation, especially if

that investigation is going to take a year or more, especially if your

mission requirement is a military operation of some sort. There are

provisions for interim procedures, for risk-based approaches to

granting interim access, supplementing them with extra supervision or what have you, those provisions have been used in the

Department.

It’s a greater challenge. I have to manage my resources more so.

But there are these built-in provisions to the system that allow you

to manage it if you utilize these provisions appropriately.

Mr. RAPALLO. I think I understand what you’re saying. I was

talking about more systemic changes, like retirement age of a lot

of people.

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Mr. LEONARD. It goes beyond that, even. Just the way we conduct operations as a department; the revolution in military affairs,

what that means. What we saw in Kosovo is, we’re in an environment today now where our objective is to have a short cycle time

between eyes on target and when that shooter gets that information. What that entails now is that now your shooter, if you will,

F–15 pilot or whatever, needs real-time intelligence. It’s a change

in the way we do business. It’s a change in our doctrine. It drives

these types of requirements.

We need to be smarter when we’re recognizing that we’re upgrading our technical capabilities in this area, that, hey, these have

consequences; and what it means now is, I have more people having real-time, hands-on access to real-life intelligence. That means

they’re going to need the higher level clearances where they may

not have necessarily needed them in the past.

So you’re absolutely right. Again, I go back to my opening comment, it permeates every element to interpret how we do business.

Mr. RAPALLO. Maybe I could have one more question.

General, do you have any control over the number of cases coming into your office?

General CUNNINGHAM. No, sir.

Mr. RAPALLO. So you have no control. So you’ve just established

your goal at 2,500.

General CUNNINGHAM. No, the Defense Management Council.

Mr. RAPALLO. They establish the goal for you?

General CUNNINGHAM. OSD, which has a good sense of history,

established that goal because, as I understand it, it was very wisely

done. That was their sense of the number we would have to do to

be sure we would take care of initial requirements. But even at

that, that was an estimate, that was not a programmatic detailed

assessment.

Mr. RAPALLO. The number might go up, incoming, it might go

down in the future. Is your funding at all tied to that?

General CUNNINGHAM. Yes. I defer that to Bill.

Mr. LEONARD. Yes. Again, if you want to go back to how do we

get into this position, clearly one of the fundamental problems we

had—this goes back years; it’s nothing recent—is that there has

been a fundamental disconnect between requirements and this man

and his predecessor’s budget. We need to fix that if we’re going to

preclude this from happening again.

Mr. SHAYS. Bottom line—I have about 10 minutes, and I’d like

to just ask a few questions.

The bottom line question I have is just to get an answer to David’s question, in the sense of understanding what it means. Mr.

Leonard, you said that because you’re transferring 40 percent of

the cases, be they small cases, to OPM, that you don’t even need

to do the 2,500.

And I need to know under what context you make that statement. What is your goal?

Mr. LEONARD. Basically the goal is, we have the challenge to do

2.1 million investigations over the next 2 years. Of that portion, 45

percent of that belongs to DSS.

Mr. SHAYS. If you do 2.1 next year what does that mean?

Mr. LEONARD. That’s 2.1 million over 2 years. So——

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Mr. SHAYS. What does that mean?

Mr. LEONARD. It means that 45 percent of those, a little less than

900,000-and-some-odd will be coming in the front door at DSS over

the next 2 years.

What they need is, they need the cap—— Mr. SHAYS. I want to know what it means to the backlog.

Mr. LEONARD. What it means to the backlog?

Mr. SHAYS. I want to know what it means.

Mr. LEONARD. What it means is that at the end of that period,

if we generate—— Mr. SHAYS. After what? Don’t say ‘‘after the period.’’ What period?

Mr. LEONARD. At the end of fiscal year 2002, September 30,

2002.

Mr. SHAYS. We’re talking basically 2 years from now.

Mr. LEONARD. Two years from now, yes, sir, 2 years from next

week what that will achieve is that everyone who has a security

clearance, an active security clearance, will either have an investigation that is current in accordance with the national standards

or they will have submitted the paperwork and identified the funding to accomplish that investigation. That’s what that means.

Mr. SHAYS. What will the backlog be?

General CUNNINGHAM. Sir, may I try that? The backlog will be

eliminated because that work that’s coming in will be initial work

within our workload. That’s—in a business that’s called ‘‘carry-in.’’ Mr. SHAYS. I understand that. So basically your definition of

backlog—so then how long will it take to do a current case?

General CUNNINGHAM. By then, we will be able to do a case within 180 days. Our target is going to be less than 100 days.

Mr. SHAYS. I think that’s a joke. You mean, it takes 6 months

when we’re current, potentially it will take 6 months when we’re

current? If I were the President of the United States, I would be

outraged with that logic. In my own mind, I think I’ve got 4 years

to be President of the United States, and you’re telling me that basically one-eighth of my time is going to be spent with people who

are in process. You would just drive me crazy with that logic. Why

would we want it to take 6 months?

General CUNNINGHAM. We don’t want it to take 6 months, sir;

however—— Mr. SHAYS. I just say this: Why would we want to take 2 years

to get the backlog down? So you’re telling me that the next President of the United States is basically, potentially going to have a

backlog for half of their term.

General CUNNINGHAM. Sir, everybody who applies for a security

clearance does not have a clean background.

Mr. SHAYS. So?

General CUNNINGHAM. There are matters that need to be pursued.

Mr. SHAYS. Yes, sir.

Mr. LEONARD. And that 180 days is an average. There will be

cases that will be done especially for those critical positions critical

missions, that will be accomplished in 35 days.

Mr. SHAYS. And?

Mr. LEONARD. Pardon?

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Mr. SHAYS. And?

Mr. LEONARD. ‘‘And?’’ Mr. SHAYS. And then finish off the average. So it will be longer

than 6?

Mr. LEONARD. Some will be longer.

Mr. SHAYS. That’s crazy. I’m just telling you, in my judgment,

that’s just idiotic.

Will the record note one of the witnesses went like—lifted a hand

up in the air like—translate that for me, General.

General CUNNINGHAM. Sir, it is not necessarily idiotic. Because

we have to be very fair to the subject who is being investigated.

We have to be judicious in the leads that we run. We often learn

something during the investigation that requires other leads.

Mr. SHAYS. But you’re not suggesting to me, as soon as their case

is filed, that they start to investigate. It may take you 4 months

before you even start to investigate. So that’s just bogus.

General CUNNINGHAM. Not in that timeframe, it won’t, sir. It will

not take us 4 months.

Mr. SHAYS. Are you telling me everyone will begin their investigation within a month?

General CUNNINGHAM. Yes, sir.

Mr. SHAYS. You are?

General CUNNINGHAM. Yes, sir.

Mr. SHAYS. Say it to me.

General CUNNINGHAM. Sir, by the beginning of fiscal year 2003,

we will be in a position to begin the investigation for an actionable

EPSQ, electronic personal security questionnaire, within 30 days.

Mr. SHAYS. And then what happens?

General CUNNINGHAM. That’s what we call opening the case. The

investigation, the field work begins.

Mr. SHAYS. I just want to say, General, I don’t know if I’m going

to be around in 2 years. But, you know, just as in February we

wanted to hold your feet to the fire, to what was now—and hold

you accountable, you know, I hope whoever is in my position here

does the same thing, because you’re making a pretty strong statement.

General CUNNINGHAM. Yes, sir. I intend it to be that.

Mr. SHAYS. And I don’t see the logic of it. I don’t see the logic

of why a case is going to take, on the average, 6 months. I don’t

see the logic to that. I don’t see why that’s in our best national interest. I don’t see why anybody would want to claim that’s what

should be the case. So that causes me some concern.

General CUNNINGHAM. Sir, your concern is well placed. If I may,

I also said we would be striving to complete them within 100 days;

and if you’d like, I could explain more why I say that.

Mr. SHAYS. Well, we have a challenge with time. Let me get two

questions on the record right now.

DOD has shifted a considerable volume of investigations and reinvestigations to the Office of Personnel Management and outside

contract investigators. I’d like to ask both of you, what are the future projections for continued use of outside contractors? I’d like to

know, is the use of DSS outside contractors subject to an OMB Circular A–76 public-private cost comparison? And I want to know, if

not, why not?

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So those are my questions. So the first is, what are the future

projections for continued use of an outside contractor, contract investigators?

Mr. LEONARD. The plan that I outlined to you, Mr. Chairman, entailing vectoring the work off to OPM, is a 2-year plan; and the intent at this point in time is that at the end of the 2 years that type

of work would return back to DSS. However, I have to tell you, Mr.

Chairman, that I am enough of a realist to know that 2 years from

now, when we look back in terms of how we accomplished this, the

only thing I can probably be absolutely certain on is that it will not

have been in accordance with the plan. Because no plan is that omnipresent and what have you.

So what it will entail is close oversight, close scrutiny, continued

flexibility, and the ability to respond to changes as appropriate.

With respect to the outsourcing within DSS, I will let General

Cunningham answer that question.

Mr. SHAYS. The circular A–76.

General CUNNINGHAM. Sir, I do not know what will happen with

regard to A–76. I do know that we intend to continue to use private

sector contractors to augment our work, and that it’s essential that,

where serious derogatory information is encountered by contractors, working under DSS contracts——

Mr. SHAYS. Excuse me 1 second.

I’m sorry.

General CUNNINGHAM. I think it’s essential that those investigations that run into serious derogatory information being conducted

by contractors, default back to the Defense Security Service the

way in which we are working with our phase two augmenting contractors now.

Mr. SHAYS. Some believe the cost to upgrade CCMS will be $300

million, not $100 million. It was—the $100 million was—excuse

me, to upgrade it will be $300, and you had to spend #100 million

to acquire.

The OPM system cost $35 million and it seems to be working.

Just there’s obviously a reason, but if you—just 1 minute.

General CUNNINGHAM. Sir, the OPM system, it’s my understanding, involves some use of paper. Our system handles an extremely

high volume; and I think that’s an apples-and-oranges comparison.

Mr. SHAYS. Fair enough.

Mr. LEONARD. Could I make one point?

Mr. SHAYS. It’s got to be quick. I have 3 minutes to vote.

Mr. LEONARD. The only point I want to make, sir, is an issue of

standards. Changes in standards help get us into this perspective.

Overnight it created a backlog of almost 400,000 investigations

when we changed the investigative standard for Secret. What we

would ask the Congress for is to be mindful of that as the Congress

considers changing standards as well.

Mr. SHAYS. I think that’s fair. But I think you all should be asking when Congress does that, to provide all the resources you need

to get the job done.

Mr. LEONARD. Yes, sir.

Mr. SHAYS. I fault the administration, frankly. It’s not meant as

a political statement. I fault them for not realizing this is a big

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deal and putting all the pressure on Congress and then Congress

has to explain it. But we’re not even in that situation.

And I fault you all for not saying this needs to be done sooner

and we need the resources to do it. I don’t fault you for not getting

the job done if you don’t have the resources, but if you don’t ask

for them, then I have a problem with it.

Sorry to have the last word, but this hearing is adjourned.

[Whereupon, at 12:32 p.m., the subcommittee was adjourned.]

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