Personnel Security Inves

for Industry and the Na

Industrial Security Pro
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 Annual Report to Congress on 

 Personnel Security Investigations  for Industry and the National  Industrial Security Program  U.S. Department of Defense 

March 2009 
Annual Report to Congress on 

Personnel Security Investigations (PSI) for Industry and 

the National Industrial Security Program 

 This report complies with Section 347 of the John Warner National Defense Authorization Act for Fiscal Y

109-364). The NDAA requires the Secretary of Defense to include, in the budget justification documents submitte

support of the President’s budget for the Department of Defense (DoD), a report on the future requirements of DoD Personnel Security Investigations for Industry and the National Industrial Security Program (NISP) of the Defense (DSS). This is the third annual report. Data in this report provided by the Office of Personnel Management (OPMby DoD. 

Section I: The Funding Requirements of the Personnel Security Clearance Investigation Program 

the Secretary of Defense to Fund the Program. 

The FY08 total cost for Personnel Security Investigations for Industry (PSI-I) was $222.8 million. The Departm

million for FY09 requirements. In addition, the Department has approved the following PSI-I funding for FY10 to current projections and requirements known at the time of this report, this funding is expected to be sufficient: 

• FY10: $230.6 million • FY11: $235.2 million • FY12: $240.0 million • FY13: $244.7 million • FY14: $249.6 million • FY15: $254.6 million 

Industry PSIs for National Security Clearances are centrally funded through the Defense-Wide Operations 

appropriation. 
Section II: The Size of the Industry Personnel Security Clearance 

 Adjudication and Investigation Process Backlog

As part of the DSS mission to facilitate the personnel security clearance process for industry, the Defense I

Clearance Office (DISCO), a DSS component, is responsible for the adjudication of PSI-Is on behalf of DoD and 2

agencies in the National Industrial Security Program. During FY08, the pending case inventory at DISCO declinemarking a 90% reduction in pending adjudication inventory. 

FY08 DISCO Pending Adjudications Chart 

Oct-07 Mar-08 Jun-08 Sep-08 Delta 

Case Type (Start of Q1) (End of Q2) (End of Q3) (End of Q4) (Q1 vs Q4) 

NACLC 11,449 488 240 1953 -83% 

SSBI 9,337 5,625 30 354 -96% 

SBPR 4,899 3,752 5,973 757 -85% 

PPR 8,945 4,923 4,210 330 -96% 

Total 

Pending 34,630 14,788 10,453 3,394 -90% 
OPM Pending Cases ReportF1

Pending Cases at the close of FY08 (9/27/08) for Initial Investigations 

The following OPM data depicts open DoD National Industrial Security Program initial investigations case

the end of FY08 (includes cases not scheduled) as well as those pending more than 90 days or more, in successive 

Case Type 

Total Pending 

91-120 

121-150 

151-180 

181-210 

211-240 

241-270 

271-300 

301-330 

331-360 >360 

Total Cases 90 < 

Standard SSBIF2 6,720 406 130 75 40 13 9 8 4 0 3 688 NACLCF3 15,561 530 245 156 60 10 11 14 7 2 9 1,044 Totals 22,281 936 375 231 100 23 20 22 11 2 12 1,732 

• In all, there was a 47% reduction in the number of total pending investigations at the end of FY08 (22,281) 

of FY07 (42,128). 

• 8% (1,732 out of 22,281) of investigations were more than 90 days old. This is a 28 percentage point imp

close of FY07 where 36% of investigations were more than 90 days old. 

1 Data Source OPM, Pending Case Report 2 SSBI – Single Scope Background Investigations are for Top Secret Clearances 3 NACLC – National Agency Check, with Local and Credit Check Investigation for Initial Secret Clearances and Periodic Reinvestigatio
OPM Pending Cases ReportF4

Pending Cases at the close of FY08 (9/27/08) for Periodic Reinvestigations

The following OPM data depicts open DoD National Industrial Security Program periodic reinvestigation c

at the end of FY08 (includes cases not scheduled) as well as those pending more than 180 days or more, in successCase Type 

Total Pending 

181-210 

211-240 

241-270 

271-300 

301-330 

331-360 >360 

Total Cases 180 < 

SSBIPRF5 4,167 34 14 5 8 5 2 37 105 Phased PRF6 6,408 24 12 9 5 4 3 7 64 Totals 10,575 58 26 14 13 9 5 44 169 

• In all, there was a 43% reduction in the number of total pending reinvestigations at the end of FY 08 (1

end of FY07 (18,696). 

• 2% (169 out of 10,575) of reinvestigations were more than 180 days old. This is a 34 percentage point imp

close of FY07 where 36% of reinvestigations were more than 180 days old. 

4 Data Source OPM, Pending Case Report 5 SSBI-PR – Single Scope Background Investigation for Periodic Re-evaluation for Top Secret Clearances 6 Phased-PR – is a streamlined investigation used for cases where derogatory information is not present and is for re-evaluation for Top S
Section III: The Length of the Average Delay for an Individual Case Pending in 

 the Personnel Security Clearance Investigation Process The National Industrial Security Program Policy Advisory Committee (NISPPAC) Ad Hoc Working Grou

members from Industry, OPM, DSS and the Information Security Oversight Office, compiled end-to-end processin100% of initial Top Secret and Secret clearances during FY08. Below are process timelines for closed cases, by c

FY 2008 Sub-Step Timeliness – Closed CasesF∗

Averages (Days) 

Sub-Step SSBI NACLC SSBI PR 

Industry Prep 19 18 22 

DISCO Open 2 2 2 OPM Open 24 16 8 OPM Invest 114 82 150 Mail to DISCO 14 14 14 Adjudication 50 27 83 TOTAL 223 159 279 

The Intelligence Reform and Terrorism Prevention Act (IRTPA) of 2004 mandates the development of a plan to re

personnel security clearance process. To the extent practicable, the plan shall require that each authorized adjudicdetermination on at least 90 percent of all applications for clearances within an aver age of 60 days from the date o

completed application. The act states that not more than 40 days should be spent on investigative phase and not mshould be spent on the adjudicative phase. The plan shall take effect by December 2009. During the fourth quarteclearances averaged 102 days to complete 90 percent of initial clearances end-to-end (this average covers only invadjudication times). This is a significant improvement over the first quarter of FY08 when the average was 167 da

7 The NISPPAC is a Federal Advisory Committee established on January 8, 1993, by Executive Order 12829, “National Industrial Securi

NISPPAC advises the Committee Chair on all matters related to the NISP, and is chaired by the Director of the Information Security Ove

∗ Pending (open) case data not available at time of publication. 
Section IV: Any Progress Made by the Secretary of Defense During the 12 

 months Preceding the Date on Which the Report is Submitted 

 Toward Implementing Planned Changes in the Personnel Security 

 Clearance Investigation Process. 

DSS’s Personnel Security Clearance Liaison Office (CLO) is responsible for working with OPM and DoD com

oversight and improvement of the DoD personnel security investigation process. CLO initiatives in FY08 include

• Rapid Assessment of Incomplete Security Investigations (RAISE): RAISE is an automated investigation q

for use by adjudicators to assess and measure whether investigations meet the scope of the national investigwhether issues known at case opening or developed during a PSI are resolved before case closing. This qu

identify deficient investigations and provide data that will facilitate improvements in the investigative procbe deployed at DISCO during the second quarter of FY09. 

• Secure Web Fingerprint Transmission (SWFT): All initial national security investigations require submiss

part of the request for investigation to OPM. SWFT is a program that permits electronic submission of fingJuly 2008, DSS launched a pilot program with a test group of key cleared contractors. Full program implethird quarter of FY09. Electronic fingerprint transmission will reduce fingerprint rejection rates as well as timeliness. 

• Joint Personnel Adjudication System (JPAS) Enhancement: This enhancement allows DoD to identify spe

processing needs to OPM via JPAS, such as identify the method of fingerprint delivery to OPM, and proceU.S. citizenship, prior to the start of the investigation rather than post investigation completion which will timelines. Additional enhancements will be deployed in DoD in conjunction with the new OPM Standard second quarter FY09. 
The DSS Personnel Security Clearance Oversight Office (COO) is responsible for estimating the annual PSI w

for DoD, monitoring PSI funding, resolving billing issues between DoD and OPM and working with OPM on met

in FY08 include: 

• DSS Security Clearance Process Metrics Oversight Report: DSS produces a monthly statistical summary o

Security investigation processing metrics and other elements of the security clearance process. The report metrics, projected vs. actual case volume, DoD pending case inventory levels, and DoD Central Adjudicati

adjudication metrics. The report is distributed to staff of the Undersecretary of Defense for Intelligence, th

the Defense Agencies as a monthly personnel security program evaluation tool. The assessment tool has b

has assisted recipients in tracking actual PSI submissions against budget projections. 

• Personnel Security Investigations for Industry Requirements Survey: On April 14, 2008, DSS deployed its 

survey to 10,953 cleared Industry Facility Security Officers representing 12,189 cleared facilities for the pu

PSI-I requirements. The projections are the key component in Future Years Defense Program (FYDP) DSplanning and budgeting for NISP security clearances. With more than 83% of cleared contractor facilities (representing 92% of the cleared contractor population), the survey has proven to be highly effective in pro

security clearance requirements. Projections provided from the survey in FY07 were 103.9% of actual sub

of FY08, industry clearance eligibility submissions were .9% above projections, which is well within the Osurvey results be +/- 5% of actual submissions. 

• Weekly PSI Budget Checkbook: DSS monitors DoD component submission of personnel security clearanc

distributes to each component a weekly summary report of PSI expenses to date and a projection of expens

The report identifies actual submissions by case type and cost. Estimated annual expenditures are based on security investigation case projections provided by each agency, plus a 3.2% adjustment for the costs assoc

Interview (SPIN) and Reimbursable Security Interview (RSI). The report is an excellent picture of actual P

to the PSI budget and assists DoD components in identifying potential or actual budget shortfalls.

• PSI Billing Automation: The current method of processing bills received from OPM by DoD includes both 

processes. DSS is completing development of a fully automated system to improve accuracy, correctly idecomponents’ separate shares of the OPM bill and efficiently process bills for payment. The PSI billing syst

consistent customer files, which will lead to accurate communication and will facilitate prompt payments bThe billing system will be operational during the fourth quarter of FY09. 
• Billing Transaction Database: DSS has developed a billing transaction database which depicts the cost of a

investigations since FY06. The database is a useful audit tool to identify discrepancies in OPM invoices fo

investigations. Every PSI transaction is grouped by special key identifier and allows DSS to identify poten

duplicate billing entries. The database has been instrumental in identifying OPM billing system anomalies charges for Entrance National Agency Check (ENTNAC) to National Agency Check with Local and Crediconversions. 

In 2004, Congress enacted the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). IRTPA m

for improving timeliness for both personnel security investigations and adjudications. DISCO, the DSS adjudicati

exceeded the mandated IRTPA guidelines for completion of adjudications. During FY08, DISCO achieved signifreducing average adjudication process times as well as increasing the number of adjudications completed. These g

through mandatory overtime and increased proficiency of adjudicators hired during the last 12 to 18 months. 

• In FY08, DISCO completed 90% of initial adjudications in 20 days. This exceeded the 25-day intermediat

established by the Office of Management and Budget by five days. 

• DISCO increased the number of interim personnel security clearance eligibilities granted by 11%, from 82

in FY08. 

• DISCO increased the number of initial personnel security clearance adjudications measured by IRTPA by 

FY08 (from 111,415 in FY07 to 150,333 in FY08). 

• DISCO increased the number of all adjudications (initial and other) by 38%, from 139,345 in FY07 to 191

• DISCO increased the number of overall personnel security clearance eligibilities granted by 30%, from 139

181,179 in FY08. 
Personnel Security Clearance Eligibilities Granted by DISCO FY05 - FY08 

Year Top Secret Secret Confidential FY08 73,063 108,115 1 FY07 40,494 98,909 4 FY06 34,098 92,980 0 FY05 34,512 73,306 528 

During FY08, DISCO developed the following initiatives to improve the personnel security clearance process: • DISCO Satellite Office: DSS established a DISCO satellite office in the vicinity of Fort Meade, Md., in FY

disruptions involved with the pending relocation of DISCO from Columbus, Ohio, to Fort Meade in 2011, connection with the 2005 Base Realignment and Closure (BRAC) Commission recommendations. 

• Clearance Adjudication Tracking System (CATS): DISCO is working with the Army and the DoD Busine

Agency (BTA) to adopt the Army's CATS system. Implementation of the system at DISCO is scheduled fCATS system will include a JPAS/CATS interface and will enable DISCO to receive and process reports oelectronically vice manually and will assist in managing work flow to DISCO adjudicators. 

In FY08 the Department completed its’ development of the Level 1 DoD Adjudicator Certification Program, a 

Training and Awareness (SETA) initiative. This certification program will promote verifiable and sustained comp

adjudicative workforce through training, initial testing, and approved continuing education. DSS is responsible to 

maintaining the program. The certification program will be implemented during the second quarter of FY09. 
SECTION V: Determination by the Secretary of Defense of whether the 

 Personnel Security Clearance Investigation Process has Improved 

 During the 12 months Preceding the Date of the Report 

 The Department of Defense is committed to working with Congress to improve the personnel security procthis document, the Department of Defense has made improvements in the funding and management of its PSI proc

timeliness of adjudications and significantly reduced the pending adjudicative inventory. The Department continuSecurity and Suitability and Reform Team and will work toward making more significant improvements in the fut
PL 109-364, SEC. 347. ANNUAL REPORT ON PERSONNEL SECURITY 

INVESTIGATIONS FOR INDUSTRY AND NATIONAL INDUSTRIAL SECURITY PROGRAM 

(a) ANNUAL REPORT REQUIRED.—The Secretary of Defense shall include in the budget justification docu

Congress in support of the President’s budget for the Department of Defense for each fiscal year, a report on the fu

the Department of Defense with respect to the Personnel Security Investigations for Industry and the National Indu

Program of the Defense Security Service. 

(b) CONTENTS OF REPORT. —Each report required to be submitted under subsection (a) shall include the f

(1) The funding requirements of the personnel security clearance investigation program and ability of the S

fund the program. 

(2) The size of the personnel security clearance investigation process backlog. 

(3) The length of the average delay for an individual case pending in the personnel security clearance inve

(4) Any progress made by the Secretary of Defense during the 12 months preceding the date on which the 

toward implementing planned changes in the personnel security clearance investigation process. 

(5) A determination certified by the Secretary of Defense of whether the personnel security clearance inve

improved during the 12 months preceding the date on which the report is submitted. 

 (c) COMPTROLLER GENERAL REPORT.—Not later than 180 days after the Secretary of Defense submits t

under subsection (a), the Comptroller General shall submit to Congress a report that contains a review of such repo

General’s report shall include the following: 

(1) The number of personnel security clearance investigations conducted during the period beginning on O

ending on September 30, 2006. 

(2) The number of each type of security clearance granted during that period. 

(3) The unit cost to the Department of Defense of each security clearance granted during that period. (4) The amount of any fee or surcharge paid to the Office of Personnel Management as a result of conduct

security clearance investigation. 

(5) A description of the procedures used by the Secretary of Defense to estimate the number of personnel 

investigations to be conducted during a fiscal year. 

(6) A description of any plan developed by the Secretary of Defense to reduce delays and backlogs in the p

clearance investigation process. 

(7) A description of any plan developed by the Secretary of Defense to adequately fund the personnel secu

investigation process. 

(8) A description of any plan developed by the Secretary of Defense to establish a more stable and effectiv

Investigations Program.