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[House Report 107-767]
[From the U.S. Government Publishing Office]

107th Congress                                                  Report
                       HOUSE OF REPRESENTATIVES                 
 2d Session                                                     107-767
_______________________________________________________________________

                                     

                                     

                                     

                                                 Union Calendar No. 482

 DEFENSE SECURITY SERVICE: THE PERSONNEL SECURITY INVESTIGATIONS [PSI] 
              BACKLOG POSES A THREAT TO NATIONAL SECURITY

                               __________

                              SIXTH REPORT

                                 by the

                     COMMITTEE ON GOVERNMENT REFORM

                                     

                                     

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

October 24, 2002.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California             PATSY T. MINK, Hawaii
JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia                    DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida                  ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California                 DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky                  JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia               JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania    THOMAS H. ALLEN, Maine
DAVE WELDON, Florida                 JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida              DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho          STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia                      ------
JOHN J. DUNCAN, Jr., Tennessee       BERNARD SANDERS, Vermont 
JOHN SULLIVAN, Oklahoma                  (Independent)

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director

 Subcommittee on National Security, Veterans Affairs and International 
                               Relations

                CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida              DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York         BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida         THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York             TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio           JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky                  JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
DAVE WELDON, Florida                 DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho          STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia

                               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

                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                  Washington, DC, October 24, 2002.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: By direction of the Committee on 
Government Reform, I submit herewith the committee's sixth 
report to the 107th Congress. The committee's report is based 
on a study conducted by its Subcommittee on National Security, 
Veterans Affairs and International Relations.
                                                Dan Burton,
                                                          Chairman.

                                 (iii)

                                     

                             C O N T E N T S

                                                                   Page
  I. Summary..........................................................1
        Findings.................................................     1
        Recommendations..........................................     2
 II. Background.......................................................2
III. Discussion......................................................11
        Findings.................................................    11
        Recommendations..........................................    36

                                  (v)

                                                 Union Calendar No. 482
107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-767

======================================================================

 
 DEFENSE SECURITY SERVICE: THE PERSONNEL SECURITY INVESTIGATIONS [PSI] 
              BACKLOG POSES A THREAT TO NATIONAL SECURITY

                                _______
                                

October 24, 2002.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Burton, from the Committee on Government Reform submitted the 
                               following

                              SIXTH REPORT

    On October 9, 2002, the Committee on Government Reform 
approved and adopted a report entitled ``Defense Security 
Service: the Personnel Security Investigations [PSI] Backlog 
Poses a Threat to National Security.'' The chairman was 
directed to transmit a copy to the Speaker of the House.

                               I. Summary

    The Government Reform Committee, National Security, 
Veterans Affairs and International Relations [NSVAIR] 
Subcommittee conducted an oversight investigation of the 
Defense Security Service. The subcommittee examined the 
agency's personnel security investigation [PSI] program to 
determine the reasons behind a growing PSI backlog. Personnel 
security investigations are conducted to determine whether an 
individual should be granted access to classified information. 
This is a critical first step in safeguarding the Nation's 
secrets.

Findings:

        1.  The Defense Security Service cannot accurately 
        determine the size or forecast the elimination of the 
        personnel security investigations backlog.
        2.  There was a lack of management oversight of the 
        Defense Security Service by the Department of Defense 
        [DOD] that contributed to a backlog of personnel 
        security investigations.
        3.  Acquisition of the Case Control Management System 
        [CCMS] and the Joint Personnel Adjudication System 
        [JPAS] did not comply with the requirements of the 
        Clinger-Cohen Act and may not provide effective 
        caseload management.
        4.  There are no common standards for investigating 
        and adjudicating a personnel security clearance in a 
        timely manner.
        5.  Defense Security Service and the Office of 
        Personnel Management [OPM] personnel security clearance 
        investigators have difficulty accessing State and local 
        criminal history record information [CHRI].

Recommendations:

        1.  The Secretary of Defense should continue to report 
        the personnel security investigations program including 
        the adjudicative process as a material weakness under 
        the Federal Managers' Financial Integrity Act to ensure 
        needed oversight is provided to effectively manage and 
        monitor the personnel security process from start to 
        finish.
        2.  The Secretary of Defense should set priorities and 
        control the flow of personnel security investigation 
        requests for all DOD components.
        3.  The Secretary of Defense should closely monitor 
        the interface between JPAS and CCMS to ensure effective 
        management of investigative and adjudicative cases and 
        avoid further backlogs.
        4.  The National Security Council should promulgate 
        Federal standards for investigating and adjudicating 
        personnel security clearances in a timely manner.
        5.  The Secretary of Defense and the Attorney General 
        jointly should develop a system which allows DSS and 
        OPM investigators access to State and local criminal 
        history information records [CHIR].

                             II. Background

    Acts of espionage have had serious consequences for the 
United States, military personnel and citizens. To prevent acts 
of espionage, and to ensure the interests of the United States 
are protected requires certain information concerning national 
security be protected against unauthorized disclosure. 
Information may not be classified unless its unauthorized 
disclosure reasonably could be expected to cause damage to 
national security. The degree of expected damage from 
unauthorized release determines which of the three levels of 
classification will be applied: TOP SECRET--``exceptionally 
grave damage'' to the national security; SECRET--``serious 
damage'' to the national security; and, CONFIDENTIAL--
``damage'' to the national security.\1\
---------------------------------------------------------------------------
    \1\ Executive Order No. 12356 of Apr. 2, 1982, National Security 
Information Guidelines, Sec. 1.1, Classification Levels, Code of 
Federal Regulations, Office of the Federal Register National Archives 
and Records Administration.
---------------------------------------------------------------------------
    Each year thousands of classified programs and projects are 
carried out by the U.S. Government. These activities generate 
millions of items of classified documents and information used 
by the military, civilian and contract employees. This 
classified information is not only in the form of documents. An 
enormous inventory of classified equipment and components must 
be safeguarded. Increasingly, classified data is being 
processed, transmitted and stored electronically, posing 
serious new problems of protection.
    The Department of Defense through the Defense Security 
Service conducts personnel security investigations [PSI] to 
determine whether an applicant should be granted access to 
classified information. Upon completion of the PSI by DSS, the 
information collected is sent to one of eight adjudication 
facilities for security clearance determination.\2\
---------------------------------------------------------------------------
    \2\ Executive Order No. 12968 of Aug. 2, 1995, Access to Classified 
Information, Sec. 1.2, Access to Classified Information, Code of 
Federal Regulations, Office of the Federal Register National Archives 
and Records Administration.
---------------------------------------------------------------------------
    At the end of fiscal year 2001 DSS reported, 2,127,476 
active duty military, civilian, and contractor employees held 
personnel security clearances: 62,108 employees held 
confidential clearances, 1,607,727 employees held secret 
clearances, 209,897 held top secret, and 247,744 held top 
secret/SCI clearances. On average, an initial top-secret 
investigation takes DSS approximately 521 days to complete and 
the Office of Policy and Management approximately 108 days to 
complete and costs approximately $2,400 per investigation for 
DSS and approximately $2,775 per investigation for OPM.\3\
---------------------------------------------------------------------------
    \3\ Email from Lt. Colonel Leo Clark, Office of the Secretary of 
Defense, Subject: DSS Final Report, Feb. 15, 2002, (in subcommittee 
files).
---------------------------------------------------------------------------
    The Department of Defense is requesting $443.0 million for 
DSS operations for fiscal year 2003 a decrease of $51.3 million 
over fiscal year 2002.\4\ The investigation budget for DSS and 
OPM is $269.7 million and $157.4 million respectively.\5\ 
Despite the overall reduction, DOD is requesting an additional 
$3.6 million for case control management system improvements in 
fiscal year 2003 and increase of 29 percent over fiscal year 
2002.\6\
---------------------------------------------------------------------------
    \4\ Defense Security Service, Fiscal Year 2003 Budget Estimates, 
February 2002, Exhibit Fund-14 Revenue and Expenses, (in subcommittee 
files).
    \5\ See supra note 3.
    \6\ Defense Security Service, Fiscal Year 2003 Budget Estimates, 
February 2002, Exhibit Fund-9a, Activity Group Capitol Investment 
Summary, (in subcommittee files).
---------------------------------------------------------------------------
    Three primary business areas comprise the DSS mission: No. 
1, the Personnel Security Investigations Program, the 
investigations conducted under this program are used by the DOD 
adjudication facilities to determine an individual's 
suitability to enter the armed forces, to access classified 
information, or to hold a sensitive position within the 
Department of Defense; No. 2, the National Industrial Security 
Program [NISP] established by Executive Order 12829,\7\ which 
primarily ensures private industry, colleges, and universities 
that perform government contracts or research safeguard 
classified information in their possession; and No. 3, the 
Security Training and Education Program, which provides 
security education and training programs to support DSS 
components, DOD agencies, military departments and 
contractors.\8\
---------------------------------------------------------------------------
    \7\ Executive Order No. 12829 of Jan. 6, 1993, National Industrial 
Security Program, Code of Federal Regulations, Office of the Federal 
Register National Archives and Records Administration.
    \8\ Defense Security Service, FY2003 Amended Budget Submission, 
February 2002, p. DSS-2, (in subcommittee files).
---------------------------------------------------------------------------
    In addition, DSS supports counterintelligence, operation 
and maintenance, and research and development activities of the 
Department of Defense Polygraph Institute [DODPI].\9\ DODPI is 
an educational, research and policy-establishing institute for 
the forensic discipline of psychophysiological detection of 
deception. The Defense Security Service is under the direction, 
authority, and control of the Office Assistant Secretary of 
Defense (Command, Control, Communications and Intelligence) 
(OASD-C3I) in accordance with the provisions of DOD Directive 
5105.42.\10\
---------------------------------------------------------------------------
    \9\ Ibid., p. DSS-11.
    \10\ Department of Defense, Directive No. 5105.42, Subject: Defense 
Security Service [DSS], May 13, 1999, (in subcommittee files).
---------------------------------------------------------------------------
    Top secret, secret, and confidential clearances require 
reinvestigation every 5, 10, and 15 years, respectively. The 
importance of reinvestigating and reevaluating a personnel 
security clearance is as much a matter of national security as 
the original background check. According to GAO, failure to 
have an up-to-date security clearance would pose a threat to 
national security.\11\
---------------------------------------------------------------------------
    \11\ Testimony of Carol R. Schuster, Associate Director, U.S. 
General Accounting Office, NSVAIR Subcommittee hearing, Serial No. 106-
267, p. 38.
---------------------------------------------------------------------------
    DSS conducts personnel security background investigations 
within the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the trust territories. DSS 
requests the military departments and other U.S. Government 
agencies, as appropriate, to complete investigative leads in 
areas not set forth above.\12\
---------------------------------------------------------------------------
    \12\ Defense Security Service, Personnel Security Investigation 
Manual, revised Oct. 15, 1999, 1-329. DSS PSI Mission, pp. 6-7, (in 
subcommittee files).
---------------------------------------------------------------------------
    A Defense Security Service personnel security investigation 
[PSI] is intended to determine an individual's loyalty to the 
United States, character, trustworthiness, honesty, 
reliability, discretion, and judgment are such that the person 
can be expected to comply with government policy and procedures 
for safeguarding classified information.\13\
---------------------------------------------------------------------------
    \13\ See supra note 2, Sec. 3.1.
---------------------------------------------------------------------------
    In 1994, the Joint Security Commission determined 
``national security policy was fragmented and lacked an 
effective mechanism to ensure commonality. Multiple groups with 
differing interests and authorities worked independently of one 
another with insufficient integration of security policy and 
procedures.'' \14\ Because of this fragmentation of security 
policy and structure, the President established the Security 
Policy Board to consider, coordinate, and recommend policy 
directives for national security. The Security Policy Board was 
the principal mechanism for reviewing and proposing to the 
National Security Council [NSC] legislative initiatives and 
Executive orders pertaining to security policy, procedures and 
practices that do not fall under the statutory jurisdiction of 
the Secretary of State.\15\ \16\
---------------------------------------------------------------------------
    \14\ Redefining Security: A Report to the Secretary of Defense and 
the Director of Central Intelligence, p. 2, Feb. 28, 1994, Joint 
Security Commission, Washington, DC 20505.
    \15\ Security Policy Board Mission Statement (in subcommittee 
files).
    \16\ The Bush administration transferred the duties assigned to the 
Security Policy Board to NSC Policy Coordination Committees pursuant to 
Presidential Directive, NSPD-1, Organization of the National Security 
Council System, Feb. 13, 2001, (in subcommittee files).
---------------------------------------------------------------------------
    In August 1995, under Executive Order 12968, ``Access to 
Classified Information,'' the President directed the Board to 
develop a set of uniform investigative standards and 
adjudicative guidelines for determining eligibility for access 
to classified information.\17\ In 1997, the Security Policy 
Board issued standard procedures to govern the access to 
classified information.\18\ The investigative standards 
developed by the Security Policy Board include examination of:
---------------------------------------------------------------------------
    \17\ See supra note 2.
    \18\ Security Policy Board, Investigative Standards for Background 
Investigations for Access to Classified Information, SPB Issuance 1-97, 
Mar. 24, 1997, (in subcommittee files).
---------------------------------------------------------------------------
  Birth and citizenship records;
  Corroboration of education;
  Verification of employment for the past 7 years and 
interviews with supervisors and co-workers:
  Interviews with character references with social 
knowledge of the subject;
  Neighborhood checks and interviews with neighbors to 
confirm all residences for the past 3 years;
  National agency checks including the FBI and CIA;
  Financial review including a credit bureau check;
  Local agency check of criminal history records and 
other public records to verify any civil or criminal court 
actions involving the individual; and
  A personal interview with the individual.
    The objectives of the investigative standards are to (1) 
examine and assess various aspects of an individual's 
trustworthiness and reliability, taking into account both 
positive and negative issues and (2) bring some uniformity and 
consistency to Federal processes to avoid unnecessary and 
costly reinvestigations when an individual switches 
agencies.\19\
---------------------------------------------------------------------------
    \19\ See supra note 2, Sec. 2.4.
---------------------------------------------------------------------------
    The standards for reinvestigations are essentially the same 
as those for initial investigations, with two exceptions. 
Reinvestigations do not require corroboration of proof of birth 
and citizenship, and education. The basis for not requiring 
this information for reinvestigation cases is that it is 
obtained in the initial investigation, and does not change.\20\
---------------------------------------------------------------------------
    \20\ Ibid.
---------------------------------------------------------------------------
    The process of obtaining a security clearance begins with a 
request from a military commander, contractor, or other DOD 
official for a security clearance for an individual because of 
the sensitive nature of his or her duties. The individual 
completes the appropriate personnel security form for the level 
of classification needed--CONFIDENTIAL, SECRET, or TOP 
SECRET.\21\ The Personnel Security form requires the candidate 
for a security clearance to provide personal background 
information needed to conduct the personnel security 
investigation. The questionnaire is then forwarded to the 
Defense Security Service's Operations Center.
---------------------------------------------------------------------------
    \21\ See supra note 12, Sec. 4, pp. 14-15.
---------------------------------------------------------------------------
    Defense Security Service analysts review clearance requests 
to ensure all necessary forms are complete, develop a scope for 
the investigation, and assign the required work to 1 or more of 
the 12 DSS field-operating locations throughout the United 
States. An investigation may be sent to one or more operating 
locations depending on where the individual seeking clearance 
has lived, worked, or attended school. Once received in the 
field, an investigation is assigned to an investigator who 
seeks information in that geographic location about the 
individual's loyalty, character, reliability, trustworthiness, 
honesty, and financial responsibility.
    As the investigation elements are completed, the field 
sends reports to the DSS Operations Center, where case analysts 
determine if all investigative criteria have been met and all 
issues relevant for a clearance decision have been resolved. 
DSS sends the completed investigation to one of eight 
adjudication facilities for security clearance determination.
    The Army, Navy, Air Force, the National Security Agency 
[NSA], the Defense Intelligence Agency [DIA], the Defense 
Office of Hearings and Appeals [DOHA], the Joint Chiefs of 
Staff [JCS], and the Washington Headquarters Service [WHS] 
operate the eight adjudication facilities.
    The adjudicative process is an examination of a sufficient 
period of the applicant's life to determine if the person is an 
acceptable security risk.\22\ The adjudication process is the 
weighing of a number of variables known as the ``whole person 
concept.'' \23\ The whole person concept is the consideration 
by the adjudicator of all available, reliable information about 
the person, past and present, favorable and unfavorable, when 
reaching a determination. In deciding if a clearance should be 
granted or denied, the adjudication facility staffs base their 
decision on the following adjudicative factors: \24\
---------------------------------------------------------------------------
    \22\ Security Policy Board, Adjudicative Guidelines for Determining 
Eligibility for Access to Classified Information, SPB Issuance 2-97, 
Mar. 24, 1997, (in subcommittee files).
    \23\ See supra note 12, Sec. 4, p. 18.
    \24\ Ibid., p. 17.
---------------------------------------------------------------------------
  Allegiance to the United States;
  Foreign influence;
  Sexual behavior;
  Personal conduct;
  Financial consideration;
  Alcohol consumption and drug involvement;
  Emotional, mental, and personality disorders;
  Criminal conduct;
  Security violations;
  Outside activities; and
  Misuse of information technology
    The ultimate determination of whether the granting or 
continuing of eligibility for a security clearance must be 
clearly consistent with the interests of national security 
based upon careful consideration of the adjudication factors, 
each of which is to be evaluated in the context of the ``whole 
person.'' \25\
---------------------------------------------------------------------------
    \25\ Department of Defense, Adjudicative Guidelines for Determining 
Eligibility for Access to Classified Information, DOD 5200.2-R, (in 
subcommittee files).
---------------------------------------------------------------------------
    Since 1985, blue ribbon commissions \26\ and the General 
Accounting Office [GAO], have recommended the quality, 
timeliness and frequency of personnel security background 
investigations be improved.\27\
---------------------------------------------------------------------------
    \26\ Keeping the Nation's Secrets: A Report to the Secretary of 
Defense by the Commission to Review DOD Security Policies and 
Practices, Nov. 19, 1985, DOD Security Commission, Office of the 
Secretary of Defense, Washington, DC 20301, (in subcommittee files).
    \27\ DOD Personnel: Inadequate Personnel Security Investigations 
Pose National Security Risks, (GAO/NSIAD-00-12) in October 1999.
---------------------------------------------------------------------------
    More recently, management deficiencies identified by GAO 
and the DOD-OIG included the failure of the Defense Security 
Service, formerly known as the Defense Investigative Service, 
to provide accurate and timely personnel security 
investigations, inattention to personnel training, and the 
acquisition and installation of new information technology 
systems without the benefit of risk assessment, proper testing 
or backup.\28\
---------------------------------------------------------------------------
    \28\ Department of Defense, Office of Inspector General Audit 
Report, Program Management of the Defense Security Service Case Control 
Management System, Report No. D-2001-019, Dec. 15, 2001.
---------------------------------------------------------------------------
    According to the 1994 Joint Security Commission Report, 
delays in the investigative and adjudicative process contribute 
directly to government costs.\29\ As far back as 1981, the 
General Accounting Office reported to Congress nearly $1 
billion was wasted annually because of investigative backlogs 
at the Defense Security Service.\30\
---------------------------------------------------------------------------
    \29\ See supra note 14, p. 47.
    \30\ Ibid.
---------------------------------------------------------------------------
    The subcommittee conducted three Defense Security Service 
oversight hearings: on February 16, 2000,\31\ September 20, 
2000,\32\ and March 2, 2001.\33\ The purpose of the hearings 
was to examine performance and management challenges 
confronting DSS, particularly the agency's plans to address the 
personnel security investigations backlog and the extent to 
which the automated case control management system can be 
improved to address the backlog of security clearances.
---------------------------------------------------------------------------
    \31\ Defense Security Service Oversight Hearing, 106th Cong., 2d 
sess., (2000) National Security, Veterans Affairs, and International 
Relations [NSVAIR] Subcommittee hearing, Feb. 16, 2000, Serial No. 106-
152.
    \32\ Oversight of the Defense Security Service: How Big is the 
Backlog of Personnel Security Investigations?, 106th Cong., 2d sess., 
(2000) National Security, Veterans Affairs, and International Relations 
[NSVAIR] Subcommittee hearing, Sept. 20, 2000, Serial No. 106-267.
    \33\ Defense Security Service: Mission Degradation?, 107th Cong., 
1st sess., (2001) National Security, Veterans Affairs and International 
Relations [NSVAIR] Subcommittee hearing, Mar. 2, 2001, Serial No. 107-
40.
---------------------------------------------------------------------------
    The backlog was a result in large part due to lax OASD-C3I 
oversight, DSS mismanagement, CCMS malfunctions, and OASD-C3I 
and DSS's inability to keep pace with changing personnel 
security clearance criteria and Presidential directives.
    Hearing testimony offered optimistic views for determining 
the size and timetables for the elimination of the personnel 
security investigations backlog \34\ and ``dramatic 
improvements'' \35\ in the case control management system 
despite recommendations to replace the system.\36\
---------------------------------------------------------------------------
    \34\ Testimony of Lt. General Charles J. Cunningham Jr., USAF 
(Ret), Director-Defense Security Service, National Security, Veterans 
Affairs, and International Relations [NSVAIR] Subcommittee hearing, 
Feb. 16, 2000, Serial No. 106-152, p. 114.
    \35\ Statement of Lt. General Charles J. Cunningham Jr., USAF 
(Ret), Director-Defense Security Service, National Security, Veterans 
Affairs and International Relations [NSVAIR] Subcommittee hearing, 
Sept. 20, 2000, Serial No. 106-267, p. 75.
    \36\ TRW's Evaluation of DSS CCMS, Final Report, July 21, 1999, 
Contract No: DASW01-99-F-3060-P001, June 22, 1999, (in subcommittee 
files).
---------------------------------------------------------------------------
    Based on the testimony and documentary record, the 
subcommittee concludes lax oversight of DSS by the Office of 
the Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence (OASD-C3I) contributed 
directly to the degradation of DSS productivity and 
effectiveness.\37\
---------------------------------------------------------------------------
    \37\ An Assessment of the Department of Defense Personnel Security 
Program: A Report to the Deputy Secretary of Defense, Personnel 
Security Investigations Process Review Team, Oct. 31, 2000, (in 
subcommittee files).
---------------------------------------------------------------------------
    Proactive intervention by OASD (C3I) did not occur until 
October 1999, after the backlog had attained crisis 
proportions.\38\ Only after much criticism and scrutiny from 
Congress,\39\ the media,\40\ other government agencies,\41\ and 
defense contractors \42\ did the Office of the Assistant 
Secretary of Defense for Command, Control, Communications, and 
Intelligence [C3I] request a serious review of the status and 
options regarding the personnel security investigations 
backlog.
---------------------------------------------------------------------------
    \38\ Ibid., p. 44.
    \39\ The General Accounting Office [GAO] reviewed DOD's personnel 
security investigative functions at the request of Congressman Ike 
Skelton, ranking member, House Committee on Armed Services. GAO issued 
the report DOD Personnel: Inadequate Personnel Security Investigations 
Pose National Security Risks, (GAO/NSIAD-00-12) in October 1999.
    \40\ USA Today, Pentagon Crisis: Security Check Backlog, Edward T. 
Pound, June 3, 1999, (in subcommittee files).
    \41\ Memorandum: Investigation Standards for Access to Classified 
Information, Oct. 26, 1996, from Peter D. Saderholm, Director-Security 
Policy Board to Richard J. Wilhelm, et. al., Co-Chair, Security Policy 
Forum, (in subcommittee files).
    \42\ Aerospace Industries Association, 1250 Eye Street NW., Suite 
1200, Washington, DC 20005, Background Investigation Timeliness 
Tracking Survey, December 2000, (in subcommittee files).
---------------------------------------------------------------------------
    The review produced an internal report issued February 8, 
2001 entitled Personnel Security Investigations: Mission 
Degradation! \43\ This report called for ``bold action'' \44\ 
and contained worse news, and more sweeping recommendations, 
than the Assistant Secretary anticipated. The report shows that 
the time to complete personnel security investigations upon 
which clearances are based is getting longer. As the time to 
complete investigations has grown, the number of investigations 
pending is also growing. In December 2000, output exceeded 
input for the first time, but it remains to be seen whether 
this constitutes a trend or a one-time improvement.
---------------------------------------------------------------------------
    \43\ Personnel Security Investigations: Mission Degradation! OASD 
(C3I) Security Directorate Draft Report for Comment, Richard F. 
Williams, Director of Security, Feb. 8, 2001, (in subcommittee files).
    \44\ Ibid., p. 1.
---------------------------------------------------------------------------
    Between June 9, 1999 and February 8, 2001,\45\ memoranda, 
program initiatives, and policy directives to eliminate the PSI 
backlog resulted in little improvement to provide timely 
investigations and clearances to soldiers, sailors, airmen, 
Marines, DOD civilian and defense contractors.
---------------------------------------------------------------------------
    \45\ Ibid., p. 21-24.
---------------------------------------------------------------------------
    As a result, defense contractors are losing qualified new 
hires that cannot wait almost a year for DSS to complete an 
initial investigation.\46\ In addition, defense contractors 
have found themselves unable to perform billions of dollars of 
work because employees have not obtained routine clearances. 
These delays threaten to affect some facilities' ability to 
effectively perform on defense contracts and meet cost 
schedules. A survey conducted by the Aerospace Industries 
Association revealed, as of December 2000, 12 percent of the 
secret clearance requests were pending for more than 1 year and 
30.6 percent of the top secret clearance requests were pending 
for more than 1 year. Another survey conducted in November 1999 
revealed it cost the aerospace industry an estimated $149.9 
million for clearances more than 90 days old.\47\
---------------------------------------------------------------------------
    \46\ See supra note 42.
    \47\ Aerospace Industries Association, 1250 Eye Street NW., Suite 
1200, Washington, DC 20005, DSS Clearance Backlog Summary, November 
1999, (in subcommittee files).
---------------------------------------------------------------------------
    In 1997, the DOD Office of Inspector General reported, the 
Director of the Defense Security Service had designated DSS as 
a ``reinvention laboratory'' to assess the agency's policies 
and procedures in an effort to determine their relevance and 
responsiveness to the users of DSS services.\48\ Under this 
``reinventing government'' initiative, DSS management and 
employees reviewed the investigation process to identify ways 
to improve the quality and timeliness of investigations.\49\ 
Initiatives developed by DSS managers included:
---------------------------------------------------------------------------
    \48\ Department of Defense, Office of Inspector General, Audit 
Report No. 97-196, Personnel Security in the Department of Defense, p. 
17, July 25, 1997 (in subcommittee files).
    \49\ Ibid., p. 5.
---------------------------------------------------------------------------
          reorganizing and streamlining the agency,
          becoming a performance based organization 
        [PBO],
          implementing new investigative procedures to 
        improve the timeliness of investigations,
          automating the scope development and review 
        of investigations, and
          charging a fee for service.\50\
---------------------------------------------------------------------------
    \50\ Ibid.
---------------------------------------------------------------------------
    The following year, the Department of Defense Office of the 
Inspector General (DOD-IG) conducted an audit of DSS to 
determine the effectiveness and efficiency of the management of 
the personnel security program. Specifically, the DOD-IG 
reviewed the processes for conducting and the procedures for 
disseminating information related to personnel security 
investigations [PSI].\51\
---------------------------------------------------------------------------
    \51\ Ibid., Executive Summary.
---------------------------------------------------------------------------
    Although, at the time, the audit conducted by the 
Department of Defense-Office of the Inspector General 
``strongly supported'' Defense Security Service reinvention 
efforts,\52\ GAO found DSS's initiative exacerbated the problem 
of accurate and timely personnel security investigations 
contributing to a massive backlog of PSI cases.\53\
---------------------------------------------------------------------------
    \52\ Ibid., p. 12.
    \53\ See supra note 27.
---------------------------------------------------------------------------
    The backlog of PSI cases can be attributed to a number of 
factors. In his memorandum of June 15, 2000, the Assistant 
Secretary of Defense (C3I) wrote, ``the periodic 
reinvestigation [PR] backlog has reached significant 
proportions largely as a result of the PR quota that was 
imposed from FY96 to present by this office as well as the 
implementation of new national policy which lowered the 
interval for SECRET PR's from 15 to 10 years and set a new 15 
year PR requirement for CONFIDENTIAL PR's.'' \54\
---------------------------------------------------------------------------
    \54\ Memorandum: Personnel Security Investigations Backlog, June 
15, 1999, from Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence Arthur L. Money to Secretaries of the 
Military Departments, et. al., (in subcommittee files).
---------------------------------------------------------------------------
    In 1995, the Assistant Secretary of Defense (C3I) directed 
DOD components to cease submitting periodic reinvestigation 
[PR] requests that were due to DSS,\55\ and then in June 1996, 
the Assistant Secretary of Defense (C3I) revised this directive 
and established a quota system allowing DOD components to 
submit up to 40,000 secret and 42,000 top secret PR requests 
per year.\56\ Although these directives were intended to reduce 
the turnaround time to process PSI cases, the directives 
created a backlog and a pent-up demand for security clearances. 
In addition, at that time, the Assistant Secretary announced 
that DOD would adopt new investigative standards.\57\ These 
standards provided less complete information for use by 
adjudicators in determining whether to grant clearances, which 
further delayed the security clearance process. And, finally 
there were system failures of the newly deployed automated case 
control management system for tracking and processing PSI 
cases.\58\ All of these factors: the PR quota system; new 
investigative standards; and CCMS failures all affected DOD's 
capacity to process PSI cases and contributed to the backlog.
---------------------------------------------------------------------------
    \55\ See supra note 27, p. 30.
    \56\ Ibid.
    \57\ Ibid., p. 19.
    \58\ Ibid., p. 26-28.
---------------------------------------------------------------------------
    According to Carol Schuster of the General Accounting 
Office, ``Since 1998, various DOD documents and statements have 
cited several widely divergent backlog estimates ranging from 
about 452,000 to 992,000.'' \59\ The backlog was a result, in 
part, of internal procedure changes in DSS. According to the 
General Accounting Office, DSS officials stated that once the 
agency became a reinvention laboratory, it was allowed to 
operate, for the most part, at its own discretion with little 
or no oversight from the Assistant Secretary of Defense-
Command, Control, Communications and Intelligence (ASD-
C3I).\60\
---------------------------------------------------------------------------
    \59\ Statement of Carol R. Schuster, Associate Director, U.S. 
General Accounting Office, NSVAIR Subcommittee hearing, Serial No. 106-
267, p. 8.
    \60\ See supra note 27, p. 19.
---------------------------------------------------------------------------
    Knowing the accurate size of the backlog is an important 
step toward effectively managing and eliminating the backlog. 
In 1999 DSS attempted to determine the size of the PSI case 
backlog. The MITRE Economic and Decision Analysis Center was 
hired to work with DSS to conduct an analysis of the backlog 
through the use of formal statistical sampling and manual 
counts.\61\ MITRE reported in 2000, with 95 percent confidence, 
the true size of the backlog population falls between 206,107 
and 558,552 cases.\62\
---------------------------------------------------------------------------
    \61\ Mitre Technical Report, The Defense Security Services Backlog 
of Periodic Reinvestigations: Statistical Analysis and Risk 
Prioritization Procedure, p. iii-iv, February 2000, Paul R. Garvey, et. 
al., (in subcommittee files).
    \62\ Ibid., p. v.
---------------------------------------------------------------------------
    In October 1998, to expedite PSI case processing, the 
Defense Security Service acquired and deployed a new 
information technology system referred to as the Case Control 
Management System at a cost of $100 million.\63\ The stated 
goals of CCMS were to simplify the investigative process by 
eliminating unnecessary manual activity, and automate the 
processes associated with the overall management of PSI 
cases.\64\ CCMS was supposed to expedite PSI case processing by 
linking all relevant information critical to an investigation 
through a network of DSS subsystems.\65\ PSI case processing 
includes the collection, tracking, adjudication, and 
disseminating of information about security clearances for more 
than 15 million individuals. The CCMS network is primarily 
located at the DSS Personnel Investigations Center in Fort 
Meade, MD.
---------------------------------------------------------------------------
    \63\ General Accounting Office briefing for the House Committee on 
Government Reform, Subcommittee on National Security, Veterans Affairs, 
and International Relations [NSVAIR], briefing slide, p. 30, Nov. 8, 
1999, (in subcommittee files).
    \64\ See supra note 48, p. 9.
    \65\ See supra note 63.
---------------------------------------------------------------------------
    In 1999, assessments of the case control management system 
were conducted by TRW \66\ and a DOD Red Team.\67\ Those 
assessments found deficiencies in acquisition strategy, program 
management, system integration, and operations and maintenance. 
It was estimated that an additional $87.2 million to $103 
million would be needed fiscal year 1999-2006 to address the 
deficiencies for a system that was projected to cost $100 
million when fully operational.\68\
---------------------------------------------------------------------------
    \66\ See supra note 36.
    \67\ DOD Red Team Advanced Draft, Red Team Recommendations--
Transition Ahead, July 14, 1999.
    \68\ See supra note 36, Sec. 7, p. 67-68.
---------------------------------------------------------------------------
    According to GAO, the case control management system 
suffers serious weaknesses and will be far more difficult to 
fix than DSS anticipates. During the September 2000 NSVAIR 
Subcommittee hearing, addressing the CCMS issue, the Director 
of DSS stated, ``there were dramatic improvements resulting 
from the software enhancements and corrections that have been 
implemented within the last 6 months.'' \69\ Yet the DOD-IG in 
December 2000 recommended the Assistant Secretary of Defense-
C3I analyze whether the investment for the Case Control 
Management System provides the best business solution when 
compared to alternative solutions for opening, tracking, and 
closing personnel investigation cases.
---------------------------------------------------------------------------
    \69\ See supra note 35, p. 75.
---------------------------------------------------------------------------
    The Defense Security Service is making progress since the 
subcommittee's oversight investigation of the agency began a 
little more than 2 years ago. However, DSS has a long way to go 
to resolve systemic problems of tracking and promptly 
completing personnel security investigations. In the meantime, 
national security risks increase and the need for additional 
financial resources grows.
    According to Donald Mancuso, Acting Inspector General, 
``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 
clearances.'' \70\
---------------------------------------------------------------------------
    \70\ Testimony of Donald Mancuso, Acting Inspector General, Office 
of the Inspector General, Department of Defense, NSVAIR Subcommittee 
hearing, Serial No. 106-267, p. 38.
---------------------------------------------------------------------------

                            III. Discussion

                                FINDINGS

1. The Defense Security Service cannot accurately determine the size or 
        forecast the elimination of the personnel security 
        investigations backlog.

    The Defense Security Service has a personnel security 
investigation backlog that has ranged from approximately 
350,000 to 900,000 cases. The disparity in the range is a 
result of different methodologies used to count the backlog, 
efforts to prioritize the most sensitive personnel security 
investigations, and the elimination of cases as a result of 
changes in employment status for the individual needing a 
security clearance. Priorities for investigations by category 
include presidential support, sensitive compartmented 
information [SCI], and special access programs [SAPs] which 
impose need-to-know or access controls beyond those normally 
provided for access to confidential, secret, or top secret 
information.\71\ The inability to prioritize investigations has 
resulted in extensive delays in clearances for some high 
priority projects.\72\ Additionally, there is currently no 
automated method for notifying DSS of a priority investigation. 
The requester has to notify DSS when a priority investigation 
is provided and special processing is necessary. DSS manually 
pulls the request and moves the investigation case to the front 
of the queue.\73\ It is currently taking, on average, more than 
a year to complete a personnel security reinvestigation for 
someone needing a top-secret clearance.
---------------------------------------------------------------------------
    \71\ See supra note 37, p. 19.
    \72\ Ibid.
    \73\ Ibid.
---------------------------------------------------------------------------
    Testifying before the NSVAIR Subcommittee, GAO's Carol 
Schuster, Associate Director for National Security Issues 
stated, ``There were several reasons that led to this backlog. 
The implementation of a quota system on the number of PSI 
requests that could be submitted created a pent-up demand 
contributing to the backlog. Then we had new requirements \74\ 
that were instituted during this period for re-investigations 
on secret and confidential clearances. Those had not been 
requirements before. So this added to the backlog. Also, the 
automated case control management system that we were talking 
about just did not work. CCMS system failures contributed to 
the backlog.'' \75\
---------------------------------------------------------------------------
    \74\ Between August 1996 and February 1999, DSS issued 31 policy 
letters directly related to the manner in which investigations were to 
be conducted. Several letters announced policy changes that gave 
investigators greater discretion in how they would meet the standards 
or pursue issues that might be of significance in deciding to grant 
clearances. Several of these policies were inconsistent with Federal 
investigative standards in the requirement to conduct local agency 
checks of criminal history records, and the verification of public 
records regarding divorce, bankruptcy, or other court actions, 
involving the subject.
    \75\ Testimony of Carol R. Schuster, Associate Director, U.S. 
General Accounting Office, NSVAIR Subcommittee hearing, Serial No. 106-
152, p. 34.
---------------------------------------------------------------------------
    Carol Schuster stated DSS also pointed to additional 
factors contributing to the backlog, ``One is that they feel 
that there are more people requesting clearances because of the 
growing number of information technology jobs that may require 
clearances, and the reduction of DSS staff and investigators 
the agency experienced as a result of DOD downsizing. So all of 
those problems collectively contributed to the problem.'' \76\
---------------------------------------------------------------------------
    \76\ Ibid.
---------------------------------------------------------------------------
    A consultant for DSS reported in February 2000 the effect 
downsizing had on the Defense Security Service. ``As a result 
of the general downsizing of defense agencies in recent years, 
DSS staffing has been significantly reduced, dropping from 
about 4,000 in 1991 to about 2,500 in 1998. In particular, DSS 
investigators fell from 1,650 to 1,250 during the same period. 
Meanwhile, the investigative workload for clearances has 
remained fairly constant over that time.'' \77\
---------------------------------------------------------------------------
    \77\ See supra note 61, p. 1.1.
---------------------------------------------------------------------------
    As congressional \78\ and media \79\ scrutiny intensified, 
concerns were raised regarding the growing backlog of personnel 
security investigations, and the affect the backlog would have 
on national security. As a result, the NSVAIR subcommittee 
asked the General Accounting Office to determine how DSS 
estimates the backlog, assess the soundness of DOD's backlog 
estimates, and identify the plans DSS developed to address the 
backlog problem.
---------------------------------------------------------------------------
    \78\ Letter from Congressman Ike Skelton of Missouri to the General 
Accounting Office a review of DOD's personnel security functions, Mar. 
25, 1998.
    \79\ See supra note 40.
---------------------------------------------------------------------------
    The General Accounting Office reported its findings in 
August 2000. According to GAO findings, the personnel security 
reinvestigations backlog for defense, civilian, and contractor 
personnel was approximately 505,000 reinvestigations, and 
growing, with an additional 480,000, which had not yet been 
submitted to DSS from DOD and the military departments. 
However, the subcommittee learned the actual backlog size was 
still unknown because existing personnel security databases 
cannot provide an accurate count of overdue reinvestigations.
    ``In the absence of a Department-wide database that can 
accurately measure the reinvestigation backlog, DOD estimates 
the backlog on an ad-hoc basis, using manual counts and 
statistical sampling as the primary methods. Using the sampling 
method, DOD makes a rough and known to be inaccurate estimate 
from existing personnel security databases.'' \80\
---------------------------------------------------------------------------
    \80\ DOD Personnel: More Action Needed to Address Backlog of 
Security Clearance Reinvestigations, (GAO/NSIAD-00-215), p. 1-2, U.S. 
General Accounting Office, in August 2000.
---------------------------------------------------------------------------
    In that regard, the subcommittee also learned the survey 
process for determining the backlog was flawed. When the Office 
of the Secretary of Defense asked Military Departments and 
Defense agencies to survey their commands and organizations in 
1999, they failed to provide the methodology for determining 
the size of the backlog. As a result, no standard format was 
used to obtain the figures. Some just filled out the 
information by using manual counts, while others did a sample 
survey. A second survey conducted a few months later again did 
not address methodology. As a result, it appears programs and 
agencies reported lower numbers giving the erroneous impression 
that DOD was making progress eliminating the PSI backlog.
    From June 9, 1999 to February 8, 2001 the Department of 
Defense issued 13 policy directives and reports to manage and 
eliminate the growing backlog of personnel security 
investigations. These included:
          June 9, 1999--Deputy Secretary of Defense 
        memorandum, Personnel Security Clearance Investigations 
        Backlog, directed the elimination of the backlog by 
        September 30, 2000. The memorandum expanded the DOD 
        investigative capacity by shifting a part of the DOD 
        civilian PSI workload to the Office of Policy and 
        Management, directed each military department and 
        defense agency to provide a quarterly plan for 
        eliminating the backlog. The Deputy Secretary further 
        directed that each military department and defense 
        agency to administratively terminate or downgrade all 
        clearances not based on a current investigation or not 
        in process for reinvestigation by September 30, 2000.
          June 15, 1999--Assistant Secretary of 
        Defense (C3I) memorandum, Personnel Security Clearance 
        Investigations Backlog, implemented the Deputy 
        Secretary's memorandum of June 9, 1999 by directing a 
        minimum number of additional periodic reinvestigations 
        to OPM for DOD civilian employees and all others to 
        DSS. The Assistant Secretary stressed military 
        departments and defense agencies would be expected to 
        identify the resources necessary to fund backlogged of 
        periodic reinvestigation's over and above those already 
        programmed as well as accomplish the adjudications at 
        the backend end of the PSI process.
          September 29, 1999--Assistant Secretary of 
        Defense (C3I) memorandum, Personnel Security Clearance 
        Investigations, directed all initial investigations of 
        DOD civilian personnel, except overseas investigations, 
        would be conducted by OPM, and rescinded the June 9, 
        1999 directive to administratively terminate or 
        downgrade all clearances not based on a current 
        investigation or not in process for reinvestigation by 
        September 30, 2000.
          November 1999--At a meeting of the Defense 
        Management Council, the Deputy Secretary of Defense 
        called for the creation of an Overarching Integrated 
        Process Review Team [OIPT] to find a cure for the PSI 
        backlog problem, and to chart a new path for the 
        future. The Team defined the backlog to be those 
        periodic reinvestigations exceeding the timeframe for 
        which a reinvestigation is required and which has not 
        yet been submitted to the investigative agency.
         deg.   The Team asked the military 
        departments to determine their backlog according to the 
        established backlog definition. For DOD agencies and 
        contractors the team used previously developed 
        estimates rather then developing new counts. The Team 
        reported their findings and recommendations in January 
        2000. The Team determined that the periodic 
        reinvestigation backlog totaled 505,786. The Team 
        recommendations included the transfer of all secret and 
        confidential investigations to OPM and restoration of 
        funding for the Joint Personnel Adjudication System to 
        improve management of the population actually receiving 
        access to the most classified information.
          March 31, 2000--Deputy Secretary of Defense 
        memorandum, Personnel Security Clearance Investigations 
        Backlog, directed implementation of the OIPT 
        recommendations and extended the timeline for 
        eliminating the PR backlog to March 31, 2002.
          June 1, 2000--Deputy Secretary of Defense 
        memorandum, Personnel Security Investigation Process 
        Review, directed a comprehensive review to baseline the 
        reform of the personnel security process, to establish 
        a ``get well'' date, and make additional 
        recommendations to expedite the personnel security 
        process effort. A Process Review Team was established 
        to accomplish this effort.
          June 22, 2000--Under Secretary of Defense 
        (Comptroller) memorandum, Personnel Clearance Backlog 
        and Security Initiatives, generally referred to as the 
        ``Spend Plan,'' extended the timeline for eliminating 
        the PR backlog to September 30, 2002. The plan provided 
        monthly targets for all DOD components for submitting 
        investigative requests to DSS and OPM, along with the 
        associated funding. PSIs were distributed between DSS 
        and OPM in accordance with the Deputy Secretary of 
        Defense memorandum dated March 31, 2000.
         deg.   The plan called for sending 
        415,841 cases to OPM in fiscal year 2001 and 395,908 in 
        fiscal year 2002. During the same period, DSS was to 
        process 558,619 new cases and 128,000 existing cases in 
        fiscal year 2001; and 388,598 new cases plus 307,000 
        existing cases in fiscal year 2002. This accounted for 
        all carryover work at DSS and all new work to be 
        submitted over fiscal year 2001 and fiscal year 2002, 
        both backlog cases and the steady-state workload.
         deg.   In addition, the memorandum 
        call for the appointment of a senior official by each 
        component to monitor processing of personnel security 
        investigations to DSS and OPM, and to establish 
        procedures for monitoring and executing the plan within 
        the component.
          August 22, 2000--Assistant Secretary of 
        Defense (C3I) memorandum, Personnel Security Clearance 
        Investigations, implemented the Spend Plan by providing 
        instructions to the components for submitting 
        investigative requests including quarterly progress 
        reports. To ensure success, the military departments 
        and defense agencies were required to appoint a senior 
        official to monitor the processing of investigations to 
        DSS and OPM and encouraged to have their Inspectors 
        General include compliance as a matter of interest 
        during inspections for fiscal year 2001 and fiscal year 
        2002.
          September 11, 2000--Deputy Secretary of 
        Defense memorandum, Personnel Security Investigation 
        Process Review, directed all military departments and 
        defense agencies to conduct a periodic reinvestigation 
        survey because the backlog baseline may have changed 
        considerably due to a lapse of time and the efforts of 
        the Departments in submitting PR requests.
          October 11, 2000--The report, An Assessment 
        of DOD's Plan to Eliminate the Periodic Reinvestigation 
        [PR] Backlog, responds to the second of three 
        assessment directives issued by the Deputy Secretary of 
        Defense on June 1, 2000. The June 1, 2000 directive 
        called for the establishment of a process review team 
        [PRT] to assess DOD's plan to eliminate the backlog of 
        overdue periodic reinvestigations by September 30, 
        2002. The PRT determined DOD would not meet the 
        September 30, 2002 target date for elimination of the 
        PR backlog. The PRT did not consider the submission of 
        the overdue PR requests sufficient to eliminate the 
        backlog. Rather, the PRT considers the backlog 
        eliminated once the investigations have been completed 
        and adjudicated and the workloads of DSS and the 
        Central Adjudication Facilities [CAFs] return to a 
        steady state.
          October 31, 2000--The report, An Assessment 
        of the Department of Defense Personnel Security 
        Program, responds to the first and third directive 
        issued by the Deputy Secretary of Defense on June 1, 
        2000 to determine where DOD currently stands in 
        reforming the PSI process, and recommend how to 
        expedite the reform effort. The assessment team 
        conducted a thorough review covering the major steps in 
        the PSI process including requesting the investigation, 
        conducting the investigation, adjudicating the results 
        of the investigation, and oversight and funding of the 
        program.
          December 14, 2000--The Office of the Under 
        Secretary of Defense (Comptroller) revised the Spend 
        Plan to incorporate the adjustment of the backlog from 
        505,786 to 316,995 in accordance with the Process 
        Review Team's survey results pursuant to the directive 
        issued by the Deputy Secretary of Defense on September 
        11, 2000.
          February 8, 2001--Office of the Assistant 
        Secretary of Defense (C3I) Security Directorate 
        released the draft report, Personnel Security 
        Investigations: Mission Degradation, which called for 
        bold action to address current PSI backlogs. The 
        purpose of the draft report is four fold: No. 1, to 
        serve as a frame of reference for surfacing various 
        options and reactions to organizations both within and 
        outside the Department; No. 2, to be used to further 
        refine the situation with those who are performing PSI 
        work for DOD; No. 3, to serve as a think piece for DOD 
        senior executives who will be reviewing the progress on 
        balancing PSI funding and workload issues; and No. 4, 
        to present options for consideration by the 
        interagency.
    On June 9, 1999, Deputy Secretary of Defense John J. Hamre 
issued a memorandum, ``Personnel Security Clearance 
Investigations Backlog'' directing the military departments, 
defense agencies, and contractors to eliminate the backlog by 
the end of fiscal year 2000.\81\ This was the first of four 
target dates calling for the elimination of the PSI backlog.
---------------------------------------------------------------------------
    \81\ Memorandum: Personnel Security Investigations Backlog, June 9, 
1999, from Deputy Secretary of Defense John J. Hamre to Secretaries of 
the Military Departments, et. al., (in subcommittee files).
---------------------------------------------------------------------------
    In addition, the Deputy Secretary's memorandum of June 9, 
1999 attempted to ease the pressure on DOD investigative 
capacity by shifting a part of the workload to the Office of 
Personnel Management. The memorandum also directed each service 
and DOD agency to provide the Assistant Secretary of Defense 
for Command, Control, Communications, and Intelligence a 
quarterly plan for eliminating the backlog. The Deputy 
Secretary of Defense further directed the services and defense 
agencies to administratively terminate or downgrade all 
clearances not based on a current investigation or not in 
process for reinvestigation by September 30, 2000.\82\
---------------------------------------------------------------------------
    \82\ Ibid.
---------------------------------------------------------------------------
    On June 15, 1999, then Assistant Secretary of Defense for 
Command, Control, Communications, and Intelligence Arthur L. 
Money issued a memorandum ``Personnel Security Clearance 
Investigations backlog'' implementing Deputy Defense 
Secretary's June 9, 1999 memorandum with respect to cost, 
process, and prioritization.\83\ The memorandum directed all 
components to identify the resources necessary to fund the 
elimination of the backlog. The memorandum changed personnel 
security reinvestigation policy directing each service, agency, 
and contractor not to apply for security investigations for 
those within 1 year of separation from DOD employment, or who 
will be assigned to duties for which a personnel security 
clearance is not required.\84\ This policy change had serious 
national security implications by allowing a person to continue 
in a sensitive position without the required periodic 
investigation. The policy change was a violation of personnel 
security clearance standards adopted and approved by the 
Security Policy Board.
---------------------------------------------------------------------------
    \83\ See supra note 54.
    \84\ Ibid.
---------------------------------------------------------------------------
    In that regard, even when the Deputy Secretary of Defense 
thought OASD (C3I) had a handle on the true size of the 
backlog, no provision was made for providing for additional 
funds to eliminate the backlog of PSI requests, nor was there 
any specific strategy available for processing the minimum 
number of additional PSI requests over and above those already 
programmed to be conducted.\85\
---------------------------------------------------------------------------
    \85\ Memorandum: Personnel Clearance Backlog and Security 
Initiatives, June 22, 2000, from Under Secretary of Defense 
(Comptroller) William J. Lynn to Secretaries of the Military 
Departments, et. al., (in subcommittee files).
---------------------------------------------------------------------------
    GAO also pointed out this directive had drawbacks, 
specifically the lack of funding. Carol Schuster stated, ``We 
recommended to the Secretary of Defense to direct the Assistant 
Secretary of Defense (C3I) to identify and prioritize overdue 
investigations and fund and implement initiatives to conduct 
these investigations in a timely manner.'' \86\
---------------------------------------------------------------------------
    \86\ Statement of Carol R. Schuster, Associate Director, U.S. 
General Accounting Office, NSVAIR Subcommittee hearing, Serial No. 106-
152, p. 16.
---------------------------------------------------------------------------
    On September 29, 1999, Assistant Secretary of Defense for 
Command, Control, Communications, and Intelligence Arthur L. 
Money issued a memorandum ``Personnel Security Clearance 
Investigations'' directing the submission of all initial 
investigations and reinvestigations of DOD civilian personnel 
to OPM effective October 1, 1999.\87\ It stated DSS would 
continue to conduct investigations for military personnel, for 
civilian personnel stationed overseas, and for contractor 
personnel.\88\
---------------------------------------------------------------------------
    \87\ Memorandum: Personnel Security Investigations, Sept. 29, 1999, 
from Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence Arthur L. Money to Secretaries of the 
Military Departments, et. al., (in subcommittee files).
    \88\ Ibid.
---------------------------------------------------------------------------
    By November 30, 1999, it became apparent the actions DOD 
had taken to date were not getting the results anticipated. As 
a result, Deputy Secretary of Defense called for the creation 
of an Overarching Integrated Process Team [OIPT] to find a 
solution for the backlog problem and to ``pioneer a different 
path to solve the crisis of the continuing personnel security 
investigations backlog,'' and to submit a plan by January 20, 
2000.\89\
---------------------------------------------------------------------------
    \89\ Memorandum: Personnel Security Investigations Backlog, Mar. 
31, 2000, from Deputy Secretary of Defense John J. Hamre to Secretaries 
of the Military Departments, et. al., (in subcommittee files).
---------------------------------------------------------------------------
    The team reported their findings and recommendations in 
January 2000. The team determined the backlog totaled 505,786 
and recommended additional personnel security investigation 
cases be transferred to OPM.\90\
---------------------------------------------------------------------------
    \90\ See supra note 43, p. 21-22.
---------------------------------------------------------------------------
    As mentioned earlier, DOD's two attempts to determine the 
backlog size had methodological limitations, produced estimates 
that were 6 months old or older, and did not include thousands 
of overdue reinvestigations that had been submitted. The two 
estimates, one by the Overarching Integrated Process Team and 
the other by the MITRE Corp., were developed independently and 
used different estimating methods but coincidently arrived at 
similar estimates of about 505,000 overdue reinvestigations. 
These estimates differed from several previous backlog 
estimates that were cited by GAO in various DOD documents and 
statements.\91\
---------------------------------------------------------------------------
    \91\ See supra note 80, p. 6.
---------------------------------------------------------------------------
    During the February 16, 2000 NSVAIR Subcommittee hearing, 
the DSS Director stated, ``I am accepting their number. 
However, I do not have total confidence in it.'' \92\ When 
asked to clarify this statement, the DSS Director said, ``While 
the number (PSI backlog) could be lower, I think the number is 
higher. That is my professional judgment.'' \93\ Carol 
Schuster, Associate Director of GAO concurred stating, ``I 
cannot tell you what the size of the backlog is. I would really 
question whether they have an exact fix it on.'' \94\
---------------------------------------------------------------------------
    \92\ See supra note 34, p. 111.
    \93\ Ibid.
    \94\ See supra note 11, p. 34.
---------------------------------------------------------------------------
    This was finally confirmed by the Office of the Assistant 
Secretary of Defense (C3I) during the September 2000 NSVAIR 
Subcommittee hearing. ``While there is some concern about the 
various methodologies used to arrive at the size of the 
backlog, it was acknowledged that a more accurate assessment 
would prove problematic. The difficulty in assessing the 
precise scope of the backlog is due to the limitations of the 
current DOD central clearance database, which contains records 
for approximately 2.5 million cleared DOD military, civilian 
and contractor personnel. This problem will be resolved when 
DOD fields the Joint Personnel Adjudication System in fiscal 
year 2001. JPAS will require continuous tracking (and input) of 
an individual's actual access requirement upon which the 
periodic reinvestigation is based.'' \95\
---------------------------------------------------------------------------
    \95\ Statement of J. William Leonard, Deputy Assistant Secretary of 
Defense for Command, Control, Communications, and Intelligence, NSVAIR 
Subcommittee hearing, Serial No. 106-267, p. 60.
---------------------------------------------------------------------------
    JPAS is designed to provide DOD with the ability to provide 
real-time data on the number of personnel currently authorized 
to have access to classified information, and will facilitate 
accurate forecasting of reinvestigation requirements. In 
addition, JPAS could further support reciprocity by including 
clearance data from non-DOD agencies.\96\
---------------------------------------------------------------------------
    \96\ See supra note 37, p. 39.
---------------------------------------------------------------------------
    DOD stated, ``JPAS will provide all DOD components, for the 
first time, a single, central, fully integrated system for 
managing their cleared personnel and providing accurate 
statistics on such things as projected periodic review 
requirements and whose PSI is pending or closed.'' \97\ In 
addition, the DOD-IG reported, JPAS will provide DOD with a 
common information resource for granting and sharing personnel 
security eligibility determinations and recording personnel 
access to sensitive information.\98\
---------------------------------------------------------------------------
    \97\ DOD response to Questions for the Record Inquiry, Mar. 27, 
2001, House Government Reform Committee, NSVAIR Subcommittee, Defense 
Security Service hearing, Mar. 2, 2001, (in subcommittee files).
    \98\ Department of Defense, Office of Inspector General Audit 
Report, Acquisition Management of the Joint Personnel Adjudication 
System, Report No. D-2001-112, May 5, 2001, (in subcommittee files).
---------------------------------------------------------------------------
    However, the projected ability to field JPAS in fiscal year 
2001, once again, was overly optimistic. According to the DOD's 
Deputy Inspector General, ``Although the future Joint Personnel 
Adjudication System is the long term solution, it is agreed 
that the case control management system would be modified this 
year as an interim alternative. Due to subsequent slippage in 
baselining the system, the change may not be made until fiscal 
year 2002.'' \99\
---------------------------------------------------------------------------
    \99\ Statement of Robert J. Lieberman, NSVAIR Subcommittee hearing, 
Serial No. 107-40, p. 17.
---------------------------------------------------------------------------
    Without knowing with any certainty the size of the PSI 
backlog but suspecting it could be higher, the DSS Director 
said at the February 16, 2000 NSVAIR Subcommittee hearing, ``We 
believe that we can bring the backlog, as we now know it, we 
can eliminate the backlog by the end of calendar year 2001.'' 
\100\
---------------------------------------------------------------------------
    \100\ See supra note 34, p. 114.
---------------------------------------------------------------------------
    The following month, DOD changed the PSI backlog 
elimination target date a third time. On March 31, 2000, Deputy 
Secretary of Defense John J. Hamre issued another 
memorandum,\101\ ``Personnel Security Clearance Investigations 
Backlog'' directing the Military Departments, Defense agencies, 
and contractors shift all new Secret and Confidential level 
investigations to OPM through its contractor US Investigations 
Services [USIS] and changing the target date for elimination of 
the backlog to March 31, 2002.\102\ DSS would retain 
responsibility for all top secret investigations and 
reinvestigations for military and contractor personnel. The 
objective was to reduce pressure on DSS for conducting hundreds 
of thousands of investigations while leveraging OPM's 
investigative capacity.\103\
---------------------------------------------------------------------------
    \101\ See supra note 89.
    \102\ Ibid.
    \103\ Ibid.
---------------------------------------------------------------------------
    On June 1, 2000, Deputy Secretary of Defense Rudy de Leon 
issued the memorandum, ``Personnel Security Investigation 
Process Review'' directing a comprehensive review of the 
personnel security process, to establish a ``get well'' date, 
and make additional recommendations to expedite the personnel 
security process effort. A Process Review Team was established 
to accomplish this effort.\104\ Once again the Department was 
attempting to ascertain the size of the backlog and when it 
would be eliminated.
---------------------------------------------------------------------------
    \104\ Memorandum: Personnel Security Investigation Process Review, 
June 1, 2000, from Deputy Secretary of Defense Rudy de Leon to 
Secretaries of the Military Departments, et. al., (in subcommittee 
files).
---------------------------------------------------------------------------
    On June 22, 2000 Under Secretary of Defense (Comptroller) 
William J. Lynn issued the memorandum, ``Personnel Clearance 
Backlog and Security Initiatives,'' generally referred to as 
the ``spend plan.'' \105\ The directive included monthly 
targets for all DOD components for submitting PSI requests to 
DSS and OPM, along with the associated funding to eliminate the 
backlog. The Comptroller estimated the Department would need an 
additional $201.6 million over 2 fiscal years to fund PSI cases 
taken over by OPM in addition to the funds already planned in 
the budget at that time.
---------------------------------------------------------------------------
    \105\ See supra note 85.
---------------------------------------------------------------------------
    The Department had finally recognized additional funding 
was needed to address the growing PSI backlog.
    GAO had recommended as part of their review of the 
Personnel Security Investigation Program in October 1999 that 
DOD provide additional funding to address the PSI backlog. 
According to Carol Schuster, ``One of the problems that has 
occurred over the last couple of years is they have mandated 
(PSI) 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. When the money is not there and the 
services choose not to reprogram the money for that purpose, 
then the submissions are not made.'' \106\ The Comptroller also 
moved the backlog elimination target date to September 30, 
2002.\107\
---------------------------------------------------------------------------
    \106\ See supra note 11, p. 47.
    \107\ See supra note 85.
---------------------------------------------------------------------------
    The ``spend plan'' mandated that each DOD component submit 
a designated quota of backlogged cases each quarter of fiscal 
year 2001 and fiscal year 2002. If implemented as planned, all 
backlogged cases as of September 2000, were to be submitted by 
the end of fiscal year 2002. These cases were to be in addition 
to those cases coming due for reinvestigation and new cases. 
Together, these new submissions represented a very large influx 
of cases given that there was already a large backlog of 
unprocessed cases at DSS. GAO had estimated that the number of 
PSI cases involved was 2.2 million, raising additional 
concerns.
    Several other attempts were made to increase capacity to 
process PSI cases. These included entering into contracts with 
private sector investigative firms and bringing a number of 
reservists onto active duty to assist DSS.\108\ General Charles 
J. Cunningham Jr., USAF (Ret), Director, Defense Security 
Service informed the subcommittee, ``Our plan to use private 
sector contractors to augment our investigative workforce has 
continued to materialize and is proving to be a successful 
endeavor. In addition, to contractor augmentation, we are also 
using military reservists to augment our investigative 
workforce. Currently, approximately 45 reservists who have 
prior investigative and interviewing experience are integrated 
into our agent workforce.'' \109\
---------------------------------------------------------------------------
    \108\ See supra note 36, p. 78.
    \109\ Ibid.
---------------------------------------------------------------------------
    Although these were positive steps, they were not seen as 
enough to handle the increase in PSI cases expected as a result 
of the implementation of the spend plan. According to GAO, 
``it's really hard to tell exactly what kind of an effect this 
large influx of cases is going to have and whether the use of 
private contractors and reservists and the like are going to 
make a dent in that.'' \110\
---------------------------------------------------------------------------
    \110\ See supra note 11, p. 46.
---------------------------------------------------------------------------
    Carol Schuster stated, ``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-those 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 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 spend plan for this 2-year period is just to 
get the cases submitted, and then it is up to the investigative 
community to somehow deal with 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 
(2000).''\111\
---------------------------------------------------------------------------
    \111\ Ibid.
---------------------------------------------------------------------------
    Other efforts to reduce the backlog and identify potential 
high-risk cases included the development of a predictive model 
or algorithm to track those cases. Carol Schuster stated, 
``They are taking several actions. One in particular, I think, 
is very promising. They are working on an algorithm that will 
try to identify those cases that are most likely to result in a 
denial of a clearance, based on their past experience. That 
will allow them, if they can get this to work, to identify 
those cases that are most risky to the government and be able 
to process those in a priority manner.'' \112\
---------------------------------------------------------------------------
    \112\ See supra note 75, p. 22.
---------------------------------------------------------------------------
    During the subcommittee's DSS oversight hearing in February 
2000, DSS Director General Charles J. Cunningham submitted 
written testimony which stated, ``DSS has established several 
initiatives to more effectively manage this significant 
increase in clearance demand while at the same time reducing 
the inherent risks associated with outdated investigations in 
individuals already accessing classified information, thus 
reducing the vulnerability of insider threat. One of those 
initiatives is the development of a predictive model to 
identify those cases that pose a higher risk based on responses 
to certain questions on the personnel security questionnaire. 
The algorithm will be applied at the front end of our 
investigative process to ensure that the potential high-risk 
investigations receive priority processing.'' \113\
---------------------------------------------------------------------------
    \113\ Statement of Lt. General Charles J. Cunningham Jr., USAF 
(Ret), Director, Defense Security Service, Serial No. 106-152, p. 54.
---------------------------------------------------------------------------
    The MITRE Corp. was retained by DSS to develop the 
algorithm. The MITRE Corp. produced ``a statistically based 
prioritization procedure whereby a high percentage of the 
`latent revocations' among the backlog could be identified and 
given immediate attention, based solely on the information 
provided in a standard Electronic Personnel Security 
Questionnaire [EPSQ]. Such a method would allow the DSS to 
allocate limited investigative resources so as to remove a high 
percentage of the risky backlog cases in the shortest amount of 
time.'' \114\
---------------------------------------------------------------------------
    \114\ See supra note 61, p. iii.
---------------------------------------------------------------------------
    Responding to the question of what kind of risk assessment 
had been developed to determine the danger the backlog poses to 
national security, the DSS Director stated, ``GAO mentioned the 
algorithm that we have been working on and we have now 
completed. Our plan is to go into the total population of the 
backlog, apply the algorithm, identify which records come up as 
high risk from the algorithm, which we believe and have had 
scientific support will predict 89 percent, based on a 6.5 
percent sample size, that we use it against the backlog while 
we are bringing the backlog down. So that we both work the 
backlog down and, in the process, go after those that are 
identifiable as highest risk in the backlog.'' \115\
---------------------------------------------------------------------------
    \115\ See supra note 34, p. 114.
---------------------------------------------------------------------------
    At that time, General Cunningham indicated DSS expected to 
implement an algorithm and have a prioritization process for 
backlog cases by July 2000. The algorithm for identification of 
high-risk cases was implemented in November 2000.\116\
---------------------------------------------------------------------------
    \116\ See supra note 97.
---------------------------------------------------------------------------
    The prioritization of backlog cases proved even more 
difficult to implement. As a result, the lack of any effective 
priority tracking procedures has subjected DSS to criticism 
from both the DOD-IG and the services. In April 2000, an Office 
of the Inspector General [OIG] audit report recommended that 
the Office of the Assistant Secretary of Defense (C3I) develop 
criteria to determine the highest priority mission-critical and 
high-risk positions based on their impact on mission-critical 
programs.\117\
---------------------------------------------------------------------------
    \117\ Department of Defense, Office of Inspector General Audit 
Report, Security Clearance Investigative Priorities, Report No. D-2000-
111, Apr. 5, 2000, Executive Summary, p. 14, (in subcommittee files).
---------------------------------------------------------------------------
    According the Acting Inspector General, ``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. 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 is my understanding that process is 
continuing, that the Department hopes to have some sort of 
process in place in the next few months.'' \118\
---------------------------------------------------------------------------
    \118\ See supra note 70, p. 44.
---------------------------------------------------------------------------
    The Acting Inspector General went on to say, ``The 
clearance requests for important programs and higher risk 
programs often languished while investigators often worked 
routine cases. The Office of the Assistant Secretary of Defense 
(C3I) 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. We believe this delay was unnecessary and 
could have been avoided through firm decisionmaking by 
leadership.'' \119\
---------------------------------------------------------------------------
    \119\ Ibid., p. 21.
---------------------------------------------------------------------------
    Due to DOD component resistance and ongoing CCMS problems, 
DSS did not expect to implement a risk prioritization process 
until January 2001. Regarding the implementation of a 
prioritization process, the Deputy Assistant Secretary of 
Defense (Security and Information Operations) stated, ``the 
recent problems with CCMS and the resulting increase in DSS 
case completion times, prioritization has become problem as 
case completion times have soared to a year or more in some 
cases. The OSAD (C3I) has taken the lead in developing with the 
DOD component customers a draft prioritization plan.'' \120\ A 
prioritization process for backlog cases was not implemented in 
January 2001.\121\
---------------------------------------------------------------------------
    \120\ See supra note 95, p. 66.
    \121\ Ibid., p. 67.
---------------------------------------------------------------------------
    In March 2001 the subcommittee learned, from the Assistant 
Secretary of Defense (C3I) Arthur L. Money, ``CCMS, which is 
part of all of this, is getting more stable and better, but it 
needs a prioritization application program added to it so we 
can prioritize things, and that is what that report (Personnel 
Security Investigations: Mission Degradation) pointed out. That 
internal report pointed out that we do not have prioritization 
within DSS, which is being fixed and will be in place in April 
2001.'' \122\
---------------------------------------------------------------------------
    \122\ Testimony of Arthur L. Money, Assistant Secretary of Defense 
for Command, Control, Communications, and Intelligence, NSVAIR 
Subcommittee hearing, Serial No. 107-40, p. 55.
---------------------------------------------------------------------------
    On August 22, 2000, Assistant Secretary of Defense for 
Command, Control, Communications, and Intelligence Arthur L. 
Money issued a memorandum ``Personnel Security Clearance 
Investigations'' implementing the Deputy Secretary's direction 
to distribute the personnel security clearance workload between 
DSS and OPM.\123\
---------------------------------------------------------------------------
    \123\ Memorandum: Personnel Security Clearance Investigations, Aug. 
22, 2000, from Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence Arthur L. Money to Secretaries of the 
Military Departments, et. al., (in subcommittee files).
---------------------------------------------------------------------------
    The Assistant Secretary also directed military departments, 
defense agencies, and contractors, per the Comptroller's 
``Spend Plan,'' to appoint a senior official to oversee the 
execution of their workload plan. Under DOD Directive No. 
5200.2 issued April 9, 1999,\124\ DOD components had previously 
been directed to designate a senior official to implement and 
administer the DOD Personnel Security Program. The senior 
component official would be responsible for monitoring and 
reporting the status of availability of sufficient funds, 
ensuring the PSI backlog workload distribution is maintained, 
and ensuring the timely adjudication of completed cases.
---------------------------------------------------------------------------
    \124\ Department of Defense Directive, No. 5200.2, Apr. 9, 1999, 
DOD Personnel Security Program, (in subcommittee files).
---------------------------------------------------------------------------
    On September 11, 2000, Deputy Secretary of Defense Rudy de 
Leon issued a memorandum, ``Personnel Security Investigation 
Review'' directing military departments, defense agencies, and 
contractors to review their requirements for personnel security 
reinvestigations.\125\ The Process Review Team that the Deputy 
Secretary created on June 1, 2000 determined that the backlog 
baseline had changed due to lapse of time and the efforts of 
the components in submitting personnel security reinvestigation 
requests. An update of the backlog was considered essential for 
planning and funding decisions. The results indicated that the 
backlog had dropped by 187,677 cases from 505,786 as reported 
in January 2000 to 318,109 in just 6 months.\126\
---------------------------------------------------------------------------
    \125\ Memorandum: Personnel Security Investigation Review, Sept. 
11, 2000, from Deputy Secretary of Defense Rudy de Leon to Secretaries 
of the Military Departments, et. al., (in subcommittee files).
    \126\ An Assessment of DOD's Plan to Eliminate the Periodic 
Reinvestigation Backlog, A Report to the Deputy Secretary of Defense, 
Personnel Security Investigations Process Review Team, Oct. 11, 2000, 
p. 4, (in subcommittee files).
---------------------------------------------------------------------------
    On October 11, 2000, the Deputy Secretary's Process Review 
Team formally reported the results of their review analyzing 
when DOD should expect the PSI process to ``get well'' as 
tasked by the Deputy Secretary's memorandum of June 1, 
2000.\127\ The Process Review Team report revealed a dispute 
over what PSI cases were to be considered as part of the 
backlog. The OASD (C3I) considered the backlog eliminated when 
all of the overdue PRs have been completed for investigation. 
``Although, this goal represents an important milestone, a 
process review team reported, the elimination of the backlog 
means completion of investigations associated with those PRs, 
the adjudication of the investigations, and a return of the 
pending workload to steady state.'' \128\ The Process Review 
Team considers the backlog eliminated once the investigations 
have been completed and adjudicated and the workloads of DSS 
and the Central Adjudication Facilities [CAFs] return to steady 
state. ``Assuming that DSS completes the last backlog 
investigation by mid to late FY2003, the last backlog cases 
would be adjudicated not later than the end of FY2003. At that 
time, the backlog will be eliminated and investigative workload 
will return to a steady state.'' \129\ This marked the fifth 
time in a 1\1/2\ year period that the target date for 
elimination of the backlog moved farther down range.
---------------------------------------------------------------------------
    \127\ Ibid.
    \128\ Ibid., p. 5.
    \129\ Ibid., p. 4.
---------------------------------------------------------------------------
    Commenting on DOD's ability to carry out this plan and 
achieve the new benchmark date for the elimination of the 
backlog, Deputy Inspector General Robert J. Lieberman said, 
``As far as the prospects for execution of the current plan are 
concerned, I don't think that we can be fully confident that we 
understand how many new investigations are going to be required 
until the system that Mr. Money referred to, the new system 
that is just being fielded now, is actually in place and starts 
generating experience data that we can all rely on. I think in 
another year or so we will be looking at the numbers again and 
perhaps the plan does not have to be stretched out. It may be 
evident that we will achieve this steady-state sometime 
earlier, but my guess is that we will not be seeing this 
steady-state for a few months after the end of the project 
plan.'' \130\
---------------------------------------------------------------------------
    \130\ Testimony of Deputy Inspector General, Robert J. Lieberman, 
NSVAIR Subcommittee hearing, Serial No. 107-40, p. 37.
---------------------------------------------------------------------------
    On October 31, 2000, the Deputy Secretary's Process Review 
Team responded to the remaining tasks as directed by the Deputy 
Secretary's memorandum of June 1, 2000. This report responds to 
the first and third tasks, to determine where DOD currently 
stands in reforming the PSI process with recommendations of how 
to expedite this reform effort.\131\
---------------------------------------------------------------------------
    \131\ See supra note 37.
---------------------------------------------------------------------------
    On December 14, 2000, the Office of the Under Secretary of 
Defense (Comptroller) issued a revised spend plan to 
incorporate the adjustment of the backlog from 505,786 to 
318,109 in accordance with the process review Process Review 
Team's survey results. The report included performance 
expectations for completing personnel security investigation 
cases and a $44.1 million reduction in funding for fiscal year 
2001 and fiscal year 2002.\132\
---------------------------------------------------------------------------
    \132\ Department of Defense, Office of the Under Secretary of 
Defense (Comptroller), Plan for Eliminating the Personnel Security 
Investigation Backlog, Dec. 14, 2000, (in subcommittee files).
---------------------------------------------------------------------------
    On February 8, 2001, the Director of Security, OASD (C3I) 
released a draft report on the status and possible options 
regarding the conduct of personnel security investigations by 
DSS.\133\
---------------------------------------------------------------------------
    \133\ See supra note 43.
---------------------------------------------------------------------------
    The draft report indicated, ``the time to complete the 
types of investigations upon which clearances are based was 
getting longer, not shorter.'' \134\ As the time to complete 
investigations has grown, the number of investigations pending 
also grew. ``If this trend remains static, there is no 
probability that the backlog of periodic reinvestigations will 
be reduced by the end of FY 2002, as currently directed.'' 
\135\ However, according to Assistant Secretary of Defense 
Arthur L. Money, ``the draft report was not reviewed; and it is 
not entirely accurate. You will see it has `draft' on it and so 
forth, so it was a failing within my office of not having the 
report vetted and made more accurate.'' \136\
---------------------------------------------------------------------------
    \134\ Ibid., p. 4.
    \135\ Ibid., p. 10.
    \136\ See supra note 122, p. 54.
---------------------------------------------------------------------------
    Commenting on the February 8, 2001 draft report, the Deputy 
Inspector General stated, ``It is likely that much of the data 
being used to track progress against the plan is flawed, but 
the errors are probably not egregious enough to distort the 
overall trends, which are very disappointing.'' \137\
---------------------------------------------------------------------------
    \137\ See supra note 99, p. 14.
---------------------------------------------------------------------------
    The draft reports states quite clearly, ``When observed as 
a whole, the current process as defined by the various 
directions and plans contained in the policy memoranda that 
have been issued by senior DOD management since June 1999, is 
not meeting the Department's need to provide timely 
investigations and clearances.'' \138\ When queried further why 
the draft report shouldn't be given more creditability, the 
Deputy Assistant Secretary J. William Leonard said the draft 
report did not include the PSI workload completed by OPM. 
Secretary Leonard said if the draft report had included the OPM 
workload, DDS turnaround time for completed PSIs would have 
been lower. ``When we were here last September (2000), we 
reported to the committee that a good part of our plan 
encompassed off-loading work from DSS to OPM. So therefore, any 
assessment of that plan would have to take into account what 
OPM is doing.'' \139\
---------------------------------------------------------------------------
    \138\ See supra note 43, p. 4.
    \139\ Testimony of J. William Leonard, Deputy Assistant Secretary 
of Defense for Command, Control, Communications, and Intelligence, 
NSVAIR Subcommittee hearing, Serial No. 107-40, p. 61.
---------------------------------------------------------------------------
    OPM had the capacity to handle personnel security 
investigations, and after 1 year demonstrated the ability to 
complete those investigations transferred from DSS in an 
accurate and timely manner.\140\ OASD (C3I) senior management 
wanted the subcommittee to accept the argument that the draft 
report was flawed because the authors did not include OPM's 
statistics in the calculation of the number of cases processed 
and how long it was taking to process those cases. As Mr. 
Leonard went on to say, ``And so, for example, for the first 
quarter OPM did, I believe close to 28,000 investigations for 
the Department of Defense, and if they were factored into case 
completion times, for example, what it would have shown is that 
Department-wide case completion times actually decreased.'' 
\141\ DSS was taking credit for OPM's ability to complete 
personnel security investigations in a timely manner and wanted 
to include those figures in a report that would have shown 
improved progress.
---------------------------------------------------------------------------
    \140\ See supra note 126, p. 15-16.
    \141\ See supra note 139, p. 61.
---------------------------------------------------------------------------
    Also, it should be noted the composition of the 
investigations handled by each is not the same. OPM handles 
many cases that can be processed by simple computerized checks, 
whereas almost all of DSS workload involves the most labor-
intensive and time-consuming background investigation work 
related to top-secret clearances. Therefore, the time necessary 
to complete a case varies widely between DSS and OPM. The 
handling of PSIs by OPM was not intended to be a permanent fix 
and as such should not be included in any measurement of DSS's 
workload capacity.
    When pressed further regarding the accuracy of the draft 
report relative to the Department's need to provide timely 
personnel security investigations and clearances, Deputy 
Assistant Secretary J. William Leonard stated, ``Don't get me 
wrong. I am not saying that we are where we want to be. We 
recognize that we are not on a glide path, so from that point 
of view, the fundamental thing you get out of that report is 
accurate. And we are very mindful of that and we are focused on 
that.'' \142\
---------------------------------------------------------------------------
    \142\ Ibid.
---------------------------------------------------------------------------
    The January 2002 Department of Defense, Office of the 
Inspector General semi-annual report to Congress highlighted 
``The inability of the Defense Security Service Program to 
ensure timely investigations also remains a serious concern. 
The Defense Security Service has increased its productivity and 
the Office of Personnel and Management has provided good 
support through its contractors to work off the backlog of 
several hundred thousand overdue clearance investigations and 
achieve reasonable turnaround times for new investigations 
requests. The program remains hampered, however, by uncertain 
projections of the future investigative workload. There is 
widespread skepticism among DOD components about the ability of 
DSS to efficiently handle more workload, yet DSS views the 
outsourcing of much of the investigative workload to OPM as a 
temporary measure. The long delayed transition of DSS to a pay-
for-service organization remains a key DOD management 
objective, but DSS still lacks a cost accounting system.'' 
\143\
---------------------------------------------------------------------------
    \143\ Inspector General, Department of Defense, Semi-Annual Report 
to Congress, Apr. 1-Sept. 30, 2001. p. 3.
---------------------------------------------------------------------------

2. There was a lack of management oversight of the Defense Security 
        Service [DSS] by the Department of Defense that contributed to 
        a backlog of personnel security investigations.

    The Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence [C3I] is the Department of 
Defense's senior agency official responsible or the personnel 
security program. Responsibilities of the Assistant Secretary 
(C3I) include oversight of the Defense Security Service, and 
direction, administration and oversight of the DOD personnel 
security program.\144\
---------------------------------------------------------------------------
    \144\ See supra note 37, p. 44.
---------------------------------------------------------------------------
    In addition, the DOD Personnel Security Committee [DODPSC] 
and Executive Steering Group [ESG] were established in 1999 to 
provide input and support to DOD's personnel security program 
management.\145\
---------------------------------------------------------------------------
    \145\ Ibid.
---------------------------------------------------------------------------
    In 1999, the General Accounting Office reported the Defense 
Security Service operated for at least 4 years with little or 
no oversight from the Office of the Assistant Secretary of 
Defense for Command, Control, Communications, and Intelligence 
[C3I] which is responsible for assessing the completeness of 
DSS investigative work.\146\
---------------------------------------------------------------------------
    \146\ See supra note 27, p. 29.
---------------------------------------------------------------------------
    Substantiating this in his prepared statement for the March 
2, 2001 NSVAIR Subcommittee hearing, Deputy Inspector General 
Robert J. Lieberman stated, ``senior DOD leaders paid very 
little attention to the Defense Security Service before the 
crisis broke.'' \147\
---------------------------------------------------------------------------
    \147\ See supra note 99, p. 9.
---------------------------------------------------------------------------
    A report, issued October 31, 2001, to the Deputy Secretary 
of Defense assessing the personnel security program observed 
oversight of the personnel security program by the Office of 
the Assistant Secretary of Defense (C3I) had not been 
effective.\148\ DOD officials told GAO that once DSS became a 
reinvention laboratory, it was allowed to operate, for the most 
part, independently.\149\
---------------------------------------------------------------------------
    \148\ See supra note 37, p. 9.
    \149\ See supra note 27, p. 29-30.
---------------------------------------------------------------------------
    As an example, from August 1996 through February 1999, DSS 
relaxed its investigative requirements through a series of 
policy letters.\150\ Several of these letters gave 
investigators greater discretion in how they would meet the 
Federal standards or pursue investigative issues that might be 
significant. These policy changes caused much confusion among 
agency staff.\151\
---------------------------------------------------------------------------
    \150\ Ibid., p. 20.
    \151\ Ibid. p. 21.
---------------------------------------------------------------------------
    In 1996 and again in 1998, the Security Policy Board 
advised DSS not to adopt policies that ran counter to the 
Federal investigative standards.\152\ The Director of the 
Security Policy Board staff stated, ``Apparently, rather than 
fight for adequate funding, DSS has chosen an assault on 
personnel security clearance standards.'' \153\
---------------------------------------------------------------------------
    \152\ See supra note 41.
    \153\ Ibid.
---------------------------------------------------------------------------
    The Board noted that DOD was a full partner in developing 
the new standards and that the planned actions by DSS would 
undermine the objectives of achieving reciprocity and PSI 
standardization among Federal Government agencies, cause a 
serious deterioration in the quality of investigative work, and 
increased security risk. The Policy Security Board stated that 
if DSS wanted to change the standards the agency should bring 
such requests to the Board, which was specifically established 
for that purpose. According to GAO, in spite of this advice, 
DSS management adopted the relaxed investigative guidance.\154\
---------------------------------------------------------------------------
    \154\ See supra note 86, p. 13-14.
---------------------------------------------------------------------------
    When questioned how lack of oversight and mismanagement of 
the agency contributed to PSI weaknesses found in GAO's review 
of the Personnel Security Investigation Program, Carol R. 
Schuster, Associate Director, stated, ``We found weaknesses in 
several areas. The first area was relaxing the standards below 
Federal standards, and also allowing perhaps too much latitude 
with their investigators as to how far and how deeply they went 
into the investigative areas. The second area was doing away 
with some of the quality control mechanisms they had on those 
investigations. They did away with the Quality Assurance 
Branch, and supervisory review, for instance. In the training 
area, they just really were not giving very much training to 
the investigators. Because there were new investigative 
standards, there was a need for such training. They also did 
away with the Security Institute, which was training not only 
to DSS investigators, but investigators throughout the 
Government.'' \155\
---------------------------------------------------------------------------
    \155\ See supra note 75, p. 19.
---------------------------------------------------------------------------
    The lack of oversight also affected the acquisition of the 
Case Control Management System. The Office of the Assistant 
Secretary of Defense (C3I) has the responsibly for monitoring 
major IT acquisitions.\156\ Robert J. Lieberman, Deputy 
Inspector General stated, ``we have spent about $100 million so 
far on CCMS.'' \157\
---------------------------------------------------------------------------
    \156\ See supra note 28, p. 3.
    \157\ Testimony of Deputy Inspector General, Robert J. Lieberman, 
NSVAIR Subcommittee hearing, Serial No. 106-267, p. 36.
---------------------------------------------------------------------------
    During the September 20, 2000 hearing, the subcommittee 
learned CCMS would be designated a major acquisition project 4 
years after the project began. In his prepared statement Donald 
Mancuso, Acting Inspector General wrote, ``We understand that 
the Assistant Secretary of Defense (Command, Control, 
Communications, and Intelligence) intends to designate CCMS as 
a major acquisition project, meaning there will be oversight by 
an Integrated Process Team and the Chief Information Officer 
[CIO] at the Office of the Secretary of the Secretary of 
Defense level. This is a prudent step, but does not in itself 
guarantee close oversight.'' \158\
---------------------------------------------------------------------------
    \158\ Statement of Donald Mancuso, Acting Inspector General, DOD, 
Office of the Inspector General, NSVAIR Subcommittee hearing, Serial 
No. 106-267, p. 34-35.
---------------------------------------------------------------------------
    When acquiring major IT systems, the Clinger-Cohen Act 
\159\ requires the Chief Information Officer [CIO] to monitor 
and evaluate the performance of information technology programs 
and advise the heads of agencies whether to continue, modify, 
or terminate a program.\160\ Carol R. Schuster, Associate 
Director, stated, ``to my mind (CCMS) is the biggest challenge 
that they face. That automated system was just not planned 
properly. It was not implemented properly. The people who were 
trying to procure that system and manage it really were not 
totally qualified to do that. They did not have the background 
in a major acquisition program. They did not have the 
information technology expertise to really do that.'' \161\
---------------------------------------------------------------------------
    \159\ 41 U.S.C. Sec. 251 (The Clinger-Cohen Act of 1996).
    \160\ See supra note 98, p. 7.
    \161\ See supra note 75, p. 22.
---------------------------------------------------------------------------
    Arthur J. Money, Assistant Secretary of Defense (C3I) 
conceded CCMS oversight failures stating, ``A program that had 
started in 1995, called case control management system, was 
installed. Now, here was a major failure. It was installed 
without testing, and the legacy system was turned-off never to 
be turned back on, or never could be turned back on.'' \162\
---------------------------------------------------------------------------
    \162\ See supra note 122, p. 36.
---------------------------------------------------------------------------
    And, acknowledging the lack of acquisition and deployment 
oversight of CCMS by the Office of the Assistant Secretary of 
Defense (C3I), the Deputy Assistant Secretary of Defense J. 
William Leonard stated, ``I am sitting here 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.'' \163\
---------------------------------------------------------------------------
    \163\ See supra note 95, p. 54.
---------------------------------------------------------------------------
    However, in that regard, there was more involved in the 
failure of CCMS than just software and design problems. In 
December 2000 the DOD Inspector General indicated in an audit 
of the case control management system that ``despite the key 
roll of CCMS in DSS operations that support virtually all DOD 
critical missions, minimal acquisition oversight and guidance 
was provided or offered by the Assistant Secretary of Defense 
for Command, Control, Communications, and Intelligence.'' \164\
---------------------------------------------------------------------------
    \164\ See supra note 28.
---------------------------------------------------------------------------
    Others have also noted the Office of the Assistant 
Secretary of Defense for Command, Control, Communications, and 
Intelligence (OASD-C3I) had difficulty providing adequate 
management oversight. The Report of the Commission to Assess 
U.S. National Security Space Management and Organization noted, 
``The current ASD (C3I) organization suffers from three 
difficulties: the span of control is so broad that only the 
most pressing issues are attended to and (space) matters are 
left, on a day-to-day basis, in the hands of middle-level 
officials without sufficient influence within the Department 
and the interagency arena.'' \165\
---------------------------------------------------------------------------
    \165\ Public Law 106-65, Report of the Commission to Access United 
States National Security Space Management and Organization, Executive 
Summary, Jan. 11, 2001, p. 21, (in subcommittee files).
---------------------------------------------------------------------------
    Insufficient influence within the Department and 
interagency arena was again evident in an OASD (C3I) August 22, 
2000 directive \166\ concerning compliance with a newly 
established workload plan for the elimination of the PSI 
backlog. The Assistant Secretary of Defense (C3I) merely 
``encouraged (emphasis added) the Military Departments and 
Defense agencies to have their Inspectors Generals include 
compliance as a matter of interest during inspections for 
FY2001 and FY 2002 to preclude the recurrence of the PSI 
backlog.'' \167\ As the PSI backlog grew to crises proportions, 
the Assistant Secretary of Defense (C3I) should have been made 
clear the PSI backlog should be treated more than just as a 
matter of interest.
---------------------------------------------------------------------------
    \166\ See supra note 123.
    \167\ Ibid.
---------------------------------------------------------------------------

3. Acquisition of the Case Control Management System [CCMS] and the 
        Joint Personnel Adjudication System [JPAS] did not comply with 
        the requirements of the Clinger-Cohen Act and may not provide 
        effective caseload management.

    The Office of the Assistant Secretary of Defense (C3I) is 
responsible for overseeing the design and implementation of 
large information technology systems are on schedule, within 
acceptable cost parameters, and have full user satisfaction. 
The Subcommittee found the Office of the Assistant Secretary of 
Defense (C3I) has a poor record for controlling the 
proliferation of incompatible IT systems, acquiring new systems 
that meet user needs within reasonable timeframes, controlling 
acquisition and upgrade costs, and ensuring the quality of 
data.
    As a result, the Office of the Assistant Secretary of 
Defense (C3I) allowed the acquisition and development of CCMS 
\168\ and JPAS \169\ without first determining whether the 
systems were the most cost-efficient and cost-effective 
solution for opening, tracking, closing, and adjudicating 
personnel security investigation cases.
---------------------------------------------------------------------------
    \168\ The case control mangement system was deployed in October 
1998.
    \169\ The Air Force is testing and deploying JPAS. Current legacy 
adjudication systems will operate in parallel with the deployed JPAS. 
Initial operational capability is planned for October 2001.
---------------------------------------------------------------------------
    The lack of oversight resulted in the deployment of a major 
IT system, the case control management system, that has put 
national security at risk and will require millions of 
additional dollars to fix or replace. The Defense Security 
Service's deployment of CCMS resulted in decreased productivity 
contributing to the periodic reinvestigation backlog. CCMS has 
become a costly attempt to maintain a failing status quo 
despite recommendations to scrap the system.\170\ DSS will 
spend more to fix the CCMS than it cost to acquire it.\171\
---------------------------------------------------------------------------
    \170\ See supra note 36, Sec. 7, p. 67-68.
    \171\ Ibid., p. 1-7.
---------------------------------------------------------------------------
    CCMS was designed to guide and control the Defense Security 
Service Enterprise System for opening, tracking, and closing 
personnel security investigation cases. The Enterprise System 
is a combination of 24 distinct primary information systems, 
subsystems, applications, and interfaces that share common data 
and connectivity.\172\
---------------------------------------------------------------------------
    \172\ See supra note 28, p. i.
---------------------------------------------------------------------------
    Commenting on the acquisition of CCMS, the Acting DOD 
Inspector General Donald Mancuso stated, ``The need for a 
modern DSS system with the capabilities intended for CCMS is 
undeniable; however, as has often been the case over the last 
decade with DOD information technology investments, 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.'' \173\
---------------------------------------------------------------------------
    \173\ See supra note 158, p. 33.
---------------------------------------------------------------------------
    DSS believed establishing a paperless Enterprise System of 
automated applications would avoid as much as $80 million in 
operating costs over a 6 year period and $900 million over a 3 
year period in reduced time for personnel security 
investigations.\174\ Without knowing the extent to which CCMS 
is meeting cost and benefit expectations, DOD was not in a 
position to make informed decisions on whether to deploy the 
system.
---------------------------------------------------------------------------
    \174\ See supra note 28, p. i.
---------------------------------------------------------------------------
    Federal information technology investment management 
guidelines require Federal agencies to economically justify IT 
projects before investing in them, and to justify them in an 
incremental manner to spread the risk of doing many things over 
many years on large projects.
    In December 2000, the DOD Office of the Inspector General 
issued an Audit Report citing DSS for not effectively managing 
the high risk involved in the acquisition and integration of 
CCMS and its Enterprise System by following the requirements of 
the Clinger-Cohen Act of 1996,\175\ OMB Circulars and DOD 
guidance for acquisition of information technology systems. The 
Clinger-Cohen Act requires agencies to design and implement a 
process for assessing and managing the risks of information 
technology acquisitions to include analyzing, tracking, 
evaluating, and reporting on risks and results of all major 
information technology capital investments.\176\ In addition, 
DOD regulations require every system acquisition program to 
establish cost, schedule, and performance objectives and 
thresholds before a major IT system is deployed.\177\
---------------------------------------------------------------------------
    \175\ Ibid., p. 3.
    \176\ Ibid., p. 15.
    \177\ DOD Regulation 5000.2-R, Mandatory Procedures for Major 
Defense Acquisition Programs and Major Automated Information Systems 
Acquisition Programs, Mar. 15, 1996 (revised June 2001), (in 
subcommittee files).
---------------------------------------------------------------------------
    In February 2000, Carol Schuster, Associate Director of 
GAO's National Security International Affairs Division stated, 
``DSS did not properly plan for the implementation of a new 
system (CCMS) designed to automate its personnel security 
investigation case processing. As a result, DSS has not been 
able to process its investigations, the volume of 
investigations sent to field offices and adjudication 
facilities has decreased sharply, and according to DSS 
officials, DOD may have to add $100 million to $300 million 
more to the $100 million already spent on its automation 
efforts to have a workable system. The automation efforts have 
exacerbated DSS's efforts to cope with the large backlog of 
overdue investigations.'' \178\
---------------------------------------------------------------------------
    \178\ See supra note 86, p. 15.
---------------------------------------------------------------------------
    Carol Schuster went on to say, ``the basic underlying 
factors are that it really was not planned very well as an 
acquisition program. The people were not very well qualified in 
either IT or acquisition management.'' \179\ DOD's Acting 
Inspector General Donald Mancuso concurred stating, ``The 
failure of CCMS, the DSS case control management system, was 
also a major setback.'' \180\ The DOD-IG reported, ``Prior to 
September 2000, neither the CCMS nor the rest of the Enterprise 
System was designed as a major automated information system or 
a special interest initiative. Funds contractually obligated 
for the Enterprise System's development and modernization 
amounted to $76 million from FY 1995 through FY 1999. Total 
planned development and operation costs for FY 2000 through FY 
2007 are estimated to be $312 million.'' \181\
---------------------------------------------------------------------------
    \179\ See supra note 75, p. 32.
    \180\ See supra note 70, p. 20.
    \181\ See supra note 28, p. 2.
---------------------------------------------------------------------------
    When questioned what was the biggest problem the agency 
faced, the Director of DSS stated, ``It is the case control 
management system because it becomes the pacing item for 
everything else that happens in the agency in investigations.'' 
\182\ And, Assistant Secretary Money stated, ``What happened in 
October 1998 was, essentially everything came to a grinding 
halt in that no cases were coming out due to software failure, 
system failures, and I will assert due to poor design on what 
CCMS ought to be.'' \183\
---------------------------------------------------------------------------
    \182\ See supra note 34, p. 117.
    \183\ See supra note 122, p. 36.
---------------------------------------------------------------------------
    The Office of the Assistant Secretary of Defense (C3I) and 
the Defense Security Service are attempting to resolve CCMS 
technical and program problems by initiating a series of 
actions designed to improve and enhance system performance. In 
August 1999, recognizing the agency did not have the capability 
or in-house expertise to manage and support the case control 
management system, DSS transferred management of the system to 
the Air Force.
    In addition, DSS is implementing a strategy to repair CCMS 
technical and program problems to improve the system's ability 
to open, track and close personnel security investigation 
cases. The aim is to expand the utility, efficiency, and 
effectiveness of CCMS to meet projected workload increases 
resulting from implementation of the spend plan.
    The strategy will involve a three-phase process and 
timetable: Phase one would stabilize the existing system; phase 
two would improve the current system; and the third phase would 
implement enhancements to CCMS. Those enhancements, called 
``target architecture,'' would be developed and implemented 
over 5 years starting in fiscal year 2002. DSS has requested an 
additional $93 million to develop and implement phase 
three.\184\ According to the Director of DSS, ``This target 
architecture provides a framework for future development and 
implementation of the entire Defense Security Service 
Enterprise System, including the case control management 
system.'' \185\ DSS believes the three-phase approach will not 
only allow for stabilization of the system and improvements to 
CCMS, but will preserve the initial investment in the system.
---------------------------------------------------------------------------
    \184\ Letter from Lt. Gen Charles J. Cunningham, Jr., USAF (Ret), 
Director, Defense Security Service to Congressman Christopher Shays, 
chairman, NSVAIR Subcommittee, July 26, 2000, (in subcommittee files).
    \185\ See supra note 35, p. 77.
---------------------------------------------------------------------------
    The August 22, 2000 memorandum issued by the Assistant 
Secretary of Defense (C3I) included detailed instructions to 
the DOD components transferring a portion of the personnel 
security clearance workload to OPM to fulfill the comptroller's 
spend plan directive. In part, this action was taken in an 
attempt to relieve the pressure on CCMS thereby allowing the 
system to more rapidly process incoming background 
investigations.\186\ However, according to TRW, the case 
control management system's serious weaknesses will be far more 
difficult to fix than DSS anticipates.\187\
---------------------------------------------------------------------------
    \186\ See supra note 95, p. 62.
    \187\ See supra note 36, p. 1-5.
---------------------------------------------------------------------------
    In December 2000, the DOD Inspector General recommended the 
Assistant Secretary of Defense (C3I) analyze whether the 
investment for the Case Control Management System provides the 
best business solution when compared to alternative solutions 
for opening, tracking, and closing personnel investigation 
cases.\188\
---------------------------------------------------------------------------
    \188\ See supra note 28, p. ii, (in subcommittee files).
---------------------------------------------------------------------------
    In January 2001, responding to the DOD IG's recommendation, 
the Assistant Secretary for Defense (C3I) wrote, ``DSS and C3I 
concur with the finding and recommendation as stated in the DOD 
IG report. We will conduct an analysis of alternatives to 
support the direction we plan to achieve for the future 
architecture and will include the economic analysis and 
calculation of the return on investment. In addition, 
performance measures and information assurance requirements 
will also be addressed.'' \189\
---------------------------------------------------------------------------
    \189\ Memorandum: Audit Report on Program Management of the Defense 
Security Service Case Control Management System (No. D-2001-019), Jan. 
23, 2001, from Arthur L. Money, Assistant Secretary of Defense (C3I) to 
the DOD IG Office of Assistant Inspector General for Audit, Director, 
Acquisition Management (in subcommittee files).
---------------------------------------------------------------------------
    As criticism of OASD (C3I) and DSS intensified over the 
handling of the case control management system, and as 
questions were raised regarding the justification for spending 
more to fix the system than it originally cost to purchase, DSS 
brought in consultants to evaluate the system. Carol Schuster 
stated, ``Regarding past evaluations, there was a DOD red team 
that came in, and evaluated what they should do with that 
system, and what went wrong with the system, and what they 
would recommend. A TRW contractor evaluation also looked at it 
from a technical standpoint.'' \190\
---------------------------------------------------------------------------
    \190\ See supra note 75, p. 23.
---------------------------------------------------------------------------
    The assessments found deficiencies in acquisition strategy, 
program management, system integration, and operations and 
maintenance. TRW estimated that an additional $168 million 
would be needed over the next 7 years to address these 
deficiencies for a system that was projected to cost $100 
million when fully operational. Ultimately, TRW believed CCMS 
could not be reengineered cost-effectively and recommended 
scrapping the system altogether. ``It is our engineering 
judgment that CCMS is not viable long-term and that it should 
be replaced. Such a replacement should be developed under the 
auspices of a strong, acquisition-experienced program 
management office.'' \191\
---------------------------------------------------------------------------
    \191\ See supra note 36, p. 1-5.
---------------------------------------------------------------------------
    Carol Schuster stated, ``Both of those groups pointed out 
numerous problems with the way the thing was put together, the 
lack of documentation, the lack of checks and controls, just 
what you would expect of an automated system, to the point that 
the TRW investigation did not feel like it was salvageable.'' 
\192\
---------------------------------------------------------------------------
    \192\ See supra note 75, p. 23.
---------------------------------------------------------------------------
    Despite the criticism, DSS persisted in plans to spend more 
to fix CCMS, and contracted with TRW for a follow-up, 
independent evaluation. In response to an inquiry from the 
chairman of the NSVAIR Subcommittee regarding the justification 
of continuing investment in CCMS, DOD responded, ``TRW reported 
in October 2000 that they now believe it is possible to retain 
and reuse substantial parts of the system. The system has 
sufficient stability to support operations for the foreseeable 
future. As improvements are made, alternatives are reviewed for 
impact and application for the various subsystems. No 
commitment to a future architecture for CCMS will be made 
without first conducting a thorough analysis of alternatives.'' 
\193\
---------------------------------------------------------------------------
    \193\ See supra note 97.
---------------------------------------------------------------------------
    During the October 2000 NSVAIR Subcommittee hearing, 
addressing the CCMS issue, the Director of DSS stated, ``there 
were dramatic improvements resulting from the software 
enhancements and corrections that have been implemented within 
the last six months.''\194\
---------------------------------------------------------------------------
    \194\ See supra note 35, p. 75.
---------------------------------------------------------------------------
    In May 2001, responding to questions \195\ for the record 
from the NSVAIR Subcommittee, the Office of the Assistant 
Secretary of Defense (C3I) reported, ``The case Control 
Management System is not contributing to any increase in the 
pending backlog. CCMS has been stabilized and recent 
improvements allow the Defense Security Service to take 
advantage of the original functional design to minimize human 
intervention and repetitive tasks. Efforts were refocused on 
stabilizing and improving the system to ensure a productive 
system. Actions were taken as necessary to meet directed policy 
scope changes, to baseline the current system, and to stabilize 
key processing functions. While we have taken advantage of the 
original CCMS functions as intended, the changing PSI and 
technology requirements dictate an assessment of needs for the 
current baseline as well as future requirements. Future target 
architecture and business process reengineering requirements 
are in the concept stage with a formal Analysis of Alternatives 
scheduled for early fiscal year 2002.'' \196\
---------------------------------------------------------------------------
    \195\ See supra note 97, p. 8.
    \196\ Ibid.
---------------------------------------------------------------------------
    Also in May 2001, the DOD-IG issued an audit report \197\ 
regarding the acquisition management of the Joint Personnel 
Adjudication System. JPAS will provide DOD with a common 
information resource for granting and sharing personnel 
security eligibility determinations and recording personnel 
access to sensitive and non-sensitive compartmented 
information. Its common database, linked by the Joint 
Adjudication Management System [JAMS] and the Joint Clearance 
and Access Verification Management System [JCAVS] applications, 
will standardize security clearance adjudications in compliance 
with DOD Regulation 5200.2-R,\198\ and will provide security 
managers with eligibility verifications for personnel desiring 
access to sensitive and classified facilities, weapon systems, 
and information. JPAS will also provide reports for programming 
and managing workloads at the Central Adjudication Facilities 
[CAFs] and locations requiring cleared personnel.\199\ JPAS is 
expected to minimize work delays for newly hired and visiting 
personnel with adjudicated clearances.\200\
---------------------------------------------------------------------------
    \197\ See supra note 99.
    \198\ Ibid., p. 1.
    \199\ Ibid.
    \200\ Ibid.
---------------------------------------------------------------------------
    As with CCMS, OASD did not manage the JPAS as an 
information technology investment when the acquisition strategy 
changed from a network of distributed database systems to a 
centralized database system.\201\ The DOD Chief Information 
Officer [CIO] did not demonstrate oversight involvement in the 
acquisition of the JPAS. JPAS supports the eligibility 
adjudication and verification business processes for granting 
security clearances to military, civilian, and contractor 
personnel. Accordingly, any processing delay caused by JPAS 
could also delay DOD and contractor personnel from performing 
assigned functions. As a result, JPAS requires CIO oversight 
because of its significance in supporting DOD missions.'' \202\
---------------------------------------------------------------------------
    \201\ Ibid., p. 8.
    \202\ Ibid., p. 7.
---------------------------------------------------------------------------

4. There are no common standards for investigating and adjudicating a 
        personnel security clearance in a timely manner.

    The subcommittee found there were no clear timeliness 
standards for completing a personnel security clearance. As an 
example, the length of time for completing a top-secret 
clearance by the Defense Security Service in 2000 ranged from 
298 days to 376 days.\203\ Completion times by OPM were lower.
---------------------------------------------------------------------------
    \203\ See supra note 43, p. 5.
---------------------------------------------------------------------------
    The DSS Director General Cunningham indicated as a result 
of reforms instituted, the agency would be able to do a case in 
180 days and that his target for completing a personnel 
security investigation was less than 100 days.\204\
---------------------------------------------------------------------------
    \204\ Testimony of Lt. General Charles J. Cunningham, Jr., USAF 
(Ret), Director, Defense Security Service, NSVAIR Subcommittee hearing, 
Feb. 16, 2000, Serial No. 106-267, p. 88.
---------------------------------------------------------------------------
    Also testifying regarding the length of time it takes to 
complete a security clearance investigation, Deputy Assistant 
Secretary of Defense J. William Leonard stated, ``The reason 
why the arrow is pointing to the left \205\ is because in one 
particular category, the most complex cases, OPM case 
completion times have gone up beyond the standard. However, the 
reason for that is because of the amount of work that we are 
giving out, we are dependent upon what I call `third-party 
providers of information.' We have to do FBI checks, INS 
checks, State Department checks, what have you. Those are the 
other activities that we are dependent upon. The more we push 
out, the more they have to respond to. That is the challenge we 
have today as a community. I have directed my people to get 
together on a community-wide effort. We need to collectively 
address this, because it is not an OPM problem, it is a 
community problem that impacts DSS and impacts every other 
agency that does background investigations.'' \206\
---------------------------------------------------------------------------
    \205\ Deputy Assistant Secretary Leonard is referring to a ``Plan 
Success Factor'' chart that compared success factors for processing 
PSIs by DSS and OPM. The success factor for OPM's Performance 
Expectations was pointing left, toward failure, even though overall OPM 
was at the high end of the chart. See NSVAIR Subcommittee hearing, 
Serial No. 107-40, p. 29.
    \206\ See supra note 139, p. 40.
---------------------------------------------------------------------------

5. Defense Security Service [DSS] and the Office of Personnel 
        Management [OPM] personnel security clearance investigators 
        have difficulty accessing State and local criminal history 
        record information [CHRI].

    The Personnel Security Investigations Process Review Team 
reported, ``Conducting a local agency check to obtain a 
criminal history record is a national requirement for all 
security clearance investigations. In some cases, a criminal 
history record can be obtained from State and federal 
repositories, thus fulfilling the local agency check 
requirement. However, the cooperation and priorities of local 
law enforcement agencies providing criminal history records 
varies depending on jurisdiction. In many cases, conducting a 
local agency check can cause significant delays in closing a 
PSI investigation.'' \207\
---------------------------------------------------------------------------
    \207\ See supra note 37, p. 25.
---------------------------------------------------------------------------
    ``State and municipal law enforcement agencies do not 
receive separate funding or resources for conducting local 
agency checks and often require payment for such checks as 
local policies dictate. Payment of fees does not appear to be 
an effective inducement for local agencies to comply with 
requests in an expeditious manner as response time does not 
change as a result of payment.'' \208\
---------------------------------------------------------------------------
    \208\ Ibid.
---------------------------------------------------------------------------
    DSS drafted proposed legislation which required access be 
given by all States to criminal history information through 
automated systems where available. ``The legislation passed 
without two key aspects: authorization for federal agencies to 
obtain criminal history record information on the basis of name 
or other common identifiers, and a prohibition on requiring 
indemnification agreements.'' \209\
---------------------------------------------------------------------------
    \209\ Ibid., p. 26.
---------------------------------------------------------------------------
    The Personnel Security Investigations Process Review Team 
recommended the Office of the Secretary of Defense 
representative to the Security Policy Board \210\ coordinate 
with the Department of Justice to develop incentives for local 
enforcement agencies to comply with requests for criminal 
history record information and to press for the enactment of 
the two unresolved issues.\211\
---------------------------------------------------------------------------
    \210\ See supra note 16. [The Security Policy Board [SPB] was 
abolished pursuant to NSPD No. 1. The functions of the SPB were 
transferred to the National Security Council, Policy Coordinating 
Committee on Feb. 13, 2000.]
    \211\ See supra note 37, p. 26.
---------------------------------------------------------------------------

                            RECOMMENDATIONS

1. The Secretary of Defense should continue to report the personnel 
        security investigations program including the adjudicative 
        process as a material weakness under the Federal Managers' 
        Financial Integrity Act to ensure needed oversight is provided 
        to effectively manage and monitor the personnel security 
        process from start to finish.

    Given the fact personnel security investigations are not 
conducted in a timely manner; many investigations are not 
meeting required national investigative standards, and long 
range milestones are planned beyond fiscal year 2001 to improve 
DSSs automation capabilities, the subcommittee recommends DOD 
continue to report the Personnel Security Investigations 
Program as a material weakness under the Federal Manager's 
Financial Integrity Act [FMFIA].
    The FMFIA requires DOD's senior managers to identify and 
solve department wide systemic problems. The General Accounting 
Office recommended this action as a result of their review of 
the PSI program. GAO found personnel security investigations 
were not conducted in a timely manner nor were they meeting 
Federal investigative standards, thus having a potential effect 
on national security. During the NSVAIR Subcommittee hearing in 
February 2000 Carol Schuster stated, ``They are designating 
this investigation program, as a material weakness to the 
Department of Defense under the Federal Manager's Financial 
Integrity Act.'' \212\
---------------------------------------------------------------------------
    \212\ See supra note 75, p. 22.
---------------------------------------------------------------------------
    The Department of Defense has made some headway in reducing 
the backlog of personnel security investigations as well as 
resolving the problems associated with tracking, processing, 
and adjudicating PSI's in a timely manner. However, the NSVAIR 
subcommittee recommends the Department of Defense continue to 
include the Personnel Security Investigation Program as a 
material weakness under the Federal Manager's Financial 
Integrity Act.
    Specifically, the subcommittee recommends the Secretary of 
Defense include in the Annual Statement of Assurance what 
progress and what action the Defense Security Service and the 
Office of the Assistant Secretary of Defense (C3I) are taking 
with regard to achieving the September 30, 2002 target date for 
the elimination of the PSI backlog, and for reducing the time 
it takes to grant a security clearance for new PSI's and 
periodic reinvestigations.
    In a prepared statement submitted to the NSVAIR 
Subcommittee, the Deputy Inspector General stated, ``We 
included the personnel clearance problem in the list of top DOD 
management challenges submitted to congressional leaders last 
December and recommend continued DOD and congressional 
oversight until the problem is truly resolved. I am confident 
that ultimately it is fixable with sustained management 
emphasis, but the current goal of eliminating the investigative 
backlogs by September 30, 2002, is clearly at risk. In 
addition, it is uncertain that all backlog cases will be 
adjudicated until well after that date.'' \213\
---------------------------------------------------------------------------
    \213\ See supra note 99, p. 19.
---------------------------------------------------------------------------
    The DOD-OIG reported, ``any large-scale shift of 
investigative workload back to DSS should be done incrementally 
and on a trial basis, with close oversight of the results. Any 
transfer must be justifiable on the basis that DSS will be able 
to out-perform OPM in terms of the cost, timeliness, and 
quality of investigations. The DOD-OIG plans additional audit 
work on these issues for the remainder of FY 2002.'' \214\
---------------------------------------------------------------------------
    \214\ See supra note 143, p. 3.
---------------------------------------------------------------------------
    In addition, the Deputy Inspector General said, ``I would 
not be surprised if the current plan has to be recast one more 
time, because I don't think that we can be fully confident that 
we understand how many new investigations are going to be 
required until the system (JPAS) that Mr. Money referred to, 
the new system (JPAS) that is just being fielded now, is 
actually in place and starts generating experience data that we 
can all rely on.'' \215\
---------------------------------------------------------------------------
    \215\ See supra note 130, p. 37.
---------------------------------------------------------------------------
    Concerns regarding the viability of the September 30, 2002 
target date were also raised by the General Accounting Office, 
``Then you've got the backlog cases, and then you've got the 
new cases coming in. So all told, we're talking about an 
enormous workload. 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.'' \216\
---------------------------------------------------------------------------
    \216\ See supra note 11, p. 46.
---------------------------------------------------------------------------

2. The Secretary of Defense should set priorities and control the flow 
        of personnel security investigation requests for all DOD 
        components.

    The Department of Defense does not have a centralized unit 
for tracking and prioritizing personnel security investigations 
and is therefore unable to determine the size or project an 
accurate date for the elimination of the PSI backlog. The 
NSVAIR Subcommittee recommends DOD establish a centralized unit 
to prioritize and control the flow of personnel security 
investigation requests.
    According to DSS Director, General Cunningham, ``The 
submission of requests for personnel security investigations is 
a function and responsibility of the individual military 
departments, defense agencies and defense contractors. More 
importantly, the Department of Defense prioritization comes 
from many sources and is difficult to integrate into our 
operations. This leaves the Defense Security Service at a 
severe disadvantage in trying to balance investigation 
requirements for a myriad of customers, all of whom have 
competing requirements and clearance needs.'' \217\
---------------------------------------------------------------------------
    \217\ See supra note 35, p. 80.
---------------------------------------------------------------------------
    The General went on to say, ``The personnel security 
process basically involves three phases, identifying the need 
for a security clearance and then prioritizing those requests, 
conducting the personnel security investigation, and 
adjudicating the PSI request.'' \218\
---------------------------------------------------------------------------
    \218\ Ibid., p. 81.
---------------------------------------------------------------------------
    Regarding the issue of prioritization, the Acting Inspector 
General stated, ``The April 2000 IG DOD report on Security 
Clearance Investigative Priorities \219\ discussed a number of 
DSS case management issues. The principal concern was the lack 
of a meaningful process for prioritizing the workload. We 
determined that investigative resources were generally applied 
on a first in, first out basis, so that clearance requests for 
important programs and higher risk positions often languished 
while investigators worked on routine cases. Since timely 
investigations are a major problem, we deemed it particularly 
unreasonable not to have a viable prioritization process that 
both the requestors of the clearance and the investigators 
understand.'' \220\
---------------------------------------------------------------------------
    \219\ See supra note 117, p. i.
    \220\ See supra note 158, p. 30-31.
---------------------------------------------------------------------------
    The Assistant Secretary of Defense (C3I) Arthur L. Money 
stated, ``There is a lack in CCMS to do prioritization. That is 
being fixed as another add-on to the software in April that 
will wash through the system, so by August there will not be 
this accumulation of cases, which have not worked their way 
through. So the prioritization will help the services once they 
prioritize.'' \221\
---------------------------------------------------------------------------
    \221\ See supra note 122, p. 63.
---------------------------------------------------------------------------
    However, according to the Director of DSS, ``With an 
anticipated significant number of security clearance requests 
expected through fiscal year 2001, it seems logical to me that 
the existing Department of Defense planning, programming and 
budgeting system would greatly improve the identification of 
requirements and simplify the process. It also seems logical 
that the establishment of central requirements facilities in 
the military departments would be most advantageous.'' \222\
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    \222\ See supra note 35, p. 80-81.
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    The subcommittee also suggests the Office of Management and 
Budget [OMB] undertake a study to determine the feasibility of 
transferring the management of DOD's Personnel Security 
Investigation Program to the Office of Personnel Management and 
report their findings to the appropriate congressional 
oversight committees.
    Legitimate concerns have been raised regarding the 
viability and the success of achieving the September 30, 2002 
target for the elimination of the backlog. Deputy Assistant 
Secretary J. William Leonard stated, ``The plan also extended 
the deadline for elimination of the investigation backlog until 
fiscal year 2002.'' \223\ Deputy Assistant Secretary Leonard 
was referring to the directive issued by Under Secretary of 
Defense William J. Lynn's on June 22, 2000, ``By using the 
services of the Office of Policy and Management for select 
investigations, we plan to clear the backlog of clearances by 
fiscal year 2002.'' \224\
---------------------------------------------------------------------------
    \223\ Testimony of J. William Leonard, Deputy Assistant Secretary 
of Defense for Command, Control, Communications, and Intelligence, 
NSVAIR Subcommittee hearing, Serial No. 106-257, p. 55.
    \224\ See supra note 85.
---------------------------------------------------------------------------
    However, the Deputy Inspector General is skeptical DOD can 
achieve this target date stating, ``The success of tracking, 
processing, and adjudicating PSI's in a timely manner is also 
doubtful. According to 2001 Defense Security Service data, it 
is taking 403 days on average for initial top-secret 
investigations, compared to 359 days in September 2000, when 
you had your last hearing on the subject. Likewise, it is 
taking 470 days on average for top-secret periodic 
reinvestigations, compared to 386 days in September 2000. The 
trends since this time last year have gone the wrong way, as 
far as this most sensitive part of the investigative workload 
is concerned.'' \225\
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    \225\ See supra note 99, p. 14-15.
---------------------------------------------------------------------------
    When compared to the results OPM is achieving, the Deputy 
Assistant Secretary J. William Leonard stated, ``OPM's 
performance has been outstanding. They have--an earlier 
question from Mr. Kucinich in terms of how long it takes to do 
an investigation, they have established time lines, anywhere 
from 35 days for a background investigation all the way up to 
180 days, depending upon what the requirements are. By and 
large, they are meeting those standards in every case.'' \226\
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    \226\ See supra note 139, p. 40.
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3. The Secretary of Defense should closely monitor the interface 
        between JPAS and CCMS to ensure effective management of 
        investigative and adjudicative cases and avoid further 
        backlogs.

    Without more consistent oversight of major information 
technology acquisitions, there can be no assurance that policy 
under the Clinger-Cohen Act is being translating into practice. 
Therefore, the subcommittee recommends the Secretary of Defense 
direct an immediate and one-time review of internal procedures 
to ensure compliance with the Clinger-Cohen Act by all DOD 
Military Departments and agencies, and the Office of Budget and 
Management initiate a review, cost/benefit analysis, and 
assessment of transferring the management and oversight of DOD 
agency information technology acquisitions to the General 
Services Administration [GSA].
    The deficiencies in DOD's Personnel Security Investigations 
Program systems are in large part due to DOD's non-compliance 
with the Clinger-Cohen Act. Both the General Accounting Office 
and the Office of the Inspector General have raised concerns 
whether the CCMS and JPAS will be fully operational and 
integrated to accomplish the task of prioritizing, opening, 
tracking, and adjudicating personnel security investigations. 
Deputy Inspector General Robert J. Lieberman stated, 
``Unfortunately, the DOD historically has not has a strong 
record in the support systems area and the entire Defense 
Personnel Security Program clearly has been hampered by 
inadequate systems for many years.'' \227\
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    \227\ See supra note 99, p. 13.
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    In regards to DOD's ability to eliminate the PSI backlog 
and prioritize PSI cases, the Deputy Inspector General said, 
``Everything is going to have to go right in terms of fielding 
new systems; and I know, Mr. Chairman, I have been over here on 
numerous subjects before you before, and the common theme 
running through all of them is that we have bad information 
systems and need something better, and historically, the track 
record for systems coming in on time, on schedule and actually 
being fully functional is not particularly good. So there is a 
risk there. If the new systems come in on schedule and are 
fully operational, we do not have anything that remotely looks 
like the CCMS fiasco, then we will have a fighting chance to 
get from here to there.'' \228\
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    \228\ See supra note 130, p. 51-52.
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    The Department of Defense, Office of Inspector General 
released audit reports critical of DOD's acquisition management 
of both Case Control Management System \229\ and the Joint 
Personnel Adjudication System.\230\
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    \229\ See supra note 28.
    \230\ See supra note 98.
---------------------------------------------------------------------------
    The DOD Inspector General reported, ``Programs are defined 
as Major Information Technology Investment if OASD (C3I) 
determines that a program requires special OSD management 
attention because of the importance of the program's DOD 
mission, the high development, operating, or maintenance costs, 
or the program's significant role in administering DOD 
programs, finances, property, or resources.'' \231\ ``Despite, 
the system's (JPAS) criticality in support of DOD missions, 
acquisition management oversight was not provided in accordance 
with the Clinger-Cohen Act.'' \232\
---------------------------------------------------------------------------
    \231\ Ibid., p. 2.
    \232\ Ibid., p. 8.
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    CCMS and the Enterprise System for personnel security 
investigations were also allowed to proceed ``without the 
benefit of program oversight and guidance.'' \233\ ``The 
failure of the Chief Information Officer (CIO) to actively 
participate in the acquisition of CCMS contributed greatly to 
the systems failures.'' \234\ \235\
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    \233\ See supra note 28, p. 7.
    \234\ Ibid.
    \235\ The failure of OASD (C3I) to monitor and evaluate the 
performance of major IT systems appears to be a systemic problem that 
the subcommittee has found in other Defense Department agencies. [See 
DOD Systems Modernization: Continued Investment in the Standard 
Procurement System Has Not been Justified, (GAO-01-682), U.S. General 
Accounting Office, July 2001. NSVAIR Subcommittee hearing record, The 
Standard Procurement System (SPS): Can the DOD Procurement Process be 
Standardized?, Feb. 7, 2002, (in subcommittee files).] ``The Clinger-
Cohen Act of 1996, OMB guidance, DOD policy, and practices of leading 
organizations provide an effective framework for managing information 
technology investments, not just when a program is initiated, but 
continuously throughout the life of the program. Together, they provide 
for economically justifying proposed projects on the basis of reliable 
analyses of expected life-cycle costs, benefits, risks, and a basis for 
investment selection, control, and evaluation decisionmaking. The 
department has not met these investment management tenets for the 
Standard Procurement System.'' [See Statement of Joel C. Willemssen, 
Managing Director, Information Technology Issues, U.S. General 
Accounting Office, NSVAIR Subcommittee hearing record, p. 5, The 
Standard Procurement System (SPS): Can the DOD Procurement Process be 
Standardized?, Feb. 7, 2002, (in subcommittee files).]
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4. The National Security Council should promulgate Federal standards 
        for investigating and adjudicating personnel security 
        clearances in a timely manner.

    Federal standards do not contain any specified time 
requirements for agencies to complete their investigative work 
for granting personnel security clearances. Because of the 
national security implications resulting from the length of 
time it takes agencies to grant security clearances, the 
subcommittee recommends that the appropriate National Security 
Council, Policy Coordinating Committee develop such Federal 
standards pursuant to National Security Presidential Directive 
No. 1.\236\
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    \236\ See supra note 16.
---------------------------------------------------------------------------
    The General Accounting Office reported, ``Defense Security 
Service customers (the military departments, DOD civilian 
agencies, and industrial contractors) and adjudication 
officials stated that they need DSS to complete its 
investigations within 90 days. The Office of Personnel 
Management uses a standard of completing its work in 35, 75, or 
a maximum of 120 days, depending on the price the customer is 
willing to pay for the service.'' \237\
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    \237\ See supra note 27, p. 16.
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    According to Carol Schuster, ``As I understand it, they are 
working 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 is any 
number of kinds of cases in this 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.'' \238\
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    \238\ See supra note 11, p. 45-46.
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5. The Secretary of Defense and the Attorney General jointly should 
        develop a system which allows DSS and OPM investigators access 
        to State and local criminal history information records [CHIR].

    During the March 2001 DSS oversight hearing, Assistant 
Secretary of Defense Arthur L. Money said in his prepared 
statement, ``In closing, I would like to ask for your help. 
First, we need automated access to State and local government 
criminal history records akin to that provided law enforcement 
agencies.'' \239\
---------------------------------------------------------------------------
    \239\ Statement of Arthur L. Money, Assistant Secretary of Defense 
for Command, Control, Communications, and Intelligence, NSVAIR 
Subcommittee hearing, Serial No. 107-40, p. 32.
---------------------------------------------------------------------------
    In that regard, Deputy Assistant Security J. William 
Leonard indicated DSS investigators could only access local and 
State criminal history record by means of a fingerprint card. 
Secretary Leonard stated, ``We have to submit finger print 
cards, which is a time-consuming and expensive process. In 
those instances where we cannot access their automated records, 
we literally have to send an agent out, put shoe leather on the 
ground, go to the local police office or local sheriff's office 
and stand in line.'' \240\
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    \240\ See supra note 139, p. 64.
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    Recently, subcommittee staff was advised by GAO that since 
September 11th there has be a greater demand for FBI 
fingerprint records for background checks by State and local 
officials. As a result, the increased demand for fingerprint 
cards is placing a greater burden on DSS to complete personnel 
security background investigations in a timely manner. The 
Department of Defense needs to develop policy in conjunction 
with the appropriate NSC Policy Committee to develop a system 
which will allow for better access to local and State criminal 
records by DSS agents and to submit Congress any legislation 
needed to implement this change.

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