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S. Hrg. 109–621

PROGRESS OR MORE PROBLEMS: ASSESSING THE

FEDERAL GOVERNMENT’S SECURITY CLEARANCE PROCESS

HEARING

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE AND THE DISTRICT 

OF COLUMBIA SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MAY 17, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

GEORGE V. VOINOVICH, Ohio, Chairman 

TED STEVENS, Alaska 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

DANIEL K. AKAKA, Hawaii 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

ANDREW RICHARDSON, Staff Director 

RICHARD J. KESSLER, Minority Staff Director 

NANCI E. LANGLEY, Minority Deputy Staff Director 

EMILY MARTHALER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Voinovich ............................................................................................. 1

Senator Akaka .................................................................................................. 15

WITNESSES 

WEDNESDAY, MAY 17, 2006

Hon. Clay Johnson, III, Deputy Director for Management, Office of Management and Budget .................................................................................................. 4

Kathy Dillaman, Associate Director, Federal Investigative Services Division, 

Office of Personnel Management ........................................................................ 5

Robert Andrews, Deputy Under Secretary for Counterintelligence and Security, U.S. Department of Defense ....................................................................... 7

Robert Rogalski, Special Assistant, Office of the Under Secretary For Intelligence, accompanied by Janice Haith, Acting Director for Defense Security 

Service, U.S. Department of Defense ................................................................. 7

Derek Stewart, Director, Defense Capabilities and Management, U.S. Government Accountability Office .................................................................................. 9

ALPHABETICAL LIST OF WITNESSES

Andrews, Robert: 

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 37

Dillaman, Kathy: 

Testimony .......................................................................................................... 5

Prepared statement with an attachment ....................................................... 30

Johnson, Hon. Clay III: 

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 27

Rogalski, Robert: 

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 39

Stewart, Derek: 

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 47

APPENDIX 

Questions and answers submitted for the Record from: 

Ms. Dillaman .................................................................................................... 65

Mr. Rogalski ...................................................................................................... 70

(1)

PROGRESS OR MORE PROBLEMS: ASSESSING 

THE FEDERAL GOVERNMENT’S SECURITY 

CLEARANCE PROCESS 

WEDNESDAY, MAY 17, 2006

U.S. SENATE,

OVERSIGHT OF GOVERNMENT MANAGEMENT,

THE FEDERAL WORKFORCE AND THE

DISTRICT OF COLUMBIA SUBCOMMITTEE

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:30 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. George V. Voinovich, 

Chairman of the Subcommittee, presiding. 

Present: Senators Voinovich and Akaka. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. The Committee will please come to order. 

Thank you all for coming. 

Today the Subcommittee on Oversight of Government Management holds its third hearing this Congress on the Federal Government security clearance progress, entitled ‘‘Progress or More Problems: Assessing the Federal Government’s Security Clearance Process.’’

A process that lacks the ability to clear highly skilled employees 

in a timely and efficient manner has serious consequences for the 

Federal Government and the security of our Nation. Our current 

system makes civilian military and contract employees wait too 

long for their security clearances. The Bush Administration and 

Congress have taken several steps to fix this process and we must 

remain devoted to accomplishing the goal. 

During the Subcommittee’s first security clearance hearing we 

discussed the transfer of investigative functions from the Department of Defense to the Office of Personnel Management and the 

impact this shift will have on the government’s ability to investigate and adjudicate security clearances in a thorough and expeditious manner. 

It has now been over a year since this transfer took place and 

I am interested in hearing your views on the effect of this transfer. 

At our second hearing, held on November 2005, we examined two 

critical components of reforming the security clearance process. 

First, we reviewed Executive Order 13381 issued June 28, 2005 

2

and the steps the Office of Management and Budget have taken to 

implement the order. 

Second, we examined the Office of Personnel Management’s strategic plan to address the long-standing backlog of security clearance investigations, which was released on November 8, 2005. 

Today we will assess OPM’s progress in implementing their plan. 

We will also explore OMB’s next steps regarding Executive Order 

13381. 

Finally, we will address the temporary halt by the Defense Security Service (DSS) in processing government contractor security 

clearances. 

Mr. Johnson, I applaud the commitment and leadership you have 

shown on this issue. I am hopeful that the Executive Order will be 

renewed. I look forward to learning about how you intend to further improve the process. Your committed leadership is very important to our progress. 

Ms. Dillaman, I look forward to your assessment of how OPM is 

implementing its plan. Specifically, OPM was mandated by the Intelligence Reform Act to complete 80 percent of their investigations 

within 90 days by the end of calendar year 2006. We will explore 

whether OPM will meet this and other goals set by the law. 

However, any progress that we have seen recently is overshadowed by the recent temporary halt by the Defense Security 

Service in processing government contractor security clearances. 

DSS blames this action on higher-than-expected clearance requests, 

which has led to a budget shortfall. Based on current predictions 

for year, DSS estimates they will need an additional $91 million to 

continue operating until the end of the fiscal year. 

Although DSS is projected to have a budget shortfall this year, 

I understand currently they have funds necessary to process the accounts. 

Additionally, the Government Accountability Office has noted, for 

a number of years, that the DOD clearance program regularly has 

problems estimating the number of clearances it will need each 

year. This is clearly evident in this case. 

Given these facts, it is hard to understand why the sudden and 

unexpected halt happened in the first place. I was happy to see 

that DSS began accepting initial secret applications on Monday of 

this week but it did not include top secret clearances. 

The inability of DSS to accurately estimate its work has serious 

consequences for the security clearance community. I have been receiving many complaints from contractors about this situation. 

First, it has increased the backlog of security clearances. Second, 

OPM plans its staffing needs based on estimates submitted by DSS 

and other agencies. As a result, OPM may not have the necessary 

work force to complete all investigations in a timely manner. Third, 

and most importantly, a prolonged halt in processing security clearances could be a serious threat to national security. 

I was reading this morning in the paper that this is such a problem that some contractors are offering a $25,000 bonus to somebody that has a clearance, or even an automobile to get them to 

come over and work on their projects. What if a contract was 

awarded to figure out how we could identify improvised explosive 

devices. What if the contractors were waiting around for individVerDate 0ct 09 2002 10:11 Oct 18, 2006 Jkt 028244 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\28244.TXT SAFFAIRS PsN: PAT
3

uals with clearances. They have the technologies but no one with 

a clearance. I just wonder how many other instances—and I am not 

saying this is one—but how many instances that could be like this 

are we encountering as a result of the fact that we are not doing 

the clearance job that we should be doing? 

Mr. Rogalski, I expect you to explain to the Subcommittee why 

DSS felt it necessary at this time to halt contractor personnel 

clearances without any warning to the contracting community, 

OPM, OMB, and Congress. Additionally, I would like to know how 

DSS plans to resolve the problem for the long-term. This incident 

is unacceptable and raises serious questions of communication between all of the agencies involved with the security clearance process and basic management competence. 

For example, did Clay Johnson know that you stopped accepting 

applications? Did Kathy Dillaman know that you stopped taking 

applications? 

All of us here today share a common goal of fixing the process. 

As I have stated in the past hearings, I am committed to working 

on this issue to ensure that motivated and qualified individuals do 

not have to wait for long periods of time to receive their security 

clearances. 

I would like to thank our witnesses for their participation this 

afternoon. I look forward to their testimony. 

We have excellent witnesses today, thank you for your participation. I look forward to your testimony and discussion. 

Your full statements will be entered into the record in their entirety and I would appreciate it if you would summarize your statements in the allotted 5 minutes. 

It is the custom of this Subcommittee to swear in all witnesses. 

Please stand to be sworn in. 

Do you swear that the testimony you are about to give this Subcommittee is the truth, the whole truth, and nothing but the truth, 

so help you, God? 

Mr. JOHNSON. I do. 

Ms. DILLAMAN. I do. 

Mr. ROGALSKI. I do. 

Mr. STEWART. I do. 

Mr. ANDREWS. I do. 

Ms. HAITH. I do. 

Senator VOINOVICH. Thank you. 

Our witnesses this afternoon include Clay Johnson, who is Deputy Director for Management at the Office of Management and 

Budget. It is always nice to have you testify before our Subcommittee. Welcome back. 

Kathy Dillaman is the Associate Director of the Federal Investigative Services Division of the office of Personnel Management. It 

is nice to see you here, too. 

Mr. Rogalski is a Special Agent to the Undersecretary of Defense 

for Intelligence. Mr. Rogalski, thank you for coming today. We appreciate you being here. 

Derek Stewart is the Director of Military and Civilian Personnel 

Issues at the Government Accountability Office. Welcome. 

I understand that, Mr. Andrews, you are going to be taking over 

the job. Welcome. 

4

1The prepared statement of Mr. Johnson appears in the Appendix on page 27. 

We will start with Mr. Johnson. 

TESTIMONY OF HON. CLAY JOHNSON, III,1 DEPUTY DIRECTOR 

FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET 

Mr. JOHNSON. Mr. Chairman, thank you for having me up here 

today. In your opening statement, you asked the question: ‘‘Are we 

making progress or do we have more problems?’’ I am here to say 

that we are making progress and, in some cases, significant 

progress. But, we are not where we want to be at this point in 

time. 

We are still committed to the goals laid out in the Intel Bill that 

called for certain levels of performance by December 2006 and we 

are working very diligently to achieve those goals. 

Overall since fiscal year 2005, we have reduced the time it takes 

to provide a security clearance to someone by 40 days. This is the 

month of April performance versus fiscal year 2005. The time it 

takes to submit a security clearance application material to OPM 

or the investigative agency has been reduced from 32 days to 21 

days. Department of Commerce and DOD have done a particularly 

good job of adopting the use of electronic transfer, eQIP, and improving their turnaround time and submission materials to OPM. 

The time it takes to do an investigation has been reduced by 40 

days. I will let Ms. Dillaman talk about that. 

The time it takes to adjudicate a security clearance request has 

increased 10 days. That is not acceptable. The Department of Commerce, Department of Energy, Department of Transportation and 

Homeland Security are all about 50 percent or 60 or 70 percent of 

where they need to be. They are processing about 50 percent of 

their adjudications within 30 days. At the other end of the spectrum, DOD is processing about 5 percent of their adjudications in 

30 days. The total net time it takes to adjudicate one of these 

things has increased, not decreased. 

Everyone knows what they need to do. We have goals. Everybody 

is committed to reform this process. The most distinguishing characteristic about this whole process, in my opinion, and I have been 

involved in a lot of government-wide efforts to do things, the singular most distinguishing characteristic about this effort is the 

level of commitment by particularly the six large agencies and by 

the investigating agency, OPM, to fix this problem. This is going 

to get fixed. 

Personally, I believe our biggest challenges in this are in working 

with the FBI primarily, but also DOD, in getting records provided 

to OPM so they can complete an investigation in an acceptable period of time. We are not very good at that now. 

I believe also the second big challenge is to improve the process, 

the timeliness of our adjudications. The reason I say I think these 

are the two biggest challenges is they require us to hire and train 

additional people. We know how many we need to hire in both 

cases. We know how to train them. But, we have not done that yet. 

So that still needs to take place and it is critical that it take place 

in a timely enough fashion that we are able to achieve our goals 

by December 2006. 

5

1The prepared statement of Ms. Dillaman with an attachment appears in the Appendix on 

page 30. 

Those are my comments and I look forward to any questions you 

or anybody else might have at the end of the opening statements. 

Thank you. 

Senator VOINOVICH. Thank you very much, Mr. Johnson. Ms. 

Dillaman. 

TESTIMONY OF KATHY DILLAMAN,1 ASSOCIATE DIRECTOR, 

FEDERAL INVESTIGATIVE SERVICES DIVISION, OFFICE OF 

PERSONNEL MANAGEMENT 

Ms. DILLAMAN. Mr. Chairman, it is my privilege to testify today, 

on behalf of the Office of Personnel Management (OPM), to provide 

you with an update on the progress that has been made to improve 

the timeliness of the security clearance process and reduce the 

backlog of background investigations. 

OPM’s mission is to ensure that the Federal Government has an 

effective civilian workforce. To accomplish this mission, OPM provides background investigation services to agencies OPM makes security clearance and suitability decisions on civilian, military, and 

contractor personnel on behalf of the agencies. 

At OPM, the division responsible for conducting background investigations is our Federal Investigative Services Division 

headquartered in Boyers, Pennsylvania. This division supports over 

100 Federal agencies with thousands of security offices worldwide. 

Its automated processing systems and vast network of field investigators handle a high volume of investigations. In fact, we expect 

to process over 1.7 million investigations this year. 

Since February 2005, OPM has had responsibility for about 90 

percent of all personnel background investigations for the Federal 

Government. Subsequently, the Office of Management and Budget 

(OMB) formalized this by officially designating OPM as the investigative agency responsible for conducting background investigations. 

We have worked closely with OMB and the major clearance 

granting agencies to meet the timeliness requirements of the Intelligence Reform Act of 2004. During my last appearance before this 

Subcommittee in November, I outlined how our performance improvement plan addressed four critical areas of the investigation 

and security clearance process: Workload projections, timeliness 

and quality of agency submissions for investigations, investigations 

timeliness, and adjudications timeliness. 

Since that time, I am happy to report that we have made great 

strides in improving overall timeliness in reducing the inventory of 

cases, and we are continuing to work aggressively to resolve any 

issues that are hindering the background investigations process. 

OPM provides reports each quarter to OMB and clearance granting agencies on the progress that has been made to meet the goals 

of the performance plan I earlier referenced. As an attachment to 

my testimony today, I am providing a chart which depicts the overall performance improvement trends for all agencies. 

To staff the investigations program responsibly, we need agencies 

to work toward projecting their annual need within a margin of 

6

error of 5 percent. Overall, agencies’ projections are within 17 percent of actual submissions this year. The Department of Defense, 

which represents over 80 percent of national security investigations, has exceeded their annual projections by 59 percent for the 

first half of the fiscal year. We have asked all agencies to reevaluate their projections for the balance of the year and, based on any 

adjustments provided, we may need to further increase our Federal 

and contractor staff to keep pace with demand. 

The first step in improving the timeliness of the investigation 

and clearance process is timely and accurate submission of the subject’s background information to OPM. The expanded use of the 

Electronic Questionnaires for Investigations Processing (eQIP), by 

submitting agencies has improved submission timeliness and lowered the rate of rejection due to inaccurate or inadequate information. 

OPM continues to make significant process in reducing the 

amount of time it takes to conduct background investigations. I 

have included a table in my written statement that demonstrates 

this progress. 

The improvement in timeliness can be attributed largely to increased staffing and productivity of our field agents. Currently, we 

are maintaining a staff level of over 8,600 employees and contractors devoted to the background investigations program. 

In addition, we began deploying field agents overseas in August 

2005 and currently have more than 40 agents working at more 

than 30 military institutions worldwide to handle international 

coverage requirements. 

Although we have been able to reduce the number of overdue initial clearance investigations, our inventory of pending investigations is increasing because of the difficultly we have in obtaining 

information from some national, State, and local record providers. 

Working with OMB, Federal agencies that provide records have developed aggressive plans to improve their performance. 

During the second quarter of this fiscal year, agencies that reported their adjudications to OPM averaged 78 days to complete 

those actions. OPM is working with those agencies to improve the 

time it takes to deliver completed investigations and report their 

adjudication actions. 

Mr. Chairman, when the Senate confirmed OPM Director Linda 

Springer last summer, I know she assured you that our work on 

security clearance reforms would be one of her highest priorities. 

I am proud to have been given the opportunity to work closely with 

our Director to put my own 30 years of Federal experience in this 

area to work, in order to meet the expectations that Congress and 

the President have set on this critical issue. 

This concludes my remarks. I would be happy to answer any 

questions. 

Senator VOINOVICH. I need to recess the hearing, as I am going 

to go over and vote. But, I will be back shortly. 

Thank you. 

[Recess.] 

Senator VOINOVICH. The hearing will reconvene. 

I understand, Mr. Andrews, that you want to make a short statement before we get to the testimony of Mr. Rogalski. 

7

1The prepared statement of Mr. Andrews appears in the Appendix on page 37. 

2The prepared statement of Mr. Rogalski appears in the Appendix on page 39. 

TESTIMONY OF ROBERT ANDREWS,1 DEPUTY UNDER SECRETARY OF DEFENSE FOR COUNTERINTELLIGENCE AND SECURITY, U.S. DEPARTMENT OF DEFENSE 

Mr. ANDREWS. Yes, sir, I certainly do. 

I am the Deputy Under Secretary of Defense for Counterintelligence and Security. The decision to suspend the security investigations was made shortly after I took up my post. It happened 

on my watch. 

This was not the finest hour for Defense Security Service, which 

reports to me. We failed, Senator, to accurately estimate the demand for security clearances or security investigations. We compounded that problem by failing to understand the systemic problems that further contributed to suspending the investigations. 

As I mentioned to you outside, I am responsible for taking steps 

to resume the investigations. I am also responsible for fixing the 

underlying problems in the process, so that something like this is 

unlikely to happen again. I want to assure you, that I will fulfill 

my responsibilities. 

We have lifted the suspensions for secret clearances and we have 

submitted to Congress a reprogramming action to permit us to lift 

the suspension on top secret and periodic reinvestigations. 

I believe we are on the path toward fixing fundamental flaws in 

our process. In the coming weeks, I will keep you and the Committee abreast of our progress and, at your convenience, consult 

with you as we move forward. 

To my left is Rob Rogalski, Special Assistant to the Under Secretary of Defense for Intelligence. Rob is the person most knowledgeable about the suspension and I have asked him to lay out 

what happened and to outline the near-term, and longer-term, solutions we have identified. Thank you, sir. 

Senator VOINOVICH. Thank you. I would like to see you in my office in several weeks so that I can find out from you how DSS is 

doing. 

Mr. ANDREWS. I would be glad to be here, sir. 

Senator VOINOVICH. Great. Mr. Rogalski. 

TESTIMONY OF ROBERT ROGALSKI,2 SPECIAL ASSISTANT, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE, ACCOMPANIED BY JANICE HAITH, ACTING DIRECTOR FOR DEFENSE SECURITY SERVICE, U.S. DEPARTMENT 

OF DEFENSE 

Mr. ROGALSKI. Good afternoon, Mr. Chairman. 

Prior to the appointment of Mr. Andrews, I was the Acting Deputy Under Secretary of Defense for Counterintelligence Security. I 

am joined by Janice Haith, Acting Director for Defense Security 

Service, DSS, and we are prepared to answer your questions today. 

The Under Secretary of Defense for Intelligence asked me to lead 

a DOD team to diagnose what caused DSS to suspend industry investigations due to a $90 million funding shortfall. The work we 

have done has uncovered a number of systemic problems associated 

8

with the industrial security process. We have identified immediate 

changes which we believe will help address these problems. 

By way of background, the Department of Defense budgets and 

provides payment to OPM to cover the cost of security clearance investigations for DOD contractors and the contractors for 23 other 

Federal agencies, as part of the National Industrial Security Program. 

On April 25, the Acting Director of DSS directed the Defense Industrial Security Clearance Office (DISCO), which processes requests from industries for investigations, to suspend submissions to 

OPM for two types of investigations: Initial investigations and periodic. 

On April 28, DSS notified the industrial security community to 

stop sending requests for investigations to DISCO. DSS projected 

that it did not have sufficient funds available to pay OPM for additional investigations. DSS took this action to comply with the AntiDeficiency Act. DSS could not knowingly request investigations 

without available funding. 

Let me stress that DSS did not direct OPM to stop work on any 

industrial investigations, initial or periodic, submitted prior to 

April 25, and DSS has paid for all work submitted to OPM through 

April 25. 

During fiscal year 2006, and prior to April 25, DSS submitted to 

OPM over 100,000 requests for additional investigations. Based on 

our current projections, we anticipate submitting another 100,000 

industry investigations for fiscal year 2006. Again, none of the 

more than 100,000 industrial investigations submitted by DSS to 

OPM prior to April 25, have been affected by DSS’s action to suspend the submission of investigations. 

A number of factors contributed to the problems faced by DSS. 

First, DSS did not adequately budget for the cost of industry investigations in fiscal year 2006. In October 2004, the Department 

signed an agreement with OPM to transfer the personnel security 

investigation function from DOD to OPM. As part of the agreement, DOD agreed to pay to OPM up to a 25 percent premium of 

the base cost of investigations to offset potential operating losses 

incurred by OPM. The DOD budget request, which was delivered 

to Congress in February 2005, prior to OPM publication of its fiscal 

year 2006 rates, did not include funds to pay the premium to OPM. 

In addition, the DSS budget was further reduced during the Congressional deliberation on the fiscal year 2006 budget and DSS did 

not appropriately manage the reduction. 

Second, when DOD transferred the personnel security function to 

OPM, DSS had approximately 45,000 pending industry investigation requests which they did not transfer to OPM. DSS directed industries to resubmit many of these investigations and it appears 

they are being submitted during this fiscal year. DSS failed to 

track the status of these investigations and did not request funding 

for them in its fiscal year 2006 budget submission. 

Let me address the immediate steps the Department has taken 

to address the suspension. DOD’s Comptroller provided DSS $28 

million to restart industry investigations. DSS has expended $5 

million of these funds to pay the most recent bill from OPM. Yesterday DSS notified industry to begin submitting requests for iniVerDate 0ct 09 2002 10:11 Oct 18, 2006 Jkt 028244 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\28244.TXT SAFFAIRS PsN: PAT
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1The prepared statement of Mr. Stewart appears in the Appendix on page 47. 

tial investigations for secret clearances to ensure individuals requiring a clearance for employment are placed in the OPM processing queue. Based on our present projections, the remaining $23 

million will allow DSS to send to OPM for processing industry initial secret clearance requests through the end of June 2006. 

DOD, with OMB approval, submitted a reprogramming request to Congress for $90 million yesterday to enable DSS to submit the 

remaining protected industry investigations through the end of fiscal year 2006. 

As you have heard from Mr. Andrews, the Deputy Under Secretary of Defense for Counterintelligence Security, he has directed 

the following actions to address the systemic problems: The establishment within DSS of a central oversight office to perform a variety of functions to include developing a process to link security investigation requirements and funding with current and future 

DOD contracts; monitor, initially on a daily basis, the industry investigation process; and develop trip wires to reduce the probability 

of any need to impose a future suspension. 

The DOD Comptroller will immediately begin work with DSS to 

develop new processes for DSS to use in preparing its budget submission. DSS will continue to work with OPM so that the two organizations can identify and track investigations submitted to OPM 

for processing as well as the associated funding. 

The Department senior leadership is committed to correcting the 

systemic problems that have been identified in the personal security process. The Department recognizes that inadequate oversight 

was a major contributor to this problem. 

Mr. Chairman, this concludes my statement. We are available to 

answer any questions you may have. 

Senator VOINOVICH. Thank you very much. Mr. Stewart. 

TESTIMONY OF DEREK B. STEWART,1 DIRECTOR, DEFENSE 

CAPABILITIES AND MANAGEMENT, U.S. GOVERNMENT 

ACCOUNTABILITY OFFICE 

Mr. STEWART. Thank you, Mr. Chairman, Senator Akaka. We are 

pleased to be back again for this third hearing on personnel security clearances. 

Executive Order 10865, dated February 1960, authorized DOD to 

enter into agreements with other Federal departments and agencies for clearances for industry personnel. This was a 1960 Executive Order. 

Today, DOD has agreements with 23 departments and agencies, 

including the Departments of State, Homeland Security, Justice, 

etc. Industry personnel hold an estimated 700,000 to 800,000 of the 

roughly 2 million DOD issued clearances. 

So given the expanse of DOD’s program, we believe this is truly 

a matter of national security. Today, I want to touch on three 

issues. I am going to give you an update on our ongoing work, looking at top secret clearances for industry personnel. Second, I will 

discuss the July expiration of Executive Order 13381. And last, I 

will discuss DOD’s decision to temporarily stop processing industry 

clearances. 

10

Regarding our ongoing work, we continue to assess the timeliness and completeness of DOD’s and OPM’s processes to grant eligibility for top secret clearances for industry personnel. Although 

our final report will be issued to you, Mr. Chairman, and other requesters in September, several preliminary observations have 

begun to emerge from our work. One of the more significant observations relates to performance problems of OPM’s investigative 

workforce, primarily due to inexperience. 

OPM has made significant efforts to develop a domestic investigative workforce but it estimates it may take a couple of years before the workforce actually reaches desired performance levels. 

The July 1, 2006 expiration of the Executive Order could slow 

improvements in the clearance processes government-wide. The Executive Order, among other things, delegated to OMB the responsibility for improving the clearance process. We have been encouraged by OMB’s high level of commitment, as demonstrated by the 

development of a government-wide plan to address clearance-related problems. 

Because there has been no indication that the Executive Order 

will be extended, we are concerned about whether the progress 

made to date will continue without OMB’s high-level management 

attention. If OMB does not continue in its current role, we believe 

it is critical to continue to have a single entity in charge of the 

overall process and that this entity be viewed as an impartial and 

of sufficient clout to maintain the momentum established under 

OMB’s leadership. 

Finally, DOD’s decision to temporarily stop processing clearances 

for industry personnel has been attributed to a number of factors. 

Of these, we believe that DOD’s perpetual inability to accurately 

project its security clearance workload is most problematic. This is 

not a new problem. Mr. Chairman, the record will show that each 

of the two times I have testified before this Subcommittee, I have 

raised this as a serious issue. 

Also, we have repeatedly raised the issue in our recent reports 

and recommended steps be taken to address this matter. DOD has 

concurred with our recommendations to improve its clearance 

workload projections but has done little to follow through. Consequently, we are far from confident and even less optimistic that 

DOD will follow through on its commitment to improve this situation for the long-term. 

Mr. Chairman, this concludes my remarks. I will be happy to respond to questions. 

Senator VOINOVICH. Thank you very much. 

I am glad Senator Akaka is here and I apologize that you were 

not able to hear the first part of the testimony, but I am sure that 

you have had a chance to familiarize yourself with it. Senator 

Akaka. 

Senator AKAKA. Thank you. I have a prepared statement I would 

like to submit for the record at this time. 

[The prepared statement of Senator Akaka follows:]

PREPARED STATEMENT OF SENATOR AKAKA 

Thank you very much, Mr. Chairman. As always, I am delighted to work with you 

in our effort to make the Federal Government more efficient—more effective—and 

more responsive. One area that will benefit from our continued oversight is the govVerDate 0ct 09 2002 10:11 Oct 18, 2006 Jkt 028244 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 C:\DOCS\28244.TXT SAFFAIRS PsN: PAT
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ernment’s security clearance process, and I’m sure that government contractors, 

whose applications for clearances were cut off three weeks ago, will agree. 

Today’s hearing is on the progress made by the Office of Personnel Management 

(OMP), the Defense Security Services (DSS), and the Office of Management and 

Budget (OMB) in attacking the backlog of security clearance applications since we 

started our oversight. In addition, we will also discuss the unilateral decision by 

DSS to stop accepting security clearance applications from contractors on April 28, 

2006. 

I strongly believe this particular action illustrates the government’s lack of strategic vision to identify problems today that will create bottlenecks in Federal programs in the future. 

Certainly I am pleased that DSS submitted its reprogramming request to Con- gress to transfer nearly $91 million to fund contractor applications for the remainder of fiscal year 2006, in time for this hearing. However, it’s troubling that contractor applications were stopped even though there was money to fund the program, and DSS knew as early as January that additional funds were needed for the 

remainder of the fiscal year. 

I reviewed Mr. Rogalski’s statement, and I was heartened by his candid admission 

that DSS has difficulties in forecasting funding and projecting clearance needs. I 

was also pleased to learn that DSS is taking immediate steps to address the interruption in accepting contractor applications and is looking at long term solutions. 

However, had the Department of Defense (DOD) complied with a provision in the 

fiscal year 2001 National Defense Authorization Act that required DOD to establish 

a process for expediting investigations and conducting annual reviews of the process, we might not be facing this problem today. In my capacity as the ranking member of the Armed Services Readiness Subcommittee, I’ve spent significant time 

working on DOD’s business transformation, and I want to see results. Like Chairman Voinovich, I understand that unless the government’s security clearance system works smoothly, our national security may be compromised, program failures 

can occur because of inadequate staffing, or contractor costs can increase significantly due to schedule delays. 

Last month, the DOD Inspector General found that delays in the security clearance process ‘‘may impact national security, completion of critical DOD missions, 

and support of the warfighter.’’ This is unacceptable. 

We must strengthen existing relationships and improve communication among 

DOD, OPM, and industry. Agencies cannot respond to problems in isolation. I want 

to make sure that the three agencies represented here today—and OMB—understand that the long-standing problems affecting the government’s security clearance 

program must be addressed jointly and openly. Too much depends on it. 

Chairman Voinovich, our goal is simple: We want to get the personnel security 

clearance program off of the GAO high-risk list. We have challenged OMB, designated by the Administration to take the lead in resolving these problems, to work 

with OPM and DOD. While there has been forward motion, the halt in industry applications is a significant step backwards. However, I am confident that with our 

continued oversight of this high-risk area we will see results. 

Thank you, Mr. Chairman.

Senator VOINOVICH. With your permission, is it all right if we get 

on with the questions? 

Senator AKAKA. Yes. 

Senator VOINOVICH. Mr. Stewart states that the communication 

problems between DOD and OPM may be limiting governmentwide efforts to improve the personnel security clearance process. 

The failure by DSS to inform OMB and OPM ahead of time of its 

intention to stop processing contractor security clearance is a case 

in point. Is there a communication problem here? 

Ms. HAITH. No, sir. We did not notify either OPM or OMB of the 

stopped processing. That was a miscommunication of our agency’s 

process and we acknowledge that and have taken corrective action 

to ensure it does not happen again, on any matter. 

Senator VOINOVICH. What is corrective action? What does that 

mean? 

Ms. HAITH. We have instituted some new policies that will prohibit external communications from going out of any magnitude 

12

that impact personnel security facility clearance processing without 

proper notification to, not only our chain and DOD, but also to appropriate entities, such as OPM or OMB. 

We have also taken appropriate disciplinary action with the employee that failed to do the coordination in advance. 

Mr. ROGALSKI. Can I follow up on that, Mr. Chairman? 

Senator VOINOVICH. Yes. 

Mr. ROGALSKI. Let me address the communication from the policy level from the Department of Defense with OPM. 

There are several fora that are in place today where DOD and 

OPM do work together. OPM chairs a background investigator 

stakeholders group with the Federal agencies. DOD participates in 

that group. 

The Acting Director of Security for the Department of Defense 

meets with Ms. Dillaman on a periodic basis, as a matter of fact 

it has been pretty frequent lately, to ensure that we are addressing 

those issues to work together. 

DOD is committed to OPM’s success. We also communicate with 

OPM on their automation initiatives. So in this particular case, 

though, as Ms. Haith has already addressed, the Department did 

not adequately inform OMB, OPM, or Members of Congress, and 

we regret that. 

But I do want to add that there is communications channels 

open. Mr. Johnson, as well, chairs a group that senior leadership 

from DOD attends with the major security holders in the government to include DOD, CIA, Department of Homeland Security, and 

so on. So I would assess that the communications is open between 

the Department, OPM, and OMB. In this particular case, that did 

not occur. 

Senator VOINOVICH. Mr. Johnson, because the Executive Order is 

coming out of OMB, have you put instituted policies that would require agencies to notify you if they were going to tinker with the 

process. 

Mr. JOHNSON. No, sir. 

Senator VOINOVICH. Why not? 

Mr. JOHNSON. It just never occurred to me that was ever going 

to happen. By the way, the communication problem associated with 

this, as I understand it, is not just DOD to other entities. It was 

internal DOD as well. When this happened, a lot of people in DOD 

were not aware of it. So there was a lot of dissatisfaction all 

around. 

Senator VOINOVICH. Mr. Johnson, I think that you ought to get 

the word out to folks that if you are going to tinker with the system and you have any problems with it, they better pick up the 

phone and let you know about it. I think I would make it darn 

clear, on behalf of the Administration, that you want that done. 

Mr. JOHNSON. Yes, sir. 

Senator VOINOVICH. Are any of you aware of government contractors attempting to recruit government employees that have clearance? In other words, to hire people that have already got a clearance to get them on the payroll? 

Mr. STEWART. Mr. Chairman, we did another study, as you may 

recall, in February 2004. And we met with a number of industry 

associations and we heard that, in particular, the Northern VirVerDate 0ct 09 2002 10:11 Oct 18, 2006 Jkt 028244 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 C:\DOCS\28244.TXT SAFFAIRS PsN: PAT
13

ginia Technology Council, NVTC, represents about 1,500 high-tech 

organizations. And they were very clear that their members were 

going across the street and hiring away other folks who had clearances, offering them trips to Las Vegas, a $10,000 signing bonus, 

and $5,000 for any additional employee that they could bring to the 

organizations with a clearance. So it is alive and well. It is happening. 

Mr. ROGALSKI. Mr. Chairman, might I follow-up on that? 

Senator VOINOVICH. Mr. Rogalski. 

Mr. ROGALSKI. There are two dynamics here. One is, as with the 

situation just described, that it has been a long ongoing practice 

within the industrial community. Clearances do make you marketable. 

The issue of people being offered bonuses happened before the 

DSS suspension. So, that is just the nature of the business of having this commodity called a security clearance, which is very valuable in the industrial security community. 

But, let me address the impact of this particular suspension, because we have looked at this carefully. I met with the key security 

directors in the industry on May 10, who represent probably 80 or 

85 percent of the cleared industrial security community for the Department. 

I asked them the impact. I asked them what they saw. As we 

have looked at the numbers, we receive, on average, 4,000 requests 

per week from industry for investigations. Of these 4,000 requests, 

approximately 2,400 are for periodic reinvestigations. 

In the 2-week period that we have assessed we received 8,000 requests. Of those requests, 2,400 are for periodic reinvestigations, 

meaning that those people are still at work. Their clearance did not 

stop, whether it is 5 years for TS. This means that approximately 

5,600 people are new hires, whose investigations we were not able 

to process because of the suspension that DSS implemented on 

April 28. So, we assess the impact of about 5,600. 

Now, that is 5,600 too many. We recognize that. But, I think the 

perception of the suspension may not be as great as the reality. 

Senator VOINOVICH. I want to let you know that I am going to 

give you 6 months to put together a plan to fix DSS. This has got 

to stop. 

Another issue that we need to address is the issue of how many 

of these jobs really need clearances and at what level. 

And I am still, Mr. Johnson, hearing complaints from individuals 

who have clearances going through investigation when they move 

agencies. Gordon England has had to get clearances for every job 

that he has had. We need to respect reciprocity. 

Mr. JOHNSON. Specifically, with regard to Gordon England, I 

think that clearance would have been per the White House. And 

they, just last week, agreed that there will be reciprocity. 

Senator VOINOVICH. I would like to see the reciprocity program. 

Dale Klein is currently the Assistant to the Secretary of Defense 

for Nuclear and Chemical Biological Defense Programs. Big clearance. He has been nominated to be Chairman of the NRC. He had 

to go through an extensive background check. It took 4 months. 

They started from the beginning. That is just foolishness. 

Senator Akaka. 

14

Senator AKAKA. Thank you very much, Mr. Chairman. 

From your questioning and from the responses, I believe that one 

of the solutions is to strengthen relationships and improve communication—it is a simple way of saying it—between DOD, OPM, and 

the industry. Agencies cannot continue to respond to problems in 

isolation. 

I want to make sure that the three agencies represented here 

today understand that the long-standing problems affecting the security clearance program process must be addressed jointly and 

openly. Too much depends on it. And this, I think, is obvious. 

Mr. Rogalski, the 2001 fiscal year National Defense Authorization Act required the Department to establish a process for expediting security clearance investigations. The end result would have 

been quite similar to what you proposed in your testimony today. 

My question to you is, do you know what progress DOD had 

made on the Congressional mandate prior to the transfer of security clearances to OPM last year? 

Mr. ROGALSKI. There is three dynamics from what we understand from the Act. One is to the qualification of requirements for 

those background investigations. We do survey the industrial community and ask the DOD components, annually, to project their requirements. 

In addition, through that process, on the military and government side, there is a process where we identify those critically sensitive positions. There is already a priority in place. Basically it is 

a categorization of those personnel on the basis of their degree, 

what they need access to. So there is a certain population within 

the Department that requires access to top secret. So that is a part 

of the process today within the Department. 

Within the industry, there is not an equivalent process. One of 

the things that we recognize, and to follow on the Chairman’s question, we have established that tiger team. As a matter of fact, I was 

asked, or directed, about a week-and-a-half ago to get my arms 

around this, to fix the problem. So we put together a team with 

representatives from the Department, military departments, Office 

of General Counsel, Comptroller, acquisition technology and logistics because this must be tied to contracting. 

So I think, to answer your question, we have identified, we have 

that prioritization if you will, on the DOD government and military 

population. 

We do not have a similar process on the industry side. It is clear 

we have to get greater traction between that DOD program manager. So, for example, if I am the program manager for a DOD acquisition program, I need to determine what is the priority for 

those clearances. 

That is one of the things we are looking at in this tiger team to 

get greater traction. The words I used with industry on May 10 

were when that clearance requirement becomes a twinkle in your 

eye, we need to understand that requirement, it needs to be validated by the DOD sponsor, and then be put in the queue, and the 

follow-on with that is the process needs to be tied to budgeting. 

That is the systemic problem that is just not happening in the Department today. We will fix that. 

15

Senator AKAKA. I am glad to hear that there will be an effort to 

fix it. 

It seems to me that if DOD had taken strong action on the 

NDAA requirement, perhaps the DSS transfer to OPM might not 

have been needed. What do you think about that? 

Mr. ROGALSKI. Since I was not privy to those discussions concerning the NDAA, and the discussions involved in the transfer, I 

cannot answer that question. We can take that as a question for 

record. 

I can say, though, that was a business case that the Department 

made to ensure there would be one Federal provider of industry—

of investigations, not just industry, all background investigations, 

security clearance investigations. And the Department made that, 

went to an agreement with OPM to really drive two things. One, 

we thought the cost could come down through that agreement. And 

two, timeliness would improve. 

Senator AKAKA. Mr. Stewart, would you care to comment on that, 

too? 

Mr. STEWART. Yes, sir, I would. Senator Akaka, thank you. 

I was around when the NDAA 2001 legislation was written. As 

Mr. Rogalski said, it does require DOD to quantify the requirements for security clearances. And Mr. Rogalski is correct in that 

the DOD does an annual survey. 

The problem is the response rate is extremely low. Not all the 

contractors respond. So that leaves DOD still in a position of not 

knowing exactly how many clearance requests are going to come in. 

We also believe that an annual survey is not sufficient. It has to 

be done more than annually. It is like you start out at the beginning of a fiscal year and you have a budget. We all know that you 

have to modify that budget. Things do not stay the same for a year. 

So given the dynamic environment of security clearances, you have 

to survey more than once a year. 

Senator Akaka, we issued a report in 2004, and made a recommendation to DOD, that they needed to quantify the requirements. They needed to get a better handle on what their requirements were. And they concurred with our recommendation. They 

came back. It is in the report. The response was everything Mr. 

Rogalski just said. They were going to get a handle on requirements. They were going to link the requirements to the budget. It 

is all right here and for 2 years now we keep hearing there is going 

to be this plan and there is going to be this effort to move out and 

it never quite happens, sir. 

Senator AKAKA. I hope some things begin to happen. 

Mr. Rogalski, you said the business case was to transfer the 

function to get a lower cost on investigations and for the sake of 

timeliness. Has that happened? 

Mr. ROGALSKI. I guess, first of all, I have to defer to OPM to answer that question. I think, again, we are still early in the process. 

The transfer has only been in place for a little over a year. But, 

our hope is that over time there will be an increased timeliness. 

You heard OPM testify, there has been some increase in timeliness. 

We all would like to see a greater increase in timeliness, obviously. 

And we, from the DOD perspective, obviously would want to see a 

decrease in cost. 

16

Senator AKAKA. Thank you, Mr. Chairman. My time has expired. 

Mr. JOHNSON. Senator, may I add a comment? 

Senator VOINOVICH. Go ahead. 

Mr. JOHNSON. On the subject of looking back, is it a good thing 

that the investigative work is being done by OPM? From my oversight role I believe the answer is clearly yes. The investigative 

work is being done 40 days faster than it was for fiscal year 2005. 

It is being done 22 percent faster. The process is being reformed. 

The time to grant security clearances is being improved. 

You were not here when I said it in my opening statement, but 

the time to submit an accurate request to the investigators is down 

one-third, from 32 days to 21 days. The goal is 14. The investigative time has gone from 189 days to 149 days. The time to adjudicate has increased 10 days, not decreased, increased 10 days. 

Some agencies have made huge strides. Others have not. So in 

some cases, there has been significant improvements, in other 

cases not. 

Overall, the time to grant a clearance has gone down 40 days, 

which is about 15 to 20 percent. So the process is being improved. 

We are not where we want to be. We still have our eyes set on the 

goals laid out by the Intel Bill for December 1, 2006, 2007, 2008, 

and 2009. We are still moving in the direction of accomplishing 

those goals, laid out for December of this year. And we are making 

every effort and working very hard and are very committed to 

achieving those goals. 

Senator AKAKA. Thank you. 

Senator VOINOVICH. Mr. Johnson, you said that there are some 

agencies doing a better job at adjudicating clearances. What has 

OMB done to bring to the attention of those agencies that are not 

doing it that they ought to shape up and get it right? 

Mr. JOHNSON. Ms. Dillaman and OPM publishes information 

monthly, with big summaries for all of the agencies quarterly, but 

monthly for the six large agencies, that shows where they are on 

all the key metrics. This goes to the lead person for this reform effort at each of the six large agencies. 

They have given me plans that show where they want to be on 

all of these key metrics by April 1, July 1, and October 1 of this 

year. 

So, when the information came out for the end of March, some 

of them were where they said they wanted to be by April 1. Many 

of them were not where they said they wanted to be. 

I then told them OK, the plan we had, where we wanted to be, 

we are not there in all cases. I asked them to review their plan, 

come back to me and tell me what they were going to do different, 

faster, less of, more of. 

Senator VOINOVICH. Pardon me but who are you talking to? Do 

you talk to the top person in the Department? Or are you talking 

to somebody down the chain? 

Mr. JOHNSON. I do not know where they are in the chain. With 

DOD it was Mr. Rogalski, before Bob Andrews arrived. There is 

great responsiveness. I have not felt like I was being told that they 

were working on it and the evidence was that they were not working on it. If I felt that was the case, I would have gone up the food 

chain until I got some attention being paid. 

17

But, as I mentioned earlier, there was a great deal of commitment to get this done. I do not sense any lack of commitment or 

lack of attention to getting this done. 

And it is so transparent. It is so clear where every agency is on 

every key dimension. We do not have to guess who is doing the 

work and who is not. I can tell you exactly on each of the key 

metrics. 

Senator VOINOVICH. Have you ever brought the ones that are 

doing it together with the ones that are not doing it——

Mr. JOHNSON. We do that——

Senator VOINOVICH [continuing]. To try and get their best 

thoughts on maybe how they can improve their operation? 

Mr. JOHNSON. In terms of best practices, let me tell you the 

meeting process. We have met, since August 1 when we first 

formed this group, or August 10, we have met I think six or seven 

times. We met the last time on April 26, and we are scheduled to 

meet the end of June. 

There is a group that meets, which involves all of the six agencies, that deals with reciprocity issues. You have a group that deals 

with standardization of applications and so forth. So there is a 

number of individual working groups. 

But specifically on adjudications, for instance, we have not. 

I know that in DOD’s case, to get adjudicating at the satisfactory 

rate where they are adjudicating, I think it is 80 percent within 30 

days, they have identified a need to hire, I think it was, 31 adjudicators, or 45 adjudicators. And they knew where they could get 

the money for most of it and they have looked at the training time 

and how they could compress the training times and so forth. So, 

there is a very specific plan for getting the number of adjudicators 

they need on board, trained, and doing the work. 

So, it is not ‘‘are you committed to doing this’’ and taking their 

word for it. It is ‘‘what is their plan?’’ And did they meet their interim goal? And, if they did meet their interim goal, what modifications to their plan are they going to make? 

So, we are just now getting the modifications to their plans back 

for me to look at. I’ll then sit down with each of them and then 

agree that the changes in their strategy appear to me to be appropriate or they appear to be inappropriate. 

But there is a lot of give and take. It is now typically on a quarterly basis where we say here is where you said you were going to 

be. You have done it or you have not. If you have not, what are 

you going to do different to get back on track? So there is an oversight, an active oversight process underway. 

Senator VOINOVICH. One of the things I discussed with Mr. 

Portman earlier today is that I start looking at agencies right 

across the board. And in so many instances they do not have the 

budget to do the jobs that they have been asked to do. I really 

think it is incumbent upon OMB, to start looking at agencies that 

are not performing the way they ought to. 

It is not a matter of mismanagement. But the fact is they just 

do not have the budget to do the job that they have been asked to 

do. 

18

Mr. Rogalski, you are talking about a tiger team internally. I 

have to tell you something, you have got industry people out there 

who are livid about the system. 

In quality management you look at your internal team. Then you 

go to your customers and you say, ‘‘what can we do to work with 

you to speed the process up and make it happen?’’ You are dealing 

with corporations that are pretty efficient. You ought to take advantage of it. You ought to get them in and say what is it that we 

are doing? Look at our process. And can you suggest to us how you 

can make it better? 

I did that when I was governor. We went out to the customers 

and we said, ‘‘what are your thoughts? We want you to be happy. 

Give us your thoughts on how we can improve the situation.’’

Mr. ROGALSKI. Let me make two comments, one on our relationship with industry. We have an excellent relationship with industry. DSS, through its Industrial Security Program, meets with industry on a frequent basis. There is a member from the USDI staff 

at the Aerospace Industry Association this week. 

So, we have an ongoing dialogue with all the key elements of industry. On May 10, I chaired a meeting with the key defense industry directors of security—and I have known most of these folks 

for years, some are personal friends—to get their input. That is exactly what I said. We need to work this together. I need to know 

from your perspective, because here is almost a quote—I do not 

want DOD to come with a bureaucratic draconian solution to this. 

We need to work this together with industry so we are coming up 

with a smart solution and fixes. 

Our fix in that Central Oversight office we are establishing at 

DSS is to be partnered with industry. So one, we take that very 

seriously and we will continue to work with industry to get their 

best practices and figure out how we can do it smarter for the Department of Defense. 

Second, our projections. It has always been a challenge for the 

Department of Defense to get adequate projections. And, I cannot 

address again what was done previously. But I can tell you today, 

having looked at this, being responsible for this tiger team, there 

are several dynamics here. 

As the Department increases intelligence information and information sharing, and we have gotten this from the military departments, there is a greater need for higher level of security clearances for our war fighters. That has attributed to a spike in the 

number of security clearance requirements. And, I agree, we projected these numbers annually, but part of our systemic process is 

to look at it across the board. 

If there is a new requirement that drops on the Department, or 

if we see it coming, we need to be flexible and agile enough to be 

able to predict that, advise OPM we may need more resources to 

meet that situation. So the first dynamic of projections is the increased intel going out there to the war fighter. 

The second thing we have seen here is greater use of intelligence 

community networks, also to the war fighter. That has also caused 

a spike in the number of investigations. We asked the military departments, about 3 or 4 weeks ago, to reassess their projections for 

19

the remainder of this fiscal year. We received those results last 

week. We are re-looking at those. 

We have an effective model in the Department of Defense today. 

The Air Force uses a model, a pretty good predictive tool, that we 

want to see if we can adopt it for the entire Department of Defense. 

But we have not done well in our projections. 

Industry, coincidentally enough, has done a pretty good job of 

forecasting those projections. But for the management of the Department of Defense, it is clear we must do a better job. 

Senator VOINOVICH. Senator Akaka. 

Senator AKAKA. Thank you, Mr. Chairman. 

I would like to ask this question to DOD, Ms. Haith or Mr. 

Rogalski. Mr. Johnson discussed the monthly reports issued by 

OPM. Wouldn’t those reports have given clues that DOD was outspending its budget for fiscal year 2006 for security clearances for 

contractors? 

Ms. HAITH. Sir, yes, we do receive those monthly reports and we 

do analyze them. However, the process is not as exact is it appears. 

We have been in discussions with OPM about how that reports 

syncs up with what we actually submit. And we are still working 

to resolve the fact that they do not exactly sync, and we need to 

resolve that soon. 

Mr. Rogalski can answer about the Department, for the Department. 

Senator AKAKA. Would you comment? 

Mr. ROGALSKI. We went back and looked at, what I will categorize as the funding chronology, and why we got into the situation we are today. It was clear that, as DSS started tracking the 

numbers and started seeing the potential shortfall that they experienced in April, that DSS, within the Department, did try to get additional funding. For example, we looked at the Global War on Terrorism Supplemental. We were unable to get funds there. So DSS 

was looking for additional sources of funding prior to the stoppage, 

prior to the suspension. 

They advised industry that we could no longer accept expedited 

cases, since those cost us more money. For example, the base cost 

for an investigation into a top secret clearance is $3,750. The expedited cost is $4,350. So, DSS was looking at ways, within their control, to try to bring the cost down, because, very candidly, we were 

trying to squeeze every dollar we could. 

DSS was reaching the Anti-Deficiency Act situation, and we 

could not get a good handle on the projected dollars. At the end of 

April, DSS was in a situation that they were faced with only one 

option to avoid violating the Anti-Deficiency Act: Suspending investigations. 

When you look at this in retrospect, it is clear, and that is one 

thing I mentioned in my testimony, we need those trip wires sooner 

in the process. Get greater fidelity between the OPM billing process, what DOD has in its pot, if you will, to ensure that we will 

not be faced with the situation to suspend investigations again. 

Senator AKAKA. Mr. Rogalski, if you were looking at the supplemental, why weren’t members of the Armed Services Committee 

aware of this problem? 

20

Mr. ROGALSKI. I would have to take that as a question for the 

record. I do not know the answer to that. That was with the internal discussions within the Department on us looking for funding. 

The communication of this, or the lack of communication to Congress, I am not prepared to address. 

Senator AKAKA. Mr. Rogalski, is DSS or the Office of Counterintelligence and Security, part of the Department’s business transformation efforts? And if so, what is the level of participation? 

Mr. ROGALSKI. I will let Ms. Haith answer the question as it relates to DSS. 

Ms. HAITH. The business transformation for DSS has been in 

progress since we transferred the workload to OPM. It has involved 

taking what was initially the primary program, personnel security 

investigations, and no longer having that there, we have made the 

three other programs in the Agency the focal points with equal balance as to how we accomplish the mission. 

We are still in the process of transforming the Agency. We are 

looking at new ways to do business using automation. We are looking at new policies, that we have to work with OSD, that will help 

us move forward with those missions. But we are still transforming. It is still a work in progress, a definite work in progress. 

Senator AKAKA. Ms. Dillaman, you may recall from our June 

hearing that I asked about the need for OPM agents overseas to 

investigate the foreign activities of individuals seeking security 

clearances such as linguists. Your testimony today indicates there 

are more than 40 field agents working at more than 30 military installations around the world. Can you tell us how many backlogged 

cases need overseas coverage? 

Ms. DILLAMAN. Yes, sir, I can. At the point of transfer a year ago, 

15,000 pending overseas leads were transferred with the program. 

In the process of establishing an international presence, that backlog grew to 29,000 investigations requiring international coverage. 

Since our deployment, and we have had a steady deployment 

internationally, that number has been reduced to 14,000. Our intent is to continue to have a steady presence abroad. 

Recently, we have been working with the Department of Defense 

to supplement our own core staff by using contractor staff, as well. 

So I am highly optimistic that by the end of the year overseas cases 

will be current. 

Senator AKAKA. Do you have an idea of how many additional 

agents are needed to eliminate the overseas backlog? 

Ms. DILLAMAN. Yes, sir. We believe a continued presence of 40 

is needed until the backlog is eliminated, and then a substantially 

smaller number, 25 plus contractors as needed. But we have ongoing work with the State Department and the Department of Defense to continue to refine the international coverage requirements 

so that we are not spending one additional resource more than we 

need for minimum required coverage. 

Senator AKAKA. Thank you. Thank you, Mr. Chairman. 

Senator VOINOVICH. Mr. Johnson, is the President going to extend the Executive Order? 

Mr. JOHNSON. There will be continued oversight. The feeling was 

this responsibility for this process will eventually be passed to the 

Director of National Intelligence. The question is ‘‘are they ready 

21

to take responsibility?’’ I bet the answer is no, in which case, I 

would bet today, that OMB’s involvement will continue, along with 

the issuance of another Executive Order. But that is just my speculation at this point. 

But, I think long-term we envision the DNI taking on the oversight responsibility for the security clearance process. 

Senator VOINOVICH. As you know, one of the goals that Senator 

Akaka and I have is we want to get this off the high-risk list. 

Mr. JOHNSON. Me, too. 

Senator VOINOVICH. I would feel a lot more comfortable if you 

would stay involved and not give it over. They have their hands 

full right now. 

Mr. JOHNSON. Right. I think they understand that. 

Senator VOINOVICH. I would like to get with the President, in 

fact if I see him this afternoon, which I may, I may tell him that 

I would love to have you continue to stay there and do it. 

Mr. JOHNSON. Perfect. I like being loved. 

Senator VOINOVICH. Reciprocity guidelines, do you have them? 

Mr. JOHNSON. We have them. The area that we do not have 

them, where they are the most ticklish, is for SAP programs, Special Access Programs, with DOD. We are making good progress on 

resolving that and our goal is to have that reciprocity policy involving SAP programs established and agreed to by mid-June. And 

then our goal would be to implement it and to get industry and our 

own security organization, particularly DOD, implementing it and 

honoring it. And I am confident that we will be able to do that. 

Senator VOINOVICH. But the fact is that currently some of the 

non-DOD agencies are not abiding by that? Is that right? 

Mr. JOHNSON. I have no doubt. But I also know that they are. 

There is more granting of reciprocity. One of the things we are trying to do in the oversight world is find better ways of measuring 

the level of reciprocity. Ms. Dillaman’s group at OPM, when they 

get requests to do investigative work, one of the things we are in 

the process of establishing is account of how many requests we get 

for clearance work that has already been done. We do not have 

those metrics yet. 

We are also in the process, we get sort of anecdotal directional 

information from industry about where they think we should have 

granted reciprocity, where we did not. We have just made our first 

collection of that. I think it was for the month of March. But we 

will be able to track that over time. 

So we are not where we need to be. But we understand it is important. We understand that we need to be able to measure it and 

hold people accountable for honoring this, the new definition of reciprocity. 

Senator VOINOVICH. In your written testimony, you discuss the 

use of the eQIP by agencies to submit investigative requests for investigations. Apparently, when they are doing it, it has really 

helped a great deal. 

Mr. JOHNSON. Yes, sir. 

Senator VOINOVICH. Currently, only 42 percent of the agencies 

are using it, and the goal was by April 1 for 100 percent of them 

to be using it. What is the problem? 

22

Mr. JOHNSON. We all agreed last fall, all six agencies, that there 

was no reason why we could not be at 100 percent by April 1. We 

are halfway there. Some agencies are at 80 percent. DOD went 

from virtually nothing to 44 percent, which for that many people 

is a huge accomplishment. 

But our goal was 100 percent. So, we have made good progress, 

in some cases huge progress. But, we are not where we said we 

wanted to be on that. So I have gone back to every agency and they 

are now coming back to me, as we speak, with OK, we said we 

would be there April 1. Here is what we are going to do and here 

is when I now think we will be there, at 100 percent. 

Senator VOINOVICH. Ms. Dillaman, the last time we were together there was talk about the high turnover rate for private contractors doing investigations for OPM. Is this still a problem? What 

is your response to what Mr. Stewart said in terms of the training 

that is going to be needed? 

What did you say, Mr. Stewart, 2 years before some of them 

would be trained to get the job done. Where are we on that? 

Ms. DILLAMAN. Yes, sir. I think we are in excellent shape. We 

still have the same six companies under contract. They are continuing to add resources. Their attrition rate has stabilized. In the 

month of April it was about 1.5 percent. 

On the Federal side of things, our attrition rate is lower. I have 

about a 1 percent attrition rate for the month of April. 

And so are keeping pace with attrition by hiring employees to replace the ones who retire. 

We have a full-blown academy in place. In fact, Mr. Stewart had 

two of his representatives attend one of our academy sessions. So 

between us and our contractors, we are quite capable of bringing 

in the additional resources we need and training them well. 

Senator VOINOVICH. Senator Akaka. 

Senator AKAKA. Thank you, Mr. Chairman. 

Ms. Dillaman, you testified that all agencies have been asked to 

reevaluate their projections for the remainder of this fiscal year 

which may result in an increase to your Federal and contractor 

staff levels. 

Do you know how many additional employees would be needed 

based on existing staff and application levels? 

Ms. DILLAMAN. Sir, as it stands today, we are adequately staffed 

to deal with today’s workloads. The unknown is what I can expect 

for the balance of the year, whether or not the Department of Defense’s receipts will continue to stay high, whether or not they will 

annualize and stabilize more closely to their projections by the end 

of the year. And that is what we are going to have to wait for to 

calculate overall FTE needs. 

I will tell you, using a broad base of contractors, six companies, 

certainly helps the ability to respond to fluctuations in workloads 

because work is distributed between the Federal staff and six contracting companies. So I believe we have a very flexible platform 

that can adjust. It is just trying to wrap our arms around what to 

adjust to? 

Senator AKAKA. Ms. Dillaman and Mr. Johnson, some of the 

problems in completing investigations can result from delays in obtaining information from national, State, and local record proVerDate 0ct 09 2002 10:11 Oct 18, 2006 Jkt 028244 PO 00000 Frm 00026 Fmt 6633 Sfmt 6601 C:\DOCS\28244.TXT SAFFAIRS PsN: PAT
23

viders. Ms. Dillaman testified that OPM is working with OMB and 

Federal agencies that provide records to rectify this problem. 

Could you both provide us with more details on what you are 

doing in this regard? 

Ms. DILLAMAN. Let me start, sir. 

First of all, by far the most problematic right now are two Federal agencies’ record systems that need some significant work or 

have significant backlogs. Today, I have 70,000 investigations 

pending where all I am waiting for is a final national agency record 

from either the FBI or the Department of Defense. Both agencies 

have put together plans on how they will reduce the backlogs in 

providing these files and get to a state of currency by the end of 

this year so that we can all meet the terms of the Intelligence Reform Act. 

For each group it is a question of system engineering, proper 

staffing, and setting up a mechanism for retrieval and responsiveness. I am highly optimistic we are going to get there. The FBI has 

made significant progress. They have recently submitted a plan 

that looks at the engineering process and what their staffing and 

cost needs are going to be. 

Quite frankly, I do expect, because we do pay a user fee to the 

FBI for their records, and because they are going to need additional 

funding, we are going to see a spike in the user fee as a result of 

this. But if that is what is necessary to get this backlog under control and get these records processed, that is what is going to have 

to happen. 

Senator AKAKA. Mr. Johnson. 

Mr. JOHNSON. Just to add to what Ms. Dillaman just said, they 

have identified how many people they need to be able to get to the 

desired level by the end of the year and there are three alternative 

ways of getting that. It is a combination of they hire more people 

and/or they take some people from OPM and transfer them into the 

FBI operation for a period of time and/or they hire contractors. So 

they know how many people. There are three alternative ways of 

getting it done. They know what the cost is. It is a cost that, if it 

is OPM people there is a cost that they have to incur in how they 

get reimbursed for that. So they are in the process of working 

through there. 

We first met with the FBI, I think it was February, to work 

through these matters. So it is now 3 months. When I think back 

about it, I should have been more aggressive at bringing this to closure. I should have been more aggressive at having a plan before 

us to say yes or no over, and begin the implementation of in way 

less than 90 days. And I was neglectful in doing that. 

Senator AKAKA. Mr. Johnson, the cost to our national security 

and agency missions are indeed high for failing to complete security clearances in a timely manner. My question to you is, has 

OMB calculated how much money is lost due to the delay in completing security clearances for contractors? 

Mr. JOHNSON. To my knowledge, we have not. For one year in 

my past life, I was a market research director for a large company. 

I remember one of our disciplines that we tried to abide by was do 

not ask any question if it will not make any difference in what you 

24

are trying to do. If it will not impact whether you go in this direction or that direction, there is no point in answering the question. 

And I would suggest that the cost is obviously large. Our commitment is to reform the process, per the goals established by the Intel 

Bill, and we are fully committed to doing that and working very 

hard to do that. I am not sure whether, if we found out that the 

cost was this or that, that we would be any more committed to 

doing this and be working any more aggressively than we are now 

to reform the process. 

But, to my knowledge, we do not know what that number is. 

Senator AKAKA. Mr. Stewart, has GAO looked into this? 

Mr. STEWART. We have not. Senator Akaka, we have not looked 

at the cost, no. 

Senator AKAKA. Mr. Chairman, thank you. 

Senator VOINOVICH. I have no more questions. Do you have any 

more, Senator Akaka? 

Senator AKAKA. I will submit my questions. 

Senator VOINOVICH. I want to thank all of you for your testimony. 

Mr. Andrews, I would like to set up a time where we can get together and talk about what you are doing. 

Mr. Johnson, I am real interested in the Executive Order. 

Mr. Stewart, I still would like GAO to stay involved with this 

issue. 

Mr. Andrews, in 6 months I want a bang up plan that deals with 

streamlining this, getting it done, and also to get your best thought 

on how we are going to do a better job of predicting the workload. 

I just want you to know I am going to stay on this thing, and 

so is Senator Akaka. We are going to get the security clearance 

process off the list. This is going to be one of the things the Administration is going to brag about, that we finally, after years, took 

a screwed up system and improved it and made it good and got it 

off the high risk list where it has been since 1990. 

This goal is very important for our country. We are talking about 

our national security. I think that should be the incentive to really 

make this work. Thank you. 

Senator AKAKA. I want to thank the Chairman for really moving 

on this and continuing to deal with these questions. 

I want to thank you, Mr. Johnson, and also Comptroller General 

Walker. As we work on high risk elements, we really are trying to 

get at the problems that are out there. And so, as we hear you, you 

are trying. We want to really be able to help you in doing this. 

I offered that there is a way of doing this, and that is to talk to 

each other and to work together on this. It is clear that some of 

the problems exist between agencies. We need to find a solution to 

the lack of communication. 

I just wanted to say that the Chairman and I are really here to 

try to help you resolve all of these problems. Please let us know 

how we can help, too. Thank you, Mr. Chairman. 

Senator VOINOVICH. Thank you, Senator Akaka. 

I want to finish on a more positive note. I want to say thank you 

very much for the progress that you have made. I know it is not 

easy and we concentrated today on the problems. But Ms. Dillaman 

25

I want to say thank you, you are moving ahead and I know you 

are serious about this. So thank you very much. 

The meeting is adjourned. 

[Whereupon, at 4:15 p.m., the Subcommittee was adjourned.] 

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