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22–198 PDF 2005

S. Hrg. 109–160

ACCESS DELAYED: FIXING THE 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

FIRST SESSION

JUNE 28, 2005

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 Counsel 

TRINA D. 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 

TARA E. BAIRD, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

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

Senator Akaka .................................................................................................. 9

Senator Carper ................................................................................................. 22

Prepared statement: 

Senator Lautenberg .......................................................................................... 27

WITNESSES 

TUESDAY, JUNE 28, 2005

Derek B. Stewart, Director, Defense Capabilities and Management, U.S. Government Accountability Office ............................................................................. 4

Kathy L. Dillaman, Deputy Associate Director for Human Resource Products 

and Services, Center for Federal Investigative Services, U.S. Office of Personnel Management ............................................................................................. 5

Heather Anderson, Director, Strategic Integration, Office of the Deputy Under 

Secretary of Defense, Counterintelligence and Security, and Acting Director, 

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

ALPHABETICAL LIST OF WITNESSES

Anderson, Heather: 

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

Prepared statement .......................................................................................... 55

Dillaman, Kathy L.: 

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

Prepared statement .......................................................................................... 49

Stewart, Derek B.: 

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

Prepared statement .......................................................................................... 28

APPENDIX

Questions and Responses from: 

Mr. Stewart ....................................................................................................... 64

Ms. Dillaman .................................................................................................... 67

Ms. Anderson .................................................................................................... 69

(1)

ACCESS DELAYED: FIXING THE SECURITY 

CLEARANCE PROCESS 

TUESDAY, JUNE 28, 2005

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 10:10 a.m., in 

room 562, Dirksen Senate Office Building, Hon. George V. 

Voinovich, Chairman of the Subcommittee, presiding. 

Present: Senators Voinovich, Akaka, and Carper. 

OPENING STATEMENT OF CHAIRMAN VOINOVICH 

Senator VOINOVICH. Good morning. I want to thank you all for 

coming, and I suspect that the Ranking Member of this Subcommittee will be coming in just a short while. We started a vote 

at 10 o’clock, so people are tied up with that. 

Today, the Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia continues its investigation into the Government Accountability Office’s 

high-risk list of Federal programs that are susceptible to waste and 

mismanagement. Today’s hearing is entitled, ‘‘Access Delayed: Fixing the Security Clearance Process.’’ We are going to explore the 

security clearance backlog and discuss what actions need to be 

taken to reduce it. We will also examine the transfer of investigative responsibilities from the Department of Defense (DOD) to the 

Office of Personnel Management (OPM), including the impact that 

the shift will have on the ability to investigate and adjudicate security clearances in a thorough and expeditious manner. 

In order to improve the workflow of any process, we must first 

understand the root causes of the problem. In the case of the security clearance backlog, there appear to be several barriers to a 

streamlined process, including (1) the sheer size of the backlog, 

which in this case we don’t know; (2) an influx of new requests 

since September 11, 2001; (3) an inadequate number of investigator 

and adjudicator employees; and (4) the overall lack of a strategic 

plan for managing the process. 

In fact, according to GAO, the clearance process is so disjointed 

that DOD has not calculated the size of the backlog since 2000, 

meaning that we do not have an exact number of investigations 

pending. However, in a February 2004 report, GAO estimated that 

2

the DOD clearance backlog is roughly 270,000 investigations and 

90,000 adjudications. 

Unfortunately, the implications of a broken security clearance 

process send shockwaves throughout the Federal Government’s national security workforce. The bottom line is that the security clearance process is a major national security and human capital challenge that needs to be resolved immediately. The cumbersome and 

lengthy process can stall the hiring of both Federal employees and 

contractors for classified positions, such as terrorism and intelligence analysts, which can adversely impact our national security. 

During the lengthy security clearance process, prospective government employees are often in a state of limbo because they are 

unable to start their new job until they receive proper clearances. 

I can think of nothing more frustrating for a bright, ambitious, and 

qualified individual who wants to serve our Nation, but is told by 

agencies, such as the FBI and CIA, they must sit idly for months 

on end because their security clearance is being slowly processed. 

This scenario is all too real for the private sector, as well, as 

GAO found that obtaining a clearance can take over one year. For 

example, in fiscal year 2003, GAO reported it was taking DOD an 

average of 375 days to process clearances for private sector contracting positions. Whether they are computer technology consultants, network engineers, or intelligence analysts, contractors play 

a vital role in securing our Nation. Therefore, it is imperative that 

we improve this process, because in today’s job market, it is unrealistic to assume that the best and brightest applicants are going to 

wait over one year to receive a government clearance so they can 

begin their jobs. 

With all these factors, it is no surprise that the security clearance process has been designated as high risk by GAO. However, 

this is one area where I believe that we can make significant 

progress in the near future. 

A number of simultaneous actions are occurring to streamline 

the security clearance process. First, as outlined in the 2004 Defense authorization bill, DOD transferred its security clearance investigation workforce to OPM. With this event occurring on February 22, 2005, I am interested in the assessment from our witnesses regarding the transition, including the short- and long-term 

impact this will have on the entire security clearance investigation 

and adjudication process. I would also like to know if we have 

enough employees trained to process the growing security clearance 

demands of our post-September 11 Federal Government. 

Second, last year, I offered an amendment to the intelligence reform legislation in Committee to enhance and consolidate the Federal Government’s security clearance process. My amendment, 

which was included in the final bill, directs the President to select 

a single Executive Branch department to develop and implement 

policies and procedures for security clearance investigations and 

adjudications. 

The law also requires the President to select a single Executive 

Branch agency to conduct security clearance investigations. Additionally, it requires reciprocity of security clearances in order to 

streamline the process of transferring employees from one agency 

to another, and that has always been a problem. Too often employVerDate 0ct 09 2002 10:49 Oct 26, 2005 Jkt 022198 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\22198.TXT SAFFAIRS PsN: PHOGAN
3

ees receive a security clearance from one agency only to find that 

another agency won’t recognize it, so they have to start the entire 

process over again. I think that we need to understand that once 

you get a clearance for a certain level, like ‘‘top secret,’’ that the 

clearance should be transferrable from one agency to another without starting the process all over again. 

I understand that President Bush issued an Executive Order late 

yesterday that provides the necessary framework for implementing 

the Intelligence Reform Act. I cannot help but wonder if it is a coincidence that the Executive Order was issued on the eve of this 

hearing today. 

Under the Executive Order, OPM is the primary Federal agency 

responsible for investigating security clearance applications—congratulations, OPM—while the Office of Management and Budget is 

accountable for setting and implementing the government’s security clearance policies. Although the Executive Order is not the 

focus of today’s discussion, the timing is important, as I plan to 

hold another hearing to examine its implementation later this year. 

Senator Akaka and I share a passion for improving the performance of the high-risk areas. I look forward to working with the Administration and GAO to make sure that the security clearance 

process is removed from the list as expeditiously as possible. 

And I would like to make clear to everyone here today that I am 

going to be on this like a junkyard dog. Since this issue is on the 

high-risk list, I am going to make sure, as a Member of the U.S. 

Senate and the Chairman of this Subcommittee, that measurable 

performance improvements are made. We are going to get this off 

the high-risk list. Does everybody understand me? 

This Subcommittee will hold a hearing on the Executive Order 

in 3 months, but quarterly, I am going to be meeting with Ms. 

Dillaman, on this issue, and we are going to make improvements. 

If you are having any problems with personnel, with budget, or 

anything, I want to know about it, because this is very important. 

I am interested in human capital and making sure Federal agencies have the right people with the right skills and knowledge at 

the right place to get the job done. Unfortunately the security 

clearance process is hurting our government’s ability to function 

properly, particularly at a time when we are at risk. 

Intelligence is very important, and it is just ridiculous that you 

have a backlog of 275,000 cases. It is just something that needs to 

be taken care of. It has gone on too long, and we are all going to 

work together and we are going to get it taken care of, OK? 

I would like to thank our witnesses for their participation this 

morning and I look forward to their testimony. 

Since Senator Akaka is not here, we will go forward with your 

testimony, and then when he comes or other Members come, we 

will get their opening statements. If you will rise and please raise 

your hand, it is a tradition of this Subcommittee to swear in witnesses. 

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

so help you, God? 

Mr. STEWART. I do. 

Ms. DILLAMAN. I do. 

4

1The prepared statement of Mr. Stewart appears in the Apprendix on page 28. 

Ms. ANDERSON. I do. 

Senator VOINOVICH. Let the record show that the witnesses answered in the affirmative. 

Our witnesses this morning include Derek Stewart, who is the 

Director of Military and Civilian Personnel Issues at the Government Accountability Office. 

Kathy Dillaman is the Deputy Associate Director of the Center 

for Investigative Services at the Office of Personnel Management. 

Ms. Dillaman, thank you for making the trip from Boyers, Pennsylvania, to be here today with us. 

Heather Anderson is the Director of the Strategic Integration at 

the Office of the Deputy Under Secretary of Defense, Counterintelligence and Security, and is also the Acting Director of the Defense 

Security Service. 

Again, I thank you for being here today, and Mr. Stewart, if you 

will begin the testimony. 

TESTIMONY OF DEREK B. STEWART,1 DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. STEWART. Thank you, Mr. Chairman. We are pleased to be 

here today to discuss this program that we have spent over two 

decades reporting on various aspects of. 

Senator VOINOVICH. Two decades? 

Mr. STEWART. Over two decades, sir. DOD has approximately two 

million active security clearances and is responsible for clearances 

to contractors in 22 other Federal departments and agencies. So for 

these and other reasons, it is imperative that there be an effective 

and efficient security clearance program. We view this as a matter 

of national security. 

Unfortunately, Mr. Chairman, after two decades of looking at 

this program, we concluded that not only was the program not effective and efficient, but this was a program in trouble. This led 

us to declare the program high risk in January of this year. Today, 

I would like to briefly touch on some of the major conditions we 

found that led to the high-risk designation and then offer our observations on steps being taken to address some of these conditions. 

There were four major program conditions that led to the highrisk designation. First, longstanding, persistent delays in completing clearance investigations. Second, no single performance 

standard for timeliness in completing investigations. Third, an undetermined backlog of overdue investigations. As you noted, Mr. 

Chairman, DOD has not estimated the size of its backlog since January 2000. And last, no effective method for estimating the program’s total workload requirement, and this was especially so for 

the thousands of clearances needing reinvestigation. 

Shortly after we designated the program high risk in January of 

this year, DOD transferred its investigative function and personnel 

to OPM. However, the problems I just enumerated did not go away 

with the transfer to OPM. 

5

1The prepared statement of Ms. Dillaman appears in the Apprendix on page 49. 

For example, DOD’s inability to estimate the program’s total 

workload is still a critical problem. However, I am pleased to report 

that DOD is taking a number of steps to improve the ability to 

forecast the number of military, civilian, and contractor positions 

requiring clearances and the level of clearance needed. While these 

are steps in the right direction, DOD has not set a target completion date for these efforts. Until DOD can accurately project its 

total workload, it will be difficult to determine with certainty the 

resources and staff needed to process investigations and adjudications in a timely, high-quality manner and ultimately eliminate the 

longstanding backlog. 

Another problem that did not go away with the transfer is the 

backlog of overdue investigations. Earlier this year, OPM reported 

a government-wide backlog of almost 186,000 investigations, which 

included some DOD investigations. To address the backlog and improve timeliness in completing investigations, OPM reportedly has 

hired the full-time equivalent of 3,800 investigative staff. We believe that this is a positive step forward, but adding thousands of 

new staff could result in quality and timeliness concerns until the 

staff gains experience. This situation bears close scrutiny. 

Mr. Chairman, the one point I would like to emphasize in closing 

is that the transfer of this program’s investigative functions to 

OPM was not a panacea that fixed all the problems. Much remains 

to be done to bring about lasting solutions to this high-risk area. 

Your hearing today will go far in focusing the kind of attention 

that is needed on this critical matter of national security. 

This concludes my prepared remarks. I will be happy to respond 

to questions. Thank you. 

Senator VOINOVICH. Thank you. Ms. Dillaman. 

TESTIMONY OF KATHY L. DILLAMAN,1 DEPUTY ASSOCIATE DIRECTOR FOR HUMAN RESOURCE PRODUCTS AND SERVICES, 

CENTER FOR FEDERAL INVESTIGATIVE SERVICES, U.S. OFFICE OF PERSONNEL MANAGEMENT 

Ms. DILLAMAN. Mr. Chairman, I do have a complete statement 

that I ask be made part of the record. 

Senator VOINOVICH. Without objection. 

Ms. DILLAMAN. Mr. Chairman, Senator Akaka, it is my privilege 

to testify today on behalf of the Office of Personnel Management 

concerning this critical issue and to update you on OPM’s efforts 

to expedite and consolidate elements of the personnel security investigations program. 

There are four steps in the clearance process. First, agencies determine what level of clearance or access their employees, applicants, or contractors need. They then confirm if the person has an 

active clearance or if a background investigation is required. To 

support this, in 2003, OPM implemented the Clearance Verification 

System, which provides online access to current clearance and investigations information. This system, linked to the Department of 

Defense Joint Personnel Adjudication System, contains the clearance records of over 90 percent of all cleared individuals. 

6

Under the terms of the Intelligence Reform and Terrorism Prevention Act of 2004, OPM is required to establish, operate, and 

maintain an integrated, secure, consolidated database of security 

clearances with information on granting, denial, and revocation of 

clearance actions on military, civilian, or government contractor 

personnel. OPM’s CVS system will serve as the foundation for this 

and has ample capacity to expand the content of the information 

maintained and provide access for authorized users. We are now 

determining what additional information should be recorded in this 

system and the most effective ways for keeping this information up 

to date while ensuring the privacy and security of the information 

maintained. 

When a background investigation is required, the subject and the 

agency provide the data and forms necessary to conduct the investigation. To support this requirement, in 2004, OPM implemented 

eQIP, a web-based data collection system used to obtain a subject’s 

background information. Today, 27 agencies use this online system, 

and we are now working with the Department of Defense to implement its use for all military, civilian, and contractor personnel. 

The second step of the process is conducting the background investigation itself, and that is ours. This year, we expect to receive 

over 550,000 requests for initial or reinvestigations to support security clearance determinations. Approximately 80,000 will be investigations for initial top secret clearances. We also expect to conduct 

almost 900,000 investigations to determine the trustworthiness or 

suitability of individuals in public trust or nonsensitive positions or 

for regulatory purposes. Beginning next fiscal year, we are also 

planning for a new workload with the implementation of the Personal Identity Verification Project under Homeland Security Presidential Directive 12. 

OPM is working to ensure that adequate staff is available to deal 

with our high-volume workloads. Since 1999, the overall demand 

has risen sharply, reaching unprecedented levels in the aftermath 

of September 11. OPM and DOD both face the challenge of dramatically increasing staff levels to keep pace with the demand. 

In 2001, the decision to consolidate OPM’s and DOD’s investigations programs was made, and I am pleased to report that the 

DOD personnel security investigations program workload and staff 

were successfully transferred to OPM on February 20. At that time, 

1,578 personnel and over 146,000 investigations transferred from 

DOD to OPM. 

OPM is also working to increase the size of our contractor base. 

We estimate that a total of 8,000 employees and contractors combined are needed to handle peak workloads. Last year, we awarded 

contracts to five new companies, and today, the six companies 

under contract have over 6,000 staff that supplements our Federal 

staff. Over the next 6 months, we will see significant performance 

improvement as the staff becomes fully productive and the number 

of contractors continues to grow. 

Senator VOINOVICH. You said 8,000 people, and then you mentioned 6,000 others. 

Ms. DILLAMAN. Eight-thousand total, sir. Today, we have 6,000 

contractors, 1,578 transferred DSS staff, and the core Federal staff 

we had to begin with. We are now over 8,000. 

7

1The prepared statement of Ms. Anderson appears in the Apprendix on page 55. 

Senator VOINOVICH. So it is 8,000 altogether, including the private contractors? 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. Thank you. 

Ms. DILLAMAN. We are also focusing on delays in obtaining information from national, State, and local agencies. Many of these 

were unprepared for the substantial increases in demands for their 

services, resulting in substantial backlogs. We are working with 

them closely to identify the problem areas and to streamline or 

automate the processes whenever possible. 

We are also continuing to look at the use of information technology in other areas to improve the overall content or timely processing of investigations or strengthen the protection of the sensitive 

information maintained in OPM’s record systems. 

The third step of the clearance process is the agency adjudication 

of the completed investigation. To minimize handling, OPM is converting completed investigations to image files, which will allow for 

electronic transfer. 

When the adjudication action is complete, the fourth and final 

step of the process is recording the clearance action in either 

OPM’s or DOD’s record system. This provides OPM a mechanism 

for monitoring agency adjudication timeliness. 

Through these efforts, we are beginning to see progress in restoring acceptable processing time. By October 1, 2005, our goal is to 

average 35 calendar days or less on approximately 10 percent of 

the initial investigations that are targeted for priority processing. 

For all others, our goal is to complete 80 percent or more within 

120 days. We are confident that we will be able to meet these 

goals, barring any substantial or unexpected changes in our workloads. 

Mr. Chairman, that concludes my remarks and I would be happy 

to answer any questions you have. 

Senator VOINOVICH. Thank you very much. Ms. Anderson. 

TESTIMONY OF HEATHER ANDERSON,1 DIRECTOR, STRATEGIC 

INTEGRATION, OFFICE OF THE DEPUTY UNDER SECRETARY 

OF DEFENSE, COUNTERINTELLIGENCE AND SECURITY, AND 

ACTING DIRECTOR, DEFENSE SECURITY SERVICE, U.S. DEPARTMENT OF DEFENSE 

Ms. ANDERSON. Chairman Voinovich and Senator Akaka, Members of the Subcommittee, I am Heather Anderson representing the 

Department of Defense. I am pleased to testify today and update 

you on the personnel security clearance process. 

DOD requests personnel security investigations to ensure that 

only trustworthy and reliable individuals are granted access to 

classified information or placed in sensitive positions. As prescribed 

by Executive Order 12968, the investigative process includes an 

initial investigation that provides assurance a person has not demonstrated behavior that could be of security concern, to be followed 

by a reinvestigation that is conducted at specified time intervals to 

determine if an individual’s clearance should be continued. 

8

There are approximately 3.2 million cleared individuals within 

the Federal Government, of which almost 2.5 million, or 80 percent, are cleared DOD affiliates—civilians, military, or industry 

personnel, which would include industry individuals who are processed for clearances by DOD on behalf of 22 other Federal agencies 

and under the auspices of the National Industrial Security Program. 

DOD has been partnering with the Office of Personnel Management for the past 5 years, obtaining their assistance in the conduct 

of investigations and collaborating on initiatives to improve and 

modernize the investigations process. As Kathy mentioned, on February 20 of this year, DOD completed the transfer of the PSI function to OPM, an initiative that began approximately 2.5 years ago 

and which has effectively consolidated management and personnel 

security investigative resources within a single agency of the Federal Government. 

Prior to the transfer of function, Defense Security Service succeeded in closing nearly all of their pending investigative work received on their legacy database. 

Our success in completing these investigations was accomplished 

in part by redesigning the PSI organization to reduce infrastructure costs and realigning resources to improve productivity. By 

training the entire workforce on OPM’s case management system 

prior to the transfer, DOD investigative personnel were able to 

begin using the system and obtain the benefit of its operating efficiencies for 7 months before the transfer. Furthermore, the training 

enabled a seamless transfer of function with minimum production 

downtime. 

For the past several years, DOD has also planned for and has 

championed a number of initiatives to improve the end-to-end PSI 

process and eliminate the systemic weaknesses identified in past 

reports. Quite simply, our strategy is to streamline the process 

through automation initiatives while simultaneously transforming 

the PSI process into a risk-managed and proactive program with 

priority given to the most critical investigations. 

Some of these initiatives are: DOD pioneered the two-phased approach to the top secret reinvestigations, which maximizes efficiency by using field investigative resources only when needed. 

This approach is now the national standard. 

A second is the Automated Continuous Evaluation System, 

known as ACES, which will identify information of potential security concern about cleared personnel on a continuous basis using 

government and commercial data sources. Our beta testing results 

and lessons learned are being incorporated into an initial operating 

capability of ACES to be in place later this year. 

A third is that DOD, as mentioned earlier, is in the process of 

transitioning to eQIP. As an adjunct to that implementation, DOD 

will establish various locations throughout the United States where 

requestors can electronically submit fingerprint cards and release 

forms that are required as part of the eQIP request package. 

Fourth, DOD and OPM will soon implement the electronic report 

for adjudication that will provide for electronic dissemination of investigative results from OPM to the appropriate DOD adjudicative 

entity. 

9

And fifth, the Joint Personnel Adjudication System allows DOD 

security managers, including those in industry, to immediately 

grant access upon verification of eligibility and perform certain 

other clearance actions. This system has been connected to OPM’s 

Security Suitability Investigations Index since December 2002. 

This connection enables DOD and other Federal Government offices to share information. 

Through these initiatives, we believe that the prolonged processing times and backlogs of prior years will be eliminated. We are 

confident that OPM can achieve these initial goals, in part from the 

additional investigative capacity OPM has brought online and 

through process improvements already underway. 

The DOD’s central adjudication facilities are also well positioned 

for the timely adjudication of all incoming investigations expected 

from OPM. As noted in the GAO report, DOD has taken positive 

steps to hire and train additional adjudicative staff. Our goal is to 

complete 90 percent of adjudications within 30 days, not including 

the time needed for due process. 

DOD will continue to work with OPM and the rest of the community to identify additional process improvements and to ensure that 

processing of clearances meets or exceeds the requirements mandated by the intelligence Reform and Terrorism Prevention Act of 

2004. 

Thank you for the opportunity to appear before your Subcommittee today. I am happy to answer your questions. 

Senator VOINOVICH. Thank you, Ms. Anderson. 

Senator Akaka, I understand that you have another hearing at 

11 o’clock. I think before we start asking the questions, I would appreciate your opening statement, if you care to make one. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Yes. Thank you very much, Mr. Chairman. I am 

pleased to join you today, Mr. Chairman, and I am hopeful that our 

hearing will bring into focus the problems facing the issuance of security clearances. I look forward to working with all of you to get 

security clearances off the high-risk list as soon as possible. 

Mr. Chairman, our national security strategy depends more than 

ever on ensuring that security clearances for military personnel, 

Federal workers, and government contractors are investigated and 

adjudicated without unnecessary delays. 

And Mr. Chairman, as you mentioned, I regret that I will have 

to leave to serve as the Ranking Member of an important Veterans’ 

Affairs hearing called last Friday after the Department of Veterans’ 

Affairs acknowledged $1 billion of shortfall for VA health care. 

Again, I want to thank our witnesses for being here today and 

to thank you, Mr. Chairman, for holding this morning’s hearing. I 

ask that my full statement be included in the record. 

Senator VOINOVICH. Without objection. 

Senator AKAKA. Thank you, Mr. Chairman. 

[The prepared statement of Senator Akaka follows:]

PREPARED STATEMENT OF SENATOR AKAKA 

Thank you, Chairman Voinovich, I am pleased to join you today for our third 

hearing in the 109th Congress concerning programs on the GAO’s high-risk list. 

10

This morning we will review personnel security clearances which was added to the 

list 6 months ago. We agree that we cannot allow it to stay on the list long, and 

I am pleased to work with you, Chairman Voinovich, to get security clearances off 

the list as soon as possible. 

As Ranking Member of this Subcommittee, as well as the Armed Services Readiness Subcommittee, I understand the many challenges facing the Department of Defense (DOD). Between these two subcommittees, we are providing much needed additional oversight of DOD. 

In November 2003, Congress authorized the Secretary of Defense to transfer the 

DOD personnel security investigative function from DOD’s Defense Security Service 

(DSS) to the Office of Personnel Management (OPM). 

This decision was prompted by long-standing problems at DSS in conducting and 

adjudicating clearances, coupled with a dramatic increase of employees needing 

clearances after September 11. 

After some delay, approximately 1,600 DSS employees, including field investigators, support staff, and first-line supervisors were transferred to OPM’s Center for 

Federal Investigative Services (CFIS) in February 2005. OPM field investigators, 

along with OPM’s contract investigative workforce, are now responsible for nearly 

all personnel security investigations for DOD military, civilian, and industry personnel. 

Today, we will examine the impact this transfer has had on DOD’s long-standing 

backlog and whether the transfer to OPM has had the expected result. 

This hearing is important because of its impact on national security. We understand that our national security strategy depends on making sure skilled job applicants do not wait months or even years for security clearances. However, it is not 

only Federal applicants who face this problem; it impacts the defense industry as 

well. For contractors, it becomes a difficult business decision because well-qualified 

job applicants are quickly lost to a competitor. 

Once hired, the employee becomes just an overhead expense until the clearance 

is granted. Small businesses, which are vital to the U.S. economy, are especially 

hard hit by inefficiencies in this program. 

There are more immediate national security concerns relating to personnel security clearances. To allow needed employees to carry out their jobs, temporary or interim clearances maybe granted pending the outcome of the investigation and adjudication. Failure to properly manage the interim clearance process, however, can 

put classified information at risk. Also, security clearances must be periodically updated through reinvestigations. In 2000, GAO found that DOD had over 500,000 

overdue reinvestigations. That was one in five of all security clearances at DOD, 

putting classified information at serious risk. 

As we examine the transfer of functions from DSS to OPM, I am also interested 

in hearing about improvements in the transparency of the clearance process. We 

have heard complaints from industry representatives that they are still required to 

work through DSS, even though DSS is no longer in a position to provide assistance. 

I look forward to the testimony of our witnesses, and Mr. Chairman, I look forward to continuing our work. Thank you.

Senator AKAKA. I do have a few questions, Mr. Chairman. 

Ms. Dillaman, the Federal Government faces a critical shortage 

of foreign linguists. One of the best ways to improve foreign language proficiency is through immersion programs and spending 

time abroad. However, spending time abroad frequently results in 

delays in the clearance process as foreign activities must be 

verified by investigators. 

In the past, DOD’s military services have conducted most of the 

overseas leads for DSS. However, DOD terminated this mission following the transfer of investigative function from DOD to OPM. My 

question to you is, what is OPM doing to facilitate the security 

clearance process for linguists and others who have spent time 

overseas? 

Ms. DILLAMAN. Senator, obtaining international coverage has 

plagued this process for decades. Until the point of transfer, OPM 

relied on both the State Department and the Department of Defense network of resources to obtain the required overseas coverage. Prior to transfer, DOD was in the process of converting this 

11

to have their investigative resources obtain the required international coverage and are now working with OPM to facilitate 

sending OPM Federal agents abroad. We expect to begin deployment of our own agents internationally in August of this year. 

Senator AKAKA. Thank you. Mr. Stewart, much of the discussion 

has focused on the number of quantitative personnel security investigations that OPM is able to conduct. What can OPM do to improve the quality of these investigations? 

Mr. STEWART. We have a number of concerns about the quality 

of OPM investigations. One of the major concerns is the number of 

new investigators that have been added. According to our calculation, when we completed our work and issued our report in February of 2004, DOD and OPM combined had about 4,200 investigators. You have heard today that OPM has 8,000 or more investigators. That is the addition of several thousand new investigators. 

We would like, and we think it is critical, that there be uniformity in training, that all of the investigators are trained on the 

same standards with the same instructions to make sure that the 

investigations are carried out in a high-quality manner. 

The other issue in terms of quality is that before the program 

was transferred, OPM handled some of DOD’s business. For example, in fiscal year 2002, OPM closed about 280,000 DOD cases, but 

over 28,000 of those cases were closed pending cases. That is, all 

of the information was not included in the investigation. When it 

was turned over to the DOD adjudicators. That is not a quality investigation, and 28,000 closed pending cases in 1 year seems to us 

to be a fairly large number. So that is a quality issue that I think 

DOD and OPM needs to get a handle on. 

Senator AKAKA. Ms. Dillaman, would you care to respond to 

that? 

Ms. DILLAMAN. Yes, sir. First, on the training issue, we have developed a very robust training program for both our Federal and 

our contractor resources. We have succeeded in developing one 

standard handbook that is used by all resources, contractor and 

Federal, and our reports of investigation are all in one common reporting format, making it virtually invisible to the adjudicator who 

produced the investigation. So I think we are well on our way to 

meeting the training requirements that Mr. Stewart spelled out. 

As far as the closed pending process, it is absolutely true that in 

conducting the investigation, there are literally dozens of different 

data points or sources that you are contacting and collecting that 

make up a complete investigation. OPM closes an investigation 

pending, and that is a term of art for investigations, when a thirdparty record source is not available in a timely manner. That 

means if I can’t lay my hands on a 30-year-old defense file quickly, 

but I have substantially completed the investigation otherwise, I 

will advance that information to the adjudicating agency and allow 

them to decide whether or not there is substantial information that 

would support a clearance action or whether the outstanding piece 

would pose a risk and should be waited for. It is an advance process only. The investigation is completed and sent in its entirety to 

the adjudicating office. 

Senator AKAKA. Thank you. Mr. Chairman, I want to thank you 

again for holding this hearing, and focusing attention to this procVerDate 0ct 09 2002 10:49 Oct 26, 2005 Jkt 022198 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 C:\DOCS\22198.TXT SAFFAIRS PsN: PHOGAN
12

ess. Of course, all of you know that the Chairman and this Subcommittee is really looking to resolving this seemingly large problem, and I want to commend the Chairman for doing this. We will 

certainly do all we can to try to help resolve this. I thank you for 

your responses. Mr. Chairman, thank you very much for allowing 

me to ask questions. 

Senator VOINOVICH. Thank you, Senator Akaka. 

Mr. Stewart, in the mid-1990’s, OPM created an Employee Stock 

Ownership Program for its security investigation workforce. This 

action moved Federal employees to a privately-owned company 

known as U.S. Investigative Services. For almost 10 years now, 

OPM did not have Federal employees conducting security clearance 

investigations. With the transfer of the DOD employees to OPM, 

the agency has a hybrid of Federal individuals and also the private 

sector. Do you think this is an appropriate blend of employees? 

Mr. STEWART. We haven’t really assessed that situation, Mr. 

Chairman. It does give us pause because the contractor employees, 

we understand, may not be working in the same fashion as the 

former DOD employees. The process may be a little bit different. 

With training, though, we think that everybody can be brought up 

to the same place. But we haven’t really assessed that situation to 

determine whether there are any tangible problems with that. 

Senator VOINOVICH. Well, you have got one group working for the 

OPM, the former DOD employees, and then you have the private 

contractors, five or six of them. I really would be interested in 

knowing what GAO thinks about this mixture of employees. 

Ms. Dillaman, how do you decide which group gets assigned certain cases? 

Ms. DILLAMAN. Mr. Chairman, I really believe this is an ideal 

configuration, having a backbone of Federal agents nationwide that 

are supported by a broad base of contractors. I have four contractors to every Federal agent, approximately. That allows the Federal 

agents to facilitate access for the contractors to sources, because it 

is quite true that Federal agents sometimes have easier access to 

State and local law enforcement systems and other records systems 

and other sources. 

In addition, I believe there is some work that would be better 

conducted by the Federal resources, such as clearing the contractors themselves. 

Today, with the transfer, the Federal resources are still devoted 

to DOD’s highest-priority cases. Beginning in October, however, we 

are going to reconfigure this and redivide what work the Federal 

agents do, moving the clearance of contractors to the Federal workforce as well as troubleshooting all the contract management issues 

for the contractors that are placed throughout the country to the 

Federal side and giving the more routine work to the contractors 

to complete. 

Senator VOINOVICH. Ms. Anderson, since the DOD sent employees over to OPM, please provide your assessment on the transfer. 

Ms. ANDERSON. I know Kathy and I both recall the town halls 

that we did a number of years ago when we first initiated this 

whole process, and in speaking with the Federal investigators, they 

recognized that the Department of Homeland Security, and other 

Federal agencies had the same PSI requirements as DOD and they 

13

really take it as a national security mission. So I understand 

through the grapevine that they are welcoming the new challenges. 

Senator VOINOVICH. Ms. Dillaman. 

Ms. DILLAMAN. I would agree. I just completed 5 weeks of training in the field with all of our new staff, our transferred staff, and 

I believe they are a highly motivated, energized workforce and that 

they are quite comfortable with the new role they are going to play. 

Senator VOINOVICH. Since September 11, have jobs that did not 

need a clearance been added to the clearance list? 

Ms. DILLAMAN. Yes, sir, they have. The number of clearance investigations has increased substantially since September 11. 

Senator VOINOVICH. Has anyone reviewed the increases in security clearances to determine whether they are really necessary? In 

other words, after September 11, one of the things that is troubling 

to me is that we have really changed the way we do things. We 

are almost going to the extreme to accomplish certain tasks. At the 

same time, we are adding enormous sums of money to cover the 

costs of the added workload. 

Sometimes I think that Osama Bin Laden has to be the happiest 

person in the world. Because of September 11, he has been responsible for enormous change in the United States of America and, 

frankly, a very large expenditure of funds being expended because 

of the fear of terrorist activities. 

Have you examined whether certain clearances are really necessary? 

Ms. DILLAMAN. Sir, OPM isn’t in a position to challenge an agency’s request when they ask for an investigation to support a clearance, but we do maintain data, specific data by agency, on those 

types of trends that can be used to monitor shifts such as what you 

just described. 

Mr. STEWART. Mr. Chairman, we looked at this issue when we 

were doing our work for the February 2004 report. In addition to 

the increase in the number of requests for clearances, we also noticed that there was an increase in the level of clearance. 

For example, in 1995 for contractor personnel, about 17 percent 

of all requests were for top secret. In 2003, it was 27 percent. So 

we have seen not only——

Senator VOINOVICH. Repeat that again. 

Mr. STEWART. In 1995, for contractor personnel, 17 percent of the 

requests for clearances for contractor personnel was for the top secret level clearance. In 2003, a couple of years after September 11, 

that figure was 27 percent. It requires a lot more resources to investigate somebody for a top secret than for a ‘‘secret’’ or a ‘‘confidential.’’ So we have noticed that trend. 

Mr. Chairman, this is why it is so important for DOD to get a 

handle on exactly what its workload requirements are, who needs 

a clearance and at what level they need the clearance. DOD has 

undertaken this effort, but our concern is that there is no target 

completion date for this. We maintain that until DOD knows how 

many service members, how many civilian employees of their 

700,000 Federal civilian employees, and how many contractor personnel actually needs a clearance, what positions need a clearance, 

at what level the clearance is needed, there is no way that DOD 

can have an efficient and an effective security clearance process. 

14

Senator VOINOVICH. Is the agency then the one that determines——

Mr. STEWART. Yes, sir. 

Senator VOINOVICH [continuing]. Who needs a security clearance——

Mr. STEWART. Yes, sir. 

Senator VOINOVICH [continuing]. And at what level of clearance 

that should be given. Now, Ms. Anderson, you have heard what Mr. 

Stewart has to say. What is the Department of Defense doing to 

look at those that need a clearance and the level of clearance? It 

would be interesting for you to go back and look at the 17 percent 

number that he is talking about and how it is up to——

Ms. ANDERSON. We have. We actually helped provide those numbers. 

Senator VOINOVICH. Well, the question is, are the additional 

clearances really needed? 

Ms. ANDERSON. If I might start with, we really need to make a 

distinction between the need for an investigation and the need for 

a security clearance. We do an increasing proportion of our investigations for access to IT systems that require a vetting process. 

We actually think we should know who the people who are administering our networks are. So there is a distinction between the 

need for access to classified information and the need for an investigation. 

We have a DOD regulation that clearly specifies who needs an 

investigation for a clearance and who needs an investigation for a 

trustworthiness determination. So that mixes the numbers a little 

bit. 

Senator VOINOVICH. So the point is that there are some people 

that you want to investigate, but not necessarily for a level of security clearance, is that right? Just generally, you would like to have 

an investigation about the background——

Ms. ANDERSON. A trustworthiness investigation for positions of 

trust. 

Senator VOINOVICH. OK. So that is one level——

Ms. ANDERSON. That is one level of the distinction here. 

Senator VOINOVICH. How do you coordinate your requirements 

with Ms. Dillaman’s team at OPM? 

Ms. ANDERSON. We have a tendency to harmonize the types of 

investigations into the products Ms. Dillaman’s organization 

serves. So she has a number of categories of investigations of increasing investment and we use that scale and those defined investigation types for what we request. We will request a single-scope 

background investigation for somebody who needs an initial top secret clearance. We may also request that same type of investigation 

for a system administrator of a mission-critical network. They don’t 

need access to the classified information necessarily, but they will 

have the same scope of background investigations. 

We have tried to harmonize the system in that way. Then it actually is very useful for us, because if that system administrator 

actually needs access to classified later down the road, we can use 

that same investigation. So to the greatest extent possible, we have 

harmonized the two standards into one. 

15

But getting back to your original question about the change in 

mix, it is very interesting to note that the Department of Defense 

did have a significant increase over the last 10 years, but to some 

degree, we are seeing it stabilize in the last 3 to 5 years. So we 

don’t think that there is an ever-increasing number of investigations that will be required. We are working very hard with the 

services and agencies to absolutely scrub their requirements and 

make sure that we are consistent across the Department. 

We have also provided fairly decent projections to Ms. Dillaman 

that allows her to do adequate planning. I think that there was a 

structural shift post-September 11 that everyone has talked about 

in terms of how we use people and who needs to be vetted, and I 

think that we are seeing that structural shift and we are somewhat 

hopeful that we will see it stabilize. 

Senator VOINOVICH. So the Department of Defense is cognizant 

of the problem. Has there been any recent review of who should get 

these investigations and at what level? 

Ms. ANDERSON. Yes. We work with the services and agencies to 

actually have them review their programs. The Army did a very extensive and very well done scrub most recently. The services have 

been continuously fine-tuning it. 

Now, with the change in mission requirements, we have a tendency when we call up Reservists and National Guard members that 

we have to make sure that their investigations are current, as well. 

And so the world environment being what it is today, I think that 

the number of clearances that have been requested and the number 

of investigations that have been requested is consistent with the 

mission requirements. 

Senator VOINOVICH. Now, Ms. Dillaman, I suspect that you conduct security clearances for the Department of Homeland Security? 

How many Federal agencies do you conduct security clearances for? 

Ms. DILLAMAN. For security clearances, sir, over 50, but in total, 

we deal with over 100 Federal agencies. There are several thousand offices that request investigations from OPM for either national security purposes, public trust, nonsensitive or regulatory 

purposes. 

Senator VOINOVICH. So if OMB, under the Presidential Executive 

Order, is in charge of policy, they should look at this from a management and budget perspective and examine to ascertain whether 

those agencies do, indeed, need the clearances for their employees 

and contractors. 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. Let me start with that. That kind of defines 

the customer base——

Ms. DILLAMAN. Yes, sir, and as I stated before, we have solid 

data on each and every one of those agencies, including trends for 

the past 15 years of submissions. 

Senator VOINOVICH. OK. Mr. Stewart, could you comment on this 

testimony? How does it relate to what you are saying, how can the 

DOD and OPM match their budget and workload requirements in 

order to get the job done. Can you comment on that? 

Mr. STEWART. DOD and OPM need to know the number and 

level of required clearances in order to efficiently determine the 

16

staffing, the resources, and the budgets. In order for OPM to plan 

properly, it has to know the workload coming from DOD. 

Senator VOINOVICH. And you are saying to me today that from 

your perspective, we don’t know what the workload is coming from 

DOD? 

Mr. STEWART. Exactly, Mr. Chairman. I am saying that the DOD 

has an initiative underway to determine which military, civilian, 

and contractor positions need clearances and at what level. But I 

am also telling you, DOD is not done with that initiative. There is 

no target completion date set for that, and until that is done, DOD 

is not going to have an efficient and effective program. 

Let me just give you an example. DOD started contracting with 

OPM to handle some of their cases in 1999. In 2001, DOD overestimated the number of cases by 150,000 investigations. They were off 

by 150,000 investigations. In 2002, they underestimated the number of investigations by 135,000—not 10,000, not 50,000, not 

80,000, 135,000 underestimated. In 2003, DOD underestimated its 

investigations workload by almost 90,000 investigations. 

If you are missing your target by 100,000 investigations, that 

wreaks havoc on the budgets and numbers of staff you need to 

carry out the work. There is no way you can plan for that. 

Now, there is a second piece to this, Mr. Chairman, that we are 

also concerned about. It is reinvestigations. These are people who 

already have clearances and who come up periodically for reinvestigation. For top secret clearances, it is every 5 years. For secret 

clearances, it is every 10 years. DOD in the past has not had a real 

good handle on what its reinvestigation workload is. That is, if they 

are notified that an individual needs a reinvestigation, they have 

that piece of information. The problem occurs when DOD isn’t notified. It is when an organization doesn’t submit a request on time 

that DOD doesn’t know whether the individuals need a reinvestigation or not. 

DOD estimated in 2000 that there were approximately 500,000 

overdue reinvestigations that had not been submitted to DOD for 

reinvestigation. That is a huge workload. And I am here to tell you 

today that I don’t think the Department has a good handle on that 

part of their workload, which OPM would investigate. 

So if I am OPM, I would be scared to death of this program, to 

be perfectly honest with you. I don’t know how OPM can be comfortable with estimates in workload requirements coming from 

DOD given what we know about DOD’s ability to estimate its 

workload requirements. They have missed by 100,000 in 2000, 

150,000 in 2001, 135,000 in 2002, 100,000 in 2003. 

But there is an initiative to try to get a better handle on that. 

I don’t know what is happening on the reinvestigations piece. 

There is a system, the Joint Personnel Adjudication System, that 

should give them a better handle on the reinvestigation piece. I 

think it’s close to being fully implemented. This is not a good picture at this point, sir. 

Senator VOINOVICH. The lion’s share of the requests for these security clearances come from the Department of Defense? What is 

the percentage? 

Ms. DILLAMAN. Eighty percent or better. 

17

Senator VOINOVICH. Eighty percent. So the other 20 percent is 

from other agencies. So the Department of Defense creates the 

most work. I would like to have the ranking of the percentages. It 

seems to me that the OMB folks ought to know that, also, to begin 

to get into that issue. 

What is your response to this, Ms. Anderson? It sounds to me 

like things aren’t going very well at DOD. 

Ms. ANDERSON. Sir, you will notice that GAO has not been out 

to visit us quite recently. The numbers that are quoted are from 

2000 through 2003. As I cited in my testimony, we have been working very hard for the last 5 years and we have a number of initiative that are beginning to pay off that we started over 2 years ago. 

Specifically, let us start with the issue about backlog. There is 

a lot of confusion about the term backlog. Ms. Dillaman and I talk 

about work in process. Backlog seems to have varying definitions. 

There are 329,000 DOD cases in process today. Even when the investigations are run in 90 days, we will still have over 150,000 

cases in process on any day. 

Going back to the conversation about how we could miss our estimate by 100,000, and I must say I am not familiar with those particular deltas, but in fiscal year 2001, the Department of Defense 

submitted 916,598 cases. We might have been off by 10 percent. 

That would be the better part of 100,000 cases. We might have 

been off by 15 percent. A lot of the caseload management issues 

really focused around the difference between the need, the requirement, and the ability to fulfill that requirement. 

And speaking to Mr. Stewart’s comment about why we don’t have 

a close date for our improvements to validation of the requirements 

and projections, we will never have a close date. You can never be 

better enough at this to really make it perfect. We know that what 

we have today seems to be working for Ms. Dillaman. She has the 

benefit of all the information that gets submitted to her and we 

keep her up to date on policy changes and on trends. We talk constantly about where the numbers are. 

If we are going to have a significant change in policy that will 

affect her workload, we let her know and we work out estimates. 

But there are a number of things you cannot predict. 

Senator VOINOVICH. Over or underestimating the workload by 

100,000 is a lot of clearances. 

Ms. ANDERSON. Well, given it is 100,000 out of 900,000, at least 

it puts it in context. I am not saying it is perfect. But this year, 

we have actually been running relatively close to our projections. 

It is also, with regard to predicting of periodic reinvestigations, it 

is somewhat problematic to predict it out much more than 12 or 

15 months. 

Senator VOINOVICH. Do you have a report on this that I can see? 

We are going to get into dotting the ‘‘i’’s and crossing the ‘‘t’’s on 

this, OK? 

Ms. DILLAMAN. Looking forward to it, sir. 

Senator VOINOVICH. I am going to look at this like guys who 

were working for me when I was governor, OK? [Laughter.] 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. And we have to get OMB involved in this. 

I am going to contact Clay Johnson and Josh Bolten, because they 

18

have to pay attention to this issue. If they are going to set the policy, they ought to have a few people that really know this issue 

backwards and forwards. So I will be sending a letter off to OMB 

and find out what they are doing. I will also have a follow-up hearing this fall, to make sure they are prepared and are aware of what 

responsibility they really have in regard to this whole area. 

I think you need to have some good metrics, too. It is important 

that we are all operating under the same data points because the 

only way we can really make progress is to understand what these 

numbers mean. 

Mr. Stewart, I have one question about the Intelligence Reform 

and Terrorism Prevention Act of 2004. The law requires 80 percent 

of the investigations on security clearance applications be completed within 90 days by December 17, 2006. That is the end of 

next year. It also requires 80 percent of the adjudications to be 

completed within 30 days. Given all that you know about the backlog and time frames to investigate and adjudicate security clearances, do you think that DOD and OPM can meet these timelines? 

Mr. STEWART. Based on what I——

Senator VOINOVICH. Is this realistic? Sometimes Congress sets 

deadlines and has no understanding in so many instances that they 

are not realistic. For example, we said March 15 was when the 

President was supposed to sign the Executive Order on security 

clearances. Well, what is today, June 28? It was finished June 27, 

3 months late. We have to be realistic about what we ask agencies, 

because if we are not, then they really say Congress doesn’t really 

understand. What do you think? 

Mr. STEWART. Well, based on what I understand about OPM’s 

current time standards, it is 120 days for initial investigations and 

180 days for investigations. If that is true, then they may not meet 

the standards of 90 days in the new legislation. 

Personally, I think that the 120 days and the 180 days are probably more realistic given the transition of this program and the 

number of new staff that have been added. OPM can probably 

speak better to this than can I. But given the thousands of new 

staff that have been added and the training that is required to get 

those folks up and ready to process investigations, the 90 days 

specified in the legislation is probably not realistic. 

Currently, OPM’s time limits are 120 days for initial investigations, whether it is top secret or secret, and 180 days for reinvestigations, regardless of the level. So that does not meet the 90-day 

requirement. But I don’t believe the 90 days is currently doable. 

Senator VOINOVICH. We need to establish rules and baseline 

measures for tracking progress. I would be interested in GAO’s 

opinion about what a realistic timeline would be. 

The other thing I am interested in is what process, Ms. Dillaman 

and Ms. Anderson, use, to elicit how things can be improved? Do 

you hire consultants? How do you determine how you can improve 

the respective clearances in your organizations? 

Ms. DILLAMAN. Mr. Chairman, we involve our stakeholders. We 

regularly convene a panel of the agencies we serve, including the 

Departments of Defense, Homeland Security, Treasury, etc., to talk 

about process, different process elements, and that has taken us to 

where we are today, in how we not only move work internally, but 

19

how we move work from the submitting agency and then back to 

the adjudicating facility. So there is continuous change and improvement in the investigative process. You wouldn’t recognize it 

from 10 years ago. And I think that is going to be an ongoing effort 

for us, because you can always improve. 

Senator VOINOVICH. Ms. Anderson. 

Ms. ANDERSON. Thank you. We work very closely with Kathy and 

her team, because they really are our strategic supplier with regard to investigations. We have taken a hard look at all the variety 

of processes and personnel security within the Department and we 

have been doing this for a little over 21⁄2 years, and so we are starting to put pieces in place to bring it all together. So we have solicited input from all levels of this process, to include our stakeholders, which would include industry and our MOU members who 

are part of the National Industrial Security Program Policy Advisory Committee (NISPPAC), and we have received a lot of solicited 

and unsolicited feedback along the way, not only from consultants, 

but from other interested parties, to include House and Senate 

members. So we will take input from anyone. We are looking for 

things that make the process better, more robust, and reduce risk. 

Senator VOINOVICH. Do you employ quality management techniques? For example, through Total Quality Management employees are empowered and recommend how they think they can do 

their job better and be more efficient, and ultimately streamline 

the process. 

Ms. ANDERSON. We have embraced that. One of the real benefits 

of our Joint Personnel Adjudication System is that it allows flexibility. We have a number of very different organizations within the 

Department. We have large organizations, like the services, and 

then you have smaller agencies. You have specialized agencies, intelligence agencies, and defense logistics agencies. 

So we have built a set of tools that allow us consistent measures, 

consistent quality control, but allows flexibility in how these suborganizations organize their processes to best meet their piece of 

the mission. So we have empowered them and given them the tools 

that allow them some flexibility within their process so that they 

can tailor these processes to their specific needs without engendering any dislocation to reciprocity and other pieces of the process 

that are important to preserve. 

Senator VOINOVICH. Do you have any continuous improvement 

teams? 

Ms. ANDERSON. We do not have a standing set of continuous improvement teams. We have pockets of them in different areas, to 

include our automated continuing evaluation system. We have a 

whole process improvement team associated with that. Our adjudicators have a collaborative forum and we are trying to get a little 

more structure in that, as well, to actually make sure that they are 

leveraging best practices across those organizations. 

Senator VOINOVICH. I would really like to know what process you 

use to involve your employees on developing recommendations on 

how things can be improved. 

Ms. Dillaman, what about you? 

Ms. DILLAMAN. Yes, sir. We also have users’ groups, not only 

with our own Federal staff, but we are including the contractor 

20

staff, as well. Each of our contractors sends representatives to the 

specific users’ groups to talk about process and tools. Our automation system, which is the heart of the control of these investigations, has been constantly renovated through those types of users’ 

groups activities. 

Senator VOINOVICH. OK. I have a little problem with that, because GAO determined that the private sector contractors were 

your external customers, but I think they are your internal customers. It takes 375 days for contractor clearances. In other words, 

private sector employees wait an average of 375 days to receive 

their clearances. And the question is, have you sat down to ask 

contractors how they think improvements to the security process 

could be made? 

I am concerned that the cost to private contractors continues to 

go up the longer the process takes. First of all, if you want to hire 

somebody that is good but then they can’t do their work until they 

get a clearance and you put them on the payroll, they sit there and 

can’t do their work they are supposed to do because of the fact that 

they don’t have a clearance. So the private company keeps losing 

money. 

I know OPM and DOD held a news conference with contractors, 

but I want to know how much time have you really spent with 

them getting their ideas on how they think you can improve the 

system? This is part of quality management, reaching out and asking their opinions can really make a difference. 

I know when I was governor, we had a forum for stakeholders 

to fill out. Ninety-five percent of the forms came back with problems because the form was just not relevant to the customer. So 

we spent 6 months with the customer and we reduced the size of 

the form and the questions. The end result reduced errors to close 

to 5 percent. It was good for our employees because they were having difficulty working in an efficient manner since there were high 

error rates. Customers would submit their forms and State employees would notify them that the forms were incomplete, so the customer would have to go through the process again. It just took a 

lot of time and money. 

I will never forget, one of the employees said he used to come to 

work in the morning, and the closer he got to the office, the more 

stressed he became. Just by getting involved with the customers 

and coming up with a new form, it just really relieved all of that 

tension and made things so much more efficient. 

And the question is, how much time do you spend with your private sector customers? 

Ms. DILLAMAN. Sir, personally, I spend a good deal of time with 

our customers, with the Federal agencies that are customers. In 

fact, I have a team here in Washington that is dedicated to that. 

In fact, each agency is assigned a customer service representative 

for OPM. 

When it comes to industry, industry feedback is channeled 

through the Department of Defense. I have partnered with DOD 

and presented at several conferences and meetings to industry 

issues about the process, including taking suggestions on how we 

can improve it. But I would defer to my colleague in DOD in terms 

of how industry——

21

Senator VOINOVICH. I want to know how much—when was the 

last time you sat down with the private industry people that you 

are hiring to get their feedback on this clearance process and——

Ms. ANDERSON. I, myself, briefed them on this issue and solicited 

feedback in May—I can probably tell you the exact date—at the 

AIA and NDIA forum in Arizona. We have a tendency to hit about 

one industry organization meeting for exactly that purpose a 

month, if not myself, then someone who directly reports to me. And 

we do actually incorporate all of industry’s comments in our DOD 

position to OPM. To talk about revising the form, we have provided 

significant comments which includes the industry input to OPM 

with regard to the revision of the SF–86 form. 

So we have a number of forums that we provide industry, and 

it is normally through the industry associations, although we are 

always open and I do very frequently take briefings and requests 

from individual industry participants. So we do everything we can 

to make sure that we are incorporating all of the ideas. We are entirely endorsing the need for change. 

Senator VOINOVICH. OK. The question is, my staff met with some 

private sector representatives. The real issue is, if OPM is taking 

over the investigations, why doesn’t OPM meet with the private 

sector? 

Ms. DILLAMAN. And again, sir, the request for investigations on 

industry come from the Department of Defense. We are more than 

happy to meet with industry groups with DOD, partnering with 

DOD, but the industry is channeled through DOD. 

Senator VOINOVICH. But the fact of the matter is that in terms 

of improving the process, now that OPM is conducting the investigation, it seems to me that it would be very worthwhile for you 

to meet with the private sector stakholders. 

Ms. ANDERSON. Sir, the other piece of this that is very important 

to remember, and the reason that Ms. Dillaman and I team up to 

meet with industry is invariably when we are talking about this 

process, we are talking about the clearance process and it includes 

not only the investigation but the adjudication. So we have worked 

as kind of a tag team to make sure if there is a question about 

something, our organization reviews the SF–86, the self-disclosed 

information that is provided by all of our applicants, and 80 percent of the time for secret clearances, we can provide an interim 

clearance in a week. That will put those industry people to work 

at the interim secret level. We do not have that luxury in most 

cases at some of the higher level of clearances. That is why we 

make sure that we prioritize with OPM those investigations. 

But when we have conversations with any of our constituencies, 

we have found it beneficial for us to go together because it is invariably a discussion not only about the investigation, but what 

else can be done to have those people work effectively while it is 

going on. So we have a piece of this at the front end with regard 

to taking some risk with interim clearances, and we have a piece 

of this on the back end, which is the final piece and the decision 

on eligibility and, ultimately, access. 

Senator VOINOVICH. Well, we have got this shifting. It seems to 

me there is a different perspective from your point of view since 

you are the one that is going to have to do the investigation. 

22

Senator Carper is here. Thank you very much for coming here. 

He is very interested in this, because he is also a former governor. 

Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. But you know something else? I used to be an 

intelligence officer in the Navy. 

Senator VOINOVICH. I am looking forward to your questions. 

Senator CARPER. I probably won’t show much intelligence, but 

we’ll give it our best. [Laughter.] 

Mr. Chairman, good morning, and to our witnesses, thanks for 

coming this morning. 

I guess my first question is of you, Mr. Stewart. My understanding is that GAO has placed a security clearance process on its 

high-risk list, and the process, as I understand it, has been turned 

over from DOD to OPM and the new Department of Homeland Security. I know you have already talked about this, but let me just 

start with a basic question. How is it going? 

Mr. STEWART. I think it depends on who you ask. If you are asking me——

Senator CARPER. Well, I wanted to ask you first, so——

Mr. STEWART. We have not looked at the transfer itself and how 

things are working today. Our concerns are more basic. As I mentioned earlier, one of the biggest concerns is for the Department to 

be able to project its workload requirements. Until the Department 

can do that, we at GAO don’t believe that there will be an efficient 

and effective security clearance program regardless of who is doing 

the investigations. So we have some fundamental problems with 

the way things are working overall. The actual transfer, we haven’t 

looked at that to see how things are working today. 

Senator CARPER. Let me ask you, Ms. Dillaman and Ms. Anderson, would you just comment in what Mr. Stewart has just said. 

Ms. ANDERSON. It is interesting to note, and I had mentioned it 

previously, that a lot of these problems have been longstanding and 

we have made significant improvement in the last 2 years. Our 

ability to project our requirements is very much improved, and I 

believe Ms. Dillaman will attest to that, and that we have not left 

her high and dry as far as her ability to project workload needs. 

Additionally, as we look forward, every program has room for improvement, this one more than most. We will continue to improve 

and refine those projection models to ensure that we have taken 

into account every active variable and can give Ms. Dillaman the 

most accurate projection moving forward. 

With regard to the transfer, I would say that everyone got paid, 

work continued to flow, and no one died, so I would say it is a success. 

Senator CARPER. Mr. Stewart. 

Mr. STEWART. Senator Carper, let me just tell you one of the 

things that we are concerned about, even though we haven’t looked 

at the transfer. DOD and OPM announced in February 2003 that 

this transfer was going to take place, over 2 years ago. There is a 

system, the eQIP system which OPM has, that DOD still can’t use 

to submit all of its requests through this electronic system. So 

23

there is a time lag where DOD has to reformat information in 

order to get it into the system. 

This transfer has been 2 years in the making and this is just an 

example of where it doesn’t seem that everybody is talking to each 

other and there is a strategic plan—DOD needs an overall plan to 

make this thing work efficiently and effectively. 

Senator Voinovich, have talked about the need for a Chief Management Officer at DOD. This is, I think, a program that should 

fall under the CMO’s jurisdiction. With all due respect to Ms. Anderson and folks at that level, if you don’t have somebody at the 

senior-most levels of the organization looking at this program and 

making sure that things are happening and come together in a 

strategic fashion, I don’t know that we will ever have a successful 

program there. 

Senator CARPER. Let me follow up on what you said. I was struck 

by Ms. Anderson’s comment. It sort of reminded me, I often say, 

everything I do, I can do better, and clearly, that is probably true 

with most of us who are being honest with themselves. 

I want to come back to the point that Mr. Stewart made. I think 

he used the word eQIP, and that is probably an acronym. I don’t 

know what it stands for. But let me just ask, how are DOD and 

OPM using technology to transfer investigations to OPM and to 

work through the application process and how successful have 

those technologies been? 

Ms. DILLAMAN. I will take it. Senator Carper, OPM in 2004 developed and implemented an online information submission process. That is eQIP. It would be Electronic Questionnaire for Investigations Processing. This is web-based technology that allows the 

applicant to complete his or her questionnaire online, store the information in an automated vault, and submit it electronically along 

with either imaged or hard-copy attachments, like the fingerprint 

chart in the release form. 

There was a conscious decision made between OPM and DOD to 

customize that, to allow the submissions through JPAS, a system 

that DOD was in the process of deploying, that in the long haul 

will minimize the amount of resources that it takes to maintain 

both systems. That was a very complicated, complex development, 

but I am thrilled that we are close to implementation. I expect over 

the next 2 to 3 months, we will have a full rollover so that all submissions from DOD will come in electronically. 

Senator CARPER. And how long have we been working on this? 

Ms. DILLAMAN. The customized version, over a year, heading toward two. 

Senator CARPER. OK. And do you think we are a couple of 

months out? 

Ms. ANDERSON. We have already begun using it, but as with an 

organization the size of the Department of Defense, you don’t cut 

it over all in one day. So we are in the process of matriculating 

more users every day. As a matter of fact, earlier this month, we 

allowed all industry users full access to it. So the entire cleared industry population is now free to use it and we are easing their 

transition, and this is similar to the services and agencies, is we 

give them a grace period that they can use the old EPSQ, our old 

online questionnaire, for a little while longer while they are 

24

transitioning to how the new one works. But our expectation is by 

the end of this year, everyone in the Department will be on it exclusively. 

Senator CARPER. Mr. Stewart, should we be encouraged by this? 

Mr. STEWART. Again, it just seems a little curious to us that this 

transfer was announced over 2 years ago, and this clearance-request submission process is a critical part of the program. It is 

pretty basic to be able to submit requests, and we still don’t have 

a fully operational system to make that happen. So I am not encouraged, quite frankly. 

Senator CARPER. Are you from Missouri? [Laughter.] 

Senator CARPER. Show me? Well, in a couple months, I hope you 

can show us a fully operational system. 

Ms. ANDERSON. Sir, if I might add that when we talked about the 

transfer of the investigations function, the e-Government, e-Clearance initiative—there are a lot of ‘‘e’’s—and the eQIP software that 

Ms. Dillaman deployed is separate from that functional transfer. So 

while it happened in parallel, it was not necessarily a condition for 

that transfer. It was separate. 

Senator CARPER. All right. Thanks for all those ‘‘e’’s. Governor, 

always a pleasure. 

Senator VOINOVICH. I just would get back to the same question 

I had, that DOD had the Case Control Management System that 

was used to manage the security clearance databases, is that right? 

Ms. ANDERSON. It was an investigations case management system, yes. 

Senator VOINOVICH. And OPM uses the Personnel Investigations 

Processing System. I want to make sure—the PIPS system. 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. OK. Now, are we talking about the fact that 

you are in the process of transferring the information from the 

Case Control Management System to the PIPS system? 

Ms. ANDERSON. No, sir. 

Senator VOINOVICH. You are not? 

Ms. DILLAMAN. We made the decision when we started on the 

discussion about the transfer of function. We did the analysis and 

determined it made no sense from either economic or engineering 

standpoint to move cases in process from DSS’s legacy system, the 

CCMS, to OPM’s PIPS-based system. So as part of our progression, 

we adopted the new business process in the beginning of fiscal year 

2004 which had all new work matriculating on OPM’s PIPS system. We then used the balance of 2004 and, quite frankly, a little 

bit of 2005 to clean up, that is complete, all the work on the Case 

Control Management System. 

The investigative data for investigations that were begun on 

Case Control Management System were completed on that system. 

So there are no more cases on the Case Control Management System. We are in the process of archiving those resulting investigations, so we are moving them all to an electronic format so that 

they will be available to organizations like OPM as prior investigations, but they remain with the Department and we will use an 

electronic archive to actually maintain them for the 25-year period. 

Senator VOINOVICH. So the relevant material that you need has 

been transferred to the PIPS system? 

25

Ms. DILLAMAN. Yes. The software with regard to the submission 

process and whether or not you use the old DOD EPSQ or the new 

eQIP form, actually has nothing to do with the Case Control Management System. 

Senator VOINOVICH. OK. Ms. Dillaman, in February 2004, GAO 

reported that a lack of investigative staff contributed to the delays 

in the security clearance investigative process, and since the transfer, OPM indicated they will need 8,000 full-time investigators to 

manage the investigative workload, and you are talking about almost 8,000, from what your testimony was this morning. 

In 2004, GAO noted that OPM’s primary contractor was hiring 

around 100 investigators a month, and at the same time was losing 

around 70 employees a month. Is your contractor still experiencing 

this high turnover rate? 

Ms. DILLAMAN. No, sir. Our primary contractor’s attrition rate 

now is down to 18 percent. 

Senator VOINOVICH. OK. So that they have reduced the turnover 

rate? 

Ms. DILLAMAN. Yes, sir. In fact——

Senator VOINOVICH. Were you concerned about the turnover rate 

that they had? 

Ms. DILLAMAN. Absolutely, sir. There is a large turnover in this 

business, and that is historically true, that people start and for a 

number of the street agents, that doesn’t turn out to be a longterm. But 15 percent attrition would be about right. 

In 2004, our prime contractor sold the business and it had been 

an ESOP prior to that, and so there were some windfalls from that 

and that accounted for some of the large attrition, where a number 

of people left after the sale. But that has stabilized and our contractor is bringing that down every month. 

Senator VOINOVICH. The U.S. Investigative Services, which was 

an ESOP that was created to preserve the jobs initially of the people that worked for the OPM was sold to somebody else? 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. Is it still known as the USIS? 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. They kept the name, but there is new ownership? 

Ms. DILLAMAN. Yes, sir. 

Senator VOINOVICH. And as a result of that new ownership, you 

are saying that they are a more efficient operation than they were 

prior to the change in ownership? 

Ms. DILLAMAN. Absolutely, sir. 

Senator VOINOVICH. Mr. Stewart, are you familiar with that 

change? 

Mr. STEWART. I am familiar with the change. We haven’t looked 

at it, but I am familiar with the fact that the ESOP was sold to 

another party. I think you are asking a very good question. Some 

investigations contractors depend on a large number of part-time 

individuals and our understanding is that a lot of these individuals 

are retired. They are not looking to work full-time. We also understand that they could work for more than one contractor. So they 

could work for one contractor this month and not the other contractor the next month. 

26

I think it is great that 3,800 full-time equivalent investigative 

staff have been added, but I think it is a situation that bears 

watching because of the high turnover rate that was experienced 

when we were doing our earlier work and the fact that many investigators are part-time. 

Senator VOINOVICH. OK. I appreciate your testimony here this 

morning. What I want to do next is to set a baseline about where 

we are today. I am going to have my staff work on it and we will 

contact the Office of Management and Budget to talk to them about 

it also. But I want to know, where are we today, and I want to decide on some metrics so that when we get together 3 months from 

now, 6 months from now, we can determine whether or not we are 

making any progress. 

So that is what I want to do. As I said, Ms. Dillaman, you have 

got a big job. I think in the Department of Defense, this challenge, 

which has been around a long time is unfortunately typical Department of Defense. One of the things that this Subcommittee is doing 

is taking on the fact that the Department of Defense has many 

items on the list that need to be corrected and here is another example of it. You are 80 percent of the action here. This is high-risk 

and so it is, again, part of the Department of Defense. 

I agree with you, Mr. Stewart, that if we are going to really see 

a transformation of the Defense Department, we do need a Chief 

Management Officer that is going to stay with these things over a 

long period of time. Secretary Rumsfeld came in and was really 

going to improve the Department’s management. In fact, one day 

before September 11, he said that if they could improve the efficiency by 5 percent of the Department, they could save $22 to $24 

billion per year. Then our Nation went to war and that doesn’t 

mean you are not working on process improvements. I appreciate 

the fact that the Department is trying to improve things. 

But the fact is that management improvements can get lost. 

When I was governor, I had a Chief of Staff, but I also had a Chief 

Management Officer that every day got up early in the morning, 

went to bed late at night, and when all these firestorms occurred, 

that didn’t bother that individual because every day, they were just 

working on management. And that is the way we got things done. 

This stuff is not going to get done in a short period of time, and 

that is why I think it is really important that you look at these 

numbers on a realistic basis. If we tell you to do something and you 

say, ‘‘Those people are nuts, it will never happen,’’ but if you come 

back—maybe what we should do is why don’t you sit down and figure out how long it will take you. What is a reasonable time frame? 

Maybe we need to change the law to give you more time. But I 

think we have got to be real about this, and I think if we are, I 

think we can certainly see some progress made. 

I know, Ms. Dillaman, you want to see improvements. Ms. Anderson, you have been working with us a long time and you want 

to see it. I just want to thank you very much. I didn’t bring you 

here to give you a hard time, but I want to get to some of the real 

issues here so we can get them taken care of. Thank you very 

much. 

The hearing is adjourned. 

[Whereupon, at 11:40 a.m., the Subcommittee was adjourned.] 

(27)

A P P E N D I X 

PREPARED STATEMENT OF SENATOR LAUTENBERG 

Mr. Chairman, thank you for calling this hearing and giving us the opportunity 

to learn more about the security clearance process. This process is obviously vital 

to our national security. Before an individual is given access to sensitive information, we must be absolutely certain that they are trustworthy. But it is also in our 

Nation’s interest to see that those with a legitimate need for information have access to the facts that will help them make good decisions. 

So our security clearance process must not only be thorough . . . it should also 

be timely. 

Today there is a severe backlog of investigations for security clearances. It is such 

a problem that back in January, the Government Accountability Office designated 

the security clearance process as a ‘‘high risk’’ area within the Department of Defense. 

I understand that some of this backlog might stem from the transfer of investigative responsibilities from DOD to the Office of Personnel Management. At the current time, DOD has approximately two million active security clearances issued to 

military personnel, civilian workers and defense contractors. These clearances allow 

individuals to gain access to classified information that they need to perform their 

jobs. Last year the GAO estimated that there was a backlog of roughly 270,000 applications for security clearances that needed to be investigated, and 90,000 that 

needed adjudication. 

GAO has pointed out four barriers that slowed DOD’s ability to eliminate this 

backlog, including:

(1) the sheer size of the backlog; 

(2) an influx of new requests since September 11, 2001, adding to the existing backlog; 

(3) an inadequate number of investigators and adjudicators, and; 

(4) a lack of a strategic plan for overcoming problems in gaining access to 

state, local, and overseas information.

The 9/11 Commission recommended action on this issue, and raised concerns that 

the backlog could make it difficult to expedite key national security appointments. 

The Commission recommended that a single Federal agency be responsible for providing and maintaining security clearances. This has not yet happened. 

Mr. Chairman, this is more than a matter of convenience. 

The fact is, if we can’t do a background check in a reasonable amount of time, 

it raises questions about our ability to do it thoroughly, as well. 

I look forward to hearing from our witnesses.

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