U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

59–010 

" ! SENATE 

114TH CONGRESS

2d Session 

REPORT

2016

114–246 

Calendar No. 453 

SECURITY CLEARANCE ACCOUNTABILITY, 

REFORM AND ENHANCEMENT ACT OF 2015 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 434 

TO STRENGTHEN THE ACCOUNTABILITY OF INDIVIDUALS 

INVOLVED IN MISCONDUCT AFFECTING THE INTEGRITY OF 

BACKGROUND INVESTIGATIONS, TO UPDATE GUIDELINES FOR 

SECURITY CLEARANCES, TO PREVENT CONFLICTS OF INTEREST 

RELATING TO CONTRACTORS PROVIDING BACKGROUND 

INVESTIGATION FIELDWORK SERVICES AND INVESTIGATIVE 

SUPPORT SERVICES, AND FOR OTHER PURPOSES 

APRIL 28, 2016.—Ordered to be printed 


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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JONI ERNST, Iowa 

BEN SASSE, Nebraska 

THOMAS R. CARPER, Delaware 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

CORY A. BOOKER, New Jersey 

GARY C. PETERS, Michigan 

CHRISTOPHER R. HIXON, Staff Director 

GABRIELLE D’ADAMO SINGER, Chief Counsel 

DAVID S. LUCKEY, Director of Homeland Security 

WILLIAM H.W. MCKENNA, Chief Counsel for Homeland Security 

BROOKE N. ERICSON, Deputy Chief Counsel for Homeland Security 

GABRIELLE A. BATKIN, Minority Staff Director 

JOHN P. KILVINGTON, Minority Deputy Staff Director 

MARY BETH SCHULTZ, Minority Chief Counsel 

JOHN A. KANE, Minority Senior Governmental Affairs Advisor 

LAURA W. KILBRIDE, Chief Clerk 


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Calendar No. 453 

114th Congress SENATE REPORT " ! 2d Session 114–246 

SECURITY CLEARANCE ACCOUNTABILITY, REFORM, AND 

ENHANCEMENT ACT OF 2015 

APRIL 28, 2016.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 434] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 434), to strengthen the accountability of individuals involved in misconduct affecting the integrity 

of background investigations, to update guidelines for security 

clearances, to prevent conflicts of interest relating to contractors 

providing background investigation fieldwork services and investigative support services, and for other purposes, having considered 

the same, reports favorably thereon without amendment and recommends that the bill do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 7 

IV. Section-by-Section Analysis .......................................................................... 8 

V. Evaluation of Regulatory Impact .................................................................. 9 

VI. Congressional Budget Office Cost Estimate ................................................ 9 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 10 

I. PURPOSE AND SUMMARY

S. 434, the Security Clearance Accountability, Reform, and Enhancement Act of 2015, prohibits re-employment of background investigators who engage in misconduct and requires agency contractors and subcontractors to report employees who intentionally compromise the integrity of background investigations to the agency 

within 24 hours. The bill also requires the President, at least every 

five years, to review and update guidance for agencies to use in deVerDate Sep 11 2014 08:01 Apr 29, 2016 Jkt 059010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR246.XXX SR246

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1The Committee consulted the reports for S. 1744 (113th Cong.), S. REP. NO. 113–276 (2014), 

and S. 2061 (113th Cong.), S. REP. NO. 113–257 (2014), in drafting this report. 2OFFICE OF THE DIR. OF NAT’L INTELLIGENCE, 2014 REPORT ON SECURITY CLEARANCE DETERMINATIONS (2014). 3See, e.g., GOV’T ACCOUNTABILITY OFFICE, GAO–14–186T, PERSONNEL SECURITY CLEARANCES: 

OPPORTUNITIES EXIST TO IMPROVE QUALITY THROUGHOUT THE PROCESS 1, 9–10 (2013) (describing the classification of different sensitivity levels for access to information) [hereinafter GAO– 

14–186T]. 4 Agency positions are designated at a ‘‘high, moderate, or low risk level as determined by the 

position’s potential for adverse impact to the efficiency or integrity of the service,’’ and ‘‘positions 

at the high or moderate risk levels would normally be designated as ‘Public Trust’ positions.’’ 

5 C.F.R. 731.106 (a)–(b) (2012). OPM’s regulations explain: ‘‘[s]uch positions may involve policy 

making, major program responsibility, public safety and health, law enforcement duties, fiduciary responsibilities or other duties demanding a significant degree of public trust, and positions involving access to or operation or control of financial records, with a significant risk for 

causing damage or realizing personal gain.’’ Id. 5 E.g., Memorandum for Heads of Agencies, Aligning OPM Investigative Levels with Reform 

Concepts, from John P. Fitzpatrick, Asst. Dep. Director of National Intelligence for Security, Office of the Director of National Intelligence, and Kathy L. Dillaman, Assoc. Director, Federal 

Investigative Services, Office of Personnel Management (Aug. 24, 2010), available at https:// 

www.opm.gov/investigations/background-investigations/federal-investigations-notices/2010/ 

aligning_opm_investigative_levels.pdf; OFFICE OF MGMT & BUDGET, SUITABILITY AND SECURITY

PROCESSES REVIEW: REPORT TO THE PRESIDENT 2 (2014) [hereinafter Suitability and Security 

Report]. 6See Exec. Order No. 10,450, 3 C.F.R. Comp. 936 (1953). 7See OFFICE OF PERSONNEL MGMT, POSITION DESIGNATION TOOL, POSITION DESIGNATION OF

NATIONAL SECURITY AND PUBLIC TRUST POSITIONS (2010), http://www.opm.gov/investigations/ 

background-investigations/position-designation-tool/oct2010.pdf. 

termining a position’s level of sensitivity and requisite background 

investigation requirements. Finally, S. 434 prohibits a contractor 

that performs background investigations from conducting an agency’s final quality review on a background investigation conducted 

by the same contractor. S. 434 is modeled after S. 1744 (113th Congress), the Security Clearance Accountability, Reform, and Enhancement Act, and S. 2061 (113th Congress), the Preventing Conflicts of Interest with Contractors Act, which Congress considered 

but did not enact in the 113th Congress.1

II. BACKGROUND AND THE NEED FOR LEGISLATION

The need for background investigations 

Over 4.5 million Federal employees and contractors are eligible 

to hold a security clearance.2 Several recent high-profile insider 

threat cases have shown that it is increasingly important for the 

Federal Government to control and have a complete understanding 

of who has access to sensitive documents, employees, and facilities. 

In general, Federal agencies conduct background investigations 

to determine individuals’ suitability for employment and access to 

government facilities, information, and information systems.3 More 

exhaustive investigations are reserved for determining whether to 

grant an individual a security clearance to access classified materials, or appoint an individual to a national security sensitive position or a position of public trust.4 Individuals who hold national security sensitive positions or positions of public trust are also required to undergo periodic reinvestigations after their initial investigation.5

Positions within an agency are designated as ‘‘sensitive positions’’ if an individual occupying a position could bring about ‘‘a 

material adverse effect on the national security.’’ 6 Most sensitive 

career civil service positions and some others are categorized by 

three levels of sensitivity: ‘‘Noncritical-Sensitive,’’ ‘‘Critical-Sensitive,’’ and ‘‘Special-Sensitive.’’ 7 Positions that require access to 


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8 Id. 

9See 5 C.F.R. 731.106 (2012). 10 Exec. Order No. 13,526, 3 C.F.R. 298 (2009). 11See GAO–14–186T, supra note 3 at 1–2. 12See Exec. Order No. 13,526. 13See e.g., OFFICE OF THE DIR. OF NAT’L INTELLIGENCE, INTELLIGENCE COMMUNITY POLICY

GUIDANCE NUMBER 704.1, PERSONNEL SECURITY INVESTIGATIVE STANDARDS AND PROCEDURES

GOVERNING ELIGIBILITY FOR ACCESS TO SENSITIVE COMPARTMENTED INFORMATION AND OTHER

CONTROLLED ACCESS PROGRAM INFORMATION (2008) (describing the scope of background check 

standards ‘‘A’’, ‘‘B’’, and ‘‘C’’) [hereinafter ODNI Guidance 704.1]; see also GAO–14–186T, supra 

note 3 at 8. 14See Exec. Order No. 13,526; see also OFFICE OF PERSONNEL MGMT, supra note 7 at 1. 15See sources cited supra note at 14 16See id. 17 E.g., ODNI GUIDANCE 704.1, supra note 13; Exec. Order No. 12,958 § 4.1(h), 4.4 (1995). 18See SUITABILITY AND SECURITY REPORT, supra note 5, at 3 (noting that OPM conducts approximately 95 percent of all background checks across government). 19See id. 

classified information are always considered sensitive positions.8

Aside from whether a position may have an impact on national security, positions within an agency are ‘‘moderate risk public trust’’ 

positions or ‘‘high risk public trust positions,’’ depending on the 

level of risk that someone in the position could harm the efficiency 

or integrity of the agency.9

By definition, classified national security information is information which could reasonably be expected to damage our national security if disclosed to an unauthorized person.10 Therefore, the Federal Government only issues an authorization to access classified 

national security information—a security clearance—after a satisfactory background investigation.11 All classified national security 

information is classified at one of three collateral classification levels—‘‘Top Secret,’’ ‘‘Secret,’’ or ‘‘Confidential.’’ 12 An individual’s security clearance level, and therefore the scope of the individual’s 

background investigation, corresponds to the highest level of classified national security information the person is authorized to access.13 Information classified at the lowest collateral classification 

level—confidential—is information that could reasonably be expected to cause damage to national security if disclosed to an unauthorized person.14 Information classified at the next level up—secret—is information that could reasonably be expected to cause serious damage to national security if disclosed to an unauthorized 

person.15 Information classified at the highest collateral classification level—top secret—is information that could reasonably be expected to cause exceptionally grave damage to national security if 

disclosed to an unauthorized person.16 Particularly sensitive information, such as Sensitive Compartmented Information and information on Special Access Programs, may be protected by controlled 

access programs which further limit dissemination.17

Responsibility for background investigations 

The Office of Personnel Management’s (OPM) Federal Investigative Services (FIS) conducts the vast majority of background investigations for other agencies.18 OPM and other agencies use a mix 

of contractors and Federal employees to conduct background investigations and support those investigations by gathering information 

on the subjects of investigations.19

Background investigations typically include interviews of friends, 

family, and coworkers; reviews of educational, employment, and 

mental health records; and criminal history and credit checks, all 


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20See generally ODNI GUIDANCE 704.1. 21 Id. at 3. 22See DEP’T OF DEFENSE, INTERNAL REVIEW OF THE WASHINGTON NAVY YARD SHOOTING

(2013) [hereinafter DoD Internal Review]; DEP’T OF DEFENSE, SECURITY FROM WITHIN: INDE- PENDENT REVIEW OF THE WASHINGTON NAVY YARD SHOOTING (2013) [hereinafter DoD External 

Review], available at http://www.defense.gov/Portals/1/Documents/pubs/Independent-Reviewof-the-WNY-Shooting-14-Nov-2013.pdf. 23See Safeguarding our Nation’s Secrets: Examining the Security Clearance Process: Joint 

Hearing Before the S. Subcomm. on Efficiency and Effectiveness of Federal Programs and the 

Federal Workforce and the S. Subcomm. on Financial and Contracting Oversight, of the S. 

Comm. on Homeland Sec. & Governmental Affairs, 113th Cong. (2013) [hereinafter Safeguarding 

our Nation’s Secrets Hearing] (statement of Patrick McFarland, Inspector General, U.S. Office 

of Personnel Management). 

of which can be conducted by either Federal employees or contractors.20 However, final adjudication rests with the Federal Government—in other words, the decision whether an individual is suitable for Federal employment and the decision whether to grant a 

security clearance is an inherently governmental function and must 

be made by a Federal employee (generally an employee of the requesting agency).21

Integrity of background investigations conducted by Federal and 

contractor employees 

Because agencies rely on background investigations to adjudicate 

an employee’s suitability for a sensitive position or clearance, errors or falsifications in those background investigations can lead to 

inaccurate assessments of an employee’s suitability for a sensitive 

position or a security clearance. Such investigations may omit or 

incorrectly characterize derogatory information upon which an adjudicator would have denied suitability or a security clearance. 

Quality assurance is therefore an essential part of the investigative 

process. Such quality reviews ensure that investigations are thorough and comply with all applicable standards. 

Unfortunately, recent investigations and events have highlighted 

serious errors and falsifications in background investigations over 

a period of many years. Some cleared Federal employees and contractors have even used their privileges to commit serious crimes, 

highlighting the need for better investigations and quality controls 

on those investigations.22 As then—OPM Inspector General (IG) 

Patrick McFarland testified in 2013: 

One of the most flagrant criminal violations that we encounter is the falsification of background investigation reports [. . . .] There are situations where the Federal Investigative Services’ background investigators, either Federal employees or contractors, report interviews that never 

occurred, record answers to questions that were never 

asked, and document records checks that were never conducted. For example, a record searcher fabricated 1,600 

credit checks that she never actually completed. Ironically, 

her own background investigation had been falsified by a 

background investigator convicted in a different fabrication 

case.23

In October 2013, the Department of Justice joined a qui tam 

False Claims Act complaint by a former employee of OPM’s then 

primary background investigations contractor, U.S. Investigative 

Services (USIS). At the time, USIS was OPM’s largest background 


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24 Notice of Election to Intervene by United States of America, United States Ex Rel Blake 

Percival v. U.S. Investigations Services, LLC, No. 11–CV–527 (M.D. Ala. Oct. 24, 2013). 25 United States’ Complaint, United States Ex Rel Blake Percival, No. 11–CV–527. 26Letter from Acting Director Elaine Kaplan, U.S. Office of Personnel Management, to Ranking Member Tom Coburn, Committee on Homeland Security and Governmental Affairs (Oct. 31, 

2013). 27OFFICE OF INSPECTOR GENERAL, OFFICE OF PERSONNEL MANAGEMENT, 4A–IS–00–09–060, 

AUDIT OF THE QUALITY ASSURANCE PROCESS OVER BACKGROUND INVESTIGATIONS 10–11 (2010). 28S. REP. NO. 113–276 (2014); see DOD INTERNAL REVIEW, supra note 22; DOD EXTERNAL RE- VIEW, supra note 22. 29See DOD INTERNAL REVIEW, supra note 22, at App’x B (Seattle Police Department Incident 

Report and Related Documents); DOD EXTERNAL REVIEW, supra note 22, at 36. 30DOD EXTERNAL REVIEW, supra note 22, at 36. 31DOD EXTERNAL REVIEW, supra note 22, at 12, 36. 

investigation contractor by number of investigations.24 In its complaint, the United States alleged that, 

Beginning in at least March 2008, and continuing 

through at least September 2012, USIS management devised and executed a scheme to deliberately circumvent 

contractually required quality reviews of completed background investigations in order to increase the company’s 

revenues and profits. Specifically, USIS devised a practice 

referred to internally as ‘‘dumping’’ or ‘‘flushing,’’ which involved releasing cases to OPM and representing them as 

complete when, in fact, not all [Reports of Investigation] 

comprising those cases had received a quality review as required by the Fieldwork Contracts. [. . . .] During the 

time period March 2008 through September 2012, USIS 

released at least 665,000 background investigations to 

OPM and represented them as complete when, in fact, one 

or more of the [Reports of Investigation] comprising those 

background investigations had not received a quality review as required by the Fieldwork Contracts. This represented approximately forty percent of the total background investigations conducted by USIS during that time 

frame.25

In a 2013 letter to then-Ranking Minority Member Tom Coburn, 

the acting Director of OPM explained that some lower-level investigations may be reviewed by contract employees rather than Federal employees.26 This type of work, in fact, was performed by 

former OPM investigations contractor USIS under its support contract with OPM and had previously been identified by the OPM IG 

as raising quality concerns.27

There have even been several examples in the past few years of 

cleared Federal employees and contractors who committed grave 

crimes. For example, on September 16, 2013, Aaron Alexis, a 

cleared United States Navy contractor killed 12 employees and 

wounded several others in a mass shooting at the Washington, 

D.C., Navy Yard.28 When Alexis first applied for a security clearance in 2007, he failed to disclose a Seattle arrest for ‘‘malicious 

mischief’’ after shooting the rear tires of a vehicle.29 Alexis was required to disclose this arrest on his SF–86 form and when the incident was uncovered during the course of Alexis’ investigation, he 

claimed to have simply ‘‘deflated’’ the tires on a vehicle.30 However, 

the police report from Seattle was never obtained during Alexis’ 

background investigation.31 Alexis was subsequently granted a 


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32 Id. 33S. REP. NO. 113–276 (2014); see Safeguarding our Nation’s Secrets, supra note 23; Current 

and Projected National Security Threats to the United States: Hearing Before the S. Comm. on 

Intelligence, 113th Cong. (2014) (statement of James R. Clapper, Director, National Intelligence); 

Mark Hosenball, NSA chief says Snowden leaked up to 200,000 secret documents, REUTERS, Nov. 

14, 2013, available at http://www.reuters.com/article/us-usa-security-nsaidUSBRE9AD19B20131114; see also Mark Hosenball, Snowden Downloaded NSA Secrets While 

Working for Dell, Sources Say, REUTERS, Aug. 15, 2013, available at http://www.reuters.com/ 

article/2013/08/15/usa-security-snowden-dell-idUSL2N0GF11220130815. 34 United States’ Complaint, supra note 25. 35SUITABILITY AND SECURITY REPORT, supra note 5, at 13. 36See Safeguarding our Nation’s Secrets Hearing, supra note 23 (statement of Patrick McFarland, Inspector General, U.S. Office of Personnel Management). 

clearance by adjudicators who had never reviewed the police report 

despite knowing he had misled them on his SF–86.32

Additionally, in June, 2013, computer systems administrator Edward Snowden leaked 50,000–200,000 classified documents that he 

obtained from the National Security Agency while working for intelligence contractors Dell and Booz Allen.33

Conflicts of interest 

One of the requirements for background investigations is a final 

quality review of the investigation to ensure its integrity, completeness, and accuracy. Until recently, contractors could conduct the 

final quality review of background investigations, resulting in a potential conflict of interest where a contractor reviewed its own work 

or the work of a competitor. This meant that a contractor that conducted a review could show bias toward approving its own work or 

against approving the work of its competitors. For example, according to the Department of Justice complaint, USIS management, in 

organizing its reviews of its own reports of investigation, established a priority level system to identify the risk that a report of 

investigation would be reviewed by Federal agencies. The management then passed this information to their investigative branch, instructing them to dump cases likely to be federally reviewed.34

In February 2014, OPM announced a change in this policy—by 

requiring that only Federal employees conduct final investigative 

quality reviews.35 However, the decision does not preclude OPM 

from reverting the policy in the future to allow contractors to conduct the final quality-review of their own work. In order to prevent 

such conflicts of interest, this bill prohibits contractors from conducting the final quality review of background investigations in 

which the contractor participated. It does not prohibit a contractor 

from reviewing its work for internal quality control. However an 

independent third party or Federal employee must conduct the 

final quality review. 

Accountability measures for misconduct 

OPM’s usual response to misconduct by a contractor—administrative removal of the employee from the contract—has been ‘‘insufficient’’ according to former Inspector General McFarland.36 Such 

an action does not prohibit the same individual from performing 

background investigations for the Federal Government under another contract. This bill would prevent these types of abuses by demanding better accountability from OPM and its contractors 

through timely reporting of misconduct, stiffer penalties for misconduct, and improved reporting to Congress. 


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37 Id. (statement of Brenda S. Farrell, Director, Defense Capabilities and Management, Government Accountability Office). 38GOV’T ACCOUNTABILITY OFFICE, GAO–12–800, SECURITY CLEARANCES: AGENCIES NEED

CLEARLY DEFINED POLICY FOR DETERMINING CIVILIAN POSITION REQUIREMENTS 20 (2012). 39 Id. at 21. 40 Id.; see Safeguarding our Nation’s Secrets Hearing, supra note 23 (statement of Brenda S. 

Farrell, Director, Defense Capabilities and Management, Government Accountability Office). 

Guidance for designating the sensitivity level of positions 

Inconsistent and outdated guidance for agencies in designating 

the sensitive level for national security sensitive positions also creates a potential vulnerability in the security clearance process. 

Current guidance is ambiguous and has led to Federal agencies inconsistently and sometimes incorrectly designating a position’s sensitivity level.37 Both overstating and understating a position’s sensitivity level is problematic. 

As a result, the Government Accountability Office (GAO) recommended that Federal agencies establish ‘‘clearly defined policies 

and procedures’’ in ‘‘determining if Federal civilian positions require a security clearance’’ or designation as a national security position.38 GAO also recommended periodic review of the designation 

of these positions since circumstances change over time.39 According to GAO, regulations OPM and the Director of National Intelligence promulgated in December, 2010, would result in clearly defined policies and procedures for determining whether civilian positions need security clearances.40

S. 434 would adopt similar requirements to those recommended 

by GAO. Specifically the bill would require the President, acting 

through relevant agencies, to review and update guidance for agencies to use in determining the sensitivity designation of positions 

and the appropriate background investigation to initiate for each 

position designation. The bill also requires that at least every five 

years the President review and revise position designations in accordance with the guidance if necessary. 

III. LEGISLATIVE HISTORY

On February 10, 2015, Senator Tester introduced S. 434, the Security Clearance Accountability, Reform, and Enhancement Act of 

2015, with Senators McCaskill and Vitter, which was referred to 

the Committee. 

S. 434 is based on two acts from the previous Congress: S. 1744 

(113th Congress), the Security Clearance Accountability, Reform, 

and Enhancement Act, and S. 2061 (113th Congress), the Preventing Conflicts of Interest with Contractors Act. Both S. 1744 

and S. 2061 were reported out of the Committee and passed the 

Senate by voice vote, but were not taken up in the House before 

the end of the Congress. 

The Committee considered S. 434 at a business meeting on May 

6, 2015 and ordered the bill, without amendment, reported favorably by voice vote. Senators present for the vote were: Johnson, 

McCain, Portman, Lankford, Ernst, Sasse, Carper, McCaskill, 

Baldwin, Heitkamp, and Peters. 


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IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

This section provides the bill’s short title, the ‘‘Security Clearance Accountability, Reform, and Enhancement Act of 2015.’’ 

Section 2. Table of contents 

This section provides a table of contents for the bill. 

TITLE I—SECURITY CLEARANCE ACCOUNTABILITY, 

REFORM, AND ENHANCEMENT 

Section 101. Definitions 

This section defines terms used in the title including ‘‘appropriate agency,’’ ‘‘appropriate congressional committees,’’ ‘‘covered 

contract,’’ ‘‘covered individual,’’ and ‘‘covered misconduct.’’ 

Section 102. Accountability of individuals involved in misconduct 

affecting the integrity of agency background investigations 

Subsection (a) states that a Federal employee who engages in 

covered misconduct is unfit for Federal employment and bars the 

individual from working on background investigations. 

Subsection (b) similarly bars a Federal contractor who engages in 

covered misconduct from the contract and from working on background investigation under any contract. This section also requires 

current and future contracts for background investigations include 

a provision requiring disclosure of misconduct to the contracting 

agency within 24 hours of discovery, and referral of the allegation 

for agency investigation within 5 days. 

Subsection (c) requires an annual report from the President on 

implementation of this section. 

Section 103. Review and update of position designation guidance 

This section requires that—within 180 days and every five years 

thereafter—the President update guidance for agencies to use in 

determining the sensitivity designation of positions and background investigation necessary for the position. This section also 

requires a report from the President within 30 days of each required review. 

TITLE II—PREVENTING CONFLICTS OF INTEREST WITH CONTRACTORS

Section 201. Definitions 

This section defines terms used in the title 

Section 202. Limitation on contracting to prevent organizational 

conflicts of interest 

This section prohibits a contractor from performing the agency’s 

final quality review of the contractor’s own work. This provision is 

intended to prevent conflicts of interest that might otherwise undermine the impartiality and objectivity of the quality review or 

give a contractor an unfair competitive advantage over other contractors. 


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V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA) and would impose no costs on state, local, or tribal governments. 

VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

MAY 21, 2015. 

Hon. RON JOHNSON, 

Chairman Committee on Homeland Security and Governmental Affairs, U.S. Senate Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 434, the Security Clearance 

Accountability, Reform, and Enhancement Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL. 

Enclosure. 

S. 434—Security Clearance Accountability, Reform, and Enhancement Act of 2015 

S. 434 would amend federal law to reform the security clearance 

process. A security clearance is a determination that a federal employee or contractor is eligible for access to classified national security information. The bill would require all federal agencies to terminate or place on administrative leave any employee that is involved in misconduct involving the security clearance process and 

prohibit employees of contractors and subcontractors involved in 

similar misconduct from performing background investigations. S. 

434 also would prevent security clearance contractors from reviewing and approving their own background investigations. 

Based on information from the Office of Personnel Management, 

which oversees the private firms that conduct the majority of investigations needed for security clearances, most of the provisions of 

the legislation would codify and expand current federal policies and 

practices regarding security clearances. Therefore, CBO estimates 

that implementing this legislation would have an insignificant cost. 

Enacting S. 434 could affect direct spending by some agencies (such 

as the Tennessee Valley Authority) because they are authorized to 

use receipts from the sale of goods, fees, and other collections to 

cover their operating costs. Therefore, pay-as-you-go procedures 

apply. Because most of those agencies can adjust the amounts they 

collect, CBO estimates that any net changes in direct spending by 

those agencies would not be significant. Enacting the bill would not 

affect revenues. 

S. 434 contains no intergovernmental or private-sector mandates 

as defined in the Unfunded Mandates Reform Act and would not 

affect the budgets of state, local, or tribal governments. 


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The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

Because this legislation would not repeal or amend any provision 

of current law, it would make no changes in existing law within the 

meaning of clauses (a) and (b) of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate. 

Æ 


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