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35–535 PDF 2008

S. Hrg. 110–338

EVALUATING THE PROGRESS AND IDENTIFYING

OBSTACLES IN IMPROVING THE FEDERAL

GOVERNMENT’S SECURITY CLEARANCE PROCESS

HEARING

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE, AND THE 

DISTRICT OF COLUMBIA SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 17, 2007

Available via http://www.access.gpo.gov/congress/senate

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

DANIEL K. AKAKA, Hawaii, Chairman 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

GEORGE V. VOINOVICH, Ohio 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

JOHN WARNER, Virginia

RICHARD J. KESSLER, Staff Director 

EVAN CASH, Professional Staff Member 

JENNIFER A. HEMINGWAY, Minority Staff Director 

DAVID COLE, Minority Professional Staff Member 

EMILY MARTHALER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

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

WITNESSES 

THURSDAY, MAY 17, 2007

Hon. Clay Johnson, III, Deputy Director for Management, U.S. Office of 

Management and Budget .................................................................................... 4

Robert Andrews, Deputy Under Secretary of Defense for Counterintelligence 

and Security, accompanied by Kathleen M. Watson, Director, Defense Security Service, U.S. Department of Defense .......................................................... 5

Kathy L. Dillaman, Associate Director, Federal Investigative Service Division, 

U.S. Office of Personal Management .................................................................. 7

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

Timothy R. Sample, President, Intelligence and National Security Alliance ..... 24

Doug Wagoner, Chief Operating Officer, Sentrillion, on behalf of the Information Technology Association of America ............................................................. 27

ALPHABETICAL LIST OF WITNESSES

Andrews, Robert: 

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

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

Dillaman, Kathy L.: 

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

Prepared statement with an attachment ....................................................... 55

Johnson, Hon. Clay, III: 

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

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

Sample, Timothy R.: 

Testimony .......................................................................................................... 24

Prepared statement .......................................................................................... 85

Stewart, Derek B.: 

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

Prepared statement .......................................................................................... 63

Wagoner, Doug: 

Testimony .......................................................................................................... 27

Prepared statement .......................................................................................... 93

Watson, Kathleen M.: 

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

APPENDIX 

Background .............................................................................................................. 109

(1)

EVALUATING THE PROGRESS AND 

IDENTIFYING OBSTACLES IN IMPROVING 

THE FEDERAL GOVERNMENT’S SECURITY 

CLEARANCE PROCESS 

THURSDAY, MAY 17, 2007

U.S. SENATE,

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE,

AND THE DISTRICT OF COLUMBIA,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:42 a.m., in Room 

342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, Chairman of the Subcommittee, presiding. 

Present: Senators Akaka and Voinovich. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH [presiding]. The meeting will please come to 

order. Senator Akaka is on his way. He had a speech this morning, 

and I know how those go. 

I want to first of all thank Senator Akaka for holding this Subcommittee’s fourth hearing on the Federal Government’s security 

clearance process. Although I am no longer the Chairman of this 

Subcommittee and am now Ranking Member, Senator Akaka and 

I collaborated during the 109th Congress that this issue is very important to the future of our country. I am very grateful to him that 

we are continuing our oversight on the security clearance process. 

Our oversight work on the security clearance process began during the 109th Congress because of our concern with the longstanding backlog with security clearances and the cumbersome 

process that hampered the Federal Government’s ability to clear 

highly-skilled employees in a timely manner. Our clearance processing system remains broken! It remains broken, limiting the ability of our national security agencies to meet their heightened mission requirements. 

The impact of a flawed clearance system is not limited to Washington. For example, during a recent visit to Wright-Patterson Air 

Force Base in Ohio, I was alarmed to learn of the considerable 

delays that continue to plague the Air Force’s ability to fill critical 

workforce needs. 

One year has passed since our last hearing. The first timeliness 

milestone set forth in the Intelligence Reform and Terrorism PreVerDate 0ct 09 2002 10:03 Apr 07, 2008 Jkt 035535 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 P:\DOCS\35535.TXT SAFFAIRS PsN: PAT
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vention Act are behind us. In thinking about today’s hearing, a 

number of questions come immediately to mind. 

Does the current security clearance process, a Cold War relic, 

have the capacity to meet the security needs of our Nation? Will 

OPM, which is responsible for about 90 percent of all background 

investigations for the Federal Government, be able to meet its investigative timeliness goals in the long term? Why isn’t the Department of Defense devoting the resources necessary to reform its 

process? 

Are we taking full advantage of technology and our partners in 

industry to make needed improvements? I have talked to industry 

and they are livid about this. They can’t understand why we in the 

Federal Government can’t incorporate available technology to improve this process. 

Honest responses to these questions will help us gain a better 

understanding of whether the current path will lead to success or 

failure. 

My concern is not meant as a critique of the efforts of those individuals who appear before the Subcommittee today, though I have 

some strong words. In particular, I want to applaud Mr. Johnson 

for his untiring commitment to this issue. Mr. Johnson, your leadership will become even more vital to this effort as we approach the 

end of the Administration. A question for the Administration is, are 

you going to wind down or are you going to wind up? 

Under the guidance of Ms. Dillaman, OPM has made noticeable 

improvements in the timeliness of security clearances. However, 

despite the progress that has been made, I still have some very serious concerns. 

First, although DOD’s senior leadership continues to state that 

they are committed to resolving the systemic problems at the Defense Security Service (DSS), actions do speak louder than words. 

Since her selection as permanent Director in February, DSS Director Kathy Watson has taken several important steps to reform the 

process, including hiring a committed, competent leadership team. 

This program has been on the Government Accountability Office’s 

high-risk list for years and has led to the development of a corrective action plan. 

It is my understanding that DSS is currently under-funded by 

$55 million for fiscal year 2007. I question how we can expect DSS 

to reform itself in the absence of adequate resources to get the job 

done, let alone build the infrastructure necessary to sustain itself 

in the long term. 

Mr. Johnson, I expect to hear from you how this problem will be 

fixed, particularly since OMB has been a partner in developing the 

corrective action. It seems to me that if you are a partner in the 

corrective action, that if providing the resources is extremely important to making it happen, that the resources would be provided. 

It is frustrating to me that we are asking agencies to reform themselves yet we fail to provide the resources or funding to get the job 

done. 

I had a hearing on the backlog in Social Security for folks that 

are making appeals on Social Security Disability and I was raising 

a lot of thunder. But the bottom line is, we are as guilty as they 

are because we haven’t given them the resources to do the job. If 

3

you don’t give people the funding they need, then you basically tell 

them that you don’t think very much of the job that you are asking 

them to do. 

Second, the February 2007 report by OMB and the Security 

Clearance Oversight Group identifies several obstacles which impede the security clearance process. The report admits that the 

Federal Government has yet to deal with the issue of reinvestigations. The OMB report also mentions the use of the e–QIP system 

for electronic submission of agency investigative requests. While I 

am pleased that the e–QIP has led to dramatic improvements in 

timeliness and accuracy of submissions, I remain perplexed as to 

why we have yet to reach 100 percent participation by agencies, including OPM. The deadline for compliance was April 2006, not 

April 2007. Mr. Johnson, I would like to know when you expect 

agencies to achieve compliance? 

Third, I remain very concerned that the Federal Government 

under OPM’s leadership is not taking advantage of innovative technology available in the marketplace. Subcommittee staff recently 

toured the mines in Boyers, Pennsylvania, where OPM’s clearance 

operations center is housed. After meeting with my staff to discuss 

their visit, I find it hard to believe that in the year 2007, we continue to rely on a paper-intensive clearance process. Ms. Dillaman, 

I would like to hear from you when you expect OPM to be able to 

complete a fully automated investigation from start to finish? 

Finally, in blatant disregard of the statute, agencies continue to 

disregard the reciprocity requirement. Our efforts to resolve the 

backlog will be diminished if agencies continue to reinvestigate and 

readjudicate individuals with valid clearances. 

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

Based on our efforts to date, we have made progress in reducing 

the timeliness of issuing initial security clearances, but our work 

is far from over. The timely hire of a highly-skilled workforce to 

meet our national security mission requires solutions to all the 

problems associated with the security clearance process. I remain 

committed to working on this issue until it is resolved. I remain 

committed to working on this issue until it is resolved. 

I would like to thank our witnesses for their participation and I 

look forward to your testimony. 

Senator Akaka has not arrived. We are going to go ahead to testimony. It is the custom of this Subcommittee that witnesses be 

sworn in. Will you stand and I will administer the oath to you. 

Do you solemnly swear that the testimony you are about to give 

this Subcommittee is the truth, the whole truth, and nothing but 

the truth, so help you, God? 

Mr. JOHNSON. I do. 

Mr. ANDREWS. I do. 

Ms. DILLAMAN. I do. 

Mr. STEWART. I do. 

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

Again, I want to thank you all for being here. Mr. Johnson, we 

will start with your testimony. 

4

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

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

FOR MANAGEMENT, U.S. OFFICE OF MANAGEMENT AND 

BUDGET 

Mr. JOHNSON. Senator, thank you very much for your commitment to this reform effort. You help us get a lot done that we 

wouldn’t be able to get done otherwise. What I would like to do is 

just briefly summarize what I think we have done and not done 

yet. 

In answer to your question, do we intend to wind down or wind 

up, let me put it this way. We intend and are very committed to 

stay tight, to remain tightly wound on this issue. This is a big priority for the government and it is a big priority for me personally 

because this thing can be fixed in the time that I am going to be 

here. 

Let me tell you what I think we have done. Presently, we are investigating, completing initial clearance investigations, 80 percent 

of them within 90 days, as called for. It was the goal to be accomplished by December 2006. We are adjudicating 80 percent of the 

initial clearances in less than 30 days, which was the goal for December 2006. We have reduced the backlog of old clearances. We 

have unprecedented agency commitment to fix this process. We 

have very clear goals for each of the component parts of the process. We have the information we need to hold ourselves accountable for accomplishing those goals. We have expanded our investigation and adjudication capacity and we have begun—we are 

using technology to transfer information and files more quickly 

than before. 

However, what have we not done yet? We still have a backlog of 

old investigations. We have not until this year begun to reform and 

improve the reinvestigation process. That is a commitment for 

2007, a big priority for 2007. We have, as I said, focused on the two 

major component parts, the investigation part and the adjudication 

part, of the process. We are only this year creating the data information that allows us to look at the total process, from when the 

person submits the application to when they are told they have a 

job and they have a clearance. What is that total end-to-end process? There are a lot of handoffs within agencies and between agencies that don’t get picked up and addressed and agencies aren’t 

held accountable until we look at the total end-to-end. That will become a primary focus of this reform effort this year. 

We have demonstrated this ability to do this in less than 90 days 

and adjudication in less than 30 days for several months. The proof 

in the pudding is can we do that over longer periods of time, and 

we have not—one of the challenges you raised in your opening remarks is we have not laid out what the security clearance process 

of the future looks like, but we are in the process of doing that and 

will have a very clear understanding of that by the end of this 

year, which we then will pick the next period of time to bring it 

to realization. 

This year, we have established as our goals that we want to and 

are going to hold ourselves accountable, it is not in the legislation 

but we want to hold ourselves accountable for completing 85 perVerDate 0ct 09 2002 10:03 Apr 07, 2008 Jkt 035535 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 P:\DOCS\35535.TXT SAFFAIRS PsN: PAT
5

1The prepared statement of Mr. Andrews appears in the Appendix on page 47. 

cent of all initial investigations in less than 90 days, complete 80 

percent of all adjudications in less than 25 days, to complete reinvestigations in 180 days or less, to bring all record repositories 

up to the standard of submitting the files that are requested—90 

percent of all the files that are requested within 30 days, to bring 

an end-to-end focus to our reform efforts so we can report not just 

on what adjudications are taking and not just what investigations 

are taking, but the total process, the process that the applicant for 

the security clearance, what they are realizing, and we want to explore additional—the possibility of using additional measures of investigative quality. 

In answer to a couple of questions you raised in your remarks 

in terms of the resources for DOD, DOD was provided all the funds 

in the President’s budget by OMB and the President provided that 

they requested for DSS. There have been no limitation on funds. 

If there is a funding issue at DSS, it is not because DOD doesn’t 

have enough money. It is because it is not in the right place within 

DOD. 

On the subject of e–QIP usage, yes, our commitment was—every 

agency’s commitment was to get to 100 percent usage of e–QIP by 

April of last year and we didn’t do it. It was not very well thought 

out by the agencies when they committed to do it. But the agencies 

on the government-wide were at 77 percent, I think, usage of it. 

The big agency still to get to 100 percent is DOD and they have 

very aggressive plans to get there by the end of this year. Our commitment is to be at 100 percent e–QIP usage by the end of this 

year. 

In terms of the use of technology, we are not making use now 

of a lot of these commercially available databases that a lot of the 

for-profit sector is using as they grant their employees security 

clearances, but our R&D effort will address that and we will lay 

out—within the next several months, we will have R&B milestones 

that we will be holding ourselves accountable for by the end of 

2007, 2008, and on to 2009 that we will be glad to come up here 

and share with you. We don’t need a hearing. We will just share 

that with you and your staff to give you an idea about what our 

vision for the security clearance process of the future consists of. 

That is my opening comments and I look forward to your questions. 

Senator VOINOVICH. Thank you. Mr. Andrews. 

TESTIMONY OF ROBERT ANDREWS,1 DEPUTY UNDER SECRETARY OF DEFENSE FOR COUNTERINTELLIGENCE AND SECURITY, ACCOMPANIED BY KATHLEEN M. WATSON, DIRECTOR, DEFENSE SECURITY SERVICE, U.S. DEPARTMENT OF 

DEFENSE 

Mr. ANDREWS. Good morning, sir. Thank you for the invitation 

to come up here this morning. I am the Deputy Under Secretary 

of Defense for Counterintelligence and Security and I have oversight responsibilities for DSS. I am joined by Ms. Watson, who is 

the Director of DSS. 

6

Sir, I appeared here last year about 3 days after I took over my 

job and DSS had stopped clearances. That was not a pleasant time. 

I think I started my testimony by saying this is not our best day. 

The crisis that led to the suspension of processing for security 

clearances had a cumulative effect in that it made certain that we 

knew that there were failures inside the system that couldn’t be 

papered over. I can report that DSS has corrected many of the root 

causes of last year’s shutdown, namely leadership and a lack of 

standard operating procedures. We have made progress to date, but 

much work needs to be done at DSS, throughout DOD, and across 

the interagency. 

And let me start with the positives, what the DSS team has accomplished over the past year. A year ago, my primary concern was 

a failure of leadership at DSS. The outfit had gone through four 

directors in 5 years, all of them acting directors. In the past 4 

years, they have had nine comptrollers. We have made progress, 

most notably in the senior team. 

The Secretary of Defense named Ms. Watson as Acting Director 

in May 2006 and permanent Director in February of this year. Ms. 

Watson is the first permanent Director at the agency within the 

last 5 years. Kathy assembled a team, a core team, in her first few 

months on the job. This team is talented, focused, and committed 

to the success of DSS. To say that we are proud of Kathy’s team 

would be a massive understatement, and I would like to outline 

some of her team’s accomplishments. 

We have a closer working relationship with OPM. The Defense 

Security Service has reinvigorated its working relationship with 

OPM, and together we are working to create a process to better 

serve our customers. We resolved the surcharge issue that existed 

last year. As a result of OMB mediation, we worked out an agreement with OPM over the rates that OPM charges DOD for investigations. OPM has refunded DOD $7 million in 2006 and for 2007 

OPM has eliminated the surcharge. 

We are closer, but not close enough, to technology compatibility. 

A better working relationship between DSS information technology 

team and its OPM counterparts has better enabled OPM’s e–QIP 

security to mesh with the DOD IT system to facilitate overall clearance processes. As Mr. Johnson has mentioned, we are still in the 

process of adapting 100 percent to e–QIP and we hope to do that 

by the end of the year or even sooner. 

DSS completed a very brutal zero-based review of its infrastructure funding requirements. This is a bedrock prerequisite toward 

establishing order in any budgetary household. We can also report 

progress toward meeting the requirements of IRTPA. DOD, including DISCO, is meeting IRTPA’s requirements that call for 80 percent of the adjudications to be completed within an average of 30 

days. 

And we are strengthening our industrial security program. This 

remains a challenge to us, though. There are almost 12,000 cleared 

contractor facilities across the country. There are more than 25,000 

information systems approved to process classified information, and 

DSS has a field workforce of less than 300. We have to balance resources against inspection and accreditation requirements, and it is 

7

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

page 55. 

clear when we do so that DSS must adopt a risk management approach to execute its industrial oversight role. 

Another challenge is automation. DSS maintains IT systems 

upon which the defense community depends. New and changing requirements are taxing those systems. We are continuing to evaluate the best solution to our IT system requirements. 

DSS infrastructure is another challenge. The personnel security 

industry function was transferred from DSS to OPM—the inspection function was transferred to OPM in February 2005. We at 

DOD planned inadequately to support the DSS infrastructure that 

remained in DOD after that transfer. DSS retained the responsibility to oversee OPM funding and financial reconciliation. We 

failed to recognize the magnitude of the cost of that oversight. That 

failure caused accounts for the so-called shortfalls for 2007–2008, 

sir. DSS has continued to work closely with the DOD comptroller 

to identify these funding challenges and to resolve them. 

Finally, DSS’s overarching challenge is to manage expectations. 

We must convey, and we have failed to do so so far, but we must 

convey to the rest of government and to the defense industrial contractor base a realistic sense of what DSS, its current budget and 

size, can be expected to support. 

We are assessing the personnel security program from end to 

end. We will come up with concrete changes necessary to overhaul 

and streamline the program. We are committed to working with 

OMB, the Office of the Director of National Intelligence, and the 

interagency to bring about a new personnel security process for the 

government. 

The Department’s senior leadership is committed to correcting 

systemic problems. We realize necessary changes will take time. 

We will be providing progress reports on both our short-term and 

long-term efforts to fix DSS and on our efforts to fix the overall security clearance process. 

Mr. Chairman, I want to conclude by thanking Members and 

staff for your support. You have helped us through a tough year. 

We pledge to you our best efforts and we are now available to answer any questions you may have. 

Senator AKAKA [presiding]. Thank you very much for your testimony. Ms. Dillaman. 

TESTIMONY OF KATHY L. DILLAMAN,1 ASSOCIATE DIRECTOR, 

FEDERAL INVESTIGATIVE SERVICES DIVISION, U.S. OFFICE 

OF PERSONNEL MANAGEMENT 

Ms. DILLAMAN. Mr. Chairman, Senator Voinovich, it is my privilege to testify today on behalf of the Office of Personnel Management and update you on our progress. 

In his June 2005 Executive Order, President Bush directed that 

‘‘agency functions relating to determining eligibility for access to 

classified national security information shall be appropriately uniform, centralized, efficient, effective, timely, and reciprocal.’’ OPM 

Director Linda Springer takes that direction very seriously and has 

8

1The chart submitted by Ms. Dillaman appears in the Appendix on page 62. 

included in OPM’s Strategic and Operational Plan specific goals to 

ensure that we accomplish these expectations. 

As you know, OPM provides background investigations to over 

100 Federal agencies to assist them in making security clearance 

or suitability determinations on civilian as well as military and 

contractor personnel. Our automated processing system and vast 

network of field investigators handle an extremely high volume of 

cases. This year we will conduct over 1.7 million new requests. 

Mr. Chairman, as you may recall, when the joint OMB–OPM 

Performance Improvement Plan was provided to your Subcommittee in November 2005, it addressed the critical areas of the 

overall security clearance process. As an attachment to my prepared testimony today, I have included a chart which outlines that 

process, the responsible agencies, and the timeliness goals that we 

have established for each step.1

Since developing that plan, we have made significant progress in 

improving overall timeliness and reducing the inventory of delayed 

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

issues that are hindering timely completion of background investigations. Our processing system tracks every step—from the time 

the subject completes and provides the necessary data and forms, 

to the date the agency makes the adjudication action, providing full 

transparency for the timeliness of each subject’s clearance. 

The first step addressed to improve overall timeliness is the 

timely and accurate submission of the subject’s information for investigation. The expanded use of e–QIP has improved timeliness 

and has lowered the rate of submissions that OPM has to reject because they contain incomplete or inconsistent information. The use 

of the form has increased substantially to over 70 percent of all 

submissions this fiscal year to date, and in March 2007, submissions for initial clearances through e–QIP took 14 days. This is an 

improvement from the 35 to 55 days reported in November 2005. 

The rejection rate is currently 9 percent and we believe that that 

can be reduced to the 5 percent goal through expanded use of e–

QIP. 

We continue to make good progress in reducing the amount of 

time it takes to complete the investigations for initial clearances. 

Eighty percent of the over 137,000 initial clearance investigations 

that were requested in the first quarter of fiscal year 2007 are complete and they averaged 78 days in process, well below the 90-day 

standard set in the Intelligence Reform Act. In fact, almost 28,000 

of these investigations were completed in less than 45 calendar 

days. 

In addition, we significantly reduced the inventory of both initial 

and reinvestigations that were previously delayed in process. This 

fiscal year, on average, we are closing 13,000 more investigations 

each month—national security investigations—than we are opening, which means we are effectively reducing and eliminating that 

overage portion of our inventory. Continued performance at this 

level meets the statutory goals for applications for initial security 

clearances and will result in the timely completions of reinvestigations, as well, by October 1, 2007, as planned. 

9

1The prepared statement of Mr. Stewart appears in the Appendix on page 63. 

The improvement in timeliness can be attributed in part to our 

increased staffing and productivity of our field agents. Currently, 

we have over 9,200 employees and contractors devoted to the background investigations program. In addition, we continue to work 

aggressively with national, State, and local record providers to improve their timeliness in providing information critical to the process. And while improving the timeliness of investigations, we continue to be vigilant about maintaining or improving the quality of 

the investigations we complete. 

For adjudication, during the second quarter of fiscal year 2006, 

agencies averaged 78 days to adjudicate their investigations, with 

only 9 percent of those reported done within the 30-day standard 

of the Act. During the first quarter of fiscal year 2007, 80 percent 

of the over 128,000 adjudications reported to OPM were completed 

in an average of 33 days, which includes mail and handling time 

between OPM and the adjudicating agency. 

We continue to work with agencies to improve the time it takes 

to deliver completed investigations, which includes the development of an imaging system that will allow us to electronically 

transmit completed investigations to those adjudication facilities. 

We are currently piloting that electronic transmission with nine 

agencies and we expect to be in a full production mode by October 

of this year. Next year, in 2008, the imaging system will be used 

to migrate from our current hard-copy file system, pending file system, to a virtual file system which will, in effect, make this process 

from beginning to end electronic and paperless. 

We are pleased with the improvements that have been made, but 

we recognize that there is still much work to be done. We will continue to work with OMB and the clearance-granting agencies in 

order to meet the requirements Congress and the President have 

set on this critical issue. 

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

questions you have. 

Senator AKAKA. Thank you very much for your testimony, Ms. 

Dillaman. Now we will hear from Mr. Stewart. 

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

Mr. STEWART. Good morning, Mr. Chairman, Senator Voinovich. 

Thank you for the invitation to come back again to yet the fourth 

hearing on personnel security clearances. We really do at the GAO 

appreciate your commitment to this issue. As you know, and I have 

testified all three times before that this is a very serious issue, critical to the national security of this country, and we mean that sincerely. So we appreciate your commitment to this issue. 

Today, I will highlight the results of our September report that 

looked at clearances for industry personnel. Mr. Chairman, as you 

know, and Senator Voinovich, as you know, industry personnel 

have screamed the loudest about the problems with security clearances, because if they can’t get their folks cleared, they can’t do the 

work of the government and there is a cost involved in that for all 

10

taxpayers. So this report focuses on Top Secret clearances for industry personnel. We looked at the timeliness and the quality of 

DOD and OPM’s process to grant these clearances for industry personnel. 

Mr. Chairman, I will tell you right up front that the results of 

our study are disturbing. I will address the timeliness issue first 

and then I will talk about quality. 

We reviewed over 2,000 cases of industry personnel who were 

granted Top Secret eligibility in January and February of last year, 

and I want to emphasize that these cases are a year old. We looked 

at them last year, and at that time, OMB was and OPM was about 

3 months into the reform effort. So I just want to make sure we 

have that reference. 

Our analyses showed that the process took an average of 446 

days, or about 15 months, for first-time clearances, an average of 

545 days, or about 18 months, to update existing clearances, and 

an average of 111 days for the application submission phase of the 

process. Now, I would note that OMB’s goal at that time was 14 

days. The average time was 111 days. 

Major factors contributing to these delays are an inexperienced 

investigative workforce, rejecting applications multiple times, not 

fully using technology, and in some cases requiring the manual 

entry of data, and multiple levels of application reviews. Now, 

those last three factors that I mentioned, that is the multiple rejection of applications, not fully using technology, and the multiple 

levels of reviews, those are critical factors and I just want to point 

out that the February report that was provided to Congress by the 

Security Clearance Oversight Group did not fully account for those 

factors, and I will come back to that point later. 

Regarding quality, we found that OPM provided incomplete investigative reports to DOD and DOD used these incomplete cases 

to grant Top Secret clearance eligibility. Specifically, we randomly 

sampled 50 cases out of the over 2,000 cases I referred to earlier 

to determine the completeness of documentation. We found that almost all, 47 out of 50 cases, 94 percent, were missing key documentation required by Federal standards. 

For example, of the 13 areas required to be addressed, we found 

that 44 out of 50 cases, 88 percent, were missing documentation for 

at least two and as many as six areas of the 13, and these cases 

managed to make their way from OPM to DOD despite OPM’s 

quality control procedures. Now, we understand that the procedures have since been replaced with different procedures. 

Also, 27 of the 50 cases that OPM sent to DOD contained 36 unresolved issues that were mostly related to financial matters, foreign influence, and personal conduct. Now, in such cases where 

there are unresolved issues, the DOD adjudicators should have requested OPM to provide additional information or at a minimum 

documented that additional information was needed. Neither of 

these things happened in these cases. 

Mr. Chairman, the record will show that we expressed concern 

about the quality of the process when this Subcommittee had its 

second hearing in November 2005. Today, given the results of our 

study, we remain even more concerned about the quality of the 

process. There has been a lot of talk today about timeliness, but 

11

what does it profit us to do it fast and not get it right? So we are 

very concerned about the quality of the process, as well. 

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

to questions. 

Senator AKAKA. Thank you very much, Mr. Stewart. I appreciate 

all of your testimonies. We will now begin with questions. 

Mr. Johnson, the President’s Executive Order 13381 that gave 

OMB responsibility for defining roles and requirements for security 

clearances is set to expire. What changes will take place upon this 

order expiring? 

Mr. JOHNSON. Well, it was set to expire. It was a 1-year Executive Order. It called for a time frame for OMB to be responsible. 

It was to end last June or July. We extended it for another year 

to keep us in charge. My guess is we are going to extend it another 

year. We have had thoughts about the responsibility for the oversight of the overall effort, leadership of the overall effort ought to 

pass to the Director of National Intelligence. They have some questions about that. Right now, it will continue to be OMB. I think we 

are doing a good job of moving it forward and will continue to be 

responsible for doing that. 

The long-term responsibility still has to be determined. Right 

now, we are just taking it a year at a time. 

Senator AKAKA. Thank you. Mr. Andrews, the Defense Security 

Service has consistently underestimated the number of investigations it plans to submit to OPM for the year. This makes it difficult 

for OPM to get enough staff to get through those investigations. My 

question to you is why does DSS continue to underestimate the 

number of clearances? 

Mr. ANDREWS. That is a good question, Mr. Chairman. Estimating the clearance requests from over 12,000 contractors is 

based on a data call from about 400 of these contractors on a sampling basis each year, and so the very method of sampling has 

proven unsatisfactory. Also, too, Mr. Chairman, OPM faces a challenge in that the clearance request from the rest of the Department 

of Defense, not the contractors but from the Department of Defense, from the uniformed military services, do not pass through 

DSS and so Kathy Dillaman has to cope with requirements coming 

directly into OPM from Army, Navy, Air Force, and DSS has no 

picture of that flow, either. So it is a tough sampling process and 

we are working on it and we are going to need industry’s help, sir. 

I don’t know if Ms. Watson wants to comment more on that, but 

she can add details later. 

Senator AKAKA. Yes, I would like further comment on what you 

are thinking about doing or what you are doing to fix this problem. 

Ms. WATSON. Good morning. We have recognized that——

Senator AKAKA. Will you state your name? 

Ms. WATSON. My name is Kathy Watson, and I am the Director 

of Defense Security Service. Good morning. The Department has 

recognized that its inability to properly predict its requirements for 

clearances is a problem not just for the Department, but for OPM. 

We recognized that a year ago, but DSS does not have the capability or the resources in house to actually help the Department 

predict those requirements. We recognized that last summer and 

12

we put forward in our budget request money to properly staff an 

office that would give us that capability. 

I have obtained money and funding to staff that office beginning 

in fiscal year 2008 and we are now in the process of hiring for that 

office. I have money to hire 20 people so that we can get our arms 

around the requirements process at the Department. Right now, 

each different department and agency is essentially acting on its 

own. There is no overall methodology at the Department. We realize we need to fix that. 

Senator AKAKA. Mr. Andrews. 

Mr. ANDREWS. Let me add, Mr. Chairman, that we are talking 

about some gross numbers. The constituency for security clearances 

across the U.S. Government, the intelligence communities have 

about 3 percent of those clearance requests or requirements. The 

Department of Defense has 80 percent, so that gives you an idea 

of the relative magnitude of how important it is. And industry—

this is of government clearances, so that will give you an idea of 

the challenge we face and Ms. Watson deals with daily. 

Senator AKAKA. Ms. Dillaman, the Intelligence Reform and Terrorism Protection Act required that by December 2006, 80 percent 

of all investigations take no more than 90 days. By December 2009, 

it should be less than 60 days. Are you going to meet this goal? 

Ms. DILLAMAN. Sir, we are certainly looking at what it is going 

to take to meet this goal. I think everyone recognizes that timely 

investigations cannot be at the cost of a good quality investigation. 

And because we rely on the voluntary cooperation of sources across 

the government and across this country, it is possible to overly 

compress the amount of time to the point where we are not getting 

the information we need to have a good quality investigation. 

Certainly through staffing, use of technology, research into alternative record systems and methods of obtaining information, we 

can continue to pare it down. But a lot will depend on just how 

much innovation we can bring to this process between now and the 

2009 goals. 

Clearly, sir, we were capable of, in the first quarter, producing 

28,000 investigations in less than 45 days. But that meant that the 

information for those investigations and those sources were readily 

available. That is not always the case. 

Senator AKAKA. Thank you. Mr. Stewart. 

Mr. STEWART. Yes, sir, Mr. Chairman. 

Senator AKAKA. GAO has said that OPM inacurately reports, or 

fudges information relating to clearance investigations, leaving out 

a significant amount of time. What aren’t they counting and why 

should they be counting it? 

Mr. STEWART. Thank you for the question, Mr. Chairman. I hope 

GAO didn’t use the word ‘‘fudge.’’ That is not a GAO term. 

No, it is exactly right, sir. The Security Clearance Oversight 

Group report to Congress in February points out in their report 

they are not counting all of the up-front time, the handoff time and 

the up-front time. The 111 days that I mentioned on average during the application submission phase, that is really the part that 

is not getting counted. 

When OPM says we are processing clearances in 75 days or 60 

days or whatever, I am not sure that those statistics include all of 

13

the time from the time that the security officer submitted the application to DOD, to DISCO, and then DOD looked at the application and may have sent it back to the security officer. Then they 

resubmitted. Then DOD sends it to OPM. OPM looks at it and it 

may find something wrong with it and it sends it back to DOD. 

DOD then sends it back. All of that time is not being counted. But 

the poor contractor, the industry person, is sitting out there waiting for his clearance and does not understand that all of this backand-forth is going on and then the statistics show that once OPM 

finally scheduled it for an investigation, it took us X-number of 

days. 

So we are concerned. We would like to see the up-front time 

counted in those statistics. The law says the time that it takes to 

do the investigative phase. Well, we consider all of that the investigative phase. Once it leaves the contractor, security officer, it is 

with the Federal Government. It is with DOD and then DOD sends 

it to OPM. That time should be counted, and as far as we know, 

it is not. 

Senator AKAKA. Thank you very much. 

Mr. JOHNSON. Mr. Chairman. 

Senator AKAKA. Yes. 

Mr. JOHNSON. Could I make a comment on a couple of questions 

you asked Mr. Stewart and Ms. Dillaman? 

Senator AKAKA. Yes. 

Mr. JOHNSON. Is that appropriate? 

Senator AKAKA. Yes, since we are on the question. 

Mr. JOHNSON. OK. On the comment by GAO, I want to point out 

and emphasize they don’t have any current knowledge of what is 

going on in the security clearance process. Their information is 16 

months old, when we began this reform effort. So what they are 

disturbed about is what we had, what the situation was at the beginning of the process 16 months ago. Nobody is claiming that we 

are where we want to be, but we welcome GAO to come in and take 

another sampling of what Ms. Dillaman does and Mr. Andrews 

does, to come in and take current samples of clearances and let us 

look at current information, not 16-month-old information. 

GAO talked about their concern about the quality. I didn’t hear 

any references to any quality measures that they were looking at 

or specific data that alarmed them or gave them cause for concern 

about the quality of the investigation work being done by OPM. 

They are not trying to present to you anything that wasn’t what 

it is, but I want to emphasize that is really old information, before 

16 months of effort was entered into to reform that performance 

and to improve that performance. 

Senator AKAKA. Thank you. 

Mr. JOHNSON. Thank you. 

Mr. STEWART. Mr. Chairman, may I just very quickly——

Senator AKAKA. Yes, Mr. Stewart. 

Mr. STEWART. Mr. Johnson is absolutely right. Most of our data 

is based on cases that were adjudicated in January and February 

of last year, as I mentioned in my oral statement, and a lot has 

changed in a year. However, I am holding up OMB’s report to Congress that was submitted several months ago, in February, and 

this report says OMB has not addressed reinvestigations. OMB 

14

1The chart submitted by Ms. Dillaman appears in the Appendix on page 62. 

also has not included in its timeliness statistics the time of the 

handoff of applications to the investigative agency, handoff of investigation files to the adjudicative agency, return files to the investigative agency for further information. That is the part I am 

talking about. As these files are returned for further information, 

as they are handed off, as they go back and forth, the contractor 

is sitting there waiting for its clearance and all of this is going on. 

So this should be captured in OPM statistics about how long it 

takes. It is erroneous to say it is taking us—we are doing everything—80 percent of everything that we are doing, we are doing it 

in less than 90 days. 

Mr. JOHNSON. Mr. Chairman, there is nothing erroneous in that 

report, nothing. Not one utterance in that report is erroneous. We 

say what is in there. We are very specific about what is in there. 

We are very specific about what is not in there. And we are very 

specific in our discussion about our 2007 goals, objectives, self-imposed goals, is to develop end-to-end accountability for this process. 

There is not one erroneous piece of information or contention in 

that report. 

Mr. STEWART. Mr. Chairman, if you are not capturing all the 

time in the investigative phase, which includes the application submission part—that is all the front-end part—then these statistics 

should be viewed with some skepticism. 

Mr. JOHNSON. That report is very clear about what is there and 

what is not there and I personally resent the contention by GAO 

that is an erroneous report to Congress. 

Senator AKAKA. Thank you. 

Ms. DILLAMAN. If I may, sir, included in that report in February, 

there is also another chart that clearly shows we do measure those 

segments.1 Obviously, we can’t be responsible for the timeliness of 

the investigation until we receive a request. However, we do have 

full transparency from the time the subject completes his or her 

document until it is handed back to the adjudicating agency. The 

chart shows agency-by-agency the average number of days that the 

front-end process, that handoff, took, and yes, that has to be added 

to the investigation time. 

In my testimony, I stated that the goal was to reduce that to 14 

days. Anecdotally, we have evidence where it took much longer 

than the 111 days Mr. Stewart referenced. We have gotten agencies 

focused on timely submissions. E–QIP submissions are taking 14 

days. Paper copy, 30 days, and that 30 days will reduce to 14 when 

we have full e–QIP submission. Nothing is being left out. We have 

full accountability from the time the person fires the starting pistol 

until we get it to investigate. That includes my piece, which is 

doing the investigation, a handoff, yes, but also timeliness then 

through adjudication. 

Senator VOINOVICH. Ms. Dillaman, OPM has desiganted a category in the clearance process ‘‘closed pending.’’ When a case is 

designated ‘‘closed pending,’’ does the clock stop or is the time included when calculating the average case completion times as required by the Intelligence Reform bill? If so, I would be interested 

15

in understanding why OPM believes this is an accurate method of 

calculating the time it takes to complete an investigation. 

Ms. DILLAMAN. Yes, sir. No, sir, it does not stop when we close 

it pending. Closed pending is an internal action within OPM to 

measure when the labor I need to provide has been provided. I may 

still be waiting on a third party. All of the data in our February 

report, all of our data which measures success under the Act is to 

‘‘closed complete,’’ final, which includes obtaining all third-party information. 

Senator VOINOVICH. You don’t take it off the clock if you put it 

in the closed pending file? 

Ms. DILLAMAN. No, sir, only internally. Nothing that we are publishing now stops the clock at closed pending. 

Senator VOINOVICH. As a result of the Subcommittee’s oversight, 

a strategic plan was developed to monitor progress. Mr. Johnson, 

you indicated that you want to update that plan. Is that correct? 

Mr. JOHNSON. You mean my opening remarks? 

Senator VOINOVICH. Yes. One of the things that we did, and I felt 

real good about it, in fact, I bragged about it, is the fact that OPM, 

GAO, OPM and the Defense Department got together and developed a strategic plan, looking at the whole picture. Mr. Johnson, 

you have now had time to monitor what is wrong with the process 

and what is right. I am asking if you intend to update the plan? 

Mr. JOHNSON. We have—our strategy on reforming this was to 

take the process that exists today, very manual, the same handoffs, 

and try to do the same work that we do now but do it better, and 

we thought that taking the process as is, doing it better, could get 

us to our December 2006 timeliness goals. We did for adjudication 

and we did for investigation, which was specifically called out by 

the Intel bill. The biggest issue is the end-to-end, from the very beginning to the very end, which was not a focus of the Intel bill but 

it needs to be and so we are changing our way of thinking about 

this to that end-to-end perspective. 

We have all come to the conclusion that the only way we can get 

to the December 2009 goals of, I think it is 40 days for the investigation and 20 days for the adjudication, is we have to completely 

rethink the way we do this. We can’t just do what we are doing 

now better. We have to do it differently. So what we need to do is 

there is a vision. DIA has a vision. The Director of National Intelligence has a vision. It has been shared in general terms with the 

leadership of this oversight group. What we need to do, and we will 

be able to do so within the next couple of months, is to come to you 

and say here is the way we envision this process working 2 years 

from now. 

Senator VOINOVICH. Let me just say this. I am really concerned, 

because I don’t believe that you are going to get it done by the time 

that you leave. I really don’t. Senator Akaka, I have spent a significant amount of time on this issue. We need to have a pretty doggone good plan of what it is going to take to get the job done——

Mr. JOHNSON. Right. 

Senator VOINOVICH [continuing]. Because when you leave, I 

would like to be able to take the next Administration and say, here 

is where we are at. Here are the things that need to be done. How 

are you going about doing them? I don’t know about Senator 

16

Akaka, but I would like to bring those people in that are going to 

be working on this immediately so we don’t lose any time on the 

clearance reform process. 

Mr. JOHNSON. Right. You will have that. What you have now, we 

committed to you in December—I mean, in February, this recent 

February, what our goals are and what we are going to work on 

this year, in 2007. One of those is a plan for the future, the new 

system, the new way of end-to-end, more automated, more use of 

commercial databases, more custom investigations and so forth. We 

will have a general picture to present to you, share with you within 

the next couple of months and we will keep you as current on that 

as you want to be and we will have by the end of 2008 a real clear 

knowledge of the validity, the likely validity of that and where that 

is going to be, and it may not be completely installed and the way 

we are doing our business then, but it will be really clear what the 

new, improved way of granting and determining security clearances 

ought to be. And so you will have that. 

Senator VOINOVICH. I would like to have it. The individuals we 

are going to be hearing from on the second panel have been critical 

of OPM’s dependency on imaging data, such as fingerprint cards, 

in automating the process. The second panel will testify that imaging does not equal automation because it does not allow for the 

image to be read for data extraction. They have many concerns. 

It is important that we listen to industry to get their ideas on 

how we can do this better. 

For example, I am really impressed with the improved rejection 

rate of initial applications because of e–QIP. It means somebody is 

talking and saying, hey, how can we come up with new technology 

to improve the process. 

E–QIP is making a big difference. That is wonderful. There is 

less frustration with the agencies. 

By working with industry, we are going to get this done. We are 

going to get this thing off the high-risk list, you hear me? Now, everybody says it can’t be done, but by God, it is going to get done 

and we are all going to work together to do it. 

Mr. JOHNSON. Well, this can be done. Nobody on this side of the 

table thinks this is impossible. No, this will be done. 

Senator AKAKA. I agree with Senator Voinovich. We have 2 minutes before the vote is called on the floor. I am going to call a recess at this time. We will be back and we will continue to discuss 

these issues. 

The Subcommittee is in recess. 

[Recess.] 

Senator AKAKA. This hearing will come to order. 

I want to welcome Kathy Watson to the table. 

I would like to say that before we recessed, there were some remarks that were made by Senator Voinovich and I want you to 

know he was right on target about what we are here to do. We are 

here to flesh out what we think needs to be changed and corrected 

and begin to put together a plan that we hope will work. That is 

what we are all here to do. 

So let me begin by asking a question of Ms. Dillaman. OPM’s investigations are almost entirely paper-based. Even when you get an 

electronic application, you print it out and you file it. All of that 

17

paper is then shipped back and forth to investigators and agencies 

with companies like FedEx. This seems like a waste of time and 

money. Why isn’t OPM storing and sending documents electronically? 

Ms. DILLAMAN. We are, sir. That is exactly the process we are 

going through now. Imaging our case papers and working in an entirely electronic mode is what is on the plate for this year. By the 

end of this fiscal year, all of our files will be imaged files. Next fiscal year, all the work in process will be imaged. 

We reach out, sir, to hundreds of different types of sources and 

often the information they provide is delivered to us in paper form 

because that is how it is stored in those repositories, Federal, 

State, and local. We will then convert all of that to imaged documents, totally eliminating the paper, both for the pending investigations and for the completed investigations. 

Senator AKAKA. This is a concern. Aren’t we risking the privacy 

of a lot of sensitive personnel information when we let it out of the 

hands of the Federal employees and contractors? 

Ms. DILLAMAN. Oh, absolutely, sir. We take every reasonable precaution to safeguard that sensitive information. 

Senator AKAKA. Ms. Dillaman, your largest contractor, the U.S. 

Investigation Service, works for other government agencies, too, 

like Customs and Border Patrol. USIS completes a lot of those investigations faster by using their own computer software and processes. Why can’t OPM do investigations as fast as its own contractor? 

Ms. DILLAMAN. Sir, I don’t believe that the computer system 

alone is the reason why investigations for some agencies can be 

done quicker. A lot of that has to do with volume, predictability of 

the location of those investigations, and the resources that contractor chooses to apply to those contractors. 

Senator AKAKA. Is there any reason to think that those investigations are inferior to an OPM investigation? 

Ms. DILLAMAN. I would have no basis to judge that, sir. 

Senator AKAKA. Mr. Johnson, would OMB ever consider allowing 

DSS to use someone other than OPM to investigate their clearances? 

Mr. JOHNSON. I would want to know why. 

Senator AKAKA. You have been working with DSS and the question was whether you would consider allowing someone other than 

OPM to investigate. 

Mr. JOHNSON. If that request came to me, I would ask, what is 

the definition of success here? What is the goal? What is the timeliness goal, the quality goal, the cost goal? What is the performance 

you are getting from OPM now relative to that goal and what do 

you believe you will get from an alternative source of investigative 

work? And understand what the risks of making a change are 

versus the benefits and then make a good decision. Our goal is to 

do the right thing for the Federal Government and for the taxpayers and if the right thing is to do it differently, we will seriously 

consider that. 

Senator AKAKA. Well, let me ask a follow-up with Ms. Watson for 

any comment on what was just said. Do you think that you would 

want more options? 

18

Ms. WATSON. DSS has been considering running a pilot program 

to see if there are alternative service providers for investigations 

so we can do a comparison on cost of investigation, the timeliness, 

and the quality, but we are restricted this year from doing that by 

reapportionment language we received from OMB. 

Senator AKAKA. As I understand it, it could be that there is a 

problem in spending funds——

Ms. WATSON. Yes. 

Senator AKAKA [continuing]. For any pilot projects that would 

use anyone other than OPM to investigate——

Ms. WATSON. Yes. 

Senator AKAKA [continuing]. Clearances, and you are saying that 

that is correct? 

Ms. WATSON. Yes. 

Senator AKAKA. That the funding is a problem? 

Ms. WATSON. Yes. 

Senator AKAKA. Mr. Andrews, I understand that the computer 

program used by DSS, JPAS, has problems. Some would call it unreliable and on the verge of collapse. Can upgrades fix JPAS or 

does it need to be replaced? 

Mr. ANDREWS. I think it needs to be replaced, sir. 

Senator AKAKA. How long have you had that system? 

Mr. ANDREWS. I don’t have any idea, sir. Ms. Dillaman, do you 

know? 

Ms. WATSON. DSS actually inherited that system from the Air 

Force. It was designed to do much less than we are asking it to do 

today. It has been upgraded by DSS for the last several years, although I don’t recall the date that DSS assumed responsibility for 

the system. It has been upgraded numerous times to meet current 

requirements, and I can tell you that we aren’t meeting current requirements with the upgrades we have, but we are now in a position where if we continue to upgrade it, we think it could kill the 

system. 

Mr. ANDREWS. On a micro-sense, Senator, my perception is that 

if we put more money into JPAS, we are throwing good money 

after bad. 

Senator AKAKA. Thank you. Ms. Dillaman, why isn’t OPM counting the time that Mr. Stewart says should be? 

Ms. DILLAMAN. We are, sir. All time is accounted for in our statistics. Again, sir, though, I can only be responsible for an investigation from the time I receive it until the time I complete it. But 

we can, however, track the time it takes to get to us and the time 

after the investigation is completed by our organization. Those statistics are provided and continue to be provided accurately and consistently and it is broken down by agency so that we can identify 

where those delays are. 

Senator AKAKA. Thank you. Senator Voinovich. 

Senator VOINOVICH. Yes. Getting back to JPAS, in your testimony, Mr. Andrews, you recommend the system be migrated to Defense Information System for Security (DISS), and discussed the 

high cost of migration. In light of your current budget shortfalls, 

how are you going to pay for it? 

19

Mr. ANDREWS. We are working on it, sir. The short answer is 

that we are working with the DOD Comptroller to do just that. We 

are still in negotiation inside the Pentagon for that. 

Senator VOINOVICH. You say that system is collapsing and you 

are going to go and get it done. Mr. Johnson said that the Defense 

Department has the money it needs. It is a question of allocating 

those resources to DISS. Is that the case, or don’t you have the 

money? Ms. Watson, do you want to comment? All I want to know 

is are you going to have the money that you need to get the job 

done? 

Mr. ANDREWS. As it stands right now, no, sir. Ms. Watson can 

fill in. 

Ms. WATSON. No, sir, I don’t have the money to do what I need 

now. I have enough money right now to sustain our current systems. JPAS is only one of five systems that we use to support the 

personnel security clearance process in the Department. DSS is responsible for the other four systems, as well. 

To give you an idea of the cost just to sustain JPAS, just to keep 

it running costs me $10 million a year. My IT budget this year is 

$20 million. Ten million of that is going to just keeping one part 

of the system alive. There is not enough money left to upgrade the 

other systems, to keep them running, and to build a new system. 

We have spent many hours working this issue with the Comptroller’s office in the Department of Defense. We are continuing to 

scope the budgetary requirements. But I do not yet have funding 

that I need. 

Senator VOINOVICH. So you are saying that the Defense Department isn’t allocating resources that they have to your operation, or 

is it because you haven’t had enough money made available to you 

in the appropriation process or request from the Office of Management and Budget? 

Ms. WATSON. I don’t have enough money made available to me. 

Part of that was because DSS probably did not request enough. We 

have in the past years. In the last year, it has not been funded. 

Whether or not the Department has that money and is not allocating it to me, I do not know the answer to that. 

Senator VOINOVICH. Well, it sounds to me like button, button, 

who has got the button? 

Ms. WATSON. Yes. 

Senator VOINOVICH. Where are the buttons, Mr. Johnson? Is the 

money going to be there? 

Mr. JOHNSON. DOD, as an entity, has all the money it needs to 

address the opportunities at DSS. They are talking about finding 

$10 million, $15 million, which is not even a rounding error at 

DOD. 

DOD does not need more total money to fix security clearances. 

Senator VOINOVICH. How is OMB going to work with DOD to 

help with the funding issues? 

Mr. JOHNSON. We are going to help them—if they want to move 

money around within DOD, we will help them do that. 

Senator VOINOVICH. Next week, I am meeting with Gordon England. I am going to find out whether he is going to reallocate the 

money. It seems to me it is incumbent on you to lean on these 

20

agencies to say they need to budget enough money to improve the 

security clearance process. Can I count on you to do that? 

Mr. JOHNSON. You can count on me to deliver that message and 

communicate from Mr. England on down how important it is, but 

I can’t make them reallocate that money. 

Senator VOINOVICH. Senator Akaka, you are on the Armed Services Committee. I think you have a little clout there. Maybe the 

two of us will get Mr. England and get a commitment out of him 

that the money is going to be forthcoming. 

Senator AKAKA. Well, there is no question the money is needed, 

so we will have to work on that. 

Mr. JOHNSON. One of the questions you asked me, Senator 

Voinovich, was funding for general operations, continuous operations of DSS this year, was that assured, and I think your answer, 

Ms. Dillamon, is yes. The money that they are talking about not 

having is the money to change the way we do business and to upgrade or replace JPAS, is that correct? 

Senator VOINOVICH. You haven’t taken—I didn’t swear you in. 

[Laughter.] 

Go ahead, Ms. Watson. 

Ms. WATSON. Sir, right now, I am $25 million short for the rest 

of this fiscal year. There is a reprogramming action and I believe 

it made it to the Hill yesterday or the day before. It has the support of the Comptroller in DOD, it has the support of OMB, and 

now we are just waiting for Hill action. I anticipate that it will be 

acted upon favorably, but I don’t have the answer to that yet. But 

that money will simply just sustain what I have through the end 

of this fiscal year. It is not to upgrade anything. 

Senator VOINOVICH. Ms. Watson, how much money do you need? 

Ms. WATSON. Twenty-five million will get me through this year. 

That is it. Yes, I need plus money for next year. We are working 

with the DOD Comptroller on what we actually need for next year. 

We do have an increase in our budget, but it is not enough and 

they understand that now. We are working through that issue. 

And in terms of out years, 2009 and beyond, we are working that 

through the POM process. We know that we need approximately 

$200 million at a minimum to fund the next system, DISS. It is not 

inexpensive to do this work. And, in fact, if we are fully funded 

now, we can’t deploy that new system until probably fiscal year 

2010 or 2011. 

Senator VOINOVICH. Well, I think that we are going to have to 

get together more often than hearings on this, Senator Akaka. 

Ms. WATSON. And I want to get it done. I have the team assembled to do the work. I just need the money to do it. 

Senator VOINOVICH. Our staff is very impressed with the management team. I agree with Mr. Andrews, your observation where 

you have a good management team. They are really impressed with 

the team that you have. So we are going to work with you real 

close to see if we can’t make sure you get your money. 

Ms. WATSON. Thank you. I will take all the help I can get. 

Senator VOINOVICH. Yes. In all of the process of improving this, 

have any of you brought in the private sector to get their opinion 

about what they think needs to be done and how they can help or 

what their recommendations are? Mr. Johnson. 

21

Mr. JOHNSON. With an eye towards how do we do it differently, 

how do we do it more like the private sector does? But they have 

a different challenge. We have a more complicated security clearance challenge than Wall Street firms and so forth. But nevertheless, sir, there are lessons to be learned, and yes, there has been 

a lot of conversation between Eric Boswell and John Fitzpatrick at 

the Office of the Director of National Intelligence. DOD has had a 

lot of conversations with outside firms, as well, about alternative 

ways of doing this. And so there will be a lot of consultation with 

outside firms, not only suppliers of and that will continue. 

Senator VOINOVICH. You put together a strategic plan for security clearances. What input have you received? We are going to 

have a second panel here. What input have you or the Department 

of Defense or even Ms. Dillaman, in your operation, gotten from 

the private sector looking at the system and getting their thoughts 

on how they think that you can improve the system? 

Mr. ANDREWS. Senator Voinovich, let me sort of drop down one 

level of granularity from Mr. Johnson. ODNI, Eric Boswell, the ambassador who was responsible for security for Mike McConnell, and 

I are meeting tomorrow under Mr. Johnson’s sponsorship to put together a team that will come up with the new plan, in other words, 

not just fixing DSS, the present thing. We are working on very 

short internal time lines. I don’t want to say what the time lines 

are because you will probably drop back one day and want a report 

on that, but let me say that one of your people on the panel following, Tim Sample, is going to be representing industry’s input 

into that tiger team to work on the new process. So, yes, sir, we 

are. 

Senator VOINOVICH. So you are going to bring him in and get his 

input? 

Mr. ANDREWS. We have and we will. 

Senator VOINOVICH. OK. Ms. Watson. 

Ms. WATSON. On the IT side of the house, we knew we need to 

bring industry in to assist us in designing the new system. There 

is an acquisition management framework that we need to work 

through in the Department and that will allow us to get outside 

assistance. We talked to industry, in fact, some of our industry 

partners earlier this week, about their willingness to get involved 

in this process and assist us and our desire to take the assistance. 

To be honest with you, our team has been focused on the last 4 

months just getting enough money to stay alive this year instead 

of doing outreach on what we can do with the new systems, and 

we know we need to change our focus and we will change that once 

we have some money. 

Senator VOINOVICH. I will mention again that when I was mayor 

and when I was governor, I didn’t use a lot of consultants. I don’t 

know what the rules are in terms of ethics but it seems to me that 

if our friends that deal with the Department are concerned about 

security clearance, they ought to do some pro bono work to help 

out. 

It is amazing what the private sector can do. It seems to me that 

the private sector could be very helpful in moving this along. If you 

can do it, you ought to take advantage of them. 

Thank you, Senator Akaka. 

22

Senator AKAKA. Thank you, Senator Voinovich. 

Just to follow up on a response that you gave, Ms. Watson. You said that you were $25 million short when the question was asked 

about how much you needed. Since you are $25 million short now, 

how much do you need? 

Ms. WATSON. We have done an assessment of what we need for 

next year to sustain ourselves versus what we need to improve ourselves. The difference is substantial. It is about $80 million. We are 

working to prove our case in the Department that we need that additional $80 million so that we can begin to make improvements. 

Senator AKAKA. Thank you. Mr. Johnson, under the Intelligence 

Reform bill, agencies are supposed to allow for reciprocal security 

clearances from other agencies. This isn’t happening at all agencies. Can you tell me why that is or what is the problem? Also, is 

OMB tracking the number of security clearances that must be 

redone? 

Mr. JOHNSON. We are not where we need to be on the whole 

issue of reciprocity. One of the things we have come to realize is 

there is reciprocity in terms of granting a security clearance. There 

is also reciprocity with regards to determining suitability for employment. So if I want to hire somebody from DOD, there are two 

issues. Does their security clearance pass to me, do I reciprocate 

and accept the security clearance? Yes, but I still might want to do 

some additional investigation to determine the real suitability of 

that person for working at OMB, or whatever the agency is. 

So the intelligence bill talks about security clearance reciprocity. 

There is also the issue of suitability reciprocity. We are trying to 

reconcile those, get those brought together so that it is the same 

issue, the same additional investigation or not that would have to 

be done, the determination to be the same. We are not where we 

want to be on that. But the general feeling is that in terms of reciprocity with regards to security clearances, that is not perfect, but 

it is better than it used to be and it is a pretty high level. 

When we have looked at—we have the ability at OPM to look at 

when somebody requests a security clearance, background investigation be done, do they already have a security clearance? What 

is the incidence of that? Ms. Dillaman, do you know? Can you talk 

to that? 

Ms. DILLAMAN. I can’t address how often it happens, but I do 

know that we have an automatic stopper in the system that would 

keep an agency from reinvestigating someone who has a current, 

valid investigation on file. 

Senator AKAKA. Mr. Johnson, I was asking about the number of 

security clearances that must be redone. Can you tell me how 

many clearances have been redone? 

Mr. JOHNSON. I don’t know, but I would bet it is next to none. 

Senator AKAKA. Mr. Stewart, the GAO reported last September 

that more needs to be done by the OMB to fix the clearance process. Which part of the chain is the biggest problem, OMB, OPM, 

or DSS? 

Mr. STEWART. Thank you for that question, Mr. Chairman. As 

you know, DOD’s personnel security clearance program is on the 

high-risk list, so we have focused on DOD. I am encouraged by 

much of what I have heard here today from Mr. Andrews and othVerDate 0ct 09 2002 10:03 Apr 07, 2008 Jkt 035535 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\DOCS\35535.TXT SAFFAIRS PsN: PAT
23

ers. But part of the problem that remains, and one problem that 

will have to be fixed, and I really want to emphasize this, we must 

fix this problem of DOD not knowing what its workload projections 

are, because that is one of the reasons we put them on the highrisk list and they are not coming off the list until they have a better way of projecting their workload. 

Last year, Ms. Dillaman testified that DOD exceeded its workload goals by 59 percent. OMB’s plan says that agencies will be 

within 5 percent of their workload projections. Today, I don’t know 

where DOD is, but I would bet that they are not within 5 percent 

of the workload. So that is a big problem for us as we see it and 

that part has to be fixed. 

The other part of this deals with technology, and you and Senator Voinovich have touched on pieces of this. We have not done 

an investigation of JPAS and PIPS, which is OPM’s system, and 

the other systems out there, but we would love to have the Subcommittee to ask us to do that job because we feel that part of the 

fix to this problem goes to the technology that is in play right now. 

You mentioned, Mr. Chairman, that USIS has systems in place 

that they use for other customers like NRO and other agencies that 

appear to be doing things faster. GAO would love to look at those 

systems. We have IT people in house, experts. We have the resources ready to go to do that job if you want us to do it. 

So those two areas, I would say, DOD’s workload projections and 

then the whole technological piece of this process, are where we 

think we really need to focus. 

Senator AKAKA. Well, I want to thank you so much and thank 

this panel very much for your responses to our questions. 

Mr. STEWART. Mr. Chairman, may I say one other thing? 

Senator AKAKA. Mr. Stewart. 

Mr. STEWART. I thought I was going to get a question and I 

didn’t, but I just want to say this to you and Senator Voinovich. 

Mr. Johnson mentioned that it is likely that OMB will continue as 

the lead on this situation for the Federal Government, but at some 

point, this may go to the ODNI, the intelligence community, and 

if that happens, that will take GAO out of the picture. We have significant challenges working with the intelligence community. 

Comptroller General Walker has been meeting with Senator Rockefeller on the Senate Intelligence Committee. He has met with Congressman Reyes, Chairman of the House Intelligence Committee, to 

try to make a dent in this issue. So I just wanted to let the Subcommittee know today that if at some point this issue goes to the 

intelligence community, GAO will cease to have access to many of 

the records we will need to assist Congress in doing its work. 

Mr. ANDREWS. Mr. Chairman, I hesitate to speak for my highers 

in the intelligence community, but I will tell you that neither the 

ODNI nor the USDI and the Department of Defense are casting 

any covetous eyes toward taking over Mr. Johnson’s responsibility. 

[Laughter.] 

Mr. STEWART. Thank you, Mr. Chairman. 

Senator AKAKA. Yes. Before concluding this panel, I want to 

mention that I have a bill, S. 82, that reaffirms this condition. 

Mr. STEWART. Thank you for that, Mr. Chairman. We appreciate 

that. 

24

1The prepared statement of Mr. Sample appears in the Appendix on page 85. 

Senator AKAKA. Again, I want to thank you very much and again 

repeat that Senator Voinovich and I are committed to looking at 

the problems we are facing and we are looking into all of the government’s high-risk areas to see what we can do together to even 

come to improve it and do it better. We may also try to save money 

doing it. But this is a good part of the process, and again, I want 

to thank you. We are trying to fix whatever needs to be fixed, and 

we can only do that with your help. We continue to look forward 

to working with you on this. 

I want to thank this first panel and encourage you to stay, if you 

can, to hear our second panel of witnesses. So thank you very 

much, and may I call up the second panel, please. 

As Chairman of this Subcommittee, I would like to welcome our 

second panel, Timothy Sample, President of the Intelligence and 

National Security Alliance, and Doug Wagoner, Chief Operating 

Officer of Sentrillion, representing the Information Technology Association of America. 

At this point in time, I am going to call for a recess of about 15 

minutes. This Subcommittee is in recess. 

[Recess.] 

Senator AKAKA. The hearing will be in order. 

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

so I ask you to please stand, raise your right hand, and repeat 

after me. 

Do you solemnly swear that the testimony you are about to give 

this Subcommittee is the truth, the whole truth, and nothing but 

the truth, so help you, God? 

Mr. SAMPLE. I do. 

Mr. WAGONER. I do. 

Senator AKAKA. Thank you. Let the record note the witnesses responded in the affirmative. 

At this time, I welcome both of you, Mr. Sample and Mr. Wagoner, and ask for your testimony, Mr. Sample please proceed. 

TESTIMONY OF TIMOTHY R. SAMPLE,1 PRESIDENT, 

INTELLIGENCE AND NATIONAL SECURITY ALLIANCE 

Mr. SAMPLE. Thank you, Mr. Chairman. I am honored to be with 

you this morning to discuss this vitally important issue. 

Mr. Chairman, I am the President of the Intelligence and National Security Alliance (INSA), which is a nonprofit, nonpartisan, 

professional association that focuses on intelligence and national 

security policy and practices. I wanted to mention that INSA’s 

Counsel on Security and Counterintelligence is in the process of 

completing a white paper on today’s subject, which I will be happy 

to forward to the Subcommittee once completed. 

With regard to evaluating the progress in security clearance reform, I am skeptical about the data presented in the first panel, 

in part because there is no end-to-end process of evaluation, thus 

making valid, unbiased, empirical data hard to derive. The key, 

Mr. Chairman, is to significantly transform the process, not to update it. 

25

In response to the obstacles for success, I strongly agree with the 

Security Clearance Reform Coalition, of which INSA is a part, and 

with Doug Wagoner’s testimony, including, I imagine, his oral testimony he will give in a minute. But in doing so, I also note that 

by instituting these changes alone, we end up with a more efficient 

but still very flawed system that never addresses the root cause of 

these problems, a culture steeped in risk avoidance. Saying this is 

not a criticism of security officers. It is a recognition of an overall 

approach. 

Today, the personnel security process that we utilize is not that 

different from when it was implemented over 60 years ago. This 

process relies primarily on a front-end labor-intensive investigation 

with a periodic reinvestigation. But by focusing on government efforts on initial investigations, which we are now emphasizing in 

the attempt to decrease backlog, we are creating significant security risks as the backlog in periodic reinvestigations remain at a 

lower priority. 

Let us remember that the most damaging spy cases of the past 

15 years have been committed by those who have had access to 

classified information for decades, not those who just walked in the 

door. Ames, Hanssen, and Montes all worked under the same system we are evaluating today and worked for years before beginning 

to spy against the United States. 

A second outcome of a risk avoidance culture is our inability to 

get the right people in the right job when we need them. Consider 

for a moment that under our current system, we likely would not 

hire the first and second generation Americans who were so critical 

in breaking Japanese codes in World War II or building the atomic 

bomb. 

As Senator Voinovich stated, the impact on industry supporting 

government is also substantial. Private sector contractors have a 

difficult time filling positions the government requests. The government security requirements and the acquisition process have created a competitive marketplace to hire personnel based on whether 

he or she has a clearance, driving up salaries, bonuses, and costs. 

Ultimately, industry passes those costs on to you and me. 

And society has changed enough over the past 60 years in a way 

that makes field investigations less effective than they once were. 

Although some pieces of valuable information can be discovered 

during field investigation, our society has changed to the point that 

in most cases, more information can be derived from available 

databases than from asking your neighbor whether or not you live 

within your means. 

Mr. Chairman, the security community’s risk avoidance culture 

is based on a threat posture, a society, and a pace of life that are 

well in our past. We attempt to avoid risk in a desire to achieve 

unachievable goals of absolute security and in the process we are 

now creating vulnerabilities in which others can capitalize. 

We propose moving from a risk avoidance security culture to one 

based on risk management, as many companies around the world 

have done, recognizing that risk cannot be avoided but must be 

managed by putting in place mechanisms that would mitigate this 

risk through a robust ability to detect issues on a day-to-day realtime basis. 

26

For example, a risk mitigation process could look to the financial 

sector. First, many companies that deal with the most sensitive insider information are cleared by an automated process of record 

checks, in some cases within 2 weeks, with a rigid monitored compliance structure to catch malfeasants. 

Another example comes from the credit card industry. When I 

withdraw money from an ATM, the credit card company has a 

number of continuous safeguards to ensure that the card is legitimate, that I am the legitimate card holder, including by constantly 

evaluating my purchase habits and notifying me if something out 

of the ordinary transpires. 

Mr. Chairman, there is no reason that the government could not 

adopt similar processes for granting and monitoring security clearances. In such a system, a clearance, once granted at a certain 

level for a certain job, would establish a security score, if you will, 

much like a credit score. That would be assigned to an individual 

for his lifetime and would be continuously monitored and adjusted 

based on a continuing assessment of the evaluation process. 

The elements of such a system would include a fully automated 

government-wide application system, including electronic fingerprinting; a centralized automated investigation that would perform 

significantly robust database checks, more than we do today; an 

automated adjudication system that would take this applicant’s 

score and compare it with the acceptable level of vulnerability for 

the specific job for which the individual has applied, potentially allowing granting some clearances through an automated process; an 

end-to-end case management system to ensure efficiency and effectiveness; an automated continuous evaluation system that would 

run in the background and would adjust the individual’s score on 

a near-real-time basis, raising concerns when warranted; a system 

of aperiodic investigations that would be triggered randomly or 

from a continuous evaluation process; and a robust governmentwide counterintelligence process. 

Mr. Chairman, let me stress that this is not a proposal for a cost 

saving measure, although I do believe that substantial savings 

could be recognized over time. But we cannot do security on the 

cheap. 

In addition, such a new system is achievable based on existing 

commercial technology models. Indeed, technology never has been 

the issue. It has been a matter of recognition and resolve. 

And Mr. Chairman, if I could, let me mention from today’s panel, 

I do have a little bit of concern about Mr. Johnson’s statement that 

as they look to the future, they would look at a research and development project, and in those terms for the government, that usually suggests a time line that far exceeds what I think we can accomplish here and normally involves heavy reliance on manipulating legacy systems, which is something I think we need to get 

away from. Technology has far surpassed our legacy systems of 

today. 

Heretofore, government leaders have relegated security to an administrative function. Only recently have they begun to understand 

the significant impact of today’s process and the bureaucracy that 

supports it. There is a growing realization that today’s process does 

not adequately meet today’s threats, let alone those in the future. 

27

1The prepared statement of Mr. Wagoner appears in the Appendix on page 93. 

Therefore, I implore the Subcommittee to consider the larger picture and support significant but necessary changes that have been 

offered. Thank you, Mr. Chairman. 

Senator AKAKA. Thank you very much. Mr. Wagoner. 

TESTIMONY OF DOUG WAGONER,1 CHIEF OPERATING OFFICER, SENTRILLION, ON BEHALF OF THE INFORMATION 

TECHNOLOGY ASSOCIATION OF AMERICA 

Mr. WAGONER. Good morning, Mr. Chairman and Senator 

Voinovich. My name is Doug Wagoner. I am the Chief Operating 

Officer of Sentrillion. I am speaking to you again today as a member of the Information Technology Association of America (ITAA) 

and would like to thank you for this opportunity for your continued 

commitment to reforming the clearance process. 

Since 2003, ITAA has led the Security Clearance Reform Coalition of 10 trade associations to bring industry’s recommendations 

to the clearance process. Several of our previous recommendations 

were adopted as part of the 2004 Intelligence Reform Act, which we 

talked about earlier this morning. 

Industry continues to face significant problems with the clearance process that challenges our ability to meet national and homeland security missions. Delays in processing persist because of government’s slow adoption of technology, agencies having their own 

requirements for clearances, and funding mechanisms that prevent 

investment in technology to save time and money. 

Industry’s recommendations can be summed up as this: One application, one investigation, one adjudication to create one clearance. Our detailed recommendations to achieve this are found in 

the addendum to my testimony. I would like to highlight one recommendation from each section. 

The application: Industry believes that the single biggest impact 

to the entire clearance process would be the adoption of a 100 percent digital application. There are three parts to the application, 

the 30-page SF–86, a signed release form, and fingerprints. Industry applicants for DOD now use the electronic questionnaire, e–

QIP, for the SF–86, but the other components of the application are 

not collected electronically. 

Fingerprints are still collected and submitted using paper and 

ink cards. This baffles industry, since the Armed Services recruits, 

DHS’s certification of port workers, and much of local law enforcement all use digital fingerprints. Industry has offered to provide 

the technology to submit digital fingerprints, but this offer was declined because databases are incapable of accepting the digital 

prints. The problem is that the fingerprint cards must be mailed 

and then later connected with the electronic application, creating 

significant opportunity for lost, delayed, or mismatched cards, 

which delays the start of the investigation. 

The lack of a 100 percent digital application is causing a new serious problem, known as out-of-sync applications. Out of sync applications are e–QIP applications that appear to have been submitted 

successfully to the JPAS system, but in reality these out-of-sync applications are lost in the digital ether. We estimate over 2,000 inVerDate 0ct 09 2002 10:03 Apr 07, 2008 Jkt 035535 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\DOCS\35535.TXT SAFFAIRS PsN: PAT
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dustry applications are out of sync and potentially tens of thousand 

more from DOD service members. Out-of-sync applications are only 

discovered by a diligent security officer who follows up on a delayed 

application. 

Industry would like to recognize the efforts of the new Director 

of Defense Security Service Kathy Watson for identifying these and 

other problems and making suggested improvements to JPAS, but 

as we heard this morning, we are disappointed by the lack of funding and prioritization from the Department. 

An easy solution to implement would be for OPM to enforce their 

2-year-old published requirement for government-wide use of e–

QIP. OPM continues to accept 25 to 40 percent of all applications 

in paper, with agencies like GSA sending 100 percent of their applications using paper. A complete digital application would start 

the investigation process in minutes, as opposed to days or weeks, 

and lead to greater automation of the rest of the process. 

Investigation: OPM’s Federal Investigative Services Division 

(FISD), is responsible for 90 percent of the investigations of all 

clearances granted. Here, too, the process needs technology to 

eliminate the tremendous amount of touch labor. For example, all 

files, even those submitted electronically, are printed out and 

placed in doctor office-style folders with colored tabs created for 

each applicant. It is industry’s opinion that this paper shuffling between Boyers, Pennsylvania, and the field creates delays in clearance processing. 

Industry recommends that government create an end-to-end data 

management process using e–QIP. The data collected here could 

then be electronically verified via commercial and government 

databases, such as credit histories and criminal records. This type 

of data is the linchpin to make billions of dollars of risk-based decisions in the financial and insurance industries. The DNI is currently studying the use of this type of data for investigations and 

we look forward to their findings. 

All this data would go to adjudicators as an interoperable electronic file to assist in the speed and accuracy of the adjudication 

process, and this is going beyond imaging, which we have heard 

about this morning. Imaging is simply taking a picture of a piece 

of paper. What we want is to capture the data electronically and 

then move it around, manipulate it, analyze it, and really use the 

data as opposed to just taking a picture. 

Adjudication: Adjudication can be improved through better definition of derogatory information in the course of the investigation. 

Currently, some derogatory information is not fully developed in 

the investigation, imposing long and unnecessary risk assessments 

on adjudicators. We still believe that adjudicators are a critical 

part of the process of evaluating trustworthiness, but intentionally 

leaving issues undeveloped or labeling applications as ‘‘closed pending’’ exacerbates the condition and makes it harder for adjudicators 

to accurately assess an applicant. Often, this case is sent back for 

reinvestigation, only to clog the backlog. 

Reciprocity: Bill Leonard at the Information Security Oversight 

Office should be applauded for his efforts to bring about greater 

reciprocity throughout government. Frequently, his efforts are overcome by the intractibility of old habits. This is in spite of reciVerDate 0ct 09 2002 10:03 Apr 07, 2008 Jkt 035535 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 P:\DOCS\35535.TXT SAFFAIRS PsN: PAT
29

procity requirements in the 2004 Intelligence Reform Act. Limited 

trust in other agencies’ investigations or adjudicative abilities is at 

the heart of the reciprocity problem. Empowering OPM as the single investigative source for most clearances was the correct step towards establishing uniformity of the process. Other steps, like the 

CIA sharing unclassified clearance information to JPAS, are 

applauded as enhancing reciprocity. However, government-wide 

sharing is still limited. As the sole system of record for collateral 

clearances, all agencies need to use JPAS. 

Budget: In conclusion, Congress must provide innovative and 

flexible budgetary authority to agencies to allow for needed technology and process improvements. FISD, for example, receives no 

funds but instead pays for their operations through agency customer fees. This pay-as-you-go system cannot budget for new time 

and cost-saving technology detailed in our recommendations. 

Mr. Chairman, we hope that these recommendations provide options to improve our clearance process. We are ready to discuss all 

the recommendations in the addendum and look forward to working with you and the Subcommittee to bring about additional improvements to national security by improving our clearance process. 

Senator AKAKA. Thank you very much, Mr. Wagoner. Now we 

will have a round of questions. 

Mr. Wagoner, cleared workers have become a hot commodity for 

contractors. Want ads for a lot of jobs now say that you shouldn’t 

even apply if you don’t have a clearance already. I worry that contractors now may be more concerned with finding someone with a 

clearance than finding someone with the best skills for the job. Do 

you agree with this? 

Mr. WAGONER. There is no doubt that we have customers to 

serve, we have contractual requirements that we must meet, and 

there is tremendous pressure placed upon the industry for the 

cleared personnel. At the end of the day, I can’t imagine any contractor putting an unqualified person in a job just because they 

have a clearance. At the end of the day, that is going to come out 

in your performance. It is not good business. 

But what you are seeing, as opposed to us putting unqualified 

people in the job, is us paying much more for these folks. As the 

COO of a company that does a lot of cleared work, I am stealing 

from my peers, they are stealing from me, and every single time 

the person makes a jump, they are jumping for 5, 10, 15 percent 

more salary. Someone alerted me today out in the hallway that 

there is a company that says if you were hired in the first quarter 

of this year, we are going to put your name in a hat—if you have 

a clearance—and if we pull your name, you are going to get a new 

BMW, not even an American car. So the pressure is great, but it 

is greater on the financial side of the business than our performance. 

Senator AKAKA. Mr. Sample, apparently some agencies in the intelligence community can do background investigations faster than 

OPM. In your experience, how long does it take to get an intelligence clearance versus a DOD clearance? 

Mr. SAMPLE. Mr. Chairman, thank you for that question. Obviously, part of that is position-dependent and job-dependent, but I 

30

think that there is a growing track record now, for example, it was 

mentioned this morning and I think mentioned earlier that the National Reconnaissance Office, for example, has instituted some significant technological advancements in their process as well as the 

ability to conduct their investigations in a much more robust fashion so that they have time lines that are down into, I believe, the 

30 to 40-day requirements. That is not in all cases, clearly, but I 

think for a vast majority, that is true and I would be happy to 

come back to the Subcommittee with a much more firm time line. 

Senator AKAKA. Why do you think that the intelligence clearance 

is faster? Are their standards lower or different than Defense’s? 

Mr. SAMPLE. I think it is because there are different standards 

for each different agency. I think that is part of it. But more importantly, I think an individual agency within the intelligence community has much better control and insight and the end of the overall 

process. They know when something is being held up. They know 

how to manage that. It is something that allows them to be more 

flexible, to be better responsive during the investigation, and consequently, they can move at a much faster pace. 

Senator AKAKA. Mr. Wagoner, in your testimony, you refer to 

OPM’s investigative database, PIPS, as antiquated and say that in 

the private sector, it would have been replaced as an out-of-date 

hindrance to efficiency. However, in a report last February to Congress, OPM praised the system as a model of speed, reliability, and 

security. Can you tell me why you don’t share OPM’s assessment 

of PIPS? 

Mr. WAGONER. I think the best way to answer it is in my testimony when I noted that there are things that we all would like to 

add, be it moving data around, adding the digital fingerprint, adding a digital signature, and at the end of the day, the reason we 

can’t implement those other technologies, which we use every 

day—you go to a supermarket, you have your digital signature. I 

mean, this is not super-advanced technology. The problem is that 

you can’t bolt these kinds of advancements onto PIPS. It is just 

that antiquated. 

As an ancillary note, I am not sure if they are true—we have 

heard stories of bringing people out of retirement to maintain PIPS 

because the languages that were used to build that are so old, the 

documentation was so poor, they brought folks back just to maintain it. So I cannot imagine how it could be the model for efficiency. 

Senator AKAKA. Senator Voinovich. 

Senator VOINOVICH. Were you here when the other witnesses 

were testifying? 

Mr. WAGONER. Yes, sir, I was. 

Senator VOINOVICH. OK. One of the questions I asked them is 

what input have they gotten from their customers in order to improve their system. I would like to know from you is what communication has your organizations had with OMB, OPM, and Defense? 

Mr. SAMPLE. Thank you, Senator. INSA has had a continuing 

dialogue with government. A lot of our work actually has been 

through the coalition that Mr. Wagoner is here to represent today. 

Recently, however, we have had a significant amount of interaction 

with the Department of Defense, and I give them credit in saying 

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cant needs to be changed if the Department of Defense is going to 

be able to manage their clearance process and their security process in the future and they had asked me to come in——

Senator VOINOVICH. You are talking about Gordon England now? 

Mr. SAMPLE. Yes, sir. 

Senator VOINOVICH. OK. 

Mr. SAMPLE. And the new USDI, Jim Clapper, and also Bob Andrews, the witness from this morning, brought me in and asked me 

to really take a look at this and advise them as they start to structure what a new system might look like. 

Consequently, I think that there has been some awakening within DOD. I am encouraged by it. As Mr. Andrews said, they are continuing to reach out and INSA will come together and support their 

needs as they go forward. 

I also would add, and Mr. Andrews mentioned this, that there 

are now meetings between the DNI, DOD, and OMB to really look 

at what a future system that is much more like the one that I described in my opening statement might look like and whether or 

not that is achievable, and we will certainly support them in every 

aspect that they need. 

Senator VOINOVICH. Mr. Wagoner. 

Mr. WAGONER. While ITAA and the Security Clearance Coalition 

may differ with the progress that has been made, or maybe the solutions that need to be implemented, I can tell you that all——

Senator VOINOVICH. The coalition is made up of who again? 

Mr. WAGONER. It is made up of the Aerospace Industries Association, Armed Forces Communication Electronics Association, NDIA, 

Professional Services Council, Mr. Sample’s organization, INSA, 

Association of Old Crows, Contract Services Association, American 

Council of Engineering Companies, and there is one I may be missing. 

Senator VOINOVICH. OK. We have it here in front of us. 

Mr. WAGONER. OK. 

Senator VOINOVICH. Yes. Good. 

Mr. WAGONER. But I can tell you that all the witnesses this 

morning, and in addition DNI, have been very open. Any questions, 

they always take our calls. We have several meetings a year. They 

come to talk to our members to report on progress——

Senator VOINOVICH. Have you had meetings recently with them? 

It seems like from what Mr. Sample said that there seems to be 

a renewed interest at the Department of Defense——

Mr. WAGONER. I met with representatives from DNI’s study 

group of clearances just last week, had a meeting with them personally. Ms. Dillaman has briefed our coalition on a regular basis, 

I would say at this point, on her progress. 

Senator VOINOVICH. Who did you meet with at DNI? 

Mr. WAGONER. It was Mr. Capps, representing Mr. Fitzgerald, 

who is working on the pilot project looking at data. 

Senator VOINOVICH. What is your observation in terms of the sincerity of these folks? 

Mr. WAGONER. I think it is very sincere. I think they want to 

make a difference. I think they understand the problem. I think 

they understand, to your point, sir, that there is an end customer 

that has a mission, a national security mission to complete. It is 

32

inter-government challenges, it is the budgetary challenge. We just 

can’t seem to get to the goal line. 

Senator VOINOVICH. Now, the JPAS system, Mr. Andrews says, 

is collapsing and that he recommends that the system be migrated 

to the Defense Information System for Security, DISS, and discussed high costs of migration. In light of DSS’s current budget 

shortfalls, is it your opinion that they don’t have the resources to 

get the job done? 

Mr. WAGONER. Yes, sir. They do not have the resources to get the 

job done, nor—I am not familiar with that organization, DISS. I 

don’t know how a simple transfer of an application is going to help. 

I do agree that engineering needs to start now on something new 

very close to what Mr. Sample’s recommendations were, really 

looking at a new business process and an application to support 

that new business process. 

Senator VOINOVICH. Do you think OMB, OPM, and DOD understands what has to be done? 

Mr. SAMPLE. Senator, I believe certainly within DOD they understand that, or certainly they are starting to. I think Mr. Andrews 

understands that and he has been pushing for looking at a new 

system. In relation to DISS specifically, it is a system that has 

been in development. It has a significant budget. I am not convinced yet whether at the end of the day it is the right system, and 

I only say that because it is designed to meet the current processes, 

and if you go along the line of saying you need to change your business processes going forward on how you do this, then there is a 

likelihood that system may end up not being adequate for what you 

need. 

Senator VOINOVICH. That is one of the questions that I would ask 

Gordon England. Are they really sure that transfer to DISS is the 

right technology solution. 

Mr. SAMPLE. Yes, sir. 

Mr. WAGONER. You do not want to automate a poor process. 

Senator VOINOVICH. You heard a lot of the testimony this morning. I would be interested in your comments about it. Do you think 

there were some inaccuracies or exaggerations? 

Mr. SAMPLE. Senator, I think my interpretation of this morning’s 

panel is you had a group of people who, I believe, are trying to do 

a good job under the current system. I think that their goals and 

their guidelines thus far have been to make the system that they 

have better and respond to the backlog issue. I think that not all 

of them have gotten to the point of understanding that the process 

itself may be the problem, let alone the systems that are involved, 

and I think, as I said in my statement, I think there is an awakening there, but it is slow to come and it is the first time I know 

with my experience in the security arena, the first time I have seen 

this many high-level individuals in various agencies who are actually looking at this and understanding there is a problem and are 

willing to consider what, for government, are fairly dramatic 

changes. 

Senator VOINOVICH. Mr. Wagoner, your comments? 

Mr. WAGONER. Yes, sir. Mr. Stewart’s recognition that—of 

course, it obviously was open for contention on the days—I am glad 

he brought that up, because industry has been frustrated by the 

33

numbers that we get out of OPM where they continue to say, well, 

we are doing better, the investigation is shorter, the adjudication 

is shorter. The problem is, we meet with our membership every 

month and we understand it is anecdotal evidence, but this is 

across many companies, across many associations. Generally speaking, we don’t see it getting better for the Top Secret clearances. 

Maybe a few days, but we don’t see the dramatic change that 

would be as evidenced in the February report from OPM. So I am 

glad Mr. Stewart raised that today and maybe everyone can get together on reconciliation of exactly when does the process start and 

when does it end and then we can get some good numbers and set 

some good metrics. 

Mr. SAMPLE. Senator, if I could add, what is interesting is, and 

Mr. Wagoner just said that some of this is anecdotal, but ironically, 

from my time in the intelligence community, from my time in the 

House, and now from my time with INSA, I don’t run into someone 

who has been in government and has had a security clearance who 

doesn’t have some relatively dramatic story about their own personal interaction with the security clearance process and the delays 

involved. 

Senator VOINOVICH. It is amazing to me that even though Congress has required improvements in the security clearance process, 

many agencies are not abiding by these mandates. At this stage of 

the game it is fair to say that the process is broken and has not 

been improved. 

Mr. SAMPLE. No, sir, I don’t believe it has. And one last comment 

is that I mentioned what I consider to be the risk avoidance nature 

of this culture right now. Mr. Chairman, you had asked about the 

PIPS system and one of the comments that was made earlier was 

how secure they say it is. Well, of course it is secure. It connects 

to nothing. 

[Laughter.] 

But if your goal is absolute security at the expense of getting the 

job done to support national security, then at what cost is your 

business process? 

Senator VOINOVICH. I have run out of my time. Senator Akaka. 

Senator AKAKA. Do you have further questions? 

Senator VOINOVICH. I would like to stay in touch with both of 

your organizations. It would be nice, maybe, on a monthly basis as 

to how you think things are moving along. Are you able to provided 

input? As I mentioned to Mr. Johnson, I think that we are going 

to push them hard for this plan. I would like to, as soon as possible, get your reaction to the plan so that if there are major concerns that you have, that we can raise them in the beginning rather than getting on the track and just stay with it. 

I really believe that, from what I can ascertain, that there is a 

real sense of—more of a sense of urgency. We have a golden opportunity to return this process. But if we don’t stay on it on a very 

regular basis, it is not going to get finished. 

The last thing is, how do you think Ms. Watson is doing? 

Mr. SAMPLE. My experience with Kathy Watson has been tremendous. I think she is the right person for that job right now. The 

fact that they have taken the step of taking the ‘‘acting’’ away from 

her title will be tremendous. I think her management skills are 

34

shown in the leadership team she has put together and I think it 

is an issue at this point of giving her not only the trust, but the 

backing and support to allow her to get her job done. 

Mr. WAGONER. I think she is phenomenal. I think we all need to 

support her and give her what she needs. I think she will make 

good use of it. She knows what needs to be done. She was prepared 

today. She is phenomenal, very open with industry and definitely 

wants to make a difference. 

Mr. SAMPLE. Senator, one last comment about Ms. Watson is 

that fixing DSS and fixing the overall process are two different 

issues, and sometimes they get intertwined. The importance of fixing DSS, though, is regardless of how you come out with the overall process, even with the best improvements you can make, if you 

can’t hand it off to a healthy DSS, then you have undercut your 

whole effort. 

Senator VOINOVICH. Right. So DSS has to be in the position 

where they can send the information over to OPM and do it in as 

efficient a way as possible. When it comes back to DSS they need 

to be able to adjudicate it as quickly as possible. They are fundamental to the security clearance process. 

Mr. WAGONER. And the other role they have is as the owners of 

JPAS, which should be the system that everyone uses for clearances. Giving her the funding to get that where it needs to be once 

we all agree on the new process would help all of government, not 

just DOD. 

Senator VOINOVICH. Thank you, Mr. Chairman. 

Senator AKAKA. Thank you very much. This has been a great discussion. Your testimonies were to the point, and again, I am repeating that this Subcommittee will continue to work on this issue. 

As Senator Voinovich said, we can’t let it continue. You have been 

very helpful with your responses. 

The reason that we are really going after this is our country has 

been speaking so much about national security and this process is 

so vital to our national security. When investigating this, I couldn’t 

believe the information I was finding, and because of that, I 

couldn’t just sit there and let it go. So Senator Voinovich and I, I 

want you to know, are going to stick with this, and as we pointed 

out, we are going to flesh out the problems and work on them, correct them, improve them, and also try to plan for the future. 

As my friend, Senator Voinovich said, we can’t wait for the next 

Administration. I am so glad that he also mentioned that we need 

your kind of help. As you said, Mr. Sample, we can’t just change 

things, we have got to transform what is there and we need to do 

it in a manner where everybody wants to be a part of the process. 

So I want to say thank you to our witnesses for discussing with 

us this critically important issue. We must continue to work to get 

DOD’s clearance process off GAO’s high-risk list. We have heard 

very valuable testimony today and I think it will be very useful as 

we move forward. I want to thank you also for your patience. Usually, we don’t have as many recesses as we had today. I also want 

to thank my friend, Senator Voinovich, for being such a huge part 

of this hearing. 

35

The hearing record will be open for a week for additional statements or questions from Members. With that, this hearing is adjourned. 

[Whereupon, at 12:42 p.m., the Subcommittee was adjourned.] 

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