DOD Personnel Clearances:

Additional Steps Can Be Taken to Reduce Backlogs and Delays in Determining Security Clearance Eligibility for Industry Personnel

GAO-04-632: Published: May 26, 2004. Publicly Released: May 26, 2004.

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Brenda S. Farrell
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As more and more federal jobs are privatized, individuals working for private industry are taking on a greater role in national security work for the Department of Defense (DOD) and other federal agencies. Because many of these jobs require access to classified information, industry personnel must hold a security clearance. As of September 30, 2003, industry workers held more than one-third of all clearances issued by DOD. Long-standing security clearance backlogs and delays in determining clearance eligibility affect industry personnel, military members, and federal employees. As requested, we reviewed the clearance eligibility process for industry personnel and (1) describe the size of the backlog and changes in the time needed to issue eligibility determinations, (2) identify reasons for the backlog and delays, and (3) evaluate initiatives that DOD could take to eliminate the backlog and decrease the delays.

As of March 31, 2004, DOD's security clearance backlog for industry personnel was roughly 188,000 cases, and the time needed to conduct an investigation and determine eligibility for a clearance during the last 3 fiscal years had increased by 56 days to a total of 375 days. DOD identified three separate backlog estimates; (1) more than 61,000 reinvestigations (required for renewing clearances) that were overdue but had not been submitted, (2) over 101,000 new investigations or reinvestigations that had not been completed within DOD's established time frames, and (3) over 25,000 adjudications (a determination of clearance eligibility) that had not been completed within DOD's established time frames. From fiscal year 2001 through fiscal year 2003, the average time that it took DOD to conduct an investigation and determine clearance eligibility for industry personnel increased from 319 days to 375 days. Delays in conducting investigations and determining clearance eligibility can increase national security risks, prevent industry personnel from beginning or continuing work on classified programs and activities, hinder industrial contractors from hiring the most experienced and best qualified personnel, increase the time needed to complete national-security-related contracts, and increase costs to the federal government. Several impediments hinder DOD's ability to eliminate the backlogs and reduce the amount of time needed to conduct an investigation and determine security clearance eligibility for industry personnel. Impediments include a large number of new clearance requests; an increase in the proportion of requests for top secret clearances, which require more time to process; inaccurate workload projections for both the number and type of clearances needed for industry personnel; and insufficient investigative and adjudicative workforces to handle the large workloads. Industrial contractors cited the lack of full reciprocity (the acceptance of a clearance and access granted by another department, agency, or military service) as an obstacle that can cause industry delays in filling positions and starting work on government contracts. Also, the effects of past conditions, such as the backlog itself, have been identified as impediments to timely eligibility determinations. Furthermore, DOD does not have an integrated, comprehensive management plan for addressing the backlog and delays. DOD is considering several initiatives that might reduce security clearance backlogs and processing times for determining clearance eligibility for industry personnel. Among those initiatives that DOD is exploring are (1) conducting a phased, periodic reinvestigation; (2) establishing a single adjudicative facility for industry; (3) reevaluating investigative standards and adjudicative guidelines; and (4) implementing an automated verification process for identifying and validating industrial security clearance requirements. These initiates could, however, face implementation obstacles, such as the need to change governmentwide regulations.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In its 31 U.S.C. 720 response dated June 23, 2004, DOD concurred with this recommendation. DOD agreed that the process for projecting industrial personnel clearance requirements can be improved. However, DOD officials believe that the current system of surveying cleared contractors annually to obtain best estimates of the number of background investigations required for contract performance has yielded fairly accurate results. Nonetheless, DOD reported that a plan is being developed to link the number of investigations required for contract performance to the Contract Security Classification Specification (DD 254), and to require that the number be authorized by the contracting officer. This will allow the Defense Security Service to better monitor requirements and tie them to the budget process. An electronic DD 254 database with personnel clearance information can be linked to the contract database maintained by the acquisition community, thus tying the clearance process more closely to the acquisition process. As of May 2005, the DOD investigative requirements module for OPM e-QIP software included mandatory identification of the prime contract number used to justify a personnel security investigation. Data elements from the Contract Security Classification Specification (DD 254)(including the contract number for the prime contract)were being included in the requirements definition phase for the future version of industrial security automation. As of January 2006, DSS funding constraints kept data elements from the DD 254 from being included in the requirements definition phase for the next version of automation. This functionality was a low priority and was not expected to become operational in the foreseeable future. As of October 2006, DSS obtained additional FY 2006 funding for the PSI program, and monitored CAS submissions on a daily basis. DSS was working with the USD(I)/Comptroller to obtain FY 2007 funding to cover the projected $110 million shortfall. As of March 2007, reprogramming action to address the projected shortfall currently was on hold per DOD Comptroller. Preliminary review of submissions noted a decrease in expected requests against FY 2007 investigative requirements. A more definitive review of submissions was ongoing. As of October 2007, projected industry personnel security clearance requirements were currently determined through the use of a multi-year survey of industry's requirements. Projections made closer to the requirement year are more accurate than projections further into the future. As FY 2007 progressed, projections based on weekly reviews of actual clearance submissions were revised down to $184 million. Some $7 million was reprogrammed into the PSI line to meet this new estimate and prevent any shutdown of industry investigations. Requirements for FY 2007 remained within the $184 million budgeted amount. Response did not specifically address linking the number of investigations required for contract performance to DD 254. Ultimately, the plan to link the number of investigations required for contract performance to DD 254 was never implemented. In congressional testimony (GAO-08-470T, Feb. 13, 2008), GAO testified that DOD has had a long-standing challenge in accurately projecting future industry investigation needs and is developing and implementing new methods to improve its procedures. However, DOD has not yet demonstrated the effectiveness of these changes. The testimony also noted that in April 2006, DOD temporarily stopped processing applications for clearance investigations for industry personnel, attributing the stoppage to a large volume of clearance requests and funding problems. Consequently, this recommendation is closed as not implemented.

    Recommendation: To improve the security clearance process for industry personnel as well as for military members and federal employees, the Secretary of Defense should direct the Under Secretary of Defense for Intelligence to improve the projections of clearance requirements for industrial personnel--both the number and type of clearances--by working with DOD components, industrial contractors, and the acquisition community to identify obstacles and implement steps to overcome them.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: In its 31 U.S.C. 720 response dated June 23, 2004, DOD concurred with this recommendation. DOD reported that it assures reciprocity of security clearances through the transfer, reinstatement, and conversion policies currently in place and by accepting background investigations and security clearance determinations from all other federal departments for access to equivalent levels and below. DOD has given industry access to the Joint Personnel Adjudication System, which will be the system of record for eligibility and access information for DOD and, in September 2004, for industry as well. DOD is participating in several inter-agency reciprocity working groups to identify both the impediments and corrective action to the reciprocity issues between federal agencies. The Office of the Under Secretary of Defense for Intelligence is working with the special access programs community to clearly identify the additional risk determinations required prior to granting access to a specific program and to ensure full reciprocity between programs of "like" risk. Similar processes are underway with the Intelligence Community for the granting of access to sensitive compartmented information. As of May 2005, a working group chaired by the Information Security Oversight Office issued a declaration of principles with regard to reciprocity. The Personnel Security Working Group under the National Security Council Policy Coordinating Committee on Records Access and Information Security was reviewing the declaration. The DCI recently created a new series of documents called Intelligence Community Security Implementation Procedures (ICSIP). The ICSIP will document the procedures for handling issues of common interest and will be binding throughout the Intelligence Community. The first ICSIP addressed the issue of crossovers and the criteria for reciprocal acceptance of a prior investigation or clearance. As of January 2006, Sec C5. Chapter 5 of the draft DOD 5200.2-R addresses this recommendation. As of October 2006, the draft DOD 5200.2-R contains guidance on program management requiring activities to fully program investigative requirements and activities with adjudicative functions to ensure resource and funding requirements are met. The draft regulation was expected to be sent out for formal coordination in November 2006. As of March 2007, DOD 5200.2-R was still being revised. A revised version was expected to be sent to DOD Components for informal review by the end of April 2007. Controversial issues have delayed efforts, i.e., due process procedures. As of October 2007, USD(I) was currently revising the DOD 5200.2-R, Personnel Security Program. The goal was to forward the revised version to DOD Components for informal review by the end of the calendar year. OUSD(I) has recently developed uniform due process procedures for military, civilian, and contractors. GAO has documented in two accomplishment reports (GAO-06-844A) and GAO-05-807A) steps that DOD and the federal government in general have taken to narrow the conditions under which reciprocity is not required. Despite these plans and positive steps, the impact of the steps in unclear. In a statement for the record (GAO-08-580R, Mar. 25, 2008) following a February 13, 2008, congressional hearing, GAO stated that it is not aware of a database maintained by any government agency that records information on reciprocity. Consequently, this recommendation is closed as not implemented.

    Recommendation: To improve the security clearance process for industry personnel as well as for military members and federal employees, the Secretary of Defense should direct the Under Secretary of Defense for Intelligence to work with DOD components and other agencies to eliminate unnecessary reciprocity limitations for industry personnel whose eligibility for a clearance is granted by DOD.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In its 31 U.S.C. 720 response dated June 23, 2004, DOD partially concurred with this recommendation. DOD reported that it has numerous plans underway to improve the personnel security investigation process from end-to-end. These plans align changes with functional responsibilities. In November 2002, DOD decided to divest the PSI function and procure these services from OPM. This decision came from the Secretary's Business Improvement Council under the Senior Executive Council, and was reflected in the President's Budget for FY 2004. The transfer of PSIs to OPM and the corresponding transformation of DSS were intended to result in the permanent elimination of the investigative and adjudicative backlogs, and reduce delay in determining eligibility for clearances. The transfer of the DSS investigative workforce would give OPM a federal investigative strength to accomplish the most critical and sensitive investigations. At the same time, OPM would be increasing its contractor base of investigators to ensure sufficient investigative resources for the federal investigative workload. Investigations are a core competency of OPM, so by moving all DOD investigations to OPM and centralizing the contracting function for investigations, capacity would be leveraged, resulting in decreasing investigative timelines. The DSS collaborative adjudication support (CAS) would provide common services for all of the DOD CAFs. Such services would include acquisition and contracting oversight. This DSS organization also would leverage DSS' relationship with industry as the single industry CAF for all industry clearances, including interim, suitability, and trustworthiness determinations. The adjudicative process would cover SCI accesses. The effort was intended to streamline the DOD adjudicative process, facilitating faster adjudicative timelines. As of May 2005, it was too soon to realize any benefits from transfer of the PSI function to OPM. OPM estimated that 35-day service for priority investigations could be provided by mid-2005 as long as no more than 10 percent of DOD investigations were priority requests. The CAS element at DSS was not yet fully staffed and was in the process of defining its missions and functions and establishing its organizational structure. The initiative to establish a single industry CAF has been accomplished. As of January 2006, CAS had been fully staffed. A formal CAS missions and functions statement had not yet been developed pending selection of a permanent CAS Director. As of October 2006, CAS management was under review by the Acting Director. As of March 2007, a CAS review was conducted and DSS reorganized CAS into the Personnel Security Clearance Office (PSCO). Mission and functions statement had been drafted, and PSCO had centralized expertise at the HQ element to provide action officers to work process improvement issues. As of October 23, 2007, OUSD(I) had published a memorandum (August 31, 2007) that designated DSS as the central operational manager of personnel security workload projections, funding, and quality of investigation results oversight. A copy is in the case file. The PSCO Director was in place on March 19, 2007, and DSS hired chiefs for the Clearance Oversight and Clearance Liaison offices, which are responsible for the centralized operational management of DOD PSI requirements and monitoring of PSI funding for DOD components, and the coordination of DOD-wide requirements for quality issues and PSI processing issues with OPM. Organizational staffing for the CLO would be complete and COO staffing at an operational level by end of October 2007. GAO's accomplishment report GAO-06-842A indicates that DOD's clearance-related issues were addressed in a governmentwide plan. More recently, OMB's February 2008 annual report to the Congress maintains that the timelines of the initial clearances is improving.

    Recommendation: To improve the security clearance process for industry personnel as well as for military members and federal employees, the Secretary of Defense should direct the Under Secretary of Defense for Intelligence to develop and implement an integrated, comprehensive management plan to eliminate the backlog, reduce the delays in conducting investigations and determining eligibility for security clearances, and overcome the impediments that could allow such problems to recur.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In its 31 U.S.C. 720 response dated June 23, 2004, DOD concurred with this recommendation. DOD identified specific planned actions on each initiative to decrease the backlog and delays. In December 2004, the President approved the phased periodic reinvestigation (PRR). In February 2005, DOD provided OPM with a comprehensive policy document with the criteria to be used for the PRR and directed that all investigative providers conducting TS/SCI PRs for DOD were to use the modified standard. A single, industry central adjudication facility (CAF) was established at DSS. The DSS academy was developing a comprehensive adjudication course for use across DOD. DSS was working with PERSEREC to develop an improved methodology for projecting industry workload. The Automated Continuing Evaluation System (ACES) underwent beta testing until August 2005. The system was expected to be implemented in July 2006 as a supplement to the regular periodic reinvestigation. OPM implemented the PRR at the beginning of FY 2006 and DOD components were provided guidance. The Joint Personnel Adjudication System's (JPAS) module to verify and validate all investigation requests became operational in FY 2006. As of January 2006, expansion of scope of an industry CAF and associated training was delayed pending coordination of DOD 5200.2-R. A comprehensive adjudication course had not yet been initiated due to funding limitations. PERSEREC could not come up with a better way for projecting industry clearance requirements than what was currently used by DSS. In July 2006, PSWG published a standard Program of Instruction for standardized adjudicator training throughout the security community (see D-2001-065). As of October 2006, DSS was working with the USD(I) Comptroller to obtain FY 2007 funds to build and deploy Automated Records Checks (ARC), and ACES Production System, and to obtain FY 2008-2013 funds to enhance and maintain the system. DUSD(I)(CI&S) funded a project in FY 2007 to write business rules enabling electronic review of completed investigations. As of March 2007, DSS developed a Personnel Security Program Improvement Plan to fix the process in DOD. No funding for the plan was obtained in FY 2007; however, PBD 704 provided O&M funding for ARC in FY 2008-2013, but there were no RDT&E dollars. DOD continued to make progress on developing business rules and identifying requirements with OPM to implement an Adjudication Decision Support (ADS) system to automatically process reports of completed personnel security investigations, known as electronic reports for adjudication (eRFA). ADS research on processing TS investigations was expected to have draft results in FY 2007. Regarding automated clean case screening for personnel security investigative results, as of October 2007, DOD: (1) released a research report on "ADS System Automated Approval Estimates for NACLC Investigations," regarding initial and reinvestigations for access eligibility at the SECRET and CONFIDENTIAL levels, (2) provided input to the DOD/DNI Security Clearance Process Reform Team on coordinating ADS business rules with related developments in ARC and ACES, (3) was evaluating an ADS method for automated screening of reinvestigations for continued TOP SECRET access eligibility, and (4) successfully validated an alternative ADS option for automatic screening of NACLC cases using OPM's current "no issues" and "no actionable issues" clean case codes. Business rule development regarding SSBI cases and a final validation of ADS rules for NACLC cases were delayed because OPM was not able to provide DOD with a requested case sample of OPM's new electronic Distributed Investigative File (DIF) format. The Army CAP provided PERSEREC with Army DIF case samples ADS research in September 2007. GAO accomplishment report GAO-05-1179 documented that DOD's PRR initiative was implemented. Also, more recent information shows that DOD is implementing its ACES in a pilot study for the Army.

    Recommendation: To improve the security clearance process for industry personnel as well as for military members and federal employees, the Secretary of Defense should direct the Under Secretary of Defense for Intelligence to analyze the feasibility of implementing initiatives designed to reduce the backlog and delays, prioritize the initiatives, and make resources available for testing and implementing the initiatives, which could include, but are not limited to, those evaluated in this report.

    Agency Affected: Department of Defense


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