Industry: Major overhaul of clearance process needed

Industry is uring Congress to intervene in the crisis regarding the Defense Department's cancellation of processing security clearances and proposed a legislative overhaul of the granting procedure.

Congress should immediately offer full funding for the Defense Security Service to resume its clearance program, investigate why DSS shut it down, and mandate the use of technology and databases to properly coordinate and update the clearance process, said Doug Wagoner, chairman of the Information Technology Association of America's intelligence reform subcommittee.

He testified yesterday on behalf of the Security Clearance Coalition before a House Government Reform Committee hearing on the security-clearance crisis.

The hearing examined the reasons that the Defense Department abruptly stopped processing security-clearance applications in late April and early May: insufficient funds and a high volume of requests.

Wagoner said suggestions that industry pay for clearances are untenable, because the plan would create a "have and have-not" situation between large and small firms, and industry would pass the costs on to the government along with other overhead. In addition, "industry is not in business to support failed processes in government," he said.

Industry is ready to work with DSS to prioritize urgent requests for clearances, including top secret and periodic reinvestigations, Wagoner said.

Robert Andrews, deputy undersecretary of defense for counterintelligence and security, testified at the hearing that the Defense Department was establishing a central oversight office within the Defense Security Service to prevent the problem from reoccurring.

On Tuesday, DSS said it had obtained $28 million to pay the Office of Personnel Management to resume processing secret-level security clearances for industry until the end of June, but industry deemed this inadequate. Without proper funding, industry could not carry out its work for the government, much of which requires staff with appropriate clearances.

"There's literally a panic" among small-business contractors that they would not be able to fulfill their work for the government with the delays in clearances, said Nicholas Karangelen, president of Trident Systems Inc. and a board member of the Small Business Technology Coalition. He was part of the three-member industry panel that testified before the committee. The third member was William Gunst, vice president of business operations at Anteon International Corp.

They testified after a panel of government officials from the Defense Department, Office of Management and Budget and OPM.

The Security Clearance Coalition, nine industry groups representing IT and government service contractors, issued a white paper May 17, outlining nine recommendations for Congress to prevent another crisis. They are:

• Direct the Defense Secretary to immediately restart the clearance-granting process for all levels of clearances
  
• Direct thorough audits of DSS' and OPM's finances and caseloads
  
• Require that the application process, including the collection and transmission of fingerprints and signatures, be automated by Jan. 1, 2007
  
• Order a survey of backlogged clearance applications to determine how many are still valid
  
• Ensure that the practice of changing clearance investigative contractors when clearances are already in place is not repeated during the recompetition phase of these contracts
  
• Intervene to stop OPM from collecting a premium on the investigation of applications submitted by DSS
  
• Tie OPM funding to the adoption, implementation and use of technology and commercially available databases to expedite the clearance-granting process
  
• Extend the Simmons/Davis/Davis amendment to the 2007 National Defense Authorization Act to ensure those who need a periodic reinvestigation in the remainder of fiscal 2006 receive similar relief
  
• Direct OPM to ask industry for solutions to reduce the applications backlog and to bring the process into compliance with the 2004 Intelligence Reform and Terrorism Prevention Act and
  
• Determine new workloads placed on OPM by the investigative requirements of Homeland Security Presidential Directive-12, ascertain whether the agency has the resources and funding to meet volume requirements, and consider letting agencies and contractors use approved and qualified private-sector background check provides.