Wednesday, May 5, 2004

The government’s backlog of defense security clearances, estimated to be as much as 270,000, is raising the salaries of those who hold them by 15 percent and costing taxpayers hundreds of millions of dollars each year.

As far back as 1981, the General Accounting Office, Congress’ investigative arm, reported that nearly $1 billion was wasted each year because of the backlog. That much could be wasted even today, according to industry and former Defense Department officials who say the 90 days it should take to get a clearance has ballooned into 400 to 500 days.

The Defense Security Service has long had clearance backlogs. But new problems, exacerbated by the September 11 terrorist attacks, are increasing a once-shrinking backlog, according to government and industry reports.

“Recent events, such as the terrorist attacks on the United States on September 11, 2001, and several high-profile espionage cases have heightened national security concerns and underscored the need for a timely, high-quality personnel security clearance process,” the GAO said.

“It markedly increases costs,” said Brendan Peter, a senior director at the Information Technology Association of America, an Arlington defense-industry group that represents contractors such as Lockheed Martin Corp. and General Dynamics Corp.

The background investigations by the Defense Security Service, part of the Department of Defense that performs background checks on military and civilian personnel, are the first step in safeguarding national security and are critical in identifying people who can be trusted with classified information, according to the GAO.

The situation creates a Catch-22: People who work on classified projects can’t start work until they are cleared, and employees can’t be cleared until they are hired for a classified project.

Because the clearance goes with the employee, and not the employer, it’s easier for a business to hire a new employee cleared to work on a classified project if that person has been investigated — even if the investigation took place when the employee was working for someone else, Mr. Peter said.

That has made employers hesitant to hire those without clearances. And it means that workers with clearances earn salaries 15 to 25 higher than those without, Mr. Peter said.

“That takes precedence over qualifications,” he said.

“It’s definitely a positive or a plus if someone is coming in with a clearance,” said Jeff Adams, a spokesman for Lockheed Martin.

Demand is so high that some Washington-area job fairs require job-seekers to have clearances even before talking with employers. At a March career fair, those included businesses such as General Dynamics Advanced Information Systems.

Increased salaries, salaries to nonproducing contractor employees, and increased time to finish a contract raise the costs.

“Eventually, all of these costs end up on the plate of the taxpayer,” said Frank Blanco, executive vice president for the Security Affairs Support Association, an industry group representing 1,800 companies.

The House Government Reform Committee will hold a hearing on the issue today to coincide with the release of a GAO report on the subject.

Most of the security clearances held by an estimated 2 million Americans are the result of background checks by the Defense Security Service.

Often that means conducting an interview with the person who needs the clearance and then checking records — those of the FBI, local police and courts, schools and workplace — confirming birth date and place, and interviewing references.

Since the September 11 attacks, there has been an increased demand for the investigations because of renewed concern about security issues. About 800,000 requests for security clearances were made in fiscal 2003.

Processing those requests is the chore of 4,200 people at the agency and the Office of Personnel Management (OPM). According to the GAO, 8,000 people are needed to do the job.

No one knows exactly how big the backlog is, and the GAO as well as the House Government Reform Committee say figuring that out is an important step toward eliminating it.

According to the government reports, the Defense Security Service has not attempted to evaluate the size of the backlog in several years. The GAO estimated that the backlog was at least 270,000 cases as of December.

But that doesn’t include the number of cases that haven’t been submitted for investigation but should have been, estimated before September 11 at 500,000, or the number of cases — about 90,000 — that have been investigated but haven’t received a final decision.

The agency said it has reduced the backlog to 11,000.

“We are down to very few cases,” agency spokeswoman Caryl Clubb said.

The department has made a “concentrated effort” to reduce the backlog, she said, augmenting its work force with contractors and OPM. The Defense Security Service ultimately wants OPM to take on most of the background checks, a process fraught with disputes and questions about speed and costs, according to current and former Defense Security Service employees. OPM did not return phone calls.

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