This is the accessible text file for GAO report number GAO-05-988R 
entitled 'Questions for the Record Related to DOD's Personnel Security 
Clearance Program' which was released on August 19, 2005.

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August 19, 2005:

The Honorable George V. Voinovich:
Chairman, Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:

Dear Senator Voinovich:

Subject: Questions for the Record Related to DOD's Personnel Security 
Clearance Program:

On June 28, 2005, I testified before your Subcommittee at a hearing on 
"Access Delayed: Fixing the Security Clearance Process."[Footnote 1] 
This letter responds to your request that I provide answers to Senator 
Frank R. Lautenberg's questions for the record. The questions, along 
with my responses follow.

1. Your 2004 report recommended that the Department of Defense (DOD) 
work closely with the Office of Personnel Management (OPM) to design 
and implement a plan for getting rid of clearance backlogs and delays. 
To your knowledge, what progress has DOD made on this?

GAO is unaware of any progress that DOD has made toward implementing 
our May 2004 recommendation 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." Information supplied by DOD as part of a required 
follow-up action on all GAO recommendations lists a few actions, but 
nothing is mentioned about developing an integrative approach that 
incorporates objectives and outcome-related goals, sets priorities, 
identifies resources, establishes performance measures, and provides 
milestones for permanently eliminating the backlog and reducing delays.

On June 17, 2005, the Deputy Director of Management at the Office of 
Management and Budget (OMB) announced that OMB would work with agencies 
to set clear and aggressive milestones for reducing risk in each area 
that GAO had designated high risk. On July 12, 2005, shortly after this 
Subcommittee's hearings, GAO officials met with OMB's Deputy Director 
for Management, Clay Johnson, and his staff to discuss DOD's personnel 
security clearance program, the clearance backlog, and impediments to 
timely, high-quality clearances. Among other things, Mr. Johnson 
indicated that (1) OMB staff would work with DOD and OPM to develop 
preliminary milestones and metrics for correcting problems associated 
with the program and (2) GAO would be asked to comment on that 
information in August or September 2005.

2. Based on your analysis, how much money do you think has been wasted 
due to lengthy security clearance processes, when employees come into 
work but cannot participate in substantive assignments until cleared?

GAO does not have an up-to-date estimate of the costs resulting from 
delays in determining eligibility for a personnel security clearance. 
However, our February 2004 report documents some past estimates as well 
as cost-related considerations that apply today.[Footnote 2] For 
example, we noted that in our 1981 report, we estimated the DOD 
investigative backlog could cost nearly $1 billion per year in lost 
productivity.[Footnote 3] More than a decade later, the Joint Security 
Commission report noted that the costs directly attributable to 
investigative delays in fiscal year 1994 could be as high as several 
billion dollars because workers were unable to perform their jobs while 
awaiting a clearance.[Footnote 4]

In addition to the costs associated with delays in employees being able 
to start classified work, our February 2004 report also documented 
other types of costs that have been cited by industry 
personnel.[Footnote 5] Representatives from one company with $1 billion 
per year in sales stated that their company offers a $10,000 bonus to 
employees for each person recruited who already has a security 
clearance. Such operating costs are then passed on to government 
customers in the form of higher bids for contracts. In turn, the 
recruit's former company may need to back-fill a position, as well as 
possibly settle for a lower level of contract performance while a new 
employee is found, obtains a clearance, and learns the former 
employee's job. Also, industry representatives discussed instances 
where their companies gave hiring preference to personnel who could do 
the job but were less qualified than others who did not possess a 
clearance. The chair of the interagency Personnel Security Working 
Group noted that a company might hire an employee and begin paying that 
individual, but not assign any work to the individual until a clearance 
is obtained. The head of the interagency group additionally noted that 
commands, agencies, and industry might incur lost-opportunity costs if 
the individual chooses to work somewhere else rather than wait to get 
the clearance before beginning work.

If you or other members of the Subcommittee have any additional 
questions about DOD's personnel security clearance program, please 
contact me at (202) 512-5559 or stewartd@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this correspondence. GAO staff who made major 
contributions to this correspondence are listed in the enclosure.

Sincerely yours,

Signed by: 

Derek B. Stewart:
Director, Defense Capabilities and Management:

Enclosure:

Enclosure:

GAO Contact and Staff Acknowledgments:

GAO Contact: Derek B. Stewart (202) 512-5559 or stewartd@gao.gov:

Acknowledgments: In addition to the contact above, Jack E. Edwards, 
Assistant Director, and Mark A. Pross made key contributions to this 
correspondence.

(350747):

FOOTNOTES

[1] GAO, DOD Personnel Clearances: Some Progress Has Been Made but 
Hurdles Remain to Overcome the Challenges That Led to GAO's High-Risk 
Designation, GAO-05-842T (Washington, D.C.: June 28, 2005). 

[2] GAO, DOD Personnel Clearances: DOD Needs to Overcome Impediments to 
Eliminating Backlog and Determining Its Size, GAO-04-344 (Washington, 
D.C.: Feb. 9, 2004).

[3] GAO, Faster Processing of DOD Personnel Security Clearances Could 
Avoid Millions in Losses, GAO/GGD-81-105 (Washington, D.C.: Sept. 15, 
1981).

[4] Joint Security Commission, Redefining Security: A Report to the 
Secretary of Defense and the Director of Central Intelligence, Chapter 
4, Personnel Security--The First and Best Defense (Washington, D.C.: 
Feb. 28, 1994).

[5] GAO-04-344.