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                                                        S. Hrg. 111-351




                               before the

                     THE FEDERAL WORKFORCE, AND THE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                             FIRST SESSION


                           SEPTEMBER 15, 2009


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                        and Governmental Affairs

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               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          LINDSEY GRAHAM, South Carolina

                     Lisa M. Powell, Staff Director
                Evan W. Cash, Professional Staff Member
                Shelley K. Finlayson, Legislative Fellow
             Jennifer A. Hemingway, Minority Staff Director
                      Tara Shaw, Minority Counsel
                   Benjamin B. Rhodeside, Chief Clerk

                            C O N T E N T S

Opening statements:
    Senator Akaka................................................     1
    Senator Voinovich............................................     2
    Senator Burris...............................................     4

                      Tuesday, September 15, 2009

Hon. Jeffrey D. Zients, Deputy Director for Management and Chief 
  Performance Officer, Office of Management and Budget...........     5
Hon. John Berry, Director, U.S. Office of Personnel Management...     7
Hon. James R. Clapper, Under Secretary of Defense for 
  Intelligence, U.S. Department of Defense.......................     8
David R. Shedd, Deputy Director of National Intelligence for 
  Policy, Plans, and Requirements, Office of the Director of 
  National Intelligence..........................................    10
Brenda S. Farrell, Director, Defense Capabilities and Management, 
  U.S. Government Accountability Office..........................    11

                     Alphabetical List of Witnesses

Berry, Hon. John:
    Testimony....................................................     7
    Prepared statement...........................................    35
Clapper, Hon. James R.:
    Testimony....................................................     8
    Joint prepared statement with Mr. Shedd......................    41
Farrell, Brenda S.:
    Testimony....................................................    11
    Prepared statement...........................................    48
Shedd, David R.:
    Testimony....................................................    10
    Joint prepared statement with Mr. Clapper....................    41
Zients, Hon. Jeffrey D.:
    Testimony....................................................     5
    Prepared statement...........................................    29


Background.......................................................    63
Questions and Responses to questions:
    Mr. Zients with an attachment for question 13................    70
    Mr. Berry....................................................    83
    Mr. Clapper..................................................    91



                      TUESDAY, SEPTEMBER 15, 2009

                                 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 2:35 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senators Akaka, Burris, and Voinovich.


    Senator Akaka. Good afternoon. This hearing of the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia is called to order.
    I want to welcome you to our sixth hearing on reforming the 
security clearance process, which has been on the Government 
Accountability Office's (GAO) High-Risk List since 2005. Since 
we began this line of hearings, much progress has been made in 
laying the groundwork for reform. Now is the time to move 
forward with modernizing the security clearance process in the 
Federal Government.
    When this issue was originally placed on the High-Risk 
List, it was designated as a problem with the Department of 
Defense's (DOD) clearance process. However, through our 
oversight, it has become clear that this problem must be looked 
at through a government-wide lens and in conjunction with 
suitability screening. The last Administration, with the 
support of dedicated career civil servants on the front lines 
of this issue, worked hard to reduce processing times for 
security clearances. The backlog of security clearance 
determinations has all but vanished, but the investigations 
still rely on outdated, paper-based processes.
    We must use this opportunity to make fundamental changes to 
the process to ensure that we do not experience the same 
problems in the future. Modernizing also will lead to more 
efficient operations and will help with another key priority of 
mine, streamlining the Federal hiring process and making it 
more user friendly.
    It is also time to further examine the quality of clearance 
investigations and adjudications. This means creating and 
implementing meaningful metrics that can be audited so that we 
know the system is working. The security of our Nation depends 
on ensuring that security clearance decisions are based on 
thorough, modern, and risk-based determinations.
    With metrics in place, it will become clear that one of the 
biggest barriers to modernizing the clearance system is 
reinventing and modernizing the information technology (IT) 
infrastructure at the Office of Personnel Management (OPM), the 
Department of Defense, and within the intelligence community. I 
have been concerned for years about the outdated systems in use 
throughout the clearance process. Some of these systems date 
back over 20 years.
    Every change in the Administration brings inevitable 
delays, as new leaders are put into place and get up to speed. 
Some of the reforms outlined by the Joint Reform Team made up 
of government stakeholders involved in issuing clearances and 
suitability determinations at our hearing last May are behind 
    It is important, after years of work put into reform, that 
it continues to move forward in a meaningful way. We must work 
to modernize the clearance process in order to remove it from 
the High-Risk List as soon as possible.
    While progress has been made, with timeliness greatly 
improved and backlogs reduced, meeting the Intelligence Reform 
Act's milestones alone should not be the ultimate goal. This 
will require the buy-in of all stakeholders, a willingness to 
collaborate, and the knowledge and skills that the reform team 
has brought to the table.
    I again want to thank all of our witnesses for appearing 
today. I also want to recognize the dedicated career 
professionals, those sitting behind our witnesses, as well as 
those who are not here today, who have been working on this 
issue for years. I again want to thank you all for your 
    I especially want to thank Kathy Dillaman, who has worked 
with this Subcommittee for many years and who I understand will 
be eligible for retirement in the coming years.
    I also want to thank Senator Voinovich for his continued 
dedication to this issue. We have worked together on this issue 
seamlessly, no matter who was the Chairman, and I think we have 
shown that great progress can be achieved through oversight. I 
know that Senator Voinovich is anxious to resolve some of these 
pressing government management problems as he looks forward to 
retirement, so I would urge you all to work hard on this issue 
over the next year.
    With that, I will recognize Senator Voinovich for his 
statement. Senator Voinovich.


    Senator Voinovich. Thank you, Mr. Chairman, and I thank the 
witnesses for being here today.
    We are continuing to review the Federal Government's effort 
to reform the security clearance process. We have worked on 
this for a long time. This is our sixth hearing. This goes back 
5 years--we started in 2005--so if some of our words today are 
from a little bit of exasperation about things, you will 
understand, for the newcomers here.
    More than 4 years after our first hearing, the DOD's 
security clearance process remains on GAO's High-Risk List and 
I see little evidence of progress thus far in furtherance of 
Congressional security clearance reform mandates. I am anxious 
to hear from our new people about this.
    Reforming the security clearance process and removing DOD's 
personal security clearance process from GAO's High-Risk List 
are priorities for me in, as Senator Akaka said, my final 
Congress. I have always believed that the Executive Branch 
could get DOD's clearance process off the High-Risk List, and I 
want to see that happen. I intend to closely monitor efforts in 
this regard and have told my staff I want weekly updates on 
progress made to get DOD's personnel clearance process off the 
High-Risk List before I leave.
    There are many reasons this is important, perhaps most 
notably because of the cost of the security clearance process. 
Mr. Chairman, I cited this statistic before, but I think it 
bears repeating. An August 2007, Department of Defense report 
on security clearance investigations estimated it took an 
average of 208 days to process ``secret'' clearance requests 
for industry. For every day a contract employee is on the job 
without the appropriate clearance, it costs the taxpayer 
approximately $684 in lost salary and benefits because the 
contractor is not able to do the job he is being paid to do. 
Over 208 days, a secret clearance for one person costs more 
than $140,000, about three times the 2007 median U.S. household 
income of $50,000. This is pretty serious business.
    Some real headway has been made to reduce this time. As the 
Government Accountability Office noted in its May report, 
Executive Branch agencies responsible for investigating or 
adjudicating clearances have made significant progress in 
improving the timeliness in clearance processing. Specifically, 
in 2004, top secret clearance investigations took almost 400 
days and today they take less than 80 days. Similarly, initial 
secret clearance investigations took about 200 days in 2004, 
and today they take less than 50. This is significant progress, 
and I recognize and appreciate that. But it remains to be seen 
whether the 2009 benchmark for processing clearance requests in 
60 days will be met.
    Additionally, even if that benchmark is met, timeliness is 
just one aspect of the security clearance reform that Congress 
called for in the Intelligence Reform and Terrorism Prevention 
Act (IRTPA). The law also calls for a number of other actions, 
including uniform policies regarding the security clearance 
process, reciprocal recognition of security clearances among 
agencies, and an evaluation of the use of technology to 
expedite security clearance processes. Senator Akaka, I think, 
did a pretty good job of outlining what we need to do there.
    I am particularly concerned about the lack of progress 
being made regarding reciprocity. I still consistently hear 
from individuals who have problems having one agency accept 
another agency's clearance. I am also concerned about the lack 
of progress in, as I mentioned, implementing technology. I 
believe the Executive Branch needs to do more to address these 
requirements. As GAO noted in May, problems related to the 
quality of security clearance investigations and adjudication 
determinations, reciprocity of clearance determinations, and 
information technology persist.
    The Joint Security and Suitability Reform Team recognized 
that more work regarding the security clearance process is 
needed when, in December 2008, it issued a report with tasks to 
be achieved during 2009, including implementing a revised 
electronic questionnaire (e-QIP); deploying an automated 
records check (ARC), capability in the Department of the Army, 
and developing a strategy for further ARC use; developing a 
curriculum for training national security clearance 
professions; and revising the questionnaire for national 
security positions.
    The Office of Management and Budget (OMB) tells me it is 
coordinating interagency review of these and other proposals 
and I am anxious to hear about the results of that review. I 
also want to know when that review will be complete and when 
all of the called-for-reforms will be implemented. To that end, 
I expect OMB to report to us in writing about any changes that 
are made to the December 2008 Joint Reform Team Plan, including 
a specific implementation timeline for each of the initiatives 
called for in that plan so we know that this is down in writing 
and there are goals that are being set.
    I want to thank our witnesses again for their 
participation. I am confident that if we all work together, we 
can achieve security clearance that saves the Federal 
Government time and money.
    I am particularly glad to have the Government 
Accountability Office here today, because last year, I 
expressed concern that the Department of Defense security 
clearance process, which was added to the GAO's High-Risk List 
in 2005, would remain on the list in 2009. My prediction proved 
true. In January, GAO continued the designation of DOD's 
clearance process on the High-Risk List. As I mentioned 
earlier, getting DOD's security clearance process off the High-
Risk List is a priority for me. Again, I look forward to 
hearing from you today. Thank you.
    Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much, Senator Voinovich.
    It is really a pleasure for me to welcome our witnesses 
today. But before I introduce our witnesses, let me call on 
Senator Burris for his opening statement. Senator Burris.


    Senator Burris. Thank you, Mr. Chairman, to Ranking Member 
Voinovich and to our distinguished panel. I am very anxious to 
hear all this great testimony from this distinguished panel.
    I am aware that this Subcommittee has held several hearings 
on the topic of security clearance reform. I look forward to 
hearing from our witnesses and discussing ways to further 
improve the effectiveness and efficiency of the security 
clearance process. Having been through the security clearance 
process many years ago, I am interested to see what updates 
have been made.
    Considering that the government conducts roughly 800,000 
security clearances and investigations each year, I was pleased 
to learn about the progress we made in cutting down on the 
investigative time, improving database technology, and 
bolstering interagency cooperation. Nevertheless, our efforts 
are far from over.
    Just recently, as Senator Voinovich mentioned, I had a 
problem with my own office relating to the reciprocity of one 
staffer who had a security clearance from a Federal agency 
which was not reciprocal here in the Senate. I witnessed 
firsthand the challenges this presented for the staffer as well 
as the impact it had on the office as a whole. Work was 
delayed, certain briefings could not be attended, and the 
questions arose that could have been avoided if ongoing 
problems surrounding their agency reciprocity security 
clearance was resolved.
    So I am eager to learn more about this issue as well as the 
other obstacles that could be avoided with better oversight and 
management of our security clearance process. I look forward to 
working with the entities here today in implementing a proper 
reform goal needed for improvement.
    Thank you very much, Mr. Chairman, and I will then have 
some questions.
    Senator Akaka. Thank you very much, Senator Burris.
    Now I will introduce our witnesses: Jeffrey Zients, Deputy 
Director for Management and Chief Performance Officer at the 
Office of Management and Budget; John Berry, Director of the 
Office of Personnel Management; Lieutenant General James 
Clapper, Under Secretary for Intelligence at the Department of 
Defense; David Shedd, Deputy Director of National Intelligence 
for Policy, Plans, and Requirements for the Office of the 
Director of National Intelligence; and Brenda Farrell, 
Director, Defense Capabilities and Management, Government 
Accountability Office.
    It is the custom of this Subcommittee to swear in all 
witnesses, so I ask all of you to stand and raise your right 
    Do you 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. Zients. I do.
    Mr. Berry. I do.
    Mr. Clapper. I do.
    Mr. Shedd. I do.
    Ms. Farrell. I do.
    Senator Akaka. Thank you very much. Let the record show 
that the witnesses answered in the affirmative.
    Although statements are limited to 5 minutes, I want all of 
our witnesses to know that their entire statements will be 
included in the record.
    Director Zients, will you please proceed with your 

                     MANAGEMENT AND BUDGET

    Mr. Zients. Thank you. Chairman Akaka, Ranking Member 
Voinovich, and Senator Burris, thank you for inviting me here 
today. It is my privilege to testify on behalf of the Office of 
Management and Budget to discuss the Administration's ongoing 
security clearance reform efforts and the status of 
implementing those reforms.
    \1\ The prepared statement of Mr. Zients appears in the Appendix on 
page 29.
    The Intelligence Reform and Terrorism Prevention Act of 
2004, challenged the Federal Government to address longstanding 
problems with the timeliness and the coordination for granting 
national security clearances. Executive Order 13467 reinforced 
the goals of IRTPA and recognized OMB as the lead agency to 
ensure coordination across the Federal Government.
    OMB, OPM, and the Office of the Director of National 
Intelligence (ODNI), along with the Department of Defense, 
comprise the Joint Reform Team and together provide leadership 
regarding reforms to policy, processes, and information 
technology which affect the approximately 2,000,000 security 
and suitability determinations conducted by the government each 
    Much has been accomplished to reform the process and 
improve timeliness. Of note, processing times for initial 
clearance investigations are down sharply since 2004 and the 
backlog of pending clearance investigations, once over 100,000 
cases, is now gone. These accomplishments are significant and 
testify to the dedication of the staff at the agencies 
representing the security and suitability community, as well as 
to your leadership and persistent focus on these issues.
    However, much remains to be accomplished. By the end of 
2009, IRTPA requires that, to the extent practicable, 90 
percent of security clearances must be completed within an 
average of 60 days, providing 40 days, on average, for 
investigations and 20 days, on average, for adjudications. To 
achieve this goal with sustainable solutions that also enhance 
quality, we must continue to reform and modernize existing 
processes. These ongoing efforts will require focus and 
execution, but I believe we have a strong plan from which to 
move forward.
    Since beginning work at OMB in late June, I have worked 
with the leadership of the reform effort to finalize the plan 
updates to the standard forms that support the security and 
suitability clearance processes. These updates will support 
better alignment between security and suitability processes and 
thus drive greater efficiencies and higher quality for both.
    Upon review, we determined that certain suitability 
positions would not require investigations as detailed as the 
security investigations with which they had been aligned under 
the original plan. As a result of this determination, it is 
necessary to modify the underlying investigative standards and 
make the appropriate changes to the appropriate forms, Standard 
Forms 85 and 86.
    I am pleased to report that I expect the revised Standard 
Form 86, which is used in national security investigations, 
will be available for public comment by the end of this month. 
And following a review of any comments received, we will make 
final revisions to the Federal Investigative Standards. We will 
make any changes to our overall development and implementation 
schedule as a result of these changes. However, I remain 
committed and confident that the reforms will be substantially 
operational across the Federal Government by the end of 
calendar year 2010.
    Later this month, in my role as Chairman, I will lead a 
meeting of the Performance and Accountability Council to 
underscore the importance of this effort, reinvigorate 
leadership among participating agencies, and reinforce the 
close partnership necessary between the executive agents for 
security and suitability, as well as DOD and OMB. From my 
experience in the private sector leading transformational 
projects such as this, the participation of major project 
champions is essential for success.
    With this support, the other keys to successfully driving 
this reform effort include the development of detailed work 
plans among the Joint Reform Team and all partners; 
establishing appropriate metrics for the measurement and 
management of the initiative; identifying problems early and 
thinking creatively about solutions; and holding people 
accountable for outcomes. I will ensure all of these elements 
are in place and will maintain a relentless focus on the 
overarching goals of improved timeliness, reciprocity, and 
    In summary, our shared goal of improving the suitability 
and security clearance process is one of tremendous importance 
to me personally and all the agencies at this table. It will 
remain a high priority for this Administration.
    I also want to recognize the important role that the 
Government Accountability Office plays in the reform 
initiative. I look forward to working with them toward our 
common objective of improved performance and toward the goal of 
removing the DOD security clearance program from their High-
Risk List.
    The advances to date are certainly commendable, but much 
work remains. With the commitment of this cross-agency team and 
the continued support of this Subcommittee, I am confident we 
will meet our goal of improving the timeliness, reciprocity, 
and quality of clearance decisions for the security of the 
American people.
    Senators, we indeed will work very hard. Once again, thank 
you for the opportunity to speak with you today. I would be 
happy to answer any questions you have.
    Senator Akaka. Thank you very much, Director Zients.
    Mr. Zients. Thank you.
    Senator Akaka. Now, we will hear from Director Berry. Will 
you please proceed?

                      PERSONNEL MANAGEMENT

    Mr. Berry. Mr. Chairman and Members of the Subcommittee, 
thank you. And Mr. Chairman, I want to echo sentiments that you 
made in your opening remarks. Ms. Dillaman, who sits behind me, 
is our career Senior Executive who has been working on this 
over the years, and all of the good news that I have to report 
to you today is largely the work from her and her team. She has 
been a phenomenal leader and I want to thank her for her 
incredible efforts on this issue and recognize its importance.
    \1\ The prepared statement of Mr. Berry appears in the Appendix on 
page 35.
    Mr. Chairman, I think it is important to underscore some of 
the numbers. When OPM took over these investigations 5 years 
ago, 90 percent of the cases were taking over 300 days per 
year. In fact, in many cases, approaching 400 days per year. I 
am very proud to come before this Subcommittee today and tell 
you that we are ahead of schedule in meeting the December goal. 
We will reach this year 90 percent of investigations being 
completed in 40 days or less. That is not due until December, 
but we are ahead of schedule. So that is significant progress, 
and that is largely due to Ms. Dillaman's efforts and the 
efforts of her team and all of the folks at this table.
    The other thing that is, I think, important to point out is 
the costs in addressing this over the 5 years have remained 
within the inflation rate, within 1 percent. So there has not 
been a significant increase in costs, we have been able to do 
this responsibly.
    Senator Voinovich, at my confirmation hearing, I promised 
you that I would look into these issues. You raised the forms 
at that point, that there was an issue involving a logjam on 
these form issues. I have to tell you, it has been an honor and 
a pleasure working with David Shedd and General Clapper on that 
issue and I am pleased to report to this Subcommittee today, we 
have reached consensus on the forms, and those are ready to go. 
OMB is in their final review, and I think they will be in print 
and you will see them done. So I am very pleased to report that 
that logjam has been broken.
    It doesn't mean we are all the way there, especially on IT 
and reciprocity, two issues which this Subcommittee has been 
dogging from the beginning.
    On the automation efforts, at least on the investigations 
front, we are well on our way. We are more than halfway there, 
and we fully expect that we will be on schedule in meeting the 
objectives of the plan. Obviously, if this is going to work, we 
have got to be able to make this information accessible 
electronically, and we will not rest until that is done. But 
Ms. Dillaman and her team are well on the way.
    And then the last thing I just want to do is to tip my hat 
again to Mr. Shedd and General Clapper. They have been at this 
issue for many years. They have been persistent in wrestling 
these issues to the ground with us. Our team, working closely 
with theirs, has developed a great comradeship in this effort. 
My pledge to you is I will stay engaged and involved with this, 
with Mr. Zients, General Clapper, and Mr. Shedd, until the job 
is done.
    So we won't rest until the GAO can sit at the end of the 
table and say this has been removed from the high-risk 
category, and I think that is within striking distance. We 
aren't at the goal line yet, but we are within 10 yards. So I 
am very optimistic.
    Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much, Director Berry. That 
has been great news.
    Now, I would like to call on General Clapper for your 


    Mr. Clapper. Mr. Chairman, Senator Voinovich, and Senator 
Burris, the Department of Defense shares the Subcommittee's 
great interest in and focus on security clearance reform. It is 
a top transformation priority for the Secretary and the Deputy 
Secretary of Defense.
    \1\ The joint prepared statement of Mr. Clapper and Mr. Shedd 
appears in the Appendix on page 41.
    I met with the Secretary yesterday and he specifically 
asked me to thank you for your sustained support for clearance 
reform. You can appreciate why we are so vitally interested. 
Our volume of security clearance cases is approximately 1.2 
million at a cost of nearly $1 billion a year.
    While a lot of progress has been made in reducing the 
security clearance backlog through Herculean efforts, it is 
clear that end-to-end transformation of the security clearance 
process is necessary if we are going to meet, and importantly, 
sustain, the 2009 goals required by the Intelligence Reform and 
Terrorism Prevention Act. In other words, said perhaps more 
bluntly, I think we pretty much squeezed the blood out of our 
current turnip and we need to go to a modernized system using 
modern technology and focused investigations on what actually 
produces relevant security data.
    Earlier this year, the Government Accountability Office 
identified several improvements needed in the adjudication of 
Department of Defense security clearances, and I wanted to make 
known that in response, we have taken the following actions.
    First, the Department's Personal Security Research Center, 
which I happened to visit last Thursday, worked with select 
Central Adjudication Facility representatives to develop a 
formal, professional certification program for adjudicators. 
The program includes a governing board charter, business rules, 
and an experience requirements checklist.
    Second, we developed guidance for documenting adjudicative 
rationales. This ensures that adjudicators will more thoroughly 
document relevant information used to make their decisions and 
help promote consistency among our Central Adjudication 
Facilities (CAFs). This tool will be fielded by the end of the 
    Third, we developed an automated tool that gathers specific 
information about incomplete security investigations or 
investigations that do not meet adjudicator needs. By the end 
of this month, this tool will provide visibility to improve the 
investigative process. It will also provide an automated 
request for additional investigative work, which reduces the 
number of forms adjudicators must complete.
    We took another significant step in transforming the 
adjudication process last November when the Army implemented 
electronic adjudication which applies decision support 
technology to assist in the processing of secret cases. The e-
Adjudication System screens all secret-level cases for military 
members and automatically mediates so-called clean cases, which 
are cases with no issues or acceptably minor issues. Since the 
Army fully implemented e-Adjudication earlier this year, almost 
70,000 eligible cases were screened. Nearly one-third of those 
clean cases were automatically adjudicated. This means these 
cases required no human review, which results obviously in 
significant efficiencies.
    Earlier this month, e-Adjudication was expanded to our 
industrial cases, which represents almost 180,000 additional 
cases annually. We expect that a quarter of these will qualify 
for automatic adjudication, illuminating the need for human 
intervention. The Department plans to roll out this capability 
to Air Force and Navy adjudications by the end of the year.
    We plan to co-locate the Department of Defense adjudication 
facilities by 2012 as required by Base Realignment and Closure 
(BRAC). As part of that effort and in anticipation of it, we 
plan to move all adjudicators to a standardized case management 
system. This will enhance efficiency, enable consistency, and 
allow for better performance measurement and management.
    Mr. Chairman, Senator Voinovich, and Senator Burris, thank 
you again for the opportunity to be here today. This concludes 
my remarks, and I look forward to addressing your questions.
    Senator Akaka. Thank you very much, General Clapper, for 
your part of a joint statement with Mr. Shedd.
    And now for the other part of the statement, Mr. Shedd.


    Mr. Shedd. Thank you, Mr. Chairman, Senator Voinovich, 
Senator Burris, for the opportunity to speak to you this 
afternoon. Let me assure you that the goals of this reform, to 
transform and demonstrably improve the effectiveness and 
efficiency of these important processes, remain a high priority 
for the Director of National Intelligence (DNI) and for the 
intelligence community in which I serve.
    \1\ The joint prepared statement of Mr. Clapper and Mr. Shedd 
appears in the Appendix on page 41.
    As Director Dan Blair's Deputy for Policy, Plans, and 
Requirements, the DNI has entrusted in me the implementation of 
these critical reforms. These improvements are badly needed to 
put the best skilled and trusted personnel to work in timely 
fashion in the defense of our Nation, as you have pointed out.
    Our commitment is evident in our assignment of expert 
personnel exclusively to this effort, the dedication of other 
resources, including serving as the host facility for the Joint 
Reform Team in its efforts since the inception.
    Each of us understands the role the Intelligence Reform and 
Terrorism Prevention Act of 2004 played in establishing the 
first ever performance goals for this process. I note also that 
the very same law established the Director of National 
Intelligence and established the Office of the Director of 
National Intelligence, so these goals and other organizational 
changes are linked in fundamental ways.
    That linkage was enhanced in 2008 when the DNI took on the 
responsibilities of the security executive agent, consolidating 
policy and oversight responsibility for clearances in ways both 
necessary and new. It is this perspective on reform across the 
Executive Branch that I am pleased to share with you today, 
along with my colleagues.
    As Mr. Zients has noted, progress has been made, but work 
remains to be done. In order to achieve the transformational 
change we all want, and in order to reach the 2009 IRTPA goals, 
we need to modernize the underlying security clearance 
processes across the Executive Branch. This will require an 
alignment of policies, process, and information technology.
    To that end, our reform plan's key features are collecting 
security-relevant information earlier in the process. Second, 
leveraging the technology to significantly reduce manual 
activity, as General Clapper has pointed out and is already 
well underway at the Department of Defense, by using modern 
data sources, making decisions based on modern analytic methods 
that manage rather than avoid the risk. Third, tailoring field 
investigative activity to better focus on the relevant data 
that has been collected. Fourth, enhancing the alignment of the 
investigation process in subsequent hiring and clearing 
decisions, thereby reducing duplicative work. And finally, 
applying these new capabilities to more frequently assess the 
risk within the populations that already have a security 
    The reform plan published in December 2008, Senator 
Voinovich, that you cited, includes implementation timelines 
intended to make these changes substantially operational across 
the Executive Branch by December 2010. While an Administration 
review of certain elements of the reform plan has resulted in 
some temporary delays to that time table, we remain committed 
to that goal and ask your support and attention in helping us 
achieve it.
    As the review concludes, we look forward to resuming an 
ambitious pace of achievement, resuming activity in a number of 
areas, including additional revisions to the Federal 
Investigative Standards, continuing the development of 
automated record check capabilities, changes to the automated 
systems that will collect the SF-86 forms, information online, 
changes to the automated systems to streamline management for 
future investigations and the adjudication processes, and 
finally, the guidance to enable agencies to execute their own 
implementation plans as needed.
    So last, I note that much work has continued even in the 
Administration's review as it has been undertaken and I 
highlight the work of all my partners as they pursue 
improvements to organizational case management systems, online 
repositories of clearance data, the electronic transmission and 
adjudication of investigative cases, and the additional 
meaningful performance measures to the suite of tools the 
Performance Accountability Council will use to monitor our 
collective progress.
    Chairman Akaka, Senator Voinovich, and Senator Burris, this 
concludes my prepared remarks and I submit this for the 
Subcommittee's record. Thank you very much.
    Senator Akaka. Thank you very much for your statement, Mr. 
    And now, we will receive the testimony of Ms. Farrell.


    Ms. Farrell. Thank you, Mr. Chairman, Senator Voinovich, 
and Senator Burris, for the opportunity to be here today to 
discuss DOD's security clearance process and the government-
wide reform efforts.
    \1\ The prepared statement of Ms. Farrell appears in the Appendix 
on page 48.
    We have testified on clearance-related issues in five prior 
hearings that this Subcommittee has held since January 2005, 
when we first placed DOD's personnel security program, which 
represents the vast majority of clearances adjudicated, on our 
list of high-risk government programs. At that time, DOD was 
experiencing significant backlogs and delays. Over the years, 
we have conducted a broad body of work on clearance issues that 
gives us a unique historical perspective.
    My remarks today draw from two recently issued GAO reports. 
My main message today is that progress has been made to reduce 
delays in granting clearances, but further actions are needed 
to enhance quality and sustain the reform efforts.
    My written statement is divided into three parts. The first 
addresses the progress at reducing delays in DOD's clearances. 
DOD and OPM have made significant and noteworthy progress in 
reducing delays in making clearance decisions and met statutory 
timeliness requirements for DOD's initial clearances completed 
in fiscal year 2008. Currently, 80 percent of initial 
clearances are to be made within 120 days, on average. We found 
that OPM and DOD made initial clearance decisions within 87 
days, on average. This represents significant progress from our 
finding in 2007, when we reported that industry personnel 
waited more than one year, on average, to receive a ``top 
secret'' clearance. Challenges do lie ahead to meet the 
requirement that by December 2009, a plan be implemented in 
which, to the extent practical, 90 percent of initial 
clearances are made within 60 days, on average.
    The second part of my statement addresses opportunities for 
improving the Executive Branch annual reports to Congress. For 
example, the Executive Branch's 2009 report does not reflect 
the full range of time it takes to make all initial clearance 
decisions and has provided little information on quality. Under 
the current requirements, the Executive Branch can exclude the 
slowest 20 percent and then report on the average of the 
remaining differences. Without taking averages or excluding the 
slowest percentages, we analyzed 100 percent of initial 
clearances granted in 2008 and found that 39 percent still took 
more than 120 days. The absence of comprehensive reporting 
means that Congress does not have the information about 
remaining delays that continue to exist, or importantly, about 
the reasons for their occurrences that could help with 
corrective actions.
    With respect to quality, the reports to Congress provide 
little information. However, the most recent report on the 
reform efforts identified quality measures that the Executive 
Branch proposes to collect. We have stated that timeliness 
alone does not provide a complete picture of the clearance 
process. For example, we recently estimated that with respect 
to initial ``top secret'' clearances adjudicated in fiscal year 
2008, documentation was incomplete for most OPM investigative 
    The third part of my written statement addresses the extent 
to which the joint reform efforts reflect key factors for 
reform. For example, initial joint reform efforts reflect key 
factors for organizational transformation that we have 
identified, such as having committed leadership and a dedicated 
implementation team. But the Joint Reform Team's reports do not 
provide a strategic framework that contains important elements 
of a successful transformation, including long-term goals with 
outcome-focused measures, nor do they identify potential 
obstacles to progress and possible remedies. In the absence of 
a strategic framework that is outcome-focused with clearly-
defined performance measures, the Joint Reform Team is not in a 
position to demonstrate to decisionmakers the extent of 
progress it is making toward achieving desired outcomes.
    Let me conclude by noting we are looking forward to working 
with OMB's newly-appointed Deputy Director for Management as he 
oversees the joint reform efforts.
    Mr. Chairman, this concludes my remarks. I will be pleased 
to take questions when the Subcommittee so desires.
    Senator Akaka. Thank you. Thank you very much, Ms. Farrell, 
for your statement.
    Ms. Farrell, I want to ask you a question that I believe 
Senator Voinovich asked last year, and I am sure that we are 
both eager to ask it again, and here is the question: What 
progress has DOD and other security clearance stakeholders made 
in getting this issue off the High-Risk List?
    Ms. Farrell. Yes, Mr. Chairman. The good news is that DOD 
and others are moving in the right direction, as we have just 
discussed. Backlogs and delays in granting clearances is what 
was behind GAO putting DOD on our High-Risk List in 2005, and 
we do see the numbers have moved in the right direction, and 
DOD and OPM are meeting statutory time frames.
    What remains ahead is issues of quality, which we reported 
in our 2007 and 2009 high-risk reports. The good news is, 
although there has been little done in terms of defining 
quality and building that into each step of the security 
process, the Joint Reform Team Subcommittee on Performance 
Measurement and Management has identified some metrics that 
they propose to collect, and those are what we will be watching 
very carefully. Those have not been finalized.
    What we would want to see for the personnel security 
clearance process to get off of the High-Risk List is more 
defined measures of quality, the correction action plan that 
identifies the root causes of problems with quality, what steps 
DOD and the other agencies are going to take to correct those, 
not just in the investigative phase but the adjudicative phase 
and the other phases of the clearance process, along with how 
they plan to measure that effectiveness, and steps toward their 
own measurement toward meeting that end.
    Senator Akaka. Thank you very much, Ms. Farrell.
    I would like to direct this next question to Director 
Zients, though others may want to respond to this question, as 
well. Director Zients, the Joint Reform Team report issued last 
December had specific benchmarks and milestone dates, some of 
which are scheduled for this month. Some delay was no doubt due 
to the transition and changes in leadership. At this point, 
after the transition, how many months has the process fallen 
behind, and when will we see a rebaselining of milestones.
    Mr. Zients. As to the ultimate goal of being done, or 
substantially complete by, I guess it is 14\1/2\ months from 
now, I feel very confident that we are going to make that goal. 
So as we rebaseline, we will start with the answer that we are 
going to be done on schedule. And I think that is doable.
    I think that the place where we need to spend the most time 
rebaselining is around IT. The milestones for IT were generally 
spaced throughout 2010, some in the first half, some in the 
second half, and we are going to have to make sure on the IT 
front that we set new deadlines that allow us to hit the 
ultimate end of next year's timeline, but I think we do have 
some work ahead of us across the next month or two to ensure 
that we rebaseline the IT piece of it.
    Overall, I am confident that we will be where we wanted to 
be at the end of next year. It will be in good shape for your 
retirement, Senator Voinovich, and for removal from the GAO 
High-Risk List in January 2011.
    Senator Akaka. Are there any other comments? Ms. Farrell.
    Ms. Farrell. We would like to see a strategic framework, as 
we noted in our May 2009 report, that outlines very clearly 
what the goal is of the reform effort, along with identifying 
roles, responsibilities, and how progress will be measured. We 
found in the course of our work last year that when we asked 
senior leaders with the reform effort and agency officials 
involved in the clearance progress that the goals were not 
clear. Some referred to the IRTPA requirements with 
reciprocity. Some would refer to timeliness.
    And I do not mean to imply that there are no goals that the 
Joint Reform Team has had. We feel that they have a number of 
reports, the ones that they issued last year, April, as well as 
in December, as well as the IT strategy and other memorandum 
that present certain aspects of the goals. But if those goals 
were brought together, very clearly agreed to, and there was a 
consensus by those who are at this table, that is the goal of 
this effort and who is responsible, especially for the IT 
strategy, that would help sustain the momentum of the reform 
effort and get it done.
    Senator Akaka. Director Zients, as I said at your 
confirmation hearing, security clearance reform has been an 
important oversight priority for this Subcommittee. Your 
predecessor, Clay Johnson, made it one of his highest 
priorities, as well, and your position was designated as head 
of the Performance Accountability Council (PAC) for reforming 
clearances. You were just confirmed in June and you have a lot 
on your plate at OMB, including additional responsibilities as 
the first Chief Performance Officer for the Federal Government.
    In your role as head of the PAC, how do you plan to 
prioritize this important issue and provide sustained 
leadership to ensure that this effort keeps moving forward?
    Mr. Zients. This is absolutely a top priority for me. I 
actually am lucky as to the point in the process that I am 
coming on board in that this team and the group of career folks 
behind us have really not only made a ton of progress, but have 
teed up a plan that I believe is a good plan, a detailed plan, 
and one that is doable.
    So having been--as I mentioned in my opening remarks--part 
of these larger transformational efforts, there is a lot of 
work ahead, but there is a clear line between where we are 
today and where we need to be 14\1/2\ month from now, and I 
pledge to dedicate the time and the resources and the attention 
to make sure that we get there. But with this team, I feel very 
confident that we can get it done and I commit to doing so.
    Senator Akaka. My time has expired. We will have a second 
round. Senator Voinovich, your questions?
    Senator Voinovich. First of all, I am really impressed with 
the testimony that I have heard today. There seems to be an 
urgency and seriousness about this issue and you seem to 
portray that. I think it is worthy, again, to thank Ms. 
Dillaman for the good job that she has done. The folks at the 
table are only as good as the team that sits behind them, and 
those of you that have had something to do with this, we 
appreciate the effort that you have made.
    One of the questions I was going to ask is what are the 
largest risks to successfully implementing the Intelligence 
Reform and Terrorism Prevention Act's security clearance reform 
mandates, and I think, Ms. Farrell, you have kind of laid out 
in your report some of your concerns about what it is that 
could stand in the way of moving forward. Is it possible that 
the team could go through those specific things that have been 
mentioned in the GAO report and come back to us and let us 
know, frankly, whether or not you think they are as severe as 
they have been represented to be and what you intend to do to 
move on those issues? It certainly would be comforting to know 
whether you agree with what GAO has said and what priorities 
you are going to set in order to make sure that those things 
are taken care of. Do you think you can do that?
    Mr. Zients. Yes.
    Senator Voinovich. I would be appreciative.
    The other question I have, a big question, is about the 
resources that you have available to you. I am very concerned 
when you start talking about technology, you are talking about 
spending some money. And in your respective budgets, has money 
been allocated--I am on Appropriations now--for you to do that 
portion of the assignment?
    Mr. Zients. Why don't I start and then others can fill in. 
We believe, as an overall effort, yes, that within the OPM 
budget and the DOD budget, we have sufficient funds in the 
budget to do the technology piece. We also need to make sure 
that we are interfacing with the agencies to ensure that they 
understand the technology implications for their systems and 
that their systems are modernized and ready to accept, not in 
any way to underestimate the IT piece, because I do think it is 
one of the areas we have to pay special attention to. But this 
is not very difficult, complex IT applications. This is on an 
IT scale difficult, but not very difficult.
    So I believe, bottom line, that we have the budgets and the 
resources, but I will defer to my colleagues, too, if they want 
to add anything here.
    Mr. Berry. Our IT piece is really the investigations 
portion of it, and the good news is we are halfway through that 
project. We have been through the rate increases and have been 
accumulating the funds necessary to complete that project. We 
are at a place where we believe we can do that. We are on a 
reimbursable basis, if you will, as we do the investigations.
    And so this year, I am very pleased to announce, and I 
don't know if Mr. Shedd and General Clapper have heard this 
yet, but there won't be any rate increase for investigations 
from OPM this year. So we will be holding our rates at what 
they were last year, and those levels will allow us to maintain 
what we need to do to finish the IT upgrades that are necessary 
on the investigations piece of this.
    Now, obviously, there is more work on the adjudication side 
that will have to be done, as well, but I think in terms of the 
investigations piece, we are well on track.
    Senator Voinovich. OK. You have got that portion of it. I 
just assume that the plan to go forward with the IT part of 
this, the technology you are going to use, you have already 
identified it, correct?
    Mr. Berry. Yes.
    Senator Voinovich. OK. And you have the money to do it.
    General Clapper, your shop is going to have to interface 
with OMB and OPM, and the question I have for you is have you 
been spending the time to talk about how the two of them work 
together, and do you have the wherewithal to take care of your 
end of the bargain?
    Mr. Clapper. Yes, sir, I believe we do. This is not new and 
unknown. I don't think we have spent a lot of time on research 
and development (R&D). It is largely a question of executing 
what we already know we have to do. And I can assure you that, 
based on the interest of both the Secretary and the Deputy, if 
we need more money, we can get it, because of their high 
interest in this.
    I guess I would be remiss if I didn't take mild exception 
to Ms. Farrell's commentary. Obviously, where you stand depends 
on where you sit. But having worked this pretty hard for the 
time I have been in office since April 2007, I think we have 
made substantial progress. I do think we have a strategy, as 
represented by the report that was submitted in December, and I 
think we are pretty well along it. I tried to outline in my 
previous remarks some additional things that the Department is 
doing, even during this pause, to address some of the issues 
that the GAO has appropriately raised.
    One of the major things here, of course, to Mr. Berry's 
comment, is a major feature of what we want to do in the reform 
effort is not to do so many investigations, which has huge 
impacts not only on the money that we have to convey to OPM for 
doing investigations, but in the interest of saving time and 
efficiency by capitalizing on what is available to us in 
today's IT.
    Senator Voinovich. And I assume that there is no problem 
with human capital? You have the people that you need to get 
the job done, that is not a problem?
    Mr. Clapper. I don't think so, sir. That is one thing that 
DOD has, is lots of people. So yes, sir.
    Senator Voinovich. Ms. Farrell, would you agree with that?
    Ms. Farrell. Well, human capital hasn't been identified as 
an issue right now. It has in the past, as you know, with the 
investigations, and OPM did make great progress in building up 
that capacity.
    But regarding the clear mission and goals, during our 
review, the last one, looking at the Joint Reform Team's effort 
and what is the purpose and what are they trying to accomplish, 
what we found was differences of opinion about the overall 
mission of improving the security process. We were referred to 
the report that General Clapper just referred to now. We were 
also referred to a 2007 memorandum between DOD and ODNI, which 
is not publicly distributed, in the comments on our report 
regarding what the mission is of the reform effort.
    Again, there are aspects and principles in the three key 
reports that the Joint Reform Team has issued in the last year 
and a half, as well as other memorandum. So we are not saying 
that there is not direction. We are saying if there was a very 
clear road map with a very defined mission and that these 
principles that are reflected in the other documents were 
linked to that, it would help move the reform effort forward 
and it would make it much more easier to tell what progress 
they have made. Are they halfway there? Are they 75 percent of 
the way there? Are they 99 percent there? We just can't tell 
right now without that strategic framework in place.
    Senator Voinovich. Mr. Chairman, could I just follow up on 
that? This is kind of repetitious of many of these hearings 
that we have had over the years. The Government Accountability 
Office has some ideas, suggestions that aren't acted on. I know 
we have such a problem with the Department of Homeland Security 
(DHS). If you recall, we are still trying to work out some 
metrics that we can look at to determine whether or not the 
changes that are supposed to be made are being made.
    So I would urge you, again, GAO has made some suggestions 
and has some criticisms, constructive, and I think that you 
should all sit down, or have somebody really spend some time on 
this to work this thing out in terms of the differences of 
opinion, to see if you can get some kind of consensus because 
the bottom line is after this is all over and done with, we are 
going to look to GAO to find out whether or not they think this 
thing has gotten done. And the sooner you get at it, the better 
it will be for everyone.
    So at least you all agree that, pretty much--I mean, I am 
not saying that there won't be some differences, there 
certainly will be--but I think, overall, you can agree that 
these are the metrics that ought to be looked at and this is 
what we expect to be judged on, and then you carry the ball 
from there so we don't end up 8 months from now saying, well, 
that is not what we understood the situation to be. I would be 
very grateful if you would do that, and I would like to see 
that within a reasonable time, Mr. Chairman, so that we can see 
that they have gotten together and they are on relatively the 
same page.
    Senator Akaka. Thank you, Senator Voinovich. Senator 
Burris, your questions.
    Senator Burris. Thank you, Mr. Chairman, and I would just 
like to commend the Subcommittee and their staff for bringing 
good news. I mean, I want to echo what Senator Voinovich has 
said. In my short time here in the Senate, I hear reports or 
testimony from witnesses and there are always problems. But I 
am really impressed with the progress that has been made here, 
so I urge you to keep up the good work and let us keep moving 
    Ms. Farrell, in your written testimony, you stated that the 
greater attention to quality would increase the instance of 
reciprocity, and what circumstances currently allow for 
interagency reciprocity? I have a couple more questions in that 
regard, too. What does a process of moving a clearance from one 
agency to the other agency involve? And second, what factors 
prevent interagency reciprocity? So you may want to try your 
best at that, or whoever on the panel can best help me out on 
this reciprocity question.
    Ms. Farrell. Certainly. During the course of our body of 
work on the personal security clearance process, the quality of 
investigations has arisen as a possible underlying reason for 
why there is not this sharing of clearances between or among 
agencies, and there have been steps toward using the same 
common guidelines for investigations as well as for 
adjudications to move toward that end.
    But reciprocity is one of the issues that is listed in the 
IRTPA that has not been addressed yet. As we talked about, 
there has been progress with timeliness. There has been 
progress in other areas. But reciprocity is one that is still 
under evaluation by the Joint Reform Team and is the type of 
issue that we would like to see more fully addressed in a 
strategic framework.
    Senator Burris. OK. Mr. Berry.
    Mr. Berry. Thank you, Senator. If I could, I agree with Ms. 
Farrell, and I think all of us would, that is one of the 
remaining poles in the tent we have got to get up. I mean, we 
have to do better on reciprocity, and so we are all wrestling 
with that as to assuring that gets done. And I think you have 
hit on the key to that, and that is the quality of the 
    One of the things I want to recognize is that we also share 
GAO's emphasis on this, that this is not one where we can be 
right 98 percent of the time. We have to be right 100 percent 
of the time.
    Senator Burris. Sure.
    Mr. Berry. One mistake could cause untold damages. And so 
we have got to nail this. We have put in place some things this 
year, and I think it is good for the Subcommittee to be aware 
of this.
    We have been working with the Performance Accountability 
Council. One of the things I set up with Ms. Dillaman is a 
hotline that the adjudicators can use to get their questions 
resolved. We do the investigations and then it goes to the 
agencies, and then they have people who take our investigation, 
look through the information, and decide whether this is the 
quality person that they want to assign the level of clearance 
that is being sought, and whether the case has been made that 
this person is worthy of that. Well, the adjudication is not 
our call, it is the agency's call. And we have created a 
hotline so that, if at any point they have any questions about 
information in the investigation, their call goes directly to 
Ms. Dillaman's office and they can have direct access to Ms. 
Dillaman so that we can get to the bottom of this.
    And, Ms. Farrell, you did identify that there was some 
missed information in a number of the cases that have been 
done. I think it is important for the Subcommittee to 
understand that in context.
    If somebody, for example, is on military duty in Iraq or 
one of a subject's references is on duty in Iraq, we would make 
all due efforts to try to get in touch with that person. But 
rather than hold up the investigation, we would see if there 
were other ways that we could verify the information. So, for 
example, sometimes when one neighbor might not be home, we will 
see other neighbors, or maybe two other neighbors in order to 
justify moving forward and establishing a comfort level with 
that information.
    And so I don't want to give the impression to the 
Subcommittee that we do not have a strong emphasis on quality. 
We do. And in all of the cases that GAO identified where there 
was missing information, we went back and reinvestigated all of 
those. None of those resulted in a negative determination 
through the adjudication process.
    We do emphasize this. We do try to rate 100 percent. But, 
as you are working these, there does need to be some 
flexibility with the investigator. We hire professionals and we 
do give them some discretion. We allow them to use their 
    I think as we lift that standard and assure all of the 
agencies about the quality of the investigation, the goal of 
reciprocity is going to be reachable, and I think that is where 
people will start to trust sharing the information across the 
    I apologize for the length of that, but I think that was 
important to clarify.
    Senator Burris. Mr. Berry, I am sitting here with a little 
concern in terms of what factors are there to prevent 
reciprocity from being granted? I mean, is it the level of the 
position that is being applied for in the agency? If they do 
the investigation, they do the adjudication, does DOD have a 
different--I think a ``top secret'' security clearance would be 
a ``top secret'' security clearance.
    Mr. Berry. Reciprocity has three levels to it, and I will 
defer to Mr. Shedd and General Clapper, who have been working 
on this a lot longer. But sometimes someone will come in for a 
``secret'' clearance and then seek an upgrade in the clearance 
level. Well, you can't give the ``top secret'' clearance based 
only on the investigation at the ``secret'' level.
    Senator Burris. That is correct.
    Mr. Berry. We have to go back and do more rigorous 
investigation. But what we have been trying to do is to 
standardize all the questions so that we don't have to go back 
and do the work that was done on the ``secret clearance.'' We 
can just do the difference, and that is what we are striving to 
do, is to achieve a consistency there so that, as people move 
around the government and as their security clearances change, 
agencies will recognize the work that has been done beforehand 
so that we don't have to start over from ground zero every 
time, as has been the case in the past.
    Senator Burris. Mr. Clapper, can you comment on that 
    Mr. Clapper. Well, I think one of the things that 
contributes to obstacles to reciprocity has to do with 
transparency of the data, whether investigative or 
adjudicative. So to the extent that we can promote through 
automation so that appropriate officials either within, in our 
case, the Department of Defense or with other departments of 
the government can have access uniformly and consistently to 
the basic investigative data if they require it or factors used 
in adjudications, that those who are appropriate for that would 
have uniform access to it so that if they have a question about 
someone, they can go to the original source data.
    Senator Burris. Are you saying there is a privacy question 
here in reference to the----
    Mr. Clapper. Well, I don't think that enters into it 
necessarily, because once you--if you agree to enter into a 
position that requires a clearance----
    Senator Burris. We have got to know everything about you.
    Mr. Clapper [continuing]. Then you sort of, having been one 
of those people for a long time, then you give that up.
    Senator Burris. Sure. Thank you, Mr. Chairman. If I can 
stay, I might have a second round.
    Senator Akaka. Thank you very much for your first round 
    Director Berry, the Intelligence Reform Act of 2004 
requires, and you mentioned this, that OPM conduct 90 percent 
of its investigations in an average of 40 days by December 
2009. According to your testimony, you are on track to meet or 
exceed this benchmark, and I want to commend you and the agency 
and all of those who had a part in this for making remarkable 
progress on completing security clearance investigations as 
promptly as you have.
    GAO's written testimony states that in 2008, the slowest 11 
percent of initial clearance decisions still took more than 300 
days to complete. Can you tell me about why some investigations 
still take a long time to complete and what is being done to 
speed the most difficult investigations?
    Mr. Berry. Mr. Chairman, I think that is a great question, 
and I think it is one that counsels caution for all of us. I 
think that is why the Subcommittee, and the GAO, and we use 
that standard of 90 percent, because we are not giving out 
drivers' licenses here. As you are well aware, we are giving 
out, in some cases, the highest security clearances possible.
    There are some people who will not successfully pass. And 
if we cannot verify the information, and if we cannot get to 
the bottom of it, and in some cases it is hard to do that, we 
can't go forward. Now, recognizing that in some cases that also 
denies someone a position if they are already in the 
government, we have got to make every effort.
    But I think we need to recognize in our performance 
standards, that if there are problems, we must take the time to 
do it right. I think we always need to be looking at that pool 
of cases and making sure that it is legitimate, that the delay 
is real and justified. But we do need to recognize there will 
probably always be some pool of cases like that. So I don't 
want to mislead you.
    That being said, we still need to watch that very closely, 
and it has to be, I think, one of the performance metrics that 
GAO, OMB, and OPM are going to have to watch.
    Senator Akaka. Are there any other comments? Ms. Farrell.
    Ms. Farrell. Well, we recognize that some clearances are 
going to take longer than 120 days, or come December, longer 
than the 60 days. The reason we were focusing attention on the 
slowest 10 percent or 20 percent is that there is currently not 
any reporting of that to monitor to see what is going on with 
100 percent of the clearances, not necessarily that 100 percent 
of the clearances will have been completed in 120 or 60 days, 
but what is going on with that pool that is not meeting it. And 
we feel by reporting the total 100 percent, it would bring 
visibility and thus maybe corrective action, if necessary.
    Perhaps some of these cases are going to drag on and there 
will be no clearance granted for the final result. But until 
you determine what is going on with that population that is 
taking longer than 120 and whether corrective action be done, 
it is an unknown.
    Mr. Berry. Mr. Chairman, if I could, I will pledge that we 
will report on those cases. I believe it is important. The 
transparency, as General Clapper has mentioned, is critical, we 
must be held accountable on this. If we are not reporting 
already, as the Director of OPM, my pledge to this Subcommittee 
is that we will report on it. So we will develop the metric 
necessary to get that job done.
    Senator Akaka. Thank you very much for that.
    Director Zients, you testified that the interagency review 
process determined that few changes would be made in plans for 
clearance reform. However, you did say that you plan to 
reexamine overlaps between suitability and security clearance 
investigations. Can you discuss this further and describe how 
this is different from the original reform plan?
    Mr. Zients. Yes. The original reform plan envisioned three 
tiers of investigation based on increasing levels of risk. So 
the bottom tier, all exclusively around suitability, is the 
Form 85, and the topmost tier around national security and the 
Form 86.
    It envisioned a middle tier that I think, upon review, was 
too broad in that it included, as an example, an HR executive 
at an agency and a Border Patrol who carries a gun all in the 
same tier. And what we have found is that it probably is better 
to break that middle tier into two tiers which will allow for a 
better and more efficient process. And that determination to 
break the middle tier into two has led to some changes to the 
Form 86.
    Senator Voinovich, you had asked about that up front. That 
will enter a 30-day public comment stage by the end of the 
month. And therefore, once we incorporate those comments, we 
should be done with that, certainly by the end of this year.
    So that we have largely completed the review, it will 
result in two tiers rather than one in the middle, and I think, 
ultimately, a more effective and more efficient process that 
will also allow for better reciprocity across the system.
    Senator Akaka. Secretary Shedd, last December, ODNI, along 
with OPM, updated the Federal Investigative Standards for 
Security Clearance Investigations. These standards had not been 
updated since 1995 and little has been said about the updates. 
Can you describe why the update was necessary and how the 
standards changed?
    Mr. Shedd. Mr. Chairman, the reason for looking at the 
standards was to align them into a process or a system of risk 
management into three tiers, in that the top secret SCI, the 
``sensitive compartmented information'' clearance being tier 
three, the lowest level being tier one for general access, 
below ``confidential'' level, and the middle level, tier two, 
being ``confidential secret'' level. This was done in such a 
way that as we moved forward with an E process (and what I will 
term to be the flagging of issues of concern that would require 
additional investigation), the process, of the standards for 
leading to that built off of the new SF-86, would kick in and 
be brought to bear on that investigation.
    As General Clapper has said, one of the big objectives is 
to lower, or minimize, the amount of time spent on clean cases, 
those cases where there is no issue that has been identified.
    At the Top Secret Sensitive Compartmental Information (TS-
SCI) level, an interview of that individual, that applicant 
requiring a TS-SCI will still be required. However, much 
earlier in the process because of this flagging system off of 
the E-based identification of the data that is discovered on 
the individual, you can go to a much more targeted way of doing 
that investigation and thereby cutting down the number of days 
that leads to the clearance and the adjudication of that 
clearance. So that was the purpose behind that.
    We will now go back to that with whatever realignment 
occurs with OPM and under OMB's leadership and relook at that 
if, in fact, it impacts on the standards that were issued in 
2008 under Director McConnell.
    Senator Akaka. Thank you very much.
    Mr. Shedd. You are welcome.
    Senator Akaka. Senator Voinovich.
    Senator Voinovich. Aren't there still some agencies that do 
their own clearance?
    Mr. Shedd. Yes, sir.
    Senator Voinovich. So they are not in this main area? In 
other words, they are exempt from this whole process. They do 
their own thing----
    Mr. Shedd. No. They fall under the direction of the DNI in 
terms of the standards for doing it, even though they do their 
own investigations and don't fall to OPM. So, for example, the 
National Reconnaissance Office does its own investigations, but 
they must follow the process laid out----
    Senator Voinovich. The guidelines. But the fact of the 
matter is that in certain areas, they do their own 
investigations so that----
    Mr. Shedd. Correct.
    Senator Voinovich [continuing]. The kind of investigations 
that the OPM does--there is a kind of standard investigation of 
just generally people that want to come into the Federal 
Government at a certain level of security clearance.
    Mr. Shedd. That is correct, sir.
    Senator Voinovich. And there is a consensus about the 
information that you need to have investigated so that you get 
to that level.
    Mr. Shedd. That is correct, and I might add, they rely on 
the standards for suitability that are published or issued by 
the Office of Personnel Management, as well. So they don't get 
to go outside of the suitability part of that security 
clearance data collection.
    Mr. Zients. I think we are talking about roughly 10 
percent, is that correct?
    Mr. Shedd. It is closer to 5 to 7 percent, total, for the 
intelligence community (IC), for about a total of 82,000 cases 
per year.
    Senator Voinovich. So the majority of them go through the 
regular system----
    Mr. Shedd. Yes. Correct.
    Senator Voinovich [continuing]. In terms of the 
investigation. I recall when we got into this whole 
investigation that the people that were doing it were doing it 
on a part-time basis. Obviously, you have got a new system and 
more trained people so that the quality overall, would you say, 
General Clapper, is better than what it was 2 or 3 years ago?
    Mr. Clapper. I think that is a fair statement, yes, sir.
    Mr. Berry. Senator, if I could, I would just like to point 
out the scale. As Mr. Shedd mentioned, OPM is doing, in terms 
of investigations, 2.2 million investigations a year, and that 
is not just for suitability. We do suitability, secret, top 
secret, and SCI investigation levels. So we meet that standard 
throughout. As was mentioned, there is about 8 percent still 
outside that, but----
    Senator Voinovich. You have different standards for 
investigations depending on what the call for is with the 
    Mr. Berry. Yes, sir.
    Senator Voinovich [continuing]. And you have the people on 
board that can review those investigations to make sure that 
they meet high standards, so once you send them over to the 
agency, the agency doesn't look at them and say, we don't want 
    How often, General Clapper, do you have to go back to them 
and say, you have got to do some more work?
    Mr. Clapper. I don't know the exact number, but it is 
relatively small, but I would have to get the exact number of 
    Mr. Zients. Across the system, it is less than 1 percent.
    Senator Voinovich. I didn't hear you.
    Mr. Berry. Less than 1 percent, Senator.
    Mr. Zients. Less than 1 percent are returned by the agency 
to the investigative process. And that doesn't mean that there 
was an error. It might mean that sometimes a return is--you 
only talked to four neighbors, because this is important----
    Senator Voinovich. Oh, I have to tell you, 1 percent, it is 
    Is this review of the SF-86 that you are doing pretty much 
over? In other words, the security clearance reform initiative 
of the former Administration, you have kind of looked that over 
and you have got some changes that you want to make and now the 
procedure is you have to send it out for comment? Is that where 
we are at right now?
    Mr. Zients. Yes.
    Senator Voinovich. When do you think that will get done?
    Mr. Zients. By the end of the month, we hope to have the 
Form 86 out for public comment. We are going to do a 30-day 
public comment period, and then we need to absorb those 
comments, so certainly by the end of the calendar year.
    Senator Voinovich. Yes. I would be interested, one of the 
things that many of us were concerned about is whether or not 
the DNI could reconcile some of the differences between the 
agencies in terms of reciprocity. Has that been pretty well 
worked out? Are there any hang-ups yet there?
    Mr. Shedd. There are some hang-ups because bureaucracies 
resist being told to accept something that either for them is 
not transparent: Fully transparent in terms of the reciprocity, 
the adjudication and so forth. But within the intelligence 
community, tremendous progress has been made in a system called 
Scattered Castles, which is a repository, then, of all the 
security clearances of the individuals.
    We need to modernize that database with additional 
information to further increase the level of confidence of the 
intelligence community's leadership confidence that when they 
are getting someone who is transferring from one particular 
agency in the intelligence community to another one, that all 
the information that General Clapper talked about is available 
to the receiving end for the individual who doesn't belong to 
that agency.
    Senator Voinovich. And that understanding among the 
agencies is part of this review that you are doing?
    Mr. Zients. Yes. I believe that the reciprocity issue is 
around standardization and consistency, and therefore is right 
at the heart of everything that we are doing here. We are using 
IT and process reengineering to simplify this process and make 
it more standard, and that has a big advantage when it comes to 
reciprocity because of the cultural challenges that Mr. Shedd 
is outlining. Historically, everybody has done it a different 
way, and as we get that consistency and standardization, I 
believe that, coupled with making the information available and 
transparent, which we are making a lot of progress on, will 
lead to big gains in reciprocity, because I think so far, we 
haven't experienced those, but so far, we haven't completed the 
effort around standardization and consistency. And once we do, 
reciprocity will follow.
    Mr. Shedd. Senator, I----
    Senator Voinovich. I am sure this is something you are 
going to--go ahead.
    Mr. Shedd. I wanted to add one other perspective. Something 
that is of high concern to the DNI is that the agency heads in 
the intelligence community not add additional layers that 
amount to being barriers even beyond the reciprocity on the 
security clearance basis alone. In other words, standards for 
the suitability and so forth that don't ultimately act as a 
deterrent outright from a transfer from one agency to another 
because they are added on top of the security clearance issue. 
And so that is preeminent in Director Blair's mind and 
something that we are addressing by way of policy.
    Senator Voinovich. OK. So you think you are making 
progress, and a year from now, when people feel a lot better, 
with the help of the IT and other things, people will be 
comforted because of the quality of the information and be much 
more willing to rely upon it in terms of their concerns?
    Mr. Shedd. Yes, combined with policies that make it very 
clear what the terms are under which that transfer occurs, as 
    Senator Voinovich. Thank you.
    Senator Akaka. Thank you. Senator Burris.
    Senator Burris. Thank you, Mr. Chairman.
    I am a little concerned about, are there statistics on how 
many apply for, let us say, a top secret security clearance and 
is, in fact, rejected? Now, there is an investigation and then 
it goes back to the agency for adjudication. Who does the 
rejection? What, then, is the process of this applicant--is it 
follow-up steps to attempt to try to correct situations, or 
what generally happens if there is--how many are rejected and 
what happens?
    Mr. Clapper. I, again, don't have the exact number of how 
many actually fail to get a clearance for one reason or 
another. I will tell you, though, that either in the case of an 
initial clearance or it probably happens more often of people 
who are already cleared and then have an update periodically, 
the requirement now is at least every 5 years, and if 
derogatory information turns up in the course of either the 
initial or a subsequent update, there are appeal processes, at 
least within the Department of Defense. There is a board that 
is overseen by the Office of General Counsel that allows due 
process for such appeals. They can be quite drawn out and quite 
extensive because there is a balance here between national 
security and then deference to people's rights. I can get you 
the numbers, say, for a typical year----
    Senator Burris. Just a guesstimate.
    Mr. Clapper. Well, I would say it is, for the whole 
Department, which would include the four intelligence agencies 
that are embedded in the Department and the four services, I 
would guess on the order of 200 or 300, maybe, and that is out 
of thousands of----
    Senator Burris. Is it a very small number?
    Mr. Clapper. Yes. An even smaller number that actually goes 
through an appeal process.
    Senator Burris. Very good. And this is probably for Mr. 
Berry. The investigators, in your assignment of their 
investigating of a person, are they assigned to the same agency 
or do they do various agencies? And if so, if they do, then why 
not try to have them to do more than one agency? What is your 
routine process for an investigator?
    Mr. Berry. Senator, if I could, we can respond to that in 
more detail for the record for you, but we have approximately 
2,000 Federal Government employees and then a contract force 
about double that size in terms of investigators who are 
handling cases. And so it is quite a complicated operation to 
manage, especially to make sure there is no backlog, which is 
where we are right now, and to meet these timelines, as you can 
    Senator Burris. You said you are letting contracts out to 
private sources to do the investigations?
    Mr. Berry. Absolutely. Part of this job is managed with 
private sector employees, and they are--it is something we 
watch very carefully and we work in hand----
    Senator Burris. Are we investigating the investigators in 
the private sector?
    Mr. Berry. Absolutely. All of our investigators have to 
have clearances before they are involved in the investigations. 
We can get you more information about the details of that----
    Senator Burris. Do you get consistency, then, in their 
reports? I mean, I am seeing that if a person is assigned to do 
the Defense Department, Health and Human Services (HHS), or the 
White House, and they know the routine, if you switch them off 
somewhere else, it might delay the process.
    Mr. Berry. It goes to both making sure that all of the 
investigators are trained, that their systems are in place--and 
the transparency of the data. At the end of the day, the 
investigation we are providing to the client; OPM makes no 
determinations on the clearance level.
    Senator Burris. Right.
    Mr. Berry. That is done by someone--so, essentially what we 
are doing is----
    Senator Burris. Collecting the data.
    Mr. Berry [continuing]. Collecting the data and making sure 
that data is accurate, and then transferring that to the 
client, who then makes the determination, or adjudication, 
which is the term of art. So there is that consistency. In 
other words, the client is used to it and knows what data to 
expect, and if something, for example, is missing, the 
explanation is fully transparent and made available so that the 
client has the ability to say, no, we want you to go back and 
do something else.
    Mr. Clapper. Let me just reiterate or emphasize a point 
made here, is that regardless of who does the investigation, 
whether it is in the case of the intelligence agencies doing 
their own or OPM doing the investigations--and by far the 
lion's share of the investigations particularly for all of the 
services, are done by OPM--they are operating using the same 
investigative standards. So there is consistency across the 
board in terms of how these investigations are done, be they by 
OPM or one of the agencies, at least the four agencies in DOD.
    Senator Burris. Ms. Farrell, are there any other agencies 
that are on your list other than DOD that you are having 
problems with?
    Ms. Farrell. Well, when we first put DOD on the list, DOD 
was responsible for the investigations as well as the 
adjudications, and I think the Chairman said it best. The 
personnel security process has to be looked at now through a 
government-wide lens. There are many players besides DOD. The 
roles and responsibilities have changed, as evidenced by the 
Performance Accountability Council's involvement. So it is 
beyond DOD at this point in terms of the personnel security 
clearance process.
    Senator Burris. Well, I was talking about other agencies. 
Do you have HHS?
    Ms. Farrell. Are there other agencies that we have concerns 
    Senator Burris. Yes.
    Ms. Farrell. It is more the concern of the roles and 
responsibilities of who is doing the investigations and who is 
doing the adjudications. Our focus has been on DOD and the 
reform efforts. We have met with other agencies, at the 
Department of Homeland Security, for example, and others that 
issue clearances and have heard concerns expressed about the 
sharing of investigations, as well as what we started talking 
about earlier, the role and the mission of the Joint Reform 
Team to improve the process. So we have heard from other 
agencies' concerns, but it is limited. Does that answer your 
question, sir?
    Senator Burris. There is a limited number. I mean, you 
don't have a watch list that you are looking at with reference 
to some of the other agencies that might not be following 
through or having a major backlog?
    Ms. Farrell. We are not aware of backlogs with other 
agencies, no, sir.
    Senator Burris. Thank you very much. Thank you, Mr. 
    Senator Akaka. Thank you very much, Senator Burris. I will 
have a third round here, but thank you for your questions.
    Director Berry, I want to follow up on some information 
that Mr. Zients mentioned about SF-85 and 86. While updating 
the forms is important, the goal is to have applicants use an 
electronic application, usually e-QIP. Has OPM taken steps to 
update e-QIP and the Personal Investigations Processing System 
(PIPS) system to accommodate the new forms as soon as they are 
    Mr. Berry. Senator, we are at a place now where 97 percent 
of that 2.2 million investigations are using that electronic 
system. So we are getting close to the finish line on that. And 
yes, those forms will be updated once--obviously, not until it 
has made it through the public process--but we will be ready to 
adjust and can modify that system to accommodate that once that 
process is completed.
    Senator Akaka. General Clapper, you testified that the 
Department of Defense has begun to use electronic automatic 
adjudication of some investigation files that were not flagged 
with any outstanding issues. According to the Joint Reform Team 
benchmarks, this is set to be more broadly deployed. What 
quality checks or audits has the Department conducted in order 
to validate that the electronic adjudications are as reliable 
as adjudications completed by a DOD employee?
    Mr. Clapper. I know the research that we have done, which I 
think is crucial to the whole reform effort, in which we have 
compared what would be revealed through automatic records 
checks versus what was on cases that have already been 
adjudicated under the old system, and there is a very close 
correlation. In other words, they are congruent. And we believe 
that the sample used was statistically reliable as done by the 
Personnel Security Research Center (PERSEREC) to make that 
case, that we can rely on automatic records checks. And that, 
of course, is a major feature of what was intended with the 
overall personnel reform.
    I am told that we did a 100 percent audit for the Army 
pilot that was run between November 2008 and February 2009, and 
we are now doing on a regular basis a 10 percent audit. Of 
course, I would just repeat what I said earlier in my opening 
remarks about the tools that we are building, one to assess the 
completeness and accuracy of investigatory data, a tool called 
RAISE, and then another one called RADAR, which we are in the 
process of fielding, which will help assess the quality and 
rationale for adjudications.
    Senator Akaka. And I should have mentioned, I guess you can 
call it clean cases, where there are is no negative 
investigative information.
    Mr. Clapper. In the case of the secret clearances done for 
military personnel. That is right.
    Senator Akaka. Thank you.
    Director Berry, the Intelligence Reform Act called on 
agencies to use an electronic form to apply for a security 
clearance. I understand that currently e-QIP is the only format 
OPM will accept from agencies submitting the electronic 
investigation requests. Would OPM be open to allowing agencies 
to use third-party electronic applications that conform with 
OPM submission standards rather than having e-QIP as the sole 
and only option?
    Mr. Berry. Senator, I think we need to reach the targets 
that we have set. I think bringing in new players, new systems 
at this point in time could greatly complicate the timelines 
and our ability to reach our goals. I think you always need to 
be thinking ahead and looking more broadly, but at this point 
in time, I think we need to maintain that centrality so that we 
can have the consistency and have the ability to have the 
transparency that customers should demand and should require. 
So my sense would be, this is not the time to try to expand 
that, sir.
    Mr. Clapper. If I might, Senator, I would just strongly 
endorse what Mr. Berry just said. From a DOD perspective, as 
large as we are and as globally deployed as we are, I think it 
is very important that we hew to the tenet of consistency here 
in both the applications and all the way through the process. 
So I would strongly endorse what Mr. Berry said.
    Senator Akaka. Are there any other comments on this 
particular question?
    [No response.]
    Senator Akaka. I have specific questions about the status 
of several information technology systems, and I will just tell 
you that I will submit it for the record to all of you.
    Your responses have been really helpful and all of you 
should be commended for the progress that we have made. I want 
to thank all the witnesses for appearing today. Security 
clearance reform continues to be a critical issue. I have 
confidence that progress is being made, but much, as we agree, 
needs to be done. This will require dedication, commitment, and 
modernization of existing systems and processes, and I look 
forward to seeing this issue removed from the GAO's High-Risk 
List in the near future. Again, I want to thank all of our 
witnesses for your continued efforts.
    The hearing record will be open for 2 weeks for additional 
statements or questions other Members may have pertaining to 
this hearing.
    This hearing is adjourned.
    [Whereupon, at 4:15 p.m., the Subcommittee was adjourned.]

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