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

On June 28, 2005, GAO testified before Congress at a hearing on "Access Delayed: Fixing the Security Clearance Process." This letter responds to a Congressional request that GAO provide answers to Senator Frank R. Lautenberg's questions for the record.

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." 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. 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. 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. 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. 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.