113th Congress    }                               {     Report
     1st  Session    }           SENATE              {     113-44
_______________________________________________________________________
                                                        Calendar No. 91
 
                     NATIONAL DEFENSE AUTHORIZATION

                        ACT FOR FISCAL YEAR 2014

                              R E P O R T

                         [TO ACCOMPANY S. 1197]

                                   on

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2014 FOR MILITARY 

ACTIVITIES OF THE DEPARTMENT OF DEFENSE AND FOR MILITARY CONSTRUCTION, 

TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR 

                             OTHER PURPOSES

                             together with

                            ADDITIONAL VIEWS

                               ----------                              

                      COMMITTEE ON ARMED SERVICES

                          UNITED STATES SENATE






                 June 20, 2013.--Ordered to be printed



[...]

                Subtitle C--Intelligence-Related Matters


Personnel security (sec. 931)

    The committee recommends a provision that would require 
major reform of the personnel security clearance investigation, 
adjudication, and transfer processes to improve security and 
reduce costs. Specifically, the provision would require:
          (1) the Director of Cost Analysis and Program 
        Evaluation to conduct a comprehensive, comparative 
        analysis of the cost, schedule, and performance of 
        personnel security investigations acquired through the 
        Office of Personnel Management (OPM) and through 
        components of the Department of Defense (DOD);
          (2) the Secretary of Defense to develop a plan by 
        October 1, 2014, to acquire investigations through the 
        approach most advantageous to DOD and to determine 
        whether investigations can be improved through the 
        increased utilization of private entities to conduct or 
        provide supporting information for security 
        investigations;
          (3) the Secretary and the Director of National 
        Intelligence (DNI) to develop a joint strategy to 
        continuously modernize all aspects of personnel 
        security to lower costs and improve security, and to 
        develop and report annually on metrics that will 
        demonstrate progress in achieving those objectives;
          (4) the Secretary and the DNI to consider, and allow 
        them to adopt, a series of innovations in security 
        investigation methods and data sources that have been 
        shown to be effective through analysis and/or 
        demonstrations;
          (5) the Secretary and the DNI to ensure, to the 
        maximum extent practicable, reciprocal acceptance of 
        clearances; and
          (6) development of benchmarks by which to measure the 
        current level of reciprocity in clearance transfers and 
        the costs imposed by delays.
    DOD transferred the bulk of its security investigations in 
2004 to OPM because DOD had accumulated a large backlog of 
clearance applications and investigations were taking an 
enormous amount of time which imposed high indirect costs 
through productivity losses, and (rightly) DOD did not consider 
security investigations to be a core mission.
    OPM successfully eliminated the backlog that it inherited 
and substantially reduced the time it takes to complete 
investigations.
    However, personnel security costs have steadily risen and 
DOD has had little visibility into OPM's cost structure to 
determine what has been driving those increases. A recent 
Government Accountability Office report documented OPM's lack 
of cost transparency and rapidly rising costs. DOD is spending 
three-quarters of a billion dollars annually on security 
investigations, and costs have been rising at a rate of 10 
percent a year. Multiple intelligence agencies that conduct 
their own investigations using the same contractors as OPM have 
achieved savings of up to 50 percent compared to the prices 
charged by OPM. The pressure on budgets has become severe, 
while new federal investigative standards that mandate a 
periodic reinvestigation every 5 years could increase the cost 
of personnel security dramatically in coming years.
    In addition, DOD and DNI have been eager to modernize the 
security investigation process, believing that doing so would 
actually improve security, reduce the time needed for 
investigations, and reduce costs. OPM has been slow to address 
these cost and reform issues.
    The Army and the National Reconnaissance Office 
successfully demonstrated, through a pilot program, the gains 
that can be achieved in efficiency, time, security, and cost by 
applying modern information technology and exploiting non-
traditional information sources.
    Some intelligence agencies have effectively stopped 
performing periodic reinvestigations, which has led to a huge 
new investigatory backlog, and because the government and 
contract employees of these agencies are past due for 
reinvestigations, other agencies may refuse to accept their 
clearances, limiting their employment opportunities through no 
fault of their own. Finally, industry has expressed concerns 
about a thicket of bureaucratic obstacles that still make the 
transfer of clearances between government agencies and 
departments, and from one contract to another, difficult and 
time-consuming, ultimately costing taxpayers substantial 
amounts of money as workers are idled, with their time charged 
to overhead.
    The committee believes that the time has come to issue a 
legislative mandate to force an action that all stakeholders 
seem to agree is necessary.


[...]