Defense agency resumes processing some clearances

The Defense Security Service late Tuesday announced it has located enough funding to partially resume processing of security clearances.

In a brief statement posted on its Web site, the agency said it has started processing initial requests for secret clearances. It still has not resumed its work on Top Secret clearance requests -- which take more time -- or on re-investigations of already cleared contractors who are renewing credentials, but said it will do so when additional funding is available. The agency's move came on the eve of Senate and House hearings Wednesday to examine how DSS ran out of funds, and what can be done to remedy the situation quickly. The unexpected halt in clearance processing late last month stunned and enraged some private sector managers who said it will exacerbate recruitment problems. Some requests take more than a year to process.

DSS spokeswoman Cindy McGovern said 4,800 applications had been tied up since the announcement that the agency was out of money to process paperwork. The Defense Department's location of additional funds helps 2,000 applications.

Almost immediately following its announcement Tuesday, DSS began taking criticism. Doug Wagoner, chairman of the Information Technology Association of America's intelligence committee, called the move "an inadequate solution triggered by pending oversight hearings."

"Unfortunately, this is not the first disruption of a troubled DoD system that seems to be suffering a cyclical, downward spiral," House Government Reform Committee Chairman Rep. Tom Davis, R-Va., said at the hearing Wednesday. "Intractable backlogs and lengthy delays in the security clearance process have prompted other hearings, other promises of reform."

Witnesses told members of the House Government Reform Committee and Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management that the funding issues are the result of a failure by the Defense Department and Office of Personnel Management to accurately anticipate numbers of applications filed and associated costs.

OPM took over the task of conducting background checks in February 2005, but DSS still has to cover the cost of processing applications, which can be thousands of dollars each, depending on the level of clearance needed.

A funding shortfall of $90 million caused DSS to stop submitting applications to OPM for investigations, and the Defense comptroller provided the agency with $28 million to resume processing secret-level clearance requests through the end of next month, said Robert Rogalski, special assistant to the Office of the Undersecretary of Defense for Intelligence, at the Senate subcommittee hearing.

The Defense Department's volume projections problem has been documented and "is not a new problem," said Derek Stewart, GAO director of defense capabilities and management, before the Senate subcommittee. He said he is "far from confident" it has yet been adequately resolved.

"DoD has always had a challenge in making these projections," Rogalski acknowledged. He told House members the department must "get better fidelity in our projections."

Clay Johnson, deputy director for management at the Office of Management and Budget, said Defense and OPM failed to properly coordinate negotiations on the funding issues with his office, also contributing to delays in processing.