While the  report described DOD’s immediate needs and ability to fund those needs,  it did not include information on (1) the funding requirements for fiscal  year 2009 and beyond, even though the survey used to develop the funding  requirements asked contractors about their clearance needs through 2010;  and (2) the tens of millions of dollars that the DSS Director testified to  Congress in May 2007 were necessary to maintain the infrastructure  supporting the industry security clearance program. Our September 2006 report showed that  longer delays are found in some phases of the process than in others (e.g.,  our analysis of 2,259 cases showed that the application-submission phase  took an average of 111 days to complete instead of the goal of 14 days) and  suggested that monitoring each of the phases would help DOD to identify  where actions are needed to improve timeliness. The OUSD(I) Director of  Security and the DSS Director told us that because the DOD report  included both the average time to complete an investigation and the time  to process the clearance from start to finish, the department did not  include the times to process the additional discrete phases of the  clearance process. In deciding not to provide certain important information in its first annual  report to Congress, DOD has limited the information available to Congress  as it oversees the effectiveness of DOD’s industry personnel security  clearance processes. Finally, by not  including measures of quality in the clearance processes, DOD has only  partially supported its assertion that it has made improvements to the  clearance processes. Many of DOD’s Records of the Numbers and Costs of Security Clearance Investigations and Adjudications Were Not Available or Were Considered Unreliable

DOD reported that OPM conducted 81,495 investigations for the  department in fiscal year 2005 and 138,769 in fiscal year 2006 and that  DOD staff granted clearance eligibility to 113,408 industry personnel in  fiscal year 2005 and 144,608 industry personnel in fiscal year 2006. However, we are unable to report the numbers and unit costs of  investigations and adjudications for industry personnel for fiscal years  2000 through 2004, because DOD either was not able to provide data or  supplied data that we found to be insufficiently reliable to report. DOD’s Procedures for Projecting Future Investigation Needs and Its Plans for Improving and Funding the Industry Clearance Program Are Evolving

Changes are occurring in the way in which DOD estimates its future  investigations needs, as well as its plans and funding for modifying the  personnel security clearance program for industry personnel. Similarly, DOD is not pursuing DOD- specific planning for reducing backlogs and delays as well as steps to  adequately fund its clearance process but instead is participating in  governmentwide planning efforts to improve clearance processes. However, DOD has had difficulties in  projecting its departmentwide clearance needs accurately. First, starting in 2006, DSS made its annual survey  accessible through the Internet. Consequently, DOD does not have a  comprehensive plan to address department-specific clearance backlogs,  delays, and program funding. (3) To  what extent has DOD developed procedures to estimate the number of  investigations to be conducted; plans to reduce delays and backlogs in the  clearance program, if any; and provide funding? In 2006, the John Warner National Defense Authorization Act for Fiscal  Year 2007 mandated that (1) DOD report annually on the future  requirements of its industry personnel security investigations program and  (2) we evaluate DOD’s first report in response to this mandate and provide  additional information on eight issues. For the additional information  on the number and cost—including information on surcharges that DOD  paid to the Office of Personnel Management (OPM)—of each type of  industry clearance work performed in DOD’s personnel security clearance  program, we limited our scope to DSS- and OPM-conducted investigations  and DOD adjudications of initial and renewal top secret, secret, and  confidential clearances for industry personnel completed in fiscal years  2000 through 2006. The sources also provided insights into possible causes and  effects related to our findings about whether the DOD report addressed  each of the issues specified in the mandate. Our  methodology to determine the extent to which DOD has developed  procedures to estimate the number of future investigations needed for  industry personnel included three steps: (1) we obtained and analyzed  documents describing DOD’s procedures for estimating the number of  industry investigations, (2) we reviewed DSS’s Internet-based survey of  contractors who perform classified work for the government and  discussed our observations of this survey with the DSS Director and DSS  officials responsible for this survey, and (3) we reviewed documents  obtained from DOD officials describing ongoing research on potential  changes to the methods DOD uses to make these estimates.
Why GAO Did This Study

The Department of Defense (DOD) industry personnel security clearance program has long-standing delays and backlogs in completing clearance requests and difficulties in accurately projecting its future needs for investigations to be conducted by the Office of Personnel Management (OPM). In 2006, Congress mandated that DOD report annually on the future requirements of the program and DOD's efforts to improve it, and that GAO evaluate DOD's first report. Specifically, GAO was required to report on (1) the extent to which the report responds to the issues in the mandate, (2) the number and cost of clearance investigations and adjudications in fiscal years 2000-2006, and (3) the extent to which DOD has developed procedures to estimate future needs, plans to reduce delays and backlogs, and plans to provide funding for the program. To accomplish these objectives, GAO obtained and reviewed laws, executive orders, policies, reports, and other documents related to the security clearance process and interviewed officials from a range of government offices concerned with the clearance process.

What GAO Found

Although DOD's first annual report responded to the issues specified in the mandate, it did not include certain important information that was available on funding, processing times, and quality. DOD's report limited the funding requirements information for its industry security clearance program to 2007 and 2008, even though the department asserted before Congress in May 2007 that it would need tens of millions of dollars in the future to maintain the infrastructure supporting the program and to cover operating costs. While DOD reported the average total time for DOD industry clearances and the average time to complete all clearance investigations, it did not include information on the time to complete any of the other phases (e.g., adjudication). GAO's September 2006 report suggested that longer delays are found in some phases of the process than in others and that quantifying those delays would be useful. The DOD report was largely silent on measures of quality in the clearance process, which is crucial if agencies are to accept the validity of clearances from other agencies. By not including these types of information, DOD limited the information available to Congress as it oversees the effectiveness of DOD's industry personnel security clearance program. GAO was unable to report the number and unit cost of investigations and adjudications for fiscal years 2000 through 2004 because data were either unavailable or insufficiently reliable. However, DOD reported that OPM conducted 81,495 and 138,769 investigations of industry personnel in fiscal years 2005 and 2006, respectively, and DOD granted clearance eligibility to 113,408 and 144,608 industry personnel in fiscal years 2005 and 2006, respectively. In estimating unit costs, DOD and OPM did not account for all factors affecting the cost of a clearance--factors that would have made the DOD-provided estimates higher. These factors included (1) the cost of special interviews that are sometimes necessary to resolve discrepancies in information and (2) that top secret clearance adjudications normally take about twice as long as those for secret/confidential clearances. DOD's procedures and plans are evolving, including procedures for projecting the number of future investigations it will need and plans to reduce backlogs and delays, as well as steps to fund the industry clearance program. In ongoing efforts to address the continued inaccuracy of its projections of future clearance needs, DOD has taken several steps. For example, DOD made its voluntary annual survey of contractors performing classified government work accessible through the Internet in 2006 and began encouraging industry staff to complete it. The response rate increased to 86 percent of industry personnel in 2007. Further, while DOD does not have its own plan to address the funding of its clearance program and its delays in processing clearances, it is currently participating in a governmentwide effort to make clearance processes more efficient and cost-effective. Streamlining and improving the efficiency of its clearance process is also one of DOD's top transformation priorities. In its 2004 report, GAO recommended that DOD implement a comprehensive plan and improve its estimates of future investigation needs.