Nearly 640,000 fewer people held security clearances at the end of fiscal 2014 than they did a year earlier, according to a new report from the Office of the Director of National Intelligence.

That’s a 12-percent drop in the number of federal employees, contractors and others with access to confidential information.

The statistic alone is significant. The government has been widely criticized for failing to keep tabs on the millions of people who hold security clearances. The cries grew loudest after former analyst Edward Snowden stole classified information from the National Security Agency and former contract employee Aaron Alexis shot and killed a dozen people at the Washington Navy Yard, both in 2013.

Since then, the Obama administration has ordered agencies to pare back their lists of cleared employees and contractors to those who need access to classified data in order to do their jobs. It has also instructed agencies to develop insider-threat programs to detect clearance holders with the potential to do harm.

The data reflects the impact of those orders in the post-Snowden era, said Evan Lesser, managing director of ClearanceJobs.com.

“The defense department is taking the insider threat very seriously, and lawmakers are equally concerned about who has security clearance,” he said. The Defense Department oversees the vast majority of security-clearance holders.

Most people who lost their security clearances were deemed “not in access,” to signify that they did not need those clearances for their jobs. Since the Sept. 11, 2001 terrorist attacks, the government and contractors have kept rosters of people who hold security clearances just in case they need to deploy quickly to a project that requires them.

It’s no longer necessary to have that bench, said Charlie Sowell, a former ODNI official who now works at Salient Federal Solutions.

“It is notable. It is commendable,” he said of the drop in clearances. “I think it is, frankly, more cleaning up of the books than anything else.”

Just 164,501 people deemed “in access” lost their clearances over the past year, a sign to Sowell that the government still struggles to reduce the number of jobs for which a security clearance is required.

“It’s harder to take people who are eligible and in access and downgrade them, removing their clearance altogether. It’s easier to clear a janitorial worker so they can roam through a building than reduce their clearance and force a security worker to walk around with them all the time,” he said. “There is inflation.”

The report says 4,514,576 people held either confidential/secret or top-secret clearances at the end of September 2014. Of those, 70 percent were government employees. The rest were a mix of contractors, state and local officials, and others.

Contractors most likely to struggle with clearances

As the number of clearance-holders declines, agencies and contractors alike are having more troubling finding qualified candidates for positions that require clearance, said Lesser.

“Cleared jobs have always been difficult to fill. But with the population of security-cleared individuals down significantly, and the number of open jobs up to its highest level in years, there is a critical supply and demand issue at play,” he said. “In many cases, there are more open jobs than available cleared candidates to fill them. That means some jobs go unfilled, while others lose critical staffing as cleared workers jump ship for more pay elsewhere.”

The government approved 14 percent fewer security-clearance applicants in fiscal 2014 compared with a year earlier. Contract employees were most likely to be turned down. At the same time, they were most likely to experience long waits while agencies processed their applications.

The report warns that those waits are likely to worsen this year.

“The [intelligence community] reported that the focus on periodic reinvestigations and potential insider threat cases during FY 2014 caused resources to be reprioritized. Going forward, this may cause an increase in the number of initial cases pending for more than 4 months,” it says.

That should concern the government, said Sowell.

“It’s affecting the ability of contractors to compete in the marketplace because there are less people getting cleared. This affects costs for the government because it is directly having an impact on competition,” he said.

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