Industry says security clearance transfer paves way for long-awaited modernization

In government’s quest to drastically overhaul and modernize the security clearance process, there’s a strong contingent that views Wednesday’s executive order as a notable first step.

The EO, which President Donald Trump signed this week after months of apparent legal considerations, transfers the security clearance program — along with the authorities, resources, personnel and other administrative functions — from the Office of Personnel Management to the Pentagon.

Viewed one way, the President’s latest executive order authorizes the move of a highly complex security clearance program from one bureaucratic institution to another.

But for industry, this executive order is the first step toward achieving a long-desired goal: a series of broad changes to the entire suitability, credentialing and security clearance enterprise.

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“This executive order is another important and necessary step in addressing the many issues still remaining with security clearances and suitability determinations across the entire federal government,” David Berteau, president and CEO of the Professional Services Council, said. “While the transfer of responsibility will not solve reciprocity problems, adjudication delays or the lack of publicly available information from the government, it does offer opportunities for bringing technology and process improvements into the entire personnel vetting process.”

The Office of the Director of National Intelligence earlier this spring had teased a sweeping array of changes to the suitability, credentialing and security clearance processes, which haven’t gotten a serious update in several decades.

The ODNI said it plans to develop entirely new and uniform investigative and adjudicative standards, which the government will use to establish trust with an individual and continuously vet that person’s trust over a period of time. The goal is to give both employees and contractors more flexibility to move around government — and in and out of the private sector.

The President’s recent EO includes a key deadline for government to get started on that goal. It instructs the Performance Accountability Council to review existing laws, regulations, past executive orders and guidance and issue recommendations to transform the federal vetting enterprise.

“The recommendations to the President will be important because that will lay out a road map, presumably, for the policy changes that need to be put in place, including things like the implementation of continuous evaluation across the government, the development of adjudication standards and continuous evaluation standards that can help promote reciprocity and hopefully the elimination of duplicative efforts,” Larry Hanauer, vice president for policy at the Intelligence and National Security Alliance, said in an interview.

For industry, many of these changes would be too difficult to implement if the personnel vetting program was still divided between two separate agencies, like DoD and OPM. If the program resides under one department, government can devote a clear, single stream of leadership, dedication and resources to security clearance modernization, Hanauer said.

Mark Warner (D-Va.), vice chairman of the Senate Intelligence Committee, similarly sees promise in what the EO could kick-start for the personnel vetting enterprise.

“This is an important step toward transforming the security clearance system,” he said Friday in a statement. “There is much more we can do to reform decades-old policies and processes to reflect today’s threat environment, adapt to the dynamic of a modern mobile workforce and capitalize on opportunities offered by modern information technology.”

Warner has reintroduced legislation in recent months that calls for a specific plan to merge OPM’s National Background Investigations Bureau (NBIB) into DoD’s new security clearance agency. The Modernizing the Trusted Workforce for the 21st Century Act also promotes the idea of a “portable” security clearance, meaning federal employees or contractors could take it with them as they move to other agencies or in and out of the private sector.

Tracking the transition to DoD

But before DoD and the other agencies involved can even begin to tackle security clearance modernization, the Pentagon and OPM are responsible for the program’s transition, which is bound to be complex.

The EO gives OPM and DoD a June 24 due date to sign an agreement describing the details of the security clearance transfer — and a Sept. 30 deadline for transition completion. The two agencies have a little more than five months to determine how resources, personnel, existing authorities and IT systems will transfer between the two organizations — and then three months to get it done.

Officials at NBIB and the Defense Security Service have said they’ve been preparing for the security clearance transfer months before the EO made it official, and some other functions within DoD have already moved to the new security clearance organization.

Still, industry can only hope that government is prepared for a five-month transition.

“The timelines are really complex, so unless the government has been preparing for this for some time, executing the requirements of this order will be really tough,” Berteau said in an interview.

And like most major government transitions and change efforts, communication and proper resourcing will be key to DoD’s success with the security clearance transfer, said Hawk Carlisle, president and CEO of the National Defense Industrial Association.

“One of the key things for success in the future is making sure it’s resourced properly,” he said in an interview. “Congress is interested in that and the department is interested in that. [They] need the due diligence to continue the dialogue and discussion that goes on between OPM and DoD.”

As the new governmentwide security clearance provider, DoD will need to regain trust from civilian agencies that it will work with appropriate speed to handle their investigative workload.

DoD has the most clearance holders than any other federal agency, and civilian agencies may fear the Defense Counterintelligence and Security Agency will prioritize defense investigations over the work for other organizations.

“Some of the smaller agencies that have relatively few people with security clearances may have concerns that they’re not going to be at the top of the priority list,” Hanauer said. “The Department of Defense is going to need to work with those agencies to ensure that their priority requirements are met and ensure that their personnel get cleared in a timely fashion.”

Security clearance transfer begins OPM breakup

But at least one member of Congress is skeptical of the coming security clearance transfer — and what it may initiate at the Office of Personnel Management.

In a town hall with IT contractors on Thursday, Rep. Gerry Connolly (D-Va.) reminded attendees that DoD itself struggled with the security clearance backlog when the Pentagon owned the background investigation program. The Government Accountability Office added the security clearance program to its High-Risk List back in 2005 — just as DoD prepared to transfer the responsibility to OPM — but said it had been documenting problems with it since at least the 1990s.

GAO in 2018 added security clearances back on the High-Risk List.

“Maybe by moving it to DoD you’re going to speed it up and it will be more efficient and better and thorough, in which case you have my support,” Connolly said Thursday morning. “But if that isn’t the case, and in fact you don’t have any plan at all, and you can’t answer the question [of] does this not just to add to the problem we already have, then I don’t support it.”

But beyond the sheer uncertainty that comes with moving the program between two large federal agencies, the security clearance transfer also holds financial implications for OPM. The loss of the National Background Investigations Bureau and the $1 billion it generated for OPM’s revolving fund could throw a dent in the agency’s operating budget.

Moving the security clearance business out of OPM is the first step of the agency’s proposed reorganization plan.

Connolly, as the chairman of the House Oversight and Reform Government Operations Subcommittee, has asked for a wide range of documents and materials that explain OPM’s plan and rationale for the reorg.

He said he still hasn’t seen a document.

The coming June 24 agreement between OPM and DoD, in theory, should surely paint a clearer financial picture for both agencies, if it’s made public to Congress.

“The fact that they have not produced a single piece of paper justifying any of this reorganization makes me suspicious,” Connolly said. “Maybe you don’t have one. Maybe someone just decided let’s get rid of this agency. It’s a clunker; we don’t like it. We can claim that we got rid of bureaucrats and a whole agency.”

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