After months of promises from key administration officials that an executive order was “imminent,” President Donald Trump has officially authorized the transfer of the governmentwide suitability, credentialing and security clearance portfolio from the Office of Personnel Management to the Defense Department.

The move was highly anticipated. An executive order, which Trump signed Wednesday evening, makes the transfer official.

The executive order officially renames the Pentagon’s Defense Security Service as the Defense Counterintelligence and Security Agency (DCSA). The DCSA will serve as the primary security clearance provider for all of government, effective June 24.

By the same date, the Defense secretary is supposed to sign a written agreement with the OPM director, according to the EO. The agreement is supposed to describe what “appropriate support functions” will move from OPM to the Pentagon — and set expectations for the “transition period, including for detailing personnel, funding background investigations, using and safeguarding information technology, managing facilities and property, contracting, administrative support, records access, and addressing any claims.”

If the agreement between the Pentagon and OPM isn’t complete by June 24, DoD should proceed with the majority of the planned security clearance activities until the document is finished.

The transition itself will occur in phases. DoD will create a personnel vetting transformation office within the new DCSA, according to the EO.

OPM will transfer all resources and employees at the agency’s existing security clearance agency, the National Background Investigations Bureau, to the Pentagon. Existing OPM authorities, operations and funding streams will also transfer to the Pentagon.

The transfer of those administrative and operational resources  will begin June 24 and should be completed by Sept. 30, the EO said.

NBIB itself will continue to conduct background investigations on behalf of DoD’s new clearance agency through Sept. 30.

In addition, the executive order takes care to specify the roles that the Director of National Intelligence and OPM director currently serve as security executive agent and suitability and credentialing executive agent, respectively, will remain the same.

As Federal News Network first reported, the Trump administration had been considering such a move since at least last April. The Office of Management and Budget officially announced its plans to move the entire security clearance portfolio from DoD to OPM as part of its government reorganization proposal last June.

DoD and OPM’s National Background Investigations Bureau (NBIB) have been preparing for the transfer for the past several months. DoD moved the National Background Investigations Service (NBIS), along with the people who manage it, to DSS earlier this year. NBIS was previously housed within the Defense Information Systems Agency (DISA), the entity originally tasked with the development and operation of a new security clearance IT system.

DoD’s Consolidated Adjudications Facility (CAF) and other associated employees have also moved to DSS.

The new DCSA, as Federal News Network reported last fall, will handle security clearances and continuous vetting, in addition to insider threat and other responsibilities.

The Pentagon, as mandated by the 2018 defense authorization act, has already begun to take up responsibility for its own security clearance portfolio.

The move of the entire security clearance portfolio is necessary, the executive order reads, to avoid unnecessary risk, promote the “ongoing alignment of efforts with respect to vetting federal employees and contractors” and execute “needed reforms in this critical area” that would come with having two separate agencies perform this work. 

Despite roughly a year of work and legal analysis that likely went into this executive order, OPM and DoD still have several loose ends to tie up before the security clearance transfer is complete.

Funding streams for the security clearance business is the most notable one, as the move of NBIB has serious financial implications for OPM. Security clearances bring in about $1 billion toward OPM’s revolving fund, which supplements and keeps other functions within the agency running.

Administrative support functions are also expected to transfer, according to the EO, as will the IT systems that support the existing security clearance program.

DoD will design, develop, deploy, operate, secure, defense and continuously update IT systems that support all personnel vetting processes, the order said.

“Design and operation of these information technology systems shall comply with applicable information technology standards and, to the extent practicable, ensure security and interoperability with other personnel vetting or related information technology systems,” the EO reads.

The Office of Management and Budget will mediate any disagreements between OPM and DoD and will develop a funding plan for the security clearance program, the EO said. OMB will also be the one to address any funding shortfalls that may occur during the phased security clearance transfer and will “support DoD’s efforts to establish a single, centralized funding capability for its background investigations,” the EO reads.

What’s more, the EO also sets the stage for further policy changes surrounding the security clearance program.

The members of the Performance Accountability Council, which includes the OPM and OMB directors, along with the Director of National Intelligence and Defense secretary, will review existing laws, regulations, EOs and guidance on the federal vetting enterprise and will recommend legislative and policy changes. The report is due to the President by July 24.

The Trump administration is already considering a series of sweeping changes to suitability, credentialing and security clearance programs, as the ODNI announced in March. DoD has already been pivoting toward the use of continuous evaluation and vetting in lieu of a periodic reinvestigation every few years. Most notably, the ODNI and OPM have suggested a complete overhaul of the principles and standards that agencies currently use to determine a person’s “trust” for working in government.

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