to happen agencies determine whether or not a civilian position should require a clearance, and importantly no requirement exists to review existing positions with clearances. we made recommendations to the director of national intelligence, who has responsibility for this area to develop such guidance. the second part of my statement addresses having performance measures to measure quality. since then 1990s, we have emphasized the need to build quality metrics into the clearance process. executive branch efforts to reform the process have focused more so on timeliness than

quality. we have seen results to speed up the processing of initial clearances. but we have not seen results to finish developing metrics for quality of investigations, implement the metrics or report on the findings. we have reason for concern about the quality of investigations. for example, in may 2009, gao reported that documentation was incomplete for most opm investigative reports we reviewed. 87% of 3500 investigative reportsle. we have made recommendations in this area, but those recommendations have not been implemented. the last area of my statement addresses the guidance to enhance efficiencies of the clearance process. have not focused on savingsing even though the stated mission is improving cost savings. for example, opm's investigative process, which represents a

portion of the security clearance process and has significant costs, has not been studied for process efficiencies or cost savings. in february 2012, gao reported that opm received over a billion dollars to conduct more than two million background investigations in fiscal year 2012. we have raised concerns about transparency of costs and investments in technology while maintaining a less efficient and duplicative paper-based process. we have made recommendations in this area but actions have not been realized. this conclude mist opening statement, thank you very much. >> thank you for your statement, and thank you all for your opening statements. we'll put seven minutes on the clock. i'll start with you, mr. mcfarland. without making any specific statements that could compromise the ongoing investigation, could you confirm that office of personnel management0s office of the inspector general is

investigating usis one of the three major contractors conducting background checks on behalf of the u.s. government? >> can you also confirm the usis carried out the background investigation on mr. snowden? >> i'm sorry. >> can you also confirm that company carried out the background investigation on mr. snowden? >> i'm not sure regarding that question. >> is my information that there were two -- there was two, an initial investigation and then a -- i'm sorry -- >> yes, the re-investigation, absolutely. >> we did do the re-investigation. >> yes. >> you're not sure who did the initial investigation? >> that's correct. >> would it be possible to get that information? >> yes, it is. >> good. are there any concerns that mr. snowden's background

information may not have been cared out in an appropriate or thorough manner? >> yes, we do believe that there may be in problems. >> okay. and when more information gets available on this, i would assume it's going to be made public. is that correct? >> well, all depends on the time and situation. we'll do our best to keep you informed. >> that's good. so, let me ask you this. they're under investigation, usis, but yet they're given the revision of mr. snowden. how does that really happen? excuse me just a moment.

>> if you would, please. >> absolutely. that's why they're here. >> michelle? carry on. >> it is our understanding that the periodic investigation was done in 2011, which would have predated the initiation of our investigation. >> when did you initiate your investigation? >> later in 2011. >> okay. yet this agency, if i'm correct, i believe it was in one of your opening statements, they do 75% of the -- is contracted out? , that? or they do 56% of the total contract of investigations? >> you said 75 -- i can look it up, but 75% of the investigations are contracted out. is that not correct? >> that question is probably best answered by -- i understand

the number varies depending on whether you're talking about all investigative or those which include significant field work. >> usis conducts 45% of the overall contract workload. >> i touched in my opening statement about how much classified data is being generated and maintained with an increasing number of folks with access to that data. dod currently accounts for the vast majority of personnel security clearances. since 9/11 heightened security has increased the number of background checks. i'm not challenging that. what i'm asking is given our redeployment of troops in iraq and now the drawdown in afghanistan do you anticipate

dod security clearances will decrease in the future or maintain or get more? >> it's hard to have a crystal ball on that subject. one would think that as the drawdown occurs, there would be less of a requirement for clearances, and we are engaging with the military services and others to look at scrubbing the requirements for clearances and validating need more aggressively than we have in the past. i can't predict what's going to happen with any degree of certainty with that drawdown. >> understanding there are -- the clearances are driven by need, by specific needs. is that -- is it scrubbing -- is that what -- is that what you're using to monitor or manage the number of overall clearances for the dod or what kind of metrics are you using?

or just need, get the clearance. >> we are looking at the number of clearances, and engaging with the military services to validate those needs. so, we don't have metrics at this point on that issue. >> senator mccastle. >> mr. miller, have you read miss farrell's testimony today? >> i just heard it for the first time. >> i'm not going to start now, but i would appreciate that you would read and it respond to it with specificity. it is overwhelming to me the amount of recommendations that have been made in this area that have been ignored by your agency, and i see no good reason why these recommendations have been ignored i you want to address why the recommendations have been ignored, you're welcome to if have some other area is want to ask you about also. i -- it appears to me -- which

is not the first time this has happened. i spend a lot of time around gao reports and looking at recommendations and whether or not they're implemented, and typically agencies with least amount of oversight by congress have the worst record of thinking that what gao says matters. there is some kind of cogent answer you can give why all these recommendations made have been wholesale ignored? >> we take what gao recommends through their audits very seriously. >> when is the last time you implement one of their recommendations. >> we have implemented this is in scag year a number of recommendations regarding -- i'll take the last odd. cost transparency. we have done a number of things to support cost transparency. we submitted our first null stakeholder report, the first one. 33-page report that details not only workload and resources and talks specifically about where our my -- our money goes to support the program.

>> if you would be so kind to do a score card for us with the recommendations the gao has made in this area and give us an actual score as to how many of them have been implement and when by your estimation, and then i'll have a chance to share that with you, mr.ing mier, and you can argue whether that is accurate. >> how many times as the ag asked to audit the fund. >> we're cooperative with having the ig odd audit fun. there was a question on the legal basis to provide an audit of the fund. >> there is -- >> there are lots of documents, financial reports. >> if need some agreement why this fund has never been audited. a billion dollars a year.

it's outrageous it's never been audited. what is your rationale why the fund has never been audited. >> we support the current request for revolving fund dollars to support audits in the future. the issue in the past was there was not a legal basis, apparently, for resolving fund dollars to be given to the ig for audit purposes. we welcome the igs oversight. >> these are all public dollars. >> they are public dollars. they're not appropriated public dollars, and i can't -- >> they're appropriated at some point. >> yes, ma'am. >> because you can't get them unless they're appropriated. >> yes, ma'am. >> what you're saying is all somebody has to do in government is give some of the money that's been appropriated to another agency and presto, whamo, no audit? >> no, ma'am. >> that's what you're saying. you're saying there was some legal question whether this money was auditable by an ig because it had been transferred to your agency by another

agency. >> it was absolutely auditable. the issue was whether revolving fund dollars could be given to the ig to resource additional person knoll actually conduct the audit. they could have used appropriated dollars at any time to audit the revolving fund. >> let me see if i understand. what is your view of this, mr. mcfarland, why the audits have not occurred? he seems to be saying this is an acknowledgment bit you, you didn't have the resources to do it. is that the problem? >> we absolutely have the resources to do it. >> so what -- from your view is the reason why this fund has never been audited? >> when you say the fund -- >> the revolving fund. >> the revolving fun. [inaudible conversations]

[inaudible conversations] >> this is a bit confusing, i think. our intent, as always, is to get involved as deeply as we can in any subject matter. we -- the problem we have is that we couldn't identify -- excuse me just a second, please. i want to give you as clear an answer as possible. >> my understanding and -- this may be stodge later correction because audits is not my area. my understanding they were attempting in the late 90s and there was insufficient documentation, and since that time, the oig has not had the financial resources to pay to do

an audit. we need to get that figured out. because if we are actually saying to the american people, they're not the resources viable audit a fund that hold as billion dollars worth of public money, we have a real problem. so, i'm going to need you to come up with these specific answer that you believe is holding you back from auditing this fund, and i need the same specificity from you, mr. miller, as to your willingness and your capability of being audited. we know the department of defense cannot be audited. it's been decades long we're trying to get them audited. this seems to be a discreet fund that ought not be very expensive, and it ought to be something that is as easy as brushing your teeth for the tens upon thousands of government auditors we have working. so let's get to the bottom of that. i want to talk before my time is

up, about the number of convictions for falsifications. you have had 18 people convicted for falsifying investigations. of those 11 were government employees, seven were contractors. it seems to me the number of convicts -- this is since 2007 -- seems high to me for an office as small as this is. do you believe you're catching most of the fraud, mr. mcfarland, or do you believe there's more? >> i believe there may be considerably more. i don't believe we have caught it all by any stretch. >> okay. my time is up. thank you. >> thank you, mr. chairman. one thing we have heard today which is disturbing, we can't confirm the quality of mr. snowden's investigation, and this leads to a broader question about whether the pressure you all feel to speed up investigations and the backlog that occurs is leading to lower

quality. and i'm wondering about whether you're measuring those metrics. you have been pressed, as i say, on timeliness, i'm sure. but here's some data. in 2009, gao assessed from a sample of -- they had that 87% of investigative reports the dod adjudicators used to make clearance decisions were missing background documentation. 87%. gao subsequently recommended opm measure the frequentsive with which investigative reports meet investigative standards. seems like a common sense recommendation. gao also notes that omm is developing a tool similar to dods rate of speed assessment of incomplete security evaluations, and this afternoon in your testimony, miss farrell, you talk about that and basically stated that from the

gao's observation, opm continues to assess quality based on voluntary reporting from customer agencies. so, i would just ask, in light of what just happened and in light of this information from gao now going back four years, mr. miller, how do you measure quality? >> senator, we have a number of ways we measure quality. if i could address just up front the 87% number. you probably saw opms response to that audit, and there are challenges associated with capturing every element of a background investigation. let me just explain very quickly. an employment check. that is one of the areas where there was the highest number of elements that were missing in a background investigation. employers can or can choose not to cooperate with the government when we conduct a background

investigation. i'm not saying federal agencies. i'm talking commercial entitieses where individuals may have previously worked. one of the challenges is actually giving cooperation. if an employer, either goes away, dunce exist any longer, or chooses not to provide information to the government, that information has to be documented in the investigation but you do not get the employment coverage as required by the investigation. there's issues regarding the 87% involving subjects -- subject interviews that were not accomplished. many of those subjects have been deployed into a hostile environment where investigators could not go to conduct those interviews, and so there is a documentation in the report of investigation saying the subject was not available due to deployment and that case is closed, and, senator, you're exactly right, everytime we initiate an investigation we put what we refer to as a close dade, a cd date, because that

date must be met to meet the mandated 40-day challenge that we're given for timeliness. so all investigative leads must be accomplished in that period of time and the case is then closed. >> let's follow up on this a little bit. 87% is a high figure of incomplete reports, and, again, given -- we're trying to protect or most valuable classified information, and we have seen some of the impact of this recently. do you agree what if mr. miller just said, the major problem is employers don't want to respond to questions and/or that people have been deployed into hostile environments. >> is that the reason 87% 0 are not properly completed. >> the documentation was not in the file. we recognize there may be challenging to track down people who may be deployed, and if the documentation is there, then that could explain it. we found the same types of

incomplete documentationlele in dods adjudication files, and they have guidance that if there are difficulties, you document it so that the adjudicator can know, or whoever does the review, will know why that was left blank. the person was deployed. dod implemented or -- >> so if the person was deployed, for instance, and that was the only reason there was an incomplete investigation, that would not be part of the 87%. you simply have that -- >> the federal investigative guidelines, like the federal ajude dater guideline, look at is as a baseline, so we had our staff attend investigative training. we used gao certified adjudicators to help us do these file reviews so we made sure that the staff that were coming behind and reviewing had the competency to see what was missing and what she shoo be there. so this is about documentation,

not having to look at a file -- >> your recommendation was that developed tools -- what tools have you developed. >> there's a number of initiatives ongoing currently and our own quality process. we have quality procedures in our contracts, our or contracts, well as our federal employees. there are several layer office review that occurs when a background investigation is being worked and when it is finalized. the terms of the contract has a number of requirement is within the contract for them to conduct a full quality reviewed investigation before it is delivered to the government. our federal investigators, as each lead is accomplished, there's review conducted by our reviewers. we have 400 federal employees, the sole role is quality assurance over our products that do a full review of each investigation. when that is finalized, and the final review and the delivery is to our customers, there is a

subsequent review, the most important review, quite frankly, the ajude addition decision made by the agency itself. so they review the investigation and make a determination whether all the almosts are there to make a determination. they can make an ajude dating position -- i'm not a jude dater -- >> claiming a deviation, meaning there are some certain elements there but based on the whole of the investigation they have determined to grant that person either clearance or federal employment. >> you're now providing all these metrics to the ajude daters and providing this documentation so that when the gao alongs at your good-gao looks at your process the next time they'll know why you have not provide all the information? >> we haven't had in followup recently with gao. we would welcome a follow one on that. as well as -- to address the standards, the quality standards. we have an interagency working

group chaired by the odni and dod and opm, working on establishing clear and concise standards for evaluating a brown -- background investigation to meet the quad standard. today the quality is on the eye of the beholder, whether it's complete or not. so there's a lot of gray area, that may give us defined roles. give us quality standards, and we understand that are clear, we will absolutely meet those. >> not to have the vast majority of the reports being incomplete. thank you for your testimony. we'll be back on the second round. >> mr. chairman. mr. miller, what does it mean, case closed? >> case closed means all the elements of the background investigation have been obtained and completed and passed on to the customer. >> or you haven't got all of

them and still closing the case when the 40 days is up. >> if they're not obtainable, like an employment check, that will be documented and firsted for investigation -- >> so how many of those case closed incomplete investigations then are actually adjudicated and clearance is granted? >> well, -- >> do you have any metrics on that? >> yes, sir, our numbers on metric, we look at from a quality perspective, the engagement with our customer on requests for re-open. in other words, when a culp customer comes back and says you're missing elements, there's information we don't have here to make the decision, we're asking you to re-open that investigation -- >> what percent do you get back? >> that's less than one percent. >> so then you know how many clearances are granted based on your case-closed with incomplete documentation and. >> no, sir. the only way we know what is -- >> 87% of the case that are incomplete documented,

considered case closed, and only 1% get kicked back requesting more information. we could potentially have 86% of investigations incomplete, and then security clearance is granted. that's about what is happening, right? >> it appears -- >> miss farrell. something disturbing in your testimony, no guidance in terms of what is requirement for security clearance being granted? >> that's correct. that responsible falls on the director of national intelligence. he is responsible for oversight of this security area by providing guidance regarding efficiencies, effectiveness and timeliness. >> there's no standard for even requesting a security clearance? >> the guidance -- i must say it is addressed. we have a recommendation, and i want to knowledge -- >> we have been granting

security clearances for how many decades? >> decades. >> there's literally no standard, no guidance for what is -- what circumstances -- >> in the absence of -- your correct in the absence of guidance, it's left up to the agencies to determine how they're going to classify those jobs and what you fine is inconsistency. we also found that some of the agencies were using an opm tool that helps determine the sensitivities of a job position, the sensitive of a position doesn't tell you the classification but by knowing the sensitivity, then you can translate that into whether or not a security clears is -- clearance is needed. unfortunately opm's tool was geared more toward determining sensitivity related to suitable for the job, rather than if the job required a security clearance. opm developed the tool without a lot of collaboration with odni,

and that's how you got the tool. >> anybody want to challenge this in term moves standard, no guidance, in terms of what is a requirement for even seeking security clearance? >> mr. miller? help me out here. >> sir, opm did create a position designation tool that was focused on suitability and determining what type level investigation is required for the position the individual they're asking for. >> mr. wilson, the department of defense, is there a guidance a standard, the key focus is on -- >> the key focus is on what level of access is required to perform the duties associated with the job and that depends on what the duties are, and for industry it is very carefully and closely scrutinizeed by defense security service when they do their inspection office contractor facilities. within dod, it is going to depend on what level of access

is determined to be required to perform the duties. >> isn't that some of the guidance? so we have classifications of different secrecy levels and if your job description says you need x classification, is that a guidance? >> guidance does not exist is what i'm telling you, for government-wide determination whether or not a civilian position needs a clearance. we will find that individual agencies thus have developed their own rules or procedures, and what we found from our audit last year was an inconsistency of the application. in fact even the opm ig reviewed use of the opm position tool that mr. miller mentioned, and found with their review that for the majority of the cases reviewed, applying opm's tool, they came up with a different interpretation. quite alarming. >> security clearances, we have clearances for individuals but

also have for contractors and for facilities, correct? i mean, you also are basically certifying contractors to be able to handle classified material. mr. miller, can you step me through an investigation of a contractor or facility versus an individual? can you step me through the process? >> yes, sir. for an individual, not for a facility. i would ask dan if he could handle that one. but for an investigator, for -- for an investigation, the contractor, the determination that the contractor needs a clearance, it's sponsored by dod, and the department of defense. they submit the individual -- >> again, i'm really more interested in facilities right now. >> okay, can't speak to facilities. >> want to find out how an -- itch the certification is granted, there are surveillance audits on a regular basis? i think that's kind of the crux of the problem potentially with

the most recent incident. mr. lewis. >> i would like to refer to mr. sims on that as his agency exercises that oversight. >> okay. thank you. [inaudible] -- >> as mr. lewis stated up front, as part of the national security program, the defense security service grant -- the facility service is a requirement for the government. if the contractor is operating on a contract that requires a certain level of clearance, for example, secret or top secret, they submit those requirements to dsf, that is sponsored bay government. the then look at the facility, the company, if you will, and look at the contract, and the requirements of the contract. if the contract requires that there's a secret clearance that is required, we then evaluate

the facility on a number of different things, and then we will grant the facility clearance first. once the contractor gets the facility clearance, that mandates the requirement for them of access that the contractor would have in working on the contract. for example, if they -- if there's a level of effort to perform the contract, and then the security clearance is at the secret level, that's the only level that the access of the individual can even apply for. we audit and do security reviews on a routine basis on the contract facilities out there. there's 13,500 plus facility clearance out there that we oversee. there's about 10,000 companies. we do routine security reviews out there, and when our investigative organization or our agents go to those facilities, we look at those contracts. we verify on a routine basis whether, do they have personnel

operating on the contract that is above the level in which the contract is required. for example, if we find that they have a person that is cleared at top secret, is working on a secret contract, then we mandate the removal from the action. >> i'm out of time. just a quick question. how many man hours does the first certification process take and how many man-hours involved in the surveillance audit? just trying to get some sort of feeling how rigorous these certifications are. >> it depends on the size of the facility. all the way from mom and pops up to -- >> the day-long process? few months? >> smaller companies, could be a day or two. for the larger companies, like look heed martin, we have done two or three weeks on site with a team of security professionals from my agency. >> thank you very much. thank you, mr. chairman. >> thank you, senator johnson. i'm going to read a second

paragraph on page 3 half mr. mcfarland's testimony. the problem is that patrick mcfarland's office is that the office over eninspector general, costs are not permitted to be charged against revolving fun. so this billion or two billion dollar fund, somebody has made a call that none of that money can be used for things like annual financial audits, or any basic oversight. who made that call? >> i can't answer that, sir. >> mr. mcfarland. >> i can speak to that, senator. this has been probably the most frustrating thing that's happened regarding the revolving

fund for us. because it is almost literally taken us out of the picture. we have a limited amount of money from salaries and expenses. in our case it's $3 million right now. to spend on non -- on issues. the revolving fun is a nontrust fun issue. so what we have tried to do as best we can, is stay tuned in to what is going on, and that's kind of a sad state of affairs for an ig to have to say, stay tuned in. we want to be in depth in all of these things but we haven't been able to, simply because it was decided by the general counsel's office and then supported by the director of opm, that we do not fit into the category that would allow us to have funds from the

revolving fund. now, we take total disagreement with that, of course. we feel just the opposite. what has transpired, if i may, in order to try to remedy the situation, i suggested a couple years ago that the suspension -- that maybe the director of opm should suspend his decision in agreement with general counsel's office, that we are not entitled to those funds, in hopes we could get -- in fact get the job done, and then maybe go for a comptroller general's opinion. >> we have a confirmation hearing on the new director of opm on july 12th. i have a notification that is a question that will be asked right out of the gate: are you going to support using some of

those moneys -- let me ask you one more thing and be brief if you can. when you do an oversight, an audit or whatever it may by, is typically the cost paid by the fund you're doing the offered did on? >> everything we do for the health insurance and the retirement and the life insurance, that's done out of those trust funds. >> is there any other fund out there that you know of that has been declared offlimits for reimbursement for your duties? no we're using our salary and expenses to do what we can in the revolving fund. that's why it's so limiting. >> i understand that. when you do any other odd dids from other funds, assume you're getting paid from those funds you're auditing. >> that's correct. >> any other funds you're auditing you're not able to get your costs reimbursed from those funds in. >> in general no; i think -- >> so i guess -- okay.

that is what i needed to know. the hearing is july 16th, not july 12th. if have a question to follow up on senator johnson's, to you, miss farrell. short of the profit -- president of the united states, i don't know who is responsible for these security clearances. there's different standards, different responsibilities, different metrics, different everything. so this incident comes up with snowden. we shouldn't be surprised at all. what -- i mean, who is -- where does the buck stop on this situation? is it -- where does the buck stop? i mean, where are the -- there aren't metrics, there's -- does the buck stop with congress? should we be dictating what you

should be doing or should it be -- who should be doing this? >> well, we were encouraged when a governance structure was put in place by executive order back in 2008. the executive order established a performance accountability counsel to drive reform efforts toward effectiveness, efficiency, keep it going, and the deputy for management at omb is the chair the performance accountability counsel. the order also established the director for national intelligence as the security agent. also established opm as the executive agents for suit suitable. so that question we asked many times and we looked at the reform efforts and who is in charge, and it comes down to the

pack, the performance accountable council, headed up by the deputy manager at omb. >> very quickly. mr. miller, should i be concerned about this? concerned there's no apparent metrics or standards or -- >> there are standards. but they vary between each agency so there's no reciprocity, no -- there are -- >> the standards could go from soup to nuts. >> yes, sir. there's been a great deal of effort under the performance accountability down align standards and get consistency across federal agencies. >> have we been successful in that, to develop a single measurable standard? >> sir, we're better than we

have been. there's still work to do. >> okay. senator mccaskill. [inaudible] -- investigations, what kind of processes are in place, mr. mcfarland or miss schmidt, as to the investigations that person was responsible for? >> the federal investigative services has an integrity assurance process in place, which is how most of these cases are initially detected. when they suspect that falsification is occurring, they do what they call a recovery effort, which is to identify the scope that they believe the falsifications may have occurred within, and then they have a federally employed background investigator go back and redo every single investigation that was assigned to that person. both to make sure that a quality

product replaces the possibly defective products, and to identify what is falsified for further criminal investigation and potential prosecution. >> are the access to -- for the people who are in the parameters of the investigation around these criminal convictions for falsification, i assume their access to classified material is cut off while that is done are they allowed to keep their clearance while you look into it? >> you mean the individuals who hold the security clearance? >> correct. >> to my knowledge, they are not affected while the investigation is in process. >> is that true? they're allowed to keep their classification even though you have discovered that during the period of time their security clearance was given, that somebody was criminally falsifying? >> yes, ma'am, that's correct. the recovery process that was just mentioned is top priority.

our integrity assurance program, as michelle testified, is how these false fix indication are uncovered. >> be recontacts? >> yes, ma'am, recontact letters. >> how many people get recontact letters? >> 3% a month of all investigations receive recontact activity. and that's for every agent we have employed. so, there isn't any agent that doesn't receive some recontact activity on their investigation. >> when you say agent, you mean government employee or contract? >> yes, ma'am. >> so everybody who is doing background checks, 3% of their work every month, the miami they say they interviewed, you do recontact letters to confirm they have been interviewed? >> yes, ma'am. >> what if they falsify who they contacted and they're the ones getting the recontact letter? >> then we'll uncover the fraud.

>> how? >> if the individual that we recontact was the individual lead that was falsified, typically the response is they were never spoken to by opm. >> i mean, what if the person making the falsification falsifies the person they contacted, makes up it's them, and puts down a phone number that is the a phone number they have access to or andreas, post office box, and they get the letter and say, yeah, they contacted me, when in reality the whole thing was made up. how do you catch that? >> that's an interesting scenario, but we know where our agents reside. we know -- >> aren't some of you using post office boxes? >> some contacts are post office boxes, yes, ma'am. >> i know your background, and i know that you are through and through an investigator. it worries me we have this many criminal falsifications, which means there are people employed by contractors or by you, that not doing the work and you're

catching them sometimes. but if you're catching as many as you are, that means there's a lot you're not catching, and if i was going to falsify something i would not be stupid enough to put down the name and address of the person who is going to say, no, they never contact met. i would put down name and address where i could control the receipt of the document and handle so it i would go along undetected. >> one of the challenges for that scenario is when they fill out third fs86 they reference specific leads. ...

>> this would suspend clearance temporarily for any of the people that could be impacted this because i think that it would be easy for us to have a disaster in that area.

now, in one year, we talked about the contractors that are being asked to identify this separately in their contracts. the defense contractors. in order that the costs are being delineated or are they absorbed? >> [inaudible] >> which one is it, sir? >> [inaudible] >> is the cost for funding part of the industry? >> here's part of the question

great we are doing this for the contractors, which it seems that this is something that they should pay for, if they want to do business with the government, a classified setting, it seems that they should be there. but assuming that we are paying for, why in the world be paying a premium for those that already had occurred it's not like we are paying for it twice. because they get extra money for having employees that have a clearance. not only are we paying this, but we are paying again that they have it. >> i see your point, i can't address the last part of the question. but we have done extensive research within the department as what is the most cost-effective way for this to be within the department. the analysis says that if we were allowing the contractors to build up into the contract, then they would add overhead on that. so the most cost effective way listmanager from the department

and we pay those costs because we paid either way. >> that makes some make some sense. but it doesn't make sense that we pay them for it, since we did in the first place. >> i guess the contractors are saying well, therefore you need to pass more. well, that is a good deal if you can get it heard it sounds like a contractors are getting it. i would like you to get back to the committee with why you cannot cease and desist paying a premium to contractors who have clearance. >> we pay opm with $250 million for contractor clearances on government contracts. >> i understand.

>> the taxpayers are providing clearances for taxpayers. you get premium if the people are working on the contract have clearance. it would be one thing if they were doing it for something they had paid for. but they are not. that seems dumb to me. that is why i would like to figure out how we are doing it. >> thank you. ma'am, if i could just add an that is an issue that we have to address with the acquisition community than we would be happy to come up with more information on that. >> i would love that. the next time i see you, i will mention it as well. it doesn't make any sense to me that we would do that. i'm out of time. >> thank you. mr. lewis, what measure of safeguards are in place to monitor the military personnel,

dod, civilian, private contractors with their security clearances? >> well, if you're talking about the day-to-day access to classified information, for contractors, we do the oversight. from the standpoint of a military service member or a dod civilian, that is the responsibility of the component had to establish a program to monitor and conduct oversight of their own operations. do you know what kind of criteria is used in these cases? >> there is a dod information security program which establishes criteria.

>> can you tell me what the biggest disqualifier's are? >> historically it has been. >> and as it is for financial issues and individuals who have been involved in this. >> how many clearances have been revoked? >> in a previous question, i think that mr. schmidt said that this has been part of the investigation simply 2001. did i hear that correct? >> yes, sir. >> they are still under investigation now? >> yes, sir. >> how long did it investigations take effect? >> it typically takes several years.

>> can you tell me what that investigation is about? >> well, since it is ongoing, i really don't want to jeopardize this. >> i don't thank you. senator mccaskill, do you have a questions? >> i do have a couple. not only do they have that they contract to actually -- the biggest contract to do the background checks, but they also have these programs support contracts. these contracts are, you know, one of my nemesis is in my job of overseeing the contract. it is all through the government and there has been an easy way to augment personal by doing these programs support contracts

>> it is easy to get rid of the contractors. >> the costs associated with that are important. in our front end operation has a number of routine activities that it has to conduct. we actually have 999 personnel that were confront an ominous for operations.

>> okay, so we are paying this several hundred million dollars per year to do background checks and $45 million a year to do the office work. >> yes, sir. >> the support contract itself. >> yes, ma'am. >> okay, why. why are we paying contractors. >> we are able that is part of the low-level jobs for sure.

>> you have a cost benefit analysis? >> not one that i can give you. >> how do you know they are cheaper? >> well, we will do a cost benefit analysis. >> it sounds like you haven't done one, yet he said that they were cheaper. how do you know that? >> we can contract the work force very quickly on the contract side. >> so you're telling me this is downsized. >> yes, ma'am. >> what was a lesser? >> well, it was -- i would have to get that number to you, it is over a thousand. >> i'm going to dig in here, just warn you. i want the numbers. i won't cost benefit analysis. i am tired of this assumption being made at the contractors are cheaper. i have enough this for six years. i guarantee you about half the

time that it hasn't been cheaper. i do think it is easier. and many times, there have been studies done that they are more expensive. so i would like to take a hard look at that and make sure that that is in fact the case. that was my last question. >> i know that all of you want to make this as good as possible. and we don't have these hearings to make everyone feel awkward and uncomfortable. we have these hearings because i know that oversight is needed in this area. i think all of you will acknowledge the oversight. my friends from the ig's office know that the oversight is needed. i think you can acknowledge that this is an area that we have neglected oversight with. it takes one incident for all of us to realize that there is a whole area of government that most americans have no idea how this actually works. the more we didn't come in the more we realize more work needs

to be done. >> i that we will figure this out. >> thank you, mr. chairman. >> thank you, senator. senator mccaskill, thank you so much. i just want to thank all of you for being here. we have have these hearings to try to get information to make things run better and i appreciate you giving us the notice of being here today. i know you're very busy. oversight is critically important. i think that that has been brought up several times a day in making sure that we have the proper metrics and oversight and make sure that we have folks that are government employees and contractors that are accountable.

>> we have to make sure that the intelligence they solid even to the department. once again i want to thank you for your testimony i want to say thank you for the subcommittee members. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

>> tonight on c-span2, the senate debates the immigration bill. then senate hearings on the joint strike fighter and the merger between u.s. airways and american airlines. >> one of the sticking points in the immigration bill under consideration by the senate is the issue of border security. an amendment was filed today that would increase high-tech monitoring along the border with mexico. >> we are discussing this immigration bill and how little the focus has been on the impact of it.