[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
DEFENSE SECURITY SERVICE OVERSIGHT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS, AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
FEBRUARY 16, 2000
__________
Serial No. 106-152
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
66-789 CC WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on National Security, Veterans Affairs, and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
MARK E. SOUDER, Indiana ROD R. BLAGOJEVICH, Illinois
ILEANA ROS-LEHTINEN, Florida TOM LANTOS, California
JOHN M. McHUGH, New York ROBERT E. WISE, Jr., West Virginia
JOHN L. MICA, Florida JOHN F. TIERNEY, Massachusetts
DAVID M. McINTOSH, Indiana THOMAS H. ALLEN, Maine
MARSHALL ``MARK'' SANFORD, South EDOLPHUS TOWNS, New York
Carolina BERNARD SANDERS, Vermont
LEE TERRY, Nebraska (Independent)
JUDY BIGGERT, Illinois JANICE D. SCHAKOWSKY, Illinois
HELEN CHENOWETH-HAGE, Idaho
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence J. Halloran, Staff Director and Counsel
J. Vincent Chase, Chief Investigator
Jason Chung, Clerk
David Rapallo, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on Febaruy 16, 2000................................. 1
Statement of:
Cunningham, General Charles, Director, Defense Security
Service; and General Larry D. Welch, chairman, Joint
Security Commission........................................ 36
Schuster, Carol R., Associate Director, National Security
International Affairs Division, U.S. General Accounting
Office; Christine A. Fossett, Assistant Director, National
Security International Affairs Division, U.S. General
Accounting Office; and Rodney E. Ragan, Senior Evaluator,
National Security International Affairs Division, U.S.
General Accounting Office.................................. 2
Letters, statements, et cetera, submitted for the record by:
Chenoweth-Hage, Hon. Helen, a Representative in Congress from
the State of Idaho, prepared statement of.................. 118
Cunningham, General Charles, Director, Defense Security
Service, prepared statement of............................. 39
Schuster, Carol R., Associate Director, National Security
International Affairs Division, U.S. General Accounting
Office:
Budget for investigations and other missions of the DSS.. 27
Contract costs for Personnel Security.................... 29
DSS cost breakdown....................................... 31
Personnel Security Investigation workload................ 25
Prepared statement of.................................... 5
Welch, General Larry D., chairman, Joint Security Commission,
prepared statement of...................................... 66
DEFENSE SECURITY SERVICE OVERSIGHT
----------
WEDNESDAY, FEBRUARY 16, 2000
House of Representatives,
Subcommittee on National Security, Veterans
Affairs, and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2247, Rayburn House Office Building, Christopher Shays
(chairman of the subcommittee) presiding.
Present: Representatives Terry and Mica.
Staff present: Lawrence J. Halloran, staff director and
counsel; J. Vincent Chase, chief investigator; David Rapallo,
minority counsel; and Earley Green, minority staff assistant.
Mr. Shays. I call this hearing to order.
The Department of Defense [DOD], relies on personnel
security investigations to determine whether individuals should
have access to classified information. It is a process critical
to safeguarding the national security. Currently, more than 2
million military, civilian, and Defense contractor/employees
hold confidential, secret, and top secret security clearances;
all of which require periodic re-investigation.
The agency responsible for policing access to national
secrets, DOD's Defense Security Service, referred to as DSS,
has encountered very serious, very persistent problems. In
October, the General Accounting Office [GAO], reported that,
``DOD personnel security investigations are incomplete and not
conducted in a timely manner. As a result, they pose a risk to
national security by making DOD vulnerable to espionage.''
GAO reported a backlog of more than 600,000 re-
investigations and deviations from investigative standards in
the vast majority of completed cases. How did so vital an
element of the national security apparatus fall into such
disrepair? Based on a widely publicized case of espionage in
1997 by a DOD employee holding a clearance, our colleague,
Representative Ike Skelton from Missouri, ranking member of the
House Armed Services Committee, asked GAO to reassess the rigor
and consistency of DOD's personnel security investigations.
Their findings portray an agency mismanaged and reinvented
to the point of corrupting its core mission to provide timely
thorough background investigations upon which clearance
granting agencies could confidently rely. New leadership at DSS
has a plan to address the backlog: increase the quantity and
quality of personnel security investigations, and maintain
investigative standards.
Today, we will examine the particulars of that plan, ask
how realistic DSS projections are, what it will cost to
implement them, and when we can expect to see real progress.
Despite the end of the cold war, threats to our national
security remain, more diffused, but no less determined to do us
harm, our foes will seek to exploit any lapse in vigilance and
any lack of caution.
The DSS stands guard at a critical post in the New World
Order. It must be able to perform the mission. I would like to
welcome all of our witnesses and guests today. In the months
ahead, we will convene again to measure DSS progress against
the goals and benchmarks that I think will be discussed today.
At this time, I would call our first panel and invite them
to stand and be sworn in. Carol R. Schuster, Associate
Director, National Security International Affairs Division,
GAO; Christine A. Fossett, Assistant Director, same division;
Rod E Ragan, Senior Evaluator, at the same division, if all
three, thank you.
[Witnesses sworn.]
Mr. Shays. Thank you very much. I note for the record that
all witnesses responded in the affirmative to that question.
Ms. Schuster, we welcome your testimony. Thank you. The bottom
line is we have 5 minutes. Then we will roll over another 5,
and we will roll over again if we need to. So, you take what
you need to. Our other witnesses will have that same privilege.
STATEMENTS OF CAROL R. SCHUSTER, ASSOCIATE DIRECTOR, NATIONAL
SECURITY INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL
ACCOUNTING OFFICE; CHRISTINE A. FOSSETT, ASSISTANT DIRECTOR,
NATIONAL SECURITY INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL
ACCOUNTING OFFICE; AND RODNEY E. RAGAN, SENIOR EVALUATOR,
NATIONAL SECURITY INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL
ACCOUNTING OFFICE
Ms. Schuster. Mr. Chairman, we are pleased to be here today
to present our findings related to background investigations
conducted on DOD employees by the Defense Security Service.
With your permission, I would like to briefly summarize my
statement.
Mr. Shays. I am very sorry. I am very sorry. We have a
vote. I think rather than interrupting you, so you all have
about 10 or 15 minutes if you want to go get a coffee or
something, I will be back.
[Recess.]
Mr. Terry [presiding]. We will come to order again. As I
understand, we were just beginning testimony. We might have
been a few sentences into it. Ms. Schuster, pickup where you
left off, or start at the beginning, whatever you feel
comfortable with.
Ms. Schuster. All right. We appreciate this opportunity to
present our findings on our background investigations conducted
on Department of Defense employees by the Defense Security
Service. With your permission, I would like to briefly
summarize my statement and ask that the entire statement be
submitted for the record.
Mr. Shays. Yes, please, without objection.
Ms. Schuster. First, let me underscore that safeguarding
sensitive national security information is one of the most
important responsibilities entrusted to public servants. It is
therefore critical that only those individuals who have passed
the scrutiny of rigorous background investigations be granted
security clearances.
While it now appears that DSS is making positive steps to
improve the thoroughness and timeliness of its investigations,
our review conducted last year found serious lapses in both the
thoroughness and timeliness of these investigations. This
raises questions about the risks such lapses pose to national
security. First, let me briefly summarize the findings with
respect to the completeness of DSS investigations.
A complete investigation should cover all of the
investigative areas required by Federal standards. Following
these standards is important to ensure uniformity among the
many entities involved in investigations and to provide
reciprocity among agencies that grant clearances.
Yet, we found from our detailed analysis of 530 personnel
security investigations, that the vast majority did not comply
with Federal standards, such as verifying residency,
citizenship, and employment. For example, 92 percent were
deficient in at least one of the required areas. Seventy-seven
percent did not meet the standards in two or more areas and 16
percent contained derogatory information that was not pursued,
such things as past criminal history, alcohol and drug abuse,
and financial difficulties.
All 530 individuals were granted top secret security
clearances. The primary areas where we identified lapses were
in confirming residency, corroborating birth or citizenship of
foreign-born subjects and their spouses, verification of
employment, interviews with character references, and criminal
record checks at the local level.
Of particular concern to us were the cases where leads were
not pursued. For example, one individual working in the Joint
Staff had a credit report that showed that his mortgage was
$10,000 past due and foreclosure proceedings had begun. Because
this subject denied knowledge of this matter, it was not
pursued. In another case, the subject's credit report revealed
a bankruptcy, yet there was no followup.
In still another case, the subject claimed to be a citizen
of another country and a member of a foreign military service.
Character references alleged that he had been involved in a
shooting. None of these matters were pursued. With respect to
timeliness, we found that DSS investigations simply take too
long. Defense agencies and contractors want investigations done
within 90 days to avoid costly delays.
We have found that over half of the 530 investigations we
examined, took over 204 days to complete. Less than 1 percent
took less than 90 days, and 11 percent took more than a year.
There are several problems with this. First, contractors have
to wait too long to begin their work. This jeopardizes meeting
performance, cost schedules, and drives up costs.
Second, individuals having their clearances updated
continue to work with classified materials, even though their
personal circumstances may have changed, rendering them unfit
to retain their clearances. Third, central adjudication
facilities, who evaluate the collective information to decide
whether a clearance should be granted or denied sometimes rule
favorably, even though information is incomplete, because it
could take another 6 months if the case was sent back for
further investigation.
Finally, the backlog of cases awaiting periodic
reinvestigation, as you pointed out, Mr. Chairman, has grown to
at least 500,000. At the time of our review, it was 600,000. To
put this into perspective, the total number of Defense
employees who have clearances is about 2.4 million. We found
several weaknesses that we believe contributed to the
incomplete investigations that we found.
For example, we found that DSS relaxed its investigative
requirements to give investigators greater discretion in how
they might meet Federal standards. Because this guidance was
not always consistent with Federal standards, investigators
became confused as to what constituted a thorough
investigation. DSS also eliminated two important quality
control mechanisms: supervisory review of completed
investigations and its Quality Assurance Branch.
DSS also provided almost no formal training on the new
Federal standards to its investigators between 1996 and early
1999. DSS spent $100 million to implement an automated case
management system that simply did not work. The problems that
ensued added to the already large backlog of cases waiting to
be investigated.
Another $100 million to $300 million may be needed to
correct the problems. Importantly, because DSS had been named a
re-invention laboratory under the administration's Reinventing
Government Initiative, DSS was allowed to operate with much
latitude and without the normal degree of oversight that would
normally be expected.
Our October 1999 report makes several recommendations to
the Secretary of Defense to fix these problems. For example, we
recommended that the Secretary increase oversight of DSS
operations, provide the necessary funding and priority to deal
with the case backlog, bring policy guidance on DSS
investigations in line with Federal standards, establish
effective quality control and training mechanisms, take
corrective action on the case automation problems, and direct
adjudication facilities to grant clearances only when
investigative work is complete.
We also recommended that the Secretary report the DSS
Investigative Program as containing material internal control
weaknesses under the Federal Managers Financial Integrity Act,
and that a strategic plan, with measurable goals and
performance measures be developed.
I am pleased to say that General Cunningham began taking
corrective actions on these matters the very moment he assumed
leadership of DSS in June 1999. I will leave it up to General
Cunningham to outline the specific actions his agency is taking
to correct these problems and ensure the integrity of the
investigative process.
This concludes my statement. I would be pleased to respond
to any questions that you might have.
[The prepared statement of Ms. Schuster follows:]
[GRAPHIC] [TIFF OMITTED] T6789.001
[GRAPHIC] [TIFF OMITTED] T6789.002
[GRAPHIC] [TIFF OMITTED] T6789.003
[GRAPHIC] [TIFF OMITTED] T6789.004
[GRAPHIC] [TIFF OMITTED] T6789.005
[GRAPHIC] [TIFF OMITTED] T6789.006
[GRAPHIC] [TIFF OMITTED] T6789.007
[GRAPHIC] [TIFF OMITTED] T6789.008
[GRAPHIC] [TIFF OMITTED] T6789.009
[GRAPHIC] [TIFF OMITTED] T6789.010
[GRAPHIC] [TIFF OMITTED] T6789.011
[GRAPHIC] [TIFF OMITTED] T6789.012
[GRAPHIC] [TIFF OMITTED] T6789.013
Mr. Terry. Thank you very much.
Mr. Shays is the real chairman of this subcommittee. Would
you please start?
Mr. Shays [presiding]. I will be happy to start. I ask
unanimous consent that all members of this subcommittee be
permitted to place any opening statement in the record, and
that the record remain open for 3 days for that purpose.
Without objection, so ordered.
I further ask unanimous consent that all witnesses be
permitted to include their written statements in the record,
and without objection, so ordered.
I have a number of questions that the staff has written out
that I want to go through because I really want to cover those
in some sequence. First, let me ask you, re- investigations
occur how often?
Ms. Schuster. It depends on the level of the clearance. For
a top secret clearance, which was the focus of our
investigation, it is every 5 years. For a secret clearance,
which is the next level down, that is currently now 10 years.
For a confidential clearance, which is one step below that, it
is every 15 years.
Mr. Shays. The number was approximately 2 million people
with any of these three, the top, the secret, and the
confidential. What would be the breakdown of the top secret? Do
you know that? I could ask the next panel if you do not have
that.
Ms. Schuster. Yes. We have 500,000 top secret, 1.8 million
secret, and 100,000 confidential. That is a total of 2.4
million. These are rough numbers.
Mr. Shays. I understand. Did you evaluate the logic of
every 5 years? Did you look at that and say, could it be 6?
Could it be 7?
Ms. Schuster. No. We did not include that in our review.
The only things that were in our review were top secret
clearances. So, that is what we focused on. Those are the
people who handle the most sensitive information. So, we
focused our efforts on just the top secret ones.
Mr. Shays. Has it always been 5 years? Has that just been
kind of what we do?
Ms. Schuster. Top secret has been every 5 years for a long
time. The new time limits on confidential and secret are
relatively new. I think that was 1997. Those requirements are
in the force now. DOD had been doing the secret clearances
every 15 years. Now, they will be doing them every 10 years.
They had not been doing the re- investigations on the
confidential clearances until the new requirement came into
being.
Mr. Shays. In the 530 cases that you reviewed for top
secret clearance, you basically said 92 percent of the 530
investigation cases were deficient and that they did not
contain information in at least one of the nine required
investigative areas. Then you said 77 percent of the
investigations were sufficient in meeting Federal standards in
two or more areas.
Was there any one of those nine areas that was mostly
ignored?
Ms. Schuster. Yes. There were some that were more prominent
than others. The one that was most frequently omitted was
establishing residency, going out to the neighborhoods and
making sure that the person really lived at the address that he
did, verifying birth and citizenship, checking birth records.
Mr. Shays. I do not understand. If I would logically make
an assumption, I will be the devil's advocate here, that if
they had been investigated once, that was determined. It is
like if they were born in the United States, what is the point
of checking 5 years later that they were born in the United
States.
Ms. Schuster. Right. You are making a distinction between
the initial investigation and the periodic re- investigations.
For the periodic investigations, they do not have to go back
and verify certain things that were already verified the first
time. They just have to cover the period since the initial one.
Mr. Shays. There is logic to it that way.
Ms. Schuster. Absolutely.
Mr. Shays. You also said 16 percent not pursued when
something like a drinking problem or a financial problem. I
basically thought the whole point of doing these re-
evaluations was to identify a problem area. I mean, to me that
is the most shocking thing that you have told me today.
Ms. Schuster. I would agree with that, yes. I believe that
there is really not too much of an excuse for not following up
when you come up with derogatory information. The guidelines do
call for going beyond just getting the basic information. When
there is derogatory information that seems significant, it
should be pursued under the guidelines.
Mr. Shays. It reminds me of a cartoon I saw in a newspaper
years ago and it showed an investigator and he was looking for
a bank thief. He got into this house, and he opened the closet,
and all of this money came cascading down on top of him. He
said, nothing here but money, and then went on to the next
thing. So, that you would clearly identify.
How has the mismanagement of the agency contributed to the
weakness found in your review of the Personnel Security
Investigation Program?
Ms. Schuster. I think the management problems that have
come to light have been very well-documented, including
testimonies as recent as last week, I believe, when the
Secretary of Defense acknowledged that there were a lot of
problems there. We found the weaknesses in several areas. The
first area was relaxing the standards below the Federal
standards, and also allowing perhaps too much latitude with
their investigators as to how far and how deeply they went into
the investigative areas.
The second area was doing away with some of the quality
control mechanisms they had on those investigations. They did
away with the Quality Assurance Branch, and supervisory review,
for instance. In the training area, they just really were not
giving very much training to the investigators.
Because there were new investigative standards, there was a
need for such training. They also did away with the Security
Institute, which was training not only DSS investigators, but
investigators throughout the Government.
Mr. Shays. Did this happen during the Clinton
administration or did this happen before the Clinton
administration?
Ms. Schuster. This occurred primarily between March 1996
and very early 1999, but primarily between 1996 and 1998.
Mr. Shays. Frankly, I find this pretty astounding. I was
thinking if I was asked to come in, as General Cunningham has
come in, to remedy this, I mean, to think that you would
eliminate the training of your employees who go out, as one
example of what you mentioned, to me just frankly boggles the
mind.
What would attribute to that? Did we in Congress just give
lots less money? I mean, what ultimately happened that made
that occur?
Ms. Schuster. What appears to have occurred is that leading
up to 1996, there were several groups that were bringing up
problems with the Personnel Security Program across the board.
They were saying it was taking too long to do the
investigations, and that the whole process was fragmented and
needed to be streamlined. So, the Joint Security Commission,
and the Defense Reform Initiative, the Quadrennial Defense
Review, all of those bodies were saying that something needed
to be streamlined and done to try to improve that whole
personnel security process.
So, at that particular time, the Director decided to take
up the mantle and try to do something to streamline the
procedures, and got approval to become a re-invention
laboratory and streamlined some of the procedures.
Mr. Shays. In the beginning of this, I was trying to think.
Well, you know, once you have gone through a clearance, I think
of myself. I am not really going to change that much. So, I
think once they have done a clearance, why would we keep doing
it every 5 years? That is why we have these hearings. The
answer is quite evident here.
What I had realized is that the value of the re-
investigation is that as people are in the system, they gain
more authority. They have really an opportunity to see things
that are far more precious, and important, and sensitive. So,
the logic, it seems to me, is that the re- investigation is two
things. Then I want you to comment. It is really your
statement. So, thank you for it. It is an excellent statement.
You have a more important job and you are seeing more
sensitive information. Also, you can fall on hard times. You
can have a financial problem. You can start to have a drinking
problem, both of which would, potentially, to tremendous
compromise. So, I am pretty comfortable with why we want to re-
investigate.
Ms. Schuster. I am in full agreement with what you have
said, yes. As a matter of fact, many of the people who are
experts in this arena have emphasized that periodic re-
investigations are probably more important than even the
initial investigations. So, you are absolutely right.
Mr. Shays. I think I will just yield back my time, and if
other Members want to ask questions.
Mr. Terry. Yes. I have got a couple of mop-up questions, if
you do not mind. I appreciate it. The field that you
investigated from the 530 cases, I apologize for maybe asking
questions that are already involved in your statement. I assume
those 530 were random.
Ms. Schuster. Yes.
Mr. Terry. They were not particularly pulled out of a field
that was waiting to be investigated.
Ms. Schuster. Right. If I could just explain our
methodology.
Mr. Terry. I would appreciate that, yes.
Ms. Schuster. We took all of the cases that were sent four
of the adjudication facilities, in January and February 1999.
Those four adjudication facilities were the Army, Navy, Air
Force, and the National Security Administration. We included
all of the cases that went there for adjudication, which means
they were going to decide whether to approve or deny a
clearance at the top secret level.
We took a statistical sample of those cases. I think there
were 1,698. We took 530 of those.
Mr. Terry. That is a pretty good percentage.
Ms. Schuster. The size got us to certain tolerance levels.
To be able to project results to that universe of cases that
were there. Now, those four adjudication facilities were
selected because they represent 73 percent of all the cases
that are adjudicated in the defense area. So, it does indicate,
I think, that our findings are representative of a systemic
problem. So, that is how we selected those.
Mr. Terry. The phrase ``systemic,'' shall we assume that it
was equally weighted from the four adjudication centers or was
it one that was predominantly the problem while one was doing
an excellent job?
Ms. Schuster. What we found was that all had problems. The
lowest one was 88 percent in the Army. That statistic that I
gave you about 92 percent had one thing. It was 88 percent in
the Army, 91 percent in the Navy, 94 percent at the National
Security Agency, and 95 percent in the Air Force. So, all of
them were pretty deficient.
Mr. Terry. Well, that is incredibly depressing.
Ms. Schuster. I did not come here to depress you.
Mr. Terry. No, but it is disturbing. It really is,
especially the 16 percent with derogatory information that
lacked any follow-through and followup. It really speaks
volumes. You have done an excellent job, I think, in your
report about learning where the problems lay; identifying that
there is in fact a problem that we need to address. Now, let us
look toward the solutions.
You mentioned that General Cunningham has already started
addressing them. That became obviously the shorter part of your
report and presentation here today, but I think that is where
we need to focus on now, since you have done an excellent job
of identifying the problems.
Let us focus now on the solutions. What has he been able to
implement to-date? Where can we help out? Where have been the
obstacles that you have been able to identify toward doing a
better job?
Ms. Schuster. Let me first compliment General Cunningham.
He has really taken the bull by the horns and has taken actions
on every single item that we recommended in our report. GAO is
not used to the agency coming back and agreeing with us 100
percent. But in this particular case, the Department did agree
with all of our recommendations.
Some of the things that he has done on the management
front: we asked for a strategic plan, and for performance
measures to try to measure how much progress they are trying to
make to meet their goals. He has developed a strategic plan.
They are working on it and a performance plan to set milestones
for trying to correct some of the problems there.
They are designating this investigation program, as a
material weakness to the Department of Defense under the
Federal Managers Financial Integrity Act. He has brought the
standards back in line with the Federal Standards so that the
investigators will be following the same standards that other
investigators throughout the Government are following, and has
created a new manual for them to follow, and will be providing
them training.
He has re-established the Quality Control Unit within DSS.
These staff will be periodically tested on the standards to try
to maintain the quality of the investigations. In terms of the
backlog, this is a real difficult problem for them to solve. I
understand that what they have done is to go back and try to
re-evaluate the backlog to see whether in fact all of the
people that were in the backlog really in fact needed an
update.
Some people, for instance, retired. Some people were
separated. Some people were no longer working in classified
areas. So, they are trying to get a better fix on exactly the
extent of the backlog. Because there were quotas established on
how many could be sent to DSS for investigation, there is sort
of a pent-up demand. The statistical data base was not really
very good at capturing the total universe of this backlog.
They are taking several actions. One in particular, I
think, is very promising. They are working on an algorithm that
will try to identify those cases that are most likely to result
in a denial of a clearance, based on their past experience.
That will allow them, if they can get this to work, to identify
those cases that are most risky to the Government and be able
to process those in a priority manner.
Mr. Terry. Let me interrupt. What do they need to make that
work so that we do not run into the same problem that you
identified in your testimony as spending $100 million on
automation that has not worked?
Ms. Schuster. Right. Well, that is a fair question. I do
not know the answer to that question because we have not really
gotten into the details of how they are developing that
algorithm. The idea is certainly a good one. They also are
contracting out for some of the backlog. They have put some
Reservists on active duty to temporarily work on the backlog.
They have OPM working on some of the civilian investigations.
They are thinking about also having a contract that would do
some end-to-end investigations from the very start to the very
end with contractors who would be focusing on some of the
cleaner cases, the ones that do not seem to be as risky. They
would contract those out.
So, they are doing a lot of things on that front. As you
alluded to, they have a lot of problems with the Automated Case
Control Management System. That, to my mind, is the biggest
challenge that they face. That automated system just was not
planned properly. It was not implemented properly. The people
who were trying to procure that system and manage it really
were not totally qualified to do that.
They did not have the background in a major acquisition
program. They did not have the information technology expertise
to really do that. I think all of these weaknesses have been
acknowledged. So, they are at a juncture now where they have
got to decide whether they are going to try to patch up the
system, or if they are going to just give up on it and try to
replace it. That is going to be a major decision for them to
make.
Regarding past evaluations, there was a DOD red team that
came in, and evaluated what they should do with that system,
and what went wrong with the system, and what they would
recommend. A TRW contractor evaluation also looked at it from a
technical standpoint.
Both of those groups pointed out numerous problems with the
way the thing was put together, the lack of documentation, the
lack of checks and controls, just what you would expect of an
automated system, to the point that the TRW investigation did
not feel like it was salvageable.
Mr. Terry. I was curious if any of the people from the
outside that have reviewed this made any suggestions. You are
saying TRW has made a suggestion that you walk away from it. I
assume that there are probably people on the inside, for want
of a better word. When you invest $100 million and a lot of
reputation, that is probably emotionally hard to walk away
from, but that is what TRW is recommending?
Ms. Schuster. That is what they recommended in their
evaluation. Now, I understand that there is another evaluation
going on right now. I am not sure who is conducting that. But
that evaluation is supposed to come up with a recommendation to
the Secretary, I think it is May 1st of this year, who would
make the decision: Are we going to try to fix this system or
are we going to consider an alternative?
One point that should be brought out is that if they do go
with a new system, that would fall under the Clinger-Cohen Act,
which would mean that they would have to look at things like:
Is this an inherently Governmental function? Does it have to be
done by the Government? Should it be governmental or could it
be privatized?
Are there other alternatives out there, such as OPM's
system that might be an alternative? Is a new system by the
Government needed and should one be procured? So, all of those
decisions. Make this sort of tough. It will take awhile to work
through that, if the decision would be made to go with a new
system.
Mr. Terry. But they are moving toward that direction. So,
that is movement and that is appreciated.
Ms. Schuster. They are at least considering all of the
alternatives now, and a decision is going to be made apparently
the first of May.
Mr. Terry. All right. Thank you very much.
Mr. Shays. Mr. Mica.
Mr. Mica. Thank you. Just a couple of questions, if I may.
Tell me about the numbers of personnel that we are dealing
with, with DSS. How many full-time equivalent employees?
Ms. Schuster. The employees that we are talking about that
do investigations are 11,075, roughly, at the time of our
review, and 112 case analysts who also work in this area. The
total number of DSS employees is 2,500 or thereabouts. I could
get the exact numbers for you for the record, if you would
like.
Mr. Mica. Well, wait a second. Now, 2,500?
Ms. Schuster. Total DSS employees.
Mr. Mica. That is total DSS. The 11,000 are those
conducting the investigations?
Ms. Schuster. I am sorry, 1,175. I misspoke.
Mr. Mica. OK. They conduct how many background
investigations?
Ms. Schuster. They conduct about 150,000 investigations.
That would include secret, confidential, and top secret. I
would like to check that number and get back to you on that
exact number.
Mr. Mica. I would like to know the figures on that.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T6789.014
Mr. Mica. Then I am curious, OK, then they do a rash of
other sort of renewable?
Ms. Schuster. Right. There are other kinds of
investigations.
Mr. Mica. Maybe you could give us a breakdown of figures on
that.
Ms. Schuster. OK.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T6789.015
[GRAPHIC] [TIFF OMITTED] T6789.016
Mr. Mica. The budget was $320 million. Is that right?
Ms. Schuster. It was $320 for fiscal year 2000.
Mr. Mica. 2000.
Ms. Schuster. Right.
Mr. Mica. Now, did that include any of the--how much of
that is personnel? Was any of that capital $100,000?
Ms. Schuster. No.
Mr. Mica. Was that already spent?
Ms. Schuster. Yes. I think that $100 million is what has
already been spent to-date. Then they have estimates of what
additional funds might be needed to try to fix things.
Mr. Mica. I am trying to get a handle on what it costs to
operate this, as far as personnel. Another big item, you said
they contract out work. How much in dollars is contracted out
for conducting these activities?
Ms. Schuster. I would have to get those details for you. I
do not have those with me today.
Mr. Mica. OK.
[The information referred to follows:]
Defense Security Service Fiscal Year 2000
------------------------------------------------------------------------
Contract Costs for Personnel Security In Millions
------------------------------------------------------------------------
Investigation Backlog $45.4
------------------------------------------------------------------------
Source: Defense Security Service
Ms. Schuster. I can say that the investigations are an
important part of DSS, but they also have other missions that
these 2,500 people conduct. One is the Industrial Security
Program. Then they also do security training and education.
Mr. Mica. Do they do this also for contractors, for private
contractors?
Ms. Schuster. Right. It is for civilian, military, and
contractors.
Mr. Mica. Is there any way for the contractors to reimburse
for the cost of that service? Are they billed for that?
Ms. Schuster. I am just not familiar with the way they are
paid. I know they are trying to move toward a fee-for-service
kind of a thing. It has not gotten off the ground. I think that
has been put on hold right now because they have not made much
movement toward that fee-for-service.
Mr. Mica. Because people do not want to pay for it. I think
that is something we ought to look at. As chairman of Civil
Service for 4 years, kicking and screaming of course, we were
successful in reducing the Office of Personnel Management from
nearly 6,000 to about 3,000.
Of the 3,000 we eliminated, we privatized all of the
investigators into an ESOP, Employee Stock Ownership Plan. If
you think that was not controversial, Mr. Shays, they did
everything to subvert that possibly. But it was actually most
successful. Do you know if they contract with our ESOP at all
to, yes, I see your shaking of the head. Are they doing a good
job? I see another shake of the head. We are getting
affirmative shakes of the heads from the audience, just for the
record.
I know privatization strikes fear into the heart of anyone
on a Federal payroll, but it does work and it is a great
example of it. I am not sure what could be privatized, or what
portion of this could be done, or how much could be contracted
out to the entity already privatized. I think it would be good
to look at the number of people, what we are producing.
Who is paying for the services? The Government picking up
the tab for private contractors who are doing business with the
Government. There ought to be some reimbursement in it.
Certainly, the way it is operating now, just the information
from your initial study seems that we have to be able to do a
better job doing this.
Possibly a little innovation might be in order. $320
million is a pretty big sizable budget. If possible, maybe you
could submit for the record and also for me, I would like to
see both a flow chart of the organization, and then I would
like to see a breakdown of the expenditures. I do not see it. I
looked through here and did not see it of how much is in these
different categories for personnel, for contracted services,
and other expenditures. Maybe we could get a handle on that.
Ms. Schuster. We can provide that for the record. That was
not part of the scope of our investigation, but we can
certainly get those numbers for you.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T6789.017
Mr. Mica. I noticed in your recommendations, one of the
things is prioritizing. That they need some better system of
prioritization. I would imagine some of those would be of the
utmost urgency and highest level of security clearance, which
would have to be done in a certain fashion by a very secure
personnel to start with. Then as it filters on down, maybe some
change in procedures in the way that is done. I guess that is a
part of your recommendation.
Ms. Schuster. Yes. Our recommendation was that they try to
work on that backlog as a priority matter. What they have done
is they have found several different means to try to catch up
with that backlog. Then they are also working on this algorithm
that is going to try to identify those cases that, from their
past experience, tells them that they might be most likely to
be denied a clearance.
They have an automated personnel questionnaire that flags
certain items. Based on their past experience, if there is
derogatory information on certain elements, it tells them that
the likelihood this clearance might be denied is higher than
another. So, that is what they are working on internally to try
to find a means of prioritizing the workload. That seems like a
good idea.
Mr. Mica. The other final question that deals with $100
million spent on the unsuccessful computerization.
Ms. Schuster. What they did was they took the long
questionnaire that probably all of us have filled out and they
automated that into an electronic form. The whole idea was that
everything would be paperless.
Mr. Mica. Right.
Ms. Schuster. Throuigh this Case Control Management System,
they would be assigning the cases to the investigators.
Mr. Mica. What basically went wrong? I mean, was it
something in the specifications that the agency provided, or
was it something that the vendor did not produce?
Ms. Schuster. Just about everything that you can imagine
that could go wrong did go wrong, I think.
Mr. Mica. Was the vendor held liable or did we pay the
whole thing?
Ms. Schuster. I am not so sure it was the vendor's fault
although maybe some of it was the vendor's fault. But the basic
underlying factors are that it really was not planned very well
as an acquisition program. The people were not very well
qualified in either IT or acquisition management.
A lot of the basic planning steps that you would go through
for a major procurement program, such as determining your
requirements, and drawing up a plan, and developing a testing
plan, those basis just were incompletely followed. So, when
they got to the point where they wanted to implement this, the
electronic questionnaire was only being used about 50 percent
of the time. Because it was designed as a totally automated
paperless system, and you still had paper, then you were trying
to keep two systems going; one with paper and one without
paper.
It just caused all sorts of delays because they could not
get the cases to the investigators fast enough. So, that really
did contribute to the backlog that we are seeing today.
Mr. Mica. Thank you, Mr. Chairman.
Mr. Terry [presiding]. Mr. Shays.
Mr. Shays. Thank you. As I fully grasp what you are saying,
and I am not fully there yet, it is astounding. I do not know
how DSS could be in worst shape, or how they could have done a
worst job, given the backlog. I want to ask a few more
questions. Their budget was $74 million and then it went to $84
million?
Ms. Schuster. For the whole agency?
Mr. Shays. Yes.
Ms. Schuster. $340 million.
Mr. Shays. Where am I getting this $74 million?
Ms. Schuster. $320 million for fiscal year 2000 was their
budget.
Mr. Shays. OK. It must be just one part. Was that the
contractors?
Ms. Schuster. Total budget.
Mr. Shays. We had an AIA member company survey. They tried
to estimate what its impact, what the backlog was on the
companies. These are some of the companies. Boeing had 570
employees that were zero to 90 days. I want to take the 90 days
beyond; 1,161 employees. They believe it cost them $52.1
million.
Honeywell, 31 employees. They think it cost them $1
million. Northrup-Grummend, 735 employees. They believe it cost
them $27 million. Lockheed-Martin. Now, they divided in
technical services 58 employees, 4.8; LMTAS, I do not know if
they call it LMTAS or what, but 529; employees, $28.4 million.
Skunk Works, 540 employees, $26.6 million.
United Defense, 145 employees and they did not give a cost
in that one. Aero Jet General, 40 employees, $4 million.
General Dynamics Information Systems 8 employees. They did not
give us a cost. Where we have the cost $143 million, which is
basically almost half of what the budget is. Now, I make an
assumption, and maybe you can answer this, that the cost that
these companies incurred ultimately gets passed on in terms of
the cost of the project to the Government.
Ms. Schuster. I would assume that is correct, that is the
information you are bringing to light. While I do not know
those figures, I do know that during the course of when this
backlog was building up, there was some association of these
contractors--I forget the name of it--that complained to DSS
about this and emphasized that it was costing them a lot of
money to have these delays.
Mr. Shays. But just 3,247 employee backlog, the private
sector of these companies has basically determined it cost $143
million. We are talking about potentially hundreds of
thousands. So, it is the kind of thing I begin to wonder about
the $600 toilet seat. We do know it cost the Government money.
We do know that somehow we have not factored that in.
Ms. Schuster. Right.
Mr. Shays. That is a strong argument to provide the
resources necessary to DSS to get the job done. To the extent
Congress has not done it, and it may be that we privatize more.
My understanding is that when we hear from DSS that they are
basically going to tell us that they have a 50 percent
assistance from the private sector, ultimately when they get
their number down from contractors, those employees disappear.
I am basically wondering this question. They had a
tremendous backlog so they were to find ways to streamline. It
strikes me that the streamlining not only did not streamline,
it did the exact opposite. It created even more backlog and it
provided a less acceptable quality of result, such as ignoring
a large percent, was that 16 percent, of indications you should
look at something. That was ignored. Am I correct here?
Reinventing got the backlog larger and it compromised the
system. I am not looking for a big answer.
Ms. Schuster. OK. There were several reasons that led to
this backlog. The first thing is back in 1995, the Assistant
Secretary of Defense put quotas on the number that could be
sent forward. So, you got sort of a pent-up demand that is now
a part of that backlog that was not submitted. Then we had new
requirements that were instituted during this period for re-
investigations on secret and confidential clearances. Those had
not been requirements before. So, this added to the periodic
backlog.
Mr. Shays. So, when you said the 5 has been there for
years, the 10 and the 15 were?
Ms. Schuster. New.
Mr. Shays. OK, fair enough.
Ms. Schuster. Right. Also this automated system that we
were talking about just did not work. So, the caseload was not
going through there like they really wanted to. That
contributed to the backlog. Then DSS, also point to a couple of
other factors. One is that they feel that there are more people
requesting clearances.
Their customers are requesting more clearances because of
information technology jobs that may require clearances and a
couple of other factors. One was that there was a reduction in
the number of investigators that they had. So, all of those
factors collectively contributed to that problem. The re-
invention part certainly had an impact on the quality of the
investigation.
Mr. Shays. I did not want a long answer, but I needed it
because you needed to clarify that there were a whole lot of
factors.
Ms. Schuster. A lot of factors.
Mr. Shays. I know we have a vote, but I just want to just
get into this last area. If you go into a company and you try
to determine, well, they got bad and so on. You really want to
face up to really how bad it is. This is so bad that you could
almost be tempted to say, well, it could not be worse. But it
could be worse in one respect. It could be that we have a
larger backlog.
When you go into a company and they say, well, you know,
our total IOUs are $10 million and then you look further and
you find it is $20 million, that is a shock. Can you tell me
with 100 percent confidence that the backlog is not larger than
we think it is?
Ms. Schuster. No. I cannot tell you what the size of the
backlog is. I would really question whether they have an exact
fix on it.
Mr. Shays. OK. Let me ask you, how was the backlog
determined?
Ms. Schuster. Each customer that comes to DSS with a need
for an investigation has a fix on the number of clearances that
they need investigated. But these inputs are not put into a
data base that is reliable enough to the extent that you really
know the totality of it. So, all they know is what is coming in
to DSS to be investigated.
Mr. Shays. So, you do not know, in a sense, your
liabilities?
Ms. Schuster. I would guess that they are probably just
estimating the backlog, but you will have to ask General
Cunningham exactly how they are estimating that.
Mr. Shays. So, potentially it could be double or it could
be half of what it is. We at least know that it is this number,
but it could be worse.
Ms. Schuster. It could be worse. It could be better. I do
not think they really know.
Mr. Shays. How could it be better? We have a number of
actual people, do we not?
Ms. Schuster. Well, what General Cunningham has said is
they have been trying to look at that backlog with more
scrutiny and determine whether all of those people that are in
the backlog really need to be investigated, because some may
have retired, been separated, et cetera.
Mr. Shays. OK, fair enough. You are telling me I should
have some question about the number.
Ms. Schuster. Yes.
Mr. Shays. That it is an estimate.
Ms. Schuster. I agree.
Mr. Shays. And it could go in either direction. So, we have
to determine whether it was a conservative or a liberal
estimate. In other words, you get the point. One last and final
question. There were 11 recommendations. Is that right?
Ms. Schuster. I think there were 14.
Mr. Shays. So, they agreed to 11.
Ms. Schuster. I think they agreed to all of them.
Mr. Shays. Twelve.
Ms. Schuster. Twelve.
Mr. Shays. In fact, in every one that I see in the letter
they wrote on October 13th, uncharacteristically but
thankfully, they are succinct. They give you a recommendation
and then they say ``concur.'' In ever instance, it is
``concur.''
Was there any additional recommendation that they did not
concur? Was there any area where you had disagreement or can I
basically accept the fact that all of your recommendations they
concurred with and now the issue is how do you remedy it? In
fact, you suggest how to remedy it.
Ms. Schuster. Yes.
Mr. Shays. They are following your guidelines in many
cases.
Ms. Schuster. Right. From their official response, we can
conclude, at this point, that they are doing something about
all of those recommendations, and that they do agree with them.
Mr. Shays. And that is a very positive thing. So, the
bottom line for me, though, is I should take a second look at
the number. The committee should take a second look at how is
the number determined and is it reliable, the backlog.
Ms. Schuster. Right. I am sure General Cunningham can
address that.
Mr. Shays. OK. Mr. Chairman, thank you. I am finished.
Mr. Terry. Thank you, Mr. Chairman. We will be in recess
until----
Mr. Shays. I think we have a couple of votes.
Mr. Terry. Then we will talk to the Generals.
Mr. Shays. It will probably be at least a half hour. So, I
would say 20 minutes.
Mr. Terry. We will take a 20-minute recess.
[Recess.]
Mr. Terry. Yes.
Mr. Shays [presiding]. I call our second panel, our two
witnesses, General Charles Cunningham, Director of Defense
Security Service, and General Larry D. Welch, chairman, Joint
Security Commission. I appreciate you remaining standing. I
will swear you both in. Thank you.
[Witnesses sworn.]
Mr. Shays. Thank you very much. It is very nice to have
both of you here. I know both of you have testimony. You can
have your testimony as long as you find it necessary. I think
we will start with you, General Cunningham. I know we will
start with you. Thank you.
STATEMENTS OF GENERAL CHARLES CUNNINGHAM, DIRECTOR, DEFENSE
SECURITY SERVICE; AND GENERAL LARRY D. WELCH, CHAIRMAN, JOINT
SECURITY COMMISSION
Mr. Cunningham. Thank you very much, Mr. Chairman. I made a
statement and I would like to submit that for the record. If it
is agreeable with you, sir, I would just like to abbreviate
that in the interest of time.
Mr. Shays. Sure. That testimony will be in the record.
Mr. Cunningham. Thank you, sir.
Sir, as the GAO reported, the agency did agree completely
with the report. In fact, we have used it as a very, very
helpful road map to fix the discrepancies and to go beyond
those actions. So, I want to start by thanking the GAO. It is
working very well in recovering the agency. I would quickly
like to go through why we are in this situation. What are the
problems? What are the solutions? Of course, I will not be able
to cover all of the problems or all of the solutions, but I
want to quickly get through this part.
Mr. Shays. Feel free to be quick, but do not speak fast.
Mr. Cunningham. All right, sir. The situation that we found
ourselves in was caused by very much a breakdown in our
management effectiveness as reported by the GAO. In fact, a
substantive part of the effort made by management, those
efforts by management were caused by a work force reduction. It
is well-understood that the Defense Security Service was not
the only activity in the Department of Defense being reduced in
size.
That was happening across the Department. Nevertheless,
work force reduction was a major factor in that we reduced
almost 40 percent of the work force. Investigative requirements
increased as the GAO had testified. In fact, the quotas imposed
all led to a buildup in the backlog of periodic re-
investigations.
A major factor in this was that in an effort to compensate
for the reduction in personnel, information technology in the
form of the Case Control Management System was seen as a major
way to reconcile the difference in achieving our mission.
Nevertheless, the Case Control Management System, as the GAO
reported, was managed in such a way that it did not deliver.
You will recall that the Case Control Management System was
turned on in October 1998. Immediately it ran into problems. It
was barely able to function at all for the first 6 weeks that
it was in being. That was a major part of causing the situation
we are in because: of the turbulence that it caused beyond just
not getting the work done; the turbulence that it caused in the
organization.
Thus, the management decided, and I do not agree with it at
all, the management decision to relax standards and cease the
many of the quality control activities that were ongoing. I
would hasten to add that the Security Policy Board also did not
agree with that action.
So, the problems, as they were seen inside the agency, were
that there was an un-achievable task to be accomplished. The
work force became demoralized. Training had been reduced. There
was great fear of out-sourcing in the agency. All of that is
not gone. There was a growing backlog. That becomes the
definition or the metaphor for a larger problem.
The agency, in fact, was trying to work with both the
information technology, the electronic personnel security
questionnaire and with a paper questionnaire. So that at the
time that technology was supposed to be solving the problem,
the old method had not gone away. There was the continuing
false starts that occurred in the Case Control Management
System because that program management was not organized, as
reported by the GAO.
Very quickly on solutions. The solutions for DSS have had
to derive from a comprehensive change in how the agency
operates. Quickly, the agency had to return to standards and
quality. Training had to be emphasized. The timeframe that I am
in now is the summer of 1999. Resources had to be organized to
task. That is done. Training is reestablished in the DSS
academy.
Standards are reestablished in the agency, and operating
instruction on August 16th achieved that. An investigations
manual had to be redone, approved, and fielded in December. Our
quality management activity has been reestablished and is
staffed. We have returned to basics and sound management
practices.
By that, I mean we communicate as openly as possible. We
have put our organization in a condition that has a unity of
command in it. Everybody now knows their boss. We have reduced
the span of control. We are still in the process of this. Be
careful how I say that. We are in the process of reducing span
of control in the field to where in situations where we had as
many as 36 personnel under one first-line supervisor.
In March, that will all be reduced across the board to
11:1. It has been an essential factor in how we bring our
people along. Especially, we have now put in something called
standardization and evaluation. Standardization and evaluation
is an activity whereby new investigators we call them agents
after they complete appropriate academic training, which we now
give in our academy that has been reestablished, they are given
an initial qualification check by a standardization and
evaluation examiner.
After that, we have periodic and a periodic examinations or
checks of what our agents are doing. We have begun hiring. We
are going to increase across the board from about 2,450 people
on board now. We will go up over the next year to about 2,600
people. That will include about 100 more agents, taking us from
1,200 to over 1,300 agents.
Augmentation is a major part of what we are looking at.
Before I arrived at the agency, the Deputy Secretary of Defense
had ordered that augmentation begin. That was done. The
decision was made in May. That augmentation came in the form of
getting the help of OPM.
Mr. Shays. Let me ask you. Who ordered that?
Mr. Cunningham. The Deputy Secretary.
Mr. Shays. The Deputy Secretary?
Mr. Cunningham. Excuse me, sir, the Deputy Secretary of
Defense. Thank you very much. It is hard to leave the Pentagon.
Thank you. The augmentation that we are into now, then, has
that first phase that Secretary Hamrey ordered in May, which
uses OPM. In addition to that, letter contracts with a company
named OMNISEC and a letter contract with a company named MSM.
OPM's contractor is USIS. That was the one that Mr. Mica had
mentioned earlier.
In addition to that, and this has much higher potential for
us, the phase two augmentation will consist of larger
contractor support capabilities that we intend to align, as
much as possible, with each of the military departments and
with industry so that unique requirements can be best met.
Those activities begin with the first contract coming on board
as early as the end of this month. Four of those contracts we
hope to have on board by the beginning of the summer.
Sir, I will stop with that and standby for your questions.
[The prepared statement of Mr. Cunningham follows:]
[GRAPHIC] [TIFF OMITTED] T6789.018
[GRAPHIC] [TIFF OMITTED] T6789.019
[GRAPHIC] [TIFF OMITTED] T6789.020
[GRAPHIC] [TIFF OMITTED] T6789.021
[GRAPHIC] [TIFF OMITTED] T6789.022
[GRAPHIC] [TIFF OMITTED] T6789.023
[GRAPHIC] [TIFF OMITTED] T6789.024
[GRAPHIC] [TIFF OMITTED] T6789.025
[GRAPHIC] [TIFF OMITTED] T6789.026
[GRAPHIC] [TIFF OMITTED] T6789.027
[GRAPHIC] [TIFF OMITTED] T6789.028
[GRAPHIC] [TIFF OMITTED] T6789.029
[GRAPHIC] [TIFF OMITTED] T6789.030
[GRAPHIC] [TIFF OMITTED] T6789.031
[GRAPHIC] [TIFF OMITTED] T6789.032
[GRAPHIC] [TIFF OMITTED] T6789.033
[GRAPHIC] [TIFF OMITTED] T6789.034
[GRAPHIC] [TIFF OMITTED] T6789.035
[GRAPHIC] [TIFF OMITTED] T6789.036
[GRAPHIC] [TIFF OMITTED] T6789.037
[GRAPHIC] [TIFF OMITTED] T6789.038
[GRAPHIC] [TIFF OMITTED] T6789.039
[GRAPHIC] [TIFF OMITTED] T6789.040
[GRAPHIC] [TIFF OMITTED] T6789.041
[GRAPHIC] [TIFF OMITTED] T6789.042
[GRAPHIC] [TIFF OMITTED] T6789.043
Mr. Shays. OK, thank you. I am going to ask you question
now. I do not want you to answer it, even if you want to answer
it, right yet, because I want you to think about it. I am going
to ask you how confident you are in the backlog. I want you to
know that I am going to be writing a letter of request to GAO
that they verify the backlog number. That we not work with
guesstimates.
So, I want you, and frankly this could be a help to you
because if the backlog is greater and you set out an agenda
based on the backlog, you are dead before you start. Then
somebody else will be taking your place saying the
mismanagement that preceded them.
So, General Welch, thank you. You are on.
Mr. Welch. Thank you, Mr. Shays. The Joint Security
Commission Report II is in the public record. That is really
our report for the record. I do not have an opening statement.
Let me take 1 minute and remind you of what the Joint Security
Commission was about.
Mr. Shays. Yes. I know nothing about the Security
Commission. So, you feel free to really educate me.
Mr. Welch. The first Joint Security Commission, one, was
asked by the Department of Defense and the DCI for a set of
recommendations to address what was seen as an incoherent and
perhaps sometimes chaotic set of security guidelines. There was
seen a need for much more coherent and security guidelines,
both to increase effectiveness and to reduce cost.
We reported out in 1994 with a set of recommendations. It
eventually led to a Presidential Decision Directive to
implement the key recommendations of the Joint Security
Commission. The Joint Security Commission II convened 5 years
later at the request, again, of the Department of Defense and
the DCI. It was asked specifically to give a grade on how the
Government was doing implementing the direction of the PPD and
the recommendations of the first Joint Security Commission.
The primary focus, or one of the primary foci of the Joint
Security Commission I, was personnel security. Standards were
inadequate and execution was inadequate. Once again, one of the
primary recommendations of the Joint Security Commission II was
that we had agreed to investigative and adjudicative standards,
but they were not being followed by all of the Department. So,
that was the background for the Joint Security Commission.
Mr. Shays. Anything else you would like to say?
Mr. Welch. No. That is it.
[The prepared statement of Mr. Welch follows:]
[GRAPHIC] [TIFF OMITTED] T6789.044
[GRAPHIC] [TIFF OMITTED] T6789.045
[GRAPHIC] [TIFF OMITTED] T6789.046
[GRAPHIC] [TIFF OMITTED] T6789.047
[GRAPHIC] [TIFF OMITTED] T6789.048
[GRAPHIC] [TIFF OMITTED] T6789.049
[GRAPHIC] [TIFF OMITTED] T6789.050
[GRAPHIC] [TIFF OMITTED] T6789.051
[GRAPHIC] [TIFF OMITTED] T6789.052
[GRAPHIC] [TIFF OMITTED] T6789.053
[GRAPHIC] [TIFF OMITTED] T6789.054
[GRAPHIC] [TIFF OMITTED] T6789.055
[GRAPHIC] [TIFF OMITTED] T6789.056
[GRAPHIC] [TIFF OMITTED] T6789.057
[GRAPHIC] [TIFF OMITTED] T6789.058
[GRAPHIC] [TIFF OMITTED] T6789.059
[GRAPHIC] [TIFF OMITTED] T6789.060
[GRAPHIC] [TIFF OMITTED] T6789.061
[GRAPHIC] [TIFF OMITTED] T6789.062
[GRAPHIC] [TIFF OMITTED] T6789.063
[GRAPHIC] [TIFF OMITTED] T6789.064
[GRAPHIC] [TIFF OMITTED] T6789.065
[GRAPHIC] [TIFF OMITTED] T6789.066
[GRAPHIC] [TIFF OMITTED] T6789.067
[GRAPHIC] [TIFF OMITTED] T6789.068
[GRAPHIC] [TIFF OMITTED] T6789.069
[GRAPHIC] [TIFF OMITTED] T6789.070
[GRAPHIC] [TIFF OMITTED] T6789.071
[GRAPHIC] [TIFF OMITTED] T6789.072
[GRAPHIC] [TIFF OMITTED] T6789.073
[GRAPHIC] [TIFF OMITTED] T6789.074
[GRAPHIC] [TIFF OMITTED] T6789.075
[GRAPHIC] [TIFF OMITTED] T6789.076
[GRAPHIC] [TIFF OMITTED] T6789.077
[GRAPHIC] [TIFF OMITTED] T6789.078
[GRAPHIC] [TIFF OMITTED] T6789.079
[GRAPHIC] [TIFF OMITTED] T6789.080
[GRAPHIC] [TIFF OMITTED] T6789.081
[GRAPHIC] [TIFF OMITTED] T6789.082
[GRAPHIC] [TIFF OMITTED] T6789.083
[GRAPHIC] [TIFF OMITTED] T6789.084
[GRAPHIC] [TIFF OMITTED] T6789.085
Mr. Shays. OK. Let me just ask you, there was a Commission
in 1986. Is this the same Commission that we are talking about
now or was that a different Commission?
Mr. Welch. No, sir. The Commission in 1986, whose name
escapes me, was one of the three----
Mr. Shays. Stillwell, was that it?
Mr. Welch. Right. It was one of the three earlier
Commissions that lead to increasing concern about the lack of
standards, the lack of coherent standards for personnel, and
security, and for security in general.
Mr. Shays. So, there was in 1986. Was there one earlier or
one later? There was one in 1994, right?
Mr. Welch. There was one in 1986. There was one in about
1988. There was another one in 1992. Then we reported out in
1994.
Mr. Shays. Then you were established in 1994?
Mr. Welch. I am sorry?
Mr. Shays. You say you were established in 1994?
Mr. Welch. The Joint Security Commission I reported out
their first report in 1994.
Mr. Shays. You reported out your study. You had been in
existence for how long.
Mr. Welch. Then we disbanded. We met for a year and a half.
We reported out. It eventually resulted in a Presidential
Decision Directive, which then established the Security Policy
Board, which was charged with implementing these
recommendations. Then 5 years later, we were asked to
reconvene, really for two purposes.
One, because it had been 5 years and they wanted to check
on how the Government was doing. Second, by that time, there
were enough indications of problems with personnel security
that we were asked to particularly focus on those issues.
Mr. Shays. Well, you are well-aware of what GAO has said.
What is your reaction to what they have said?
Mr. Welch. I agree with what the GAO has said.
Mr. Shays. I want you to characterize it. I mean, is it out
of concern? Should I be greatly concerned? Should you be
greatly concerned? I mean, I want some characterization of--I
will just tell you up-front. For me, I read it and I find it so
astounding. When I was speaking to someone on the floor before
I came back, I said it is so bad, it is so big that you cannot
get your arms around it in one way.
I mean, if you had told me that when they did the
reinvestigation the found 2 or 3 percent where they noticed
that they should do further research, but when you come up with
16 percent, it is like unbelievable. That is the whole point of
the investigation is to identify your problem and then go after
it. So, I want you to tell me how you characterize it.
Mr. Welch. OK. It is bad, and big, and you can get your
arms around it.
Mr. Shays. You can, c-a-n?
Mr. Welch. You can. So, let me tell you why I say that.
Personnel security is a risk management business. That is the
nature of the business. We are making judgments about the
trustworthiness and the reliability of human beings. We now
have, which we did not have in the past, a set of standards on
which we base those judgments. Understanding that we are always
talking about risk management and we are always talking about
making judgments.
So, the Government has agreed across all of the agencies of
the Government, which is an immensely difficult task, that
there is a set of standards that we can apply that will give us
reasonable confidence that based on our knowledge of past
behavior and current circumstances, we have a satisfactory
standard for access to classified material.
So, the standard is in place. The standard is
implementable. The standard is quite reasonable. I do not think
there is any question that we can achieve those standards. But
we did not. Now, you have heard a lot of reasons why we did not
achieve the standard, but the solution is very straightforward.
The solution is enforce the standards. We have all agreed that
those are the right standards.
Mr. Shays. Are those standards different than what the
report presented in 1994?
Mr. Welch. The standards are quite different. When we
entered the effort that was reported out in 1994, the going-in
emphasis was on the cost of this largely incoherent system
because there was a lot of county option. Each agency set their
own standards. Just to give an anecdote to help understand it,
at that time, I had three separate top secret clearances. I had
four separate compartmented clearances.
As we were meeting, I happened to, be undergoing three
separate background investigations. My neighbors suggested to
me that perhaps we should have a neighborhood barbeque and
invite all of the investigators at one time. That was what we
characterized. As we began to do our work, that 18-months'
worth of work, we became very concerned about personnel
standards.
Our concern was that in the area of personnel security,
some of the agencies had standards that we were so lax that we
understood why many agencies would not accept those standards.
Mr. Shays. You mean, so some agencies required more than
others. So, that is why you had more than one check. Is this
kind of like, I used to think that, you know, when you went
from red, green, brown, and then black belt, when you reached
black belt you were done. Then I learned later on that you had
10 elements to black belt.
Are you saying that we have different elements in our top
secret, or are you saying that different agencies just would
not accept the review of other agencies because of different
standards?
Mr. Welch. Both. Each agency set their own standards. The
Department of Energy had a set of requirements to grant a ``Q''
clearance, which is the equivalent of a top secret clearance.
It is the equivalent of a DOD top secret clearance. The DCI had
a different set of requirements for clearances that went by the
same name. So, there was no reciprocity, but more important we
did not have an agreement on what was an adequate standard.
Mr. Shays. That was 1994.
Mr. Welch. That was 1994.
Mr. Shays. So, the focus then was, let us have one review.
Let us have common standards among the various departments and
agencies.
Mr. Welch. Yes.
Mr. Shays. But you, in no way, were not suggesting that you
relax the standards like what took place. I mean, could someone
who had been with DSS go back and say listen, we were being
motivated by the report that you all submitted? Could they
blame your report for a part of the problem?
Mr. Welch. Well, I suppose anyone can do that.
Mr. Shays. Are they?
Mr. Welch. No. Let me comment on a couple of issues that
complicated it a bit. In the end, for the Department of
Defense, the standards went up. They went up considerably. This
was an interagency effort under the Security Policy Board. So,
it took a number of years. I cannot even remember how many, I
guess until 1997, for all of these Government agencies to agree
on what the standard would be.
That is when we came to the definition of what is required
to grant a secret clearance, and what is required to grant a
top secret clearance, and what the time period would be for re-
investigations. Those standards were more stringent than had
previously been practiced by the Department of Defense.
They were perhaps less stringent than someone's standards,
although I do not know whose those would have been. So, from a
DSS standpoint, the result of that effort was to raise the
standards that DSS was expected to follow in their background
investigations. Now, that would be demoralizing only if you
then did not get the resources to do that.
Mr. Shays. But you were also suggesting that they not have
to do double and triple reviews.
Mr. Welch. That is right. That is correct.
Mr. Shays. So, there should have been some advantage there.
Mr. Welch. Our hope was that, that would result in a
significant cost savings. But our report did not suggest that
we could reduce the cost of personnel security. We suggested
you could reduce the cost of physical security and the cost of
document security because of the change to electronics.
Mr. Shays. You did not suggest lowering the standards. You
did not suggest ignoring one of the nine elements. Is that true
or not?
Mr. Welch. Not at all. In fact, our whole emphasis was that
we need an agreed-to Government standard, and then you simply
must follow the standard. There are two reasons for that. One
is you need an agreed-to bar, some standard of judgment based
on behavior and circumstances. Second, the real essence of
security is security awareness.
Security does not just come from someone jumping over the
bar and getting access. Within the organization, everybody in
the organization has to be aware of security issues. You cannot
have security awareness if the people that you are trying to
persuade to have this kind of awareness do not see you adhering
to standards.
Mr. Shays. Thank you. General Cunningham, before I ask you
the question, I said I was going to ask you, I want you to
spare me this problem. If you say you have total confidence,
then I would want to pursue under what basis you would have
total confidence. I would have you try to explain to me, in
some detail, how the number was derived.
You may have total confidence. I just want to say that up
front. I do not want to find that you have total confidence,
but you do not know how they did it and so on. Bottom line
question is do you have total confidence? First, what is the
backlog?
Mr. Cunningham. The backlog has been assessed by an
integrated product team operating in OSD at 5,005.
Mr. Shays. Do you have intricate knowledge of how they
determined that? Are you accepting their number based on their
expertise?
Mr. Cunningham. I am accepting their number. However, I do
not have total confidence in it.
Mr. Shays. Fair enough. So, it is their best estimate as
far as you are concerned.
Mr. Cunningham. Yes, sir.
Mr. Shays. What do you think we can do to nail down that
number?
Mr. Cunningham. Sir, the best way to nail down that number
is to have very disciplined ``scrub and prioritize,'' scrub in
this case, on the part of the military departments, industry,
and other smaller entities in the security community. To that
end, we, DSS, are working with the military departments to have
them embrace the idea and resource the capability to have a
central requirements facility on the front end of the process
in the same way that there is a central adjudication facility
on the back end of the process.
Mr. Shays. If I were to ask you for your confidence level
that the number would be higher or lower, if you have no sense
either way, I do not want you to pick a direction. Do you think
it is likely to be underestimated, or overestimated, or do you
simply do not know?
Mr. Cunningham. Sir, while I think it could be
overestimated, I think the number is higher.
Mr. Terry. Will you repeat that?
Mr. Cunningham. While the number could be lower, I think
the number is higher. That is my professional judgment.
Mr. Shays. In other words, it could go either way, but if
he was a betting man.
Mr. Terry. It is or it is not, and that is your
professional opinion.
Mr. Shays. No, no. Since it was my question, what I hear
you telling me is that it could go in either direction, but if
you were a betting man, it would be higher.
Mr. Cunningham. Yes, sir. That is it.
Mr. Shays. Mr. Terry.
Mr. Terry. I want your help in coming to a full
understanding of an issue. So, I am going to ask you to apply
what you are going to perceive as fairly elementary questions,
but I have to admit that I am somewhat lost on the role of
quotas. As I am perceiving from the some of the testimony and
reading the report that some of the backlog, I do not want to
say ``blame'' or ``excuse'' but the causal relationship of the
backlog to these quotas.
Can you explain to me when these quotas were implemented
and what they are in their direct relationship toward the
backlog?
Mr. Cunningham. The quotas were implemented about 1994 in
an effort to discipline the clearance requests that were coming
in, in an effort to motivate those making their requests to
indeed request the clearances they really needed to have. We no
longer have those quotas.
Mr. Terry. Did you do away with those?
Mr. Cunningham. No. Those were done away with in early
1999, I believe, before my arrival.
Mr. Terry. But the damage had been done?
Mr. Cunningham. Quotas were basically saying, out of a
certain percentage of the re-investigations, I do not know what
the exact quota is. So, maybe 10 percent or the real high
priority ones, so we are only going to make you do 10 percent.
Mr. Terry. Is that a good generalization? Is that a
ballpark generalization?
Mr. Cunningham. Let me tell you what I think I heard you
say.
Mr. Terry. All right.
Mr. Cunningham. The quotas were put on to try to get the
number that were really needed, 10 percent or whatever.
Mr. Terry. Yes.
Mr. Cunningham. But it was a large number. It was a
reasonable number. However, it also, without intending to do
so, created what the GAO was discussing as a pent-up demand.
That pent-up demand finally becomes manifest in a backlog when
the quotas are dropped.
Mr. Terry. From my perspective, it looked like the quotas
set a minimum bar that everybody strived to meet. Then just
like the backlog built up from there and you used the quotas as
the excuse to do that. So, I am pleased that the quotas have
been dropped. Unfortunately, that puts you in a very tough
position to deal with that.
Could you discuss, as my last question, and you did hit on
it during your statement, but I would like you to expand on the
automation of the caseload and what steps you are taking now to
review the current system that I think everyone agrees is not
adequate. Where are you in that process of reviewing it? Where
do you feel the direction is going?
Mr. Cunningham. Yes, sir. The Case Control Management
System was, as the GAO reported, in need of proper program
management. Last summer, we asked for a Program Management
Office, and properly trained people to run the program and run
the recovery. Our judgment at that time was that it made
prudent business sense to continue the system, to continue with
the Case Control Management System until we knew that it was
recoverable.
There was nothing in any study that said that the system
was not recoverable. Our mission is security and this was
central to the system. So, it made good sense to continue. When
we continued, we committed to get a Program Management Office
to indeed have a test capability for the system, which was not
in the original architecture; to develop a concept of
operations; to identify the priority requirements, support, and
concept of operations to do a baseline architecture; and to do
a schedule and a budget.
Those things had never been done before. They are now in
the process. We will have our first look at those on March 1st.
We have our Program Management Office up. It now manages all
contractors. The DSS manages none of the contractors. In fact,
it has identified time lines for the recovery of the system, in
terms of stabilizing the system by June 1, 2000, improving the
system by June 1, 2001. From June 1, 2001 through June 1, 2003,
enhancing the system to meet those requirements that cannot now
be foreseen.
Mr. Terry. Thank you. Mr. Chairman, that concludes my
questions.
Mr. Shays. Thank you very much. I have a number of other
questions; some that my staff wants me to get on the record as
well. I would like to clarify the budget issue. My sense was
that I was being accurate in saying your budget of $74 million
went up to $84 million. That the difference of that number of
the $300-something is money that goes into a fund that looks at
the private sector employees. So, maybe you need to help me
sort out your budget a little bit.
Mr. Cunningham. The budget includes everything that we are
doing this year. It is $324 million. The discrete breakout of
what each one of those, each part of that composing that $324,
I would like to submit that back to you in detail.
Mr. Shays. Sure.
My understanding is that basically your Government budgets,
$84 million, and then you have a trust fund budget that really
is contributed from the employers.
Mr. Cunningham. Yes, sir. It is a working capital fund.
Mr. Shays. Right.
Mr. Cunningham. It is a financing capability by which the
requesting entities that we, say essentially the military
departments, identify what level of investigations will they
need to have done. Then they put the money in to cover that for
the year. They budget in advance. Then they move the money to
us with their clearance requests.
Mr. Shays. I realize that money is fungible. I mean, it may
be the same person that pays ultimately. My sense is that a
chunk of your budget is associated or tagged to a private
company like Boeing or Honeywell, and that they then pay that
cost.
Mr. Cunningham. Sir, I am not aware of that. I would have
to answer you back on that.
Mr. Shays. OK.
We will get into that later. It raises some interesting
questions that I have. Ultimately, if the private sector is
paying some of it, we end up paying for it in the final product
we buy. It does raise some interesting questions as it relates
to the question I asked earlier. If the AIA member companies'
survey has taken Boeing and said they have a backlog of 90 days
in November 1999.
This is what it was. And it was 1,161 employees and it cost
them $52 million, and when I went through the list, you came up
with 3,247 employees costing $143 million. This is a wasted
expenditure, as far as they are concerned. It would be an
expenditure, if they were done in a timely basis, would not
occur. Have you been presented that type of information from
anyone?
Mr. Cunningham. Yes, sir. I have a copy of that
correspondence.
Mr. Shays. Now, this is where my mind starts to work. I
say, you got a backlog of hundreds of thousands, and just 3,247
cost ultimately, I believe the Government, $143 million. I
mean, if anybody has a good case for arguing that you get the
backlog done and we invest in it, you do. I hope OMB has been
exposed to this. Is this a document I should have comfort that
is credible?
Mr. Cunningham. Sir, I think that the private sector
entities who identified that problem are in the best position
to state what that is costing us collectively. You are right
about that. So, I appreciate the urgency that must go against
that kind of a problem.
Mr. Shays. Have we, in the private sector, tried to
estimate the cost? I mean, in other words, this same logic
occurs. I mean, you have someone who is not given clearance.
So, you cannot get the job done. You have people waiting in
line. The job does not get done. It gets delayed. Well, that
happens in the public sector as well.
Mr. Cunningham. Yes, sir.
Mr. Shays. Do we have people in the public sector that have
tried to put a cost to this?
Mr. Cunningham. Not to my knowledge, sir. In fact, you are
highlighting what I am seeking on behalf of the agency to have
``scrub and prioritize'' from everybody.
Mr. Shays. Can you tell me how many of the clearance re-
investigation checks are the private sector versus the public
sector?
Mr. Cunningham. Yes, sir. In general terms, about 75
percent of our work is in the military departments and
otherwise public sector and about 25 percent is in the private
sector.
Mr. Shays. Thank you. What kind of risk assessment has been
developed to determine the danger the backlog poses to national
security?
Mr. Cunningham. Sir, the GAO mentioned the algorithm that
we have been working on and we have now completed. I will be
most pleased to provide a copy to you and your committee. It is
aimed at risk management. Our plan is to go into the total
population of the backlog, apply the algorithm, identify which
records come up as high risk from the algorithm, which we
believe and have had scientific support will predict 89
percent, based on a 6.5 percent sample size, that we use it
against the backlog while we are bringing the backlog down.
So that we both work the backlog down and, in the process,
go after those that are identifiable as highest risk in the
backlog.
Mr. Shays. Is that document ultimately going to be a public
document or will it be a secured document?
Mr. Cunningham. Sir, it is a public document. I will be
happy to provide it.
Mr. Shays. I am going to ask you two benchmark issues. What
is your timetable for eliminating the backlog? There is another
question that I want to ask. That relates to what timeframe has
been established to enhance the Case Control Management System?
So, timeframes, benchmarks.
Mr. Cunningham. Yes, sir. Sir, we believe that----
Mr. Shays. And I am going to interrupt you. I am sorry.
This is based on the number that has been presented to you as
the backlog.
Mr. Cunningham. Yes, sir. We believe that we can bring the
backlog, as we now know it, we can eliminate the backlog by the
end of calendar year 01. Sir, that is a hard task, and I will
say that right up front, but I believe, as I have come to know
the agency and the ability of private sector contractors who
are seeking the work to augment us, that we will be able to do
that.
I believe that we can do it in good form in protecting our
standards and our quality because we are requiring proper
training, certification, applying our standardization and
evaluation checking, our quality management, our operations
research so we can do the trend analysis that goes along with
it, and other activities.
It is important, sir, if I may add, it is important that we
are going to use our algorithm to determine which cases should
go to those contractors so that cases that we predict we will
have problems, we will keep those right in the agency. We
intend that all problem cases, issue cases, derogatory
information uncovered, that those cases revert back to the DSS.
Mr. Shays. Is the integral of success, will you get so many
each from this point on or will you see the vast bulk of them
done from July 2001 to December 2001? In other words, by the
end of this year, what do you anticipate you will have done?
Will you have 50 percent of it done?
Mr. Cunningham. By the end of this year, I think it will be
fair for us to expect in the neighborhood of 15 to 20 percent
of it. The reason that the rest of it is achievable in the next
calendar year is because the contractors will have spun-up. Our
timetable for the Case Control Management System, which I have
mentioned before, will have taken root.
So, that major constraint will be less so. And because all
of the four contractors that we intend to put as major efforts,
and they will have the opportunity to bring others in with
them, that the way they manage their cases will be managed
independently of our Case Control Management System.
So, it will take the agency from complete dependence on
this Case Control Management System over onto another
capability, all of which will be visible to us so we know that
they are being done properly. In other words, we are going to
have belts and suspenders.
Mr. Shays. I was with you until that last part. In other
words, you are going to have what?
Mr. Cunningham. Well, in this hearing term, ``belts and
suspenders.'' You know, we will have it both ways. It is not a
trivial point because we had all of our eggs in one basket and
we are getting out of that.
Mr. Shays. It begs the question of whether you get greater
productivity from the private sector or from the public? I
realize you have to work with both sides. I understand one
reason why we do the private is that we ultimately will have
phased down that unusual number. So then you do not want to
buildup your bureaucracy. So, it makes sense to farm it out.
Does the private sector have some inherent advantages that
allow them a greater productivity?
Mr. Cunningham. Yes, sir. They have agility. They are able
to hire and remove people quickly. They are able to locate
easily. They are able to spinup fast with a great deal of
focus. They are able to marshal resources almost
instantaneously, if they decide to go after the business.
Mr. Shays. That is a very good answer and one that I would
appreciate. One of the things that we have learned on the
subcommittees of Government Reform is that in the private
sector, three people make a decision. Ultimately, in the public
sector it is 11. What that must do for ingenuity, and
creativity, and timeliness is mind-boggling.
Mr. Cunningham. Sir, if I may tag onto that. We will be
watching very closely what happens with these private sector
contractors. Where there are better methods and applications of
IT, we intend to adopt those same things ourselves.
Mr. Shays. Now, there are only two benchmarks so far I have
heard. So, give me a few more. We are going to want to come
back, I mean, whoever is chairman of this committee next year,
I would imagine, and someone will pursue this issue. We will
want to meet with you to determine that. We frankly would want
to meet with you probably later on.
Mr. Cunningham. Yes, sir. Let me give you a few of those.
When we worked with the Program Management Office and the
contractors, and we saw the way they went about considering
progress on the Case Control Management System, those
timeframes I mentioned for the Case Control Management System,
we identified the same phasing for the overall recovery of the
agency.
We have a target right now for August of this year to be
making the number of cases closed per day, on average, to hit
that target. It happens to be 2,500 cases a day closed for the
DSS. To hit that target in August, and to hit it in a
sustainable way, and to hit it in a way that we are continuing
to build capability.
To be able to not only take care of the backlog, but also
be prepared to be able to do more than that should that arise.
We expect that it will arise because of what the security
environment is becoming. Therefore, the date to stabilize the
agency is September 1st.
It will be manifest in the data of output exceeding input
for August in a sustainable way. That we will improve the
agency, not just the CCMS, but the whole agency, through June
2001. And that we will enhance our capabilities from June 2001
through June 2003. We are tying them all together, and a very
good measurement will be when we hit that target in August.
That is one that I am happy to see the agency held
accountable to, and would be more than happy to come back when
you say.
Mr. Shays. Is that the first key date, as far as you are
concerned?
Mr. Cunningham. Yes, sir. The whole agency right now is
marshaling to hit that target in a sustainable way.
Mr. Shays. Just a few more questions here. What do you
consider to be the most pressing problem confronting DSS? You
have got lots of challenges, lots of problems. What would be
really the most?
Mr. Cunningham. I am often asked this by my boss, the
ASDC3I, and the answer is----
Mr. Shays. Wait a second.
Mr. Cunningham. The Assistant Secretary of Defense for
Command, Control, Communications and Intelligence.
Mr. Shays. Thank you.
Mr. Cunningham. Thank you, sir. Art Money asks me this
question a lot. And the answer from the beginning was our
people. Today, the answer is the same. It is our people. This
work force has had a tremendously difficult time. To bolster
their morale, and we are making progress on this, to ensure
they get the right training, proper preparation, proper
response from their systems, those are the kinds of things we
have to work on, but it all centers on the people.
Mr. Shays. You know, I have a few other questions. What I
will do is submit them, if we feel it is necessary to followup.
I will have the committee to submit it in writing and just have
you respond to one or two others. I am happy to have either of
you make any comment. Is there a question you wish I had asked
you, General Cunningham that you could wax eloquently on?
Mr. Cunningham. Wax eloquently, sir.
Mr. Shays. You do not even have to wax eloquently. Is there
a question you were really prepared to answer that you want to
answer, or is there a question I should have asked?
Mr. Cunningham. Yes, sir. You asked the question. The
question that is sometimes not asked, but is the right one to
ask is, what is your biggest problem?
Mr. Shays. Do you want me to ask you what is your second
biggest problem is?
Mr. Cunningham. Yes, sir.
What is it?
Mr. Cunningham. It is the Case Control Management System
because it becomes the pacing item for everything else that
happens in the agency in investigations.
Mr. Shays. Thank you. General Welch, is there a question
that you would have liked me to ask or something that you want
to say?
Mr. Welch. Well, I am very happy with your questions.
Mr. Shays. That makes me very concerned.
If either of you have a closing comment, we can adjourn.
Mr. Cunningham. Thank you very much.
Mr. Welch. Thank you.
Mr. Shays. Thank you very much. We appreciate you being
here. We appreciate your cooperation and we wish you well.
The hearing is closed.
[Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Helen Chenoweth-Hage
follows:]
[GRAPHIC] [TIFF OMITTED] T6789.086
[GRAPHIC] [TIFF OMITTED] T6789.087
-