Another bailout for DSS?

OMB promises process improvements designed to reduce the backlog of pending security clearance

Editor's note: This story was updated at 1:40 p.m. May 21, 2007. Please go to Corrections & Clarifications to see what has changed.

The Defense Department agency that performs security clearances has asked to be bailed out of another fiscal crisis to prevent a second consecutive disruption of services. The Defense Security Service needs $25 million “just to keep the doors open this year,” DSS director Kathleen Watson told Senate lawmakers May 17.

But the agency needs more than $25 million, Watson said. It also must have another $80 million to upgrade its Joint Personnel Adjudication System (JPAS). That system is surviving only with Band-Aid-like patches, she said. DOD spends $10 million a year to maintain the system.

Some House lawmakers recently responded to Watson’s plight. Lack of sufficient resources for DSS prevents its modernization and risks another “devastating disruption in the department’s capabilities to process security clearances for contractors,” wrote Rep. Tom Davis (R-Va.), ranking member of the Oversight and Government Reform Committee, in a letter to Defense Secretary Robert Gates.

Last year, DSS temporarily suspended the processing of personnel security clearances for industry because it did not have sufficient funds to pay the Office of Personnel Management for investigations, a situation the two agencies resolved.

During last year’s DSS clearance suspension, the backlog of candidates awaiting clearance increased considerably, said Evan Lesser, director of, which matches job seekers with security clearances to defense industry employers. Without JPAS, he added, “the defense and intelligence contracting community will come to a standstill.”

DSS received departmental approval to reprogram $25 million this year, but it is waiting for congressional approval to go ahead with the plan.

However, DSS likely will face another crisis in  2008 because the Bush administration’s budget request is short $43.5 million, Watson told the Senate Homeland Security and Government Affairs Committee’s Oversight of Government Management, the Federal Workforce and the District of Columbia Subcommittee.

DSS also needs to modernize JPAS, Watson said. “We are now in the position that if we continue to upgrade JPAS, we will kill the system,” she said.

The government will need a new security clearance process by December 2009 to comply with the Intelligence Reform and Terrorism Protection Act, said Clay Johnson, deputy director for management at OMB. That law states that agencies must complete the process in 60 days.

The Security Clearance Oversight Committee, which OMB and OPM are leading to overhaul the clearance process, has formed a subcommittee to identify new standards and methods for electronic transmission of information needed for clearances.

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