OPM puts security clearance merger plans on ice

The Office of Personnel Management is holding off on a plan to absorb a unit of the Defense Department, a move that some experts had thought might speed up the backlogged security clearance process for federal employees and contractors.

OPM had planned last year to take over the Defense Security Service, which conducts background checks of applicants. However, after examining how DSS manages its clearance process, an OPM official said the agency decided not to bring the unit under its umbrella.

"DSS business practices were not up to the standard we hoped they were," said Stephen Benowitz, OPM's associate director of human resources, products and services. He said the two agencies have different ways of doing business.

OPM already had been handling some clearance-related work for Defense in February 2003 when OPM director Kay Coles James said the merger "represents the next logical step in the process" of continuing a "solid working relationship with regard to [security clearance services]."

However, Benowitz said James made that statement before OPM had a chance "to evaluate the business processes used in DSS." The evaluation prompted OPM to call off the merger.

Those business processes will be the subject of a congressional oversight hearing Thursday that will examine why it takes so many months for the Defense Department to process security clearances.

In fiscal 2003, it took 375 days on average for a Defense-related security clearance application to be approved, according to the House Government Reform Committee. Defense had identified about 188,000 backlogged cases for private-sector workers as of the end of March 2004.

Demand for security clearances--from federal employees as well as contract workers--has risen significantly since 9/11 and the emergence of new security-related projects in several agencies. A security clearance is considered a hiring asset for private-sector workers, and more agencies are requiring them of their own employees.

The OPM-Defense merger was billed as an effort to free up the Pentagon to focus on its core military mission. OPM would take over the clearance management process for most of the government.

However, Benowitz said the merger won't occur in fiscal 2004, and he declined to speculate on whether it would occur at all. A DSS spokeswoman, however, said the agency anticipated that the merger might take place in fiscal 2005.

Instead, OPM and DSS have struck a written agreement to train DSS investigators how to use the clearance management systems OPM has developed to manage case flow, Benowitz said. The system allows caseworkers to enter new requests in a computer, automatically assign them to field investigators and also track a case's progress until it is closed.

Benowitz said OPM is managing about 330,000 pending cases now. The agency contracts most of its investigations work to U.S. Investigations Services, a company formed in 1996 when 700 OPM employees left the agency and became co-owners of the outfit. In January 2003, a group of New York venture capitalists paid more than a half-billion dollars for the company.