Contractors (Not) Vetting Contractors

A less cynical person might be surprised.  But as it turns out, something is rotten in the state of Securitystan.  In order to work for a sensitive government department, a person needs a background check and to be cleared.  This is how we make sure that no one is about to go Edward Snowden on America’s national secrets.  Now, this is a lot of effort.  As a part of the government’s general commitment to outsourcing whatever it can’t cut, it has left this duty to the care of private firms.  They are paid for every single person they clear.

The incentives are pretty clear, and the private sector has responded.  USIS, one of the largest security clearance contractors, may have fallen down on the job of performing clearance checks.  “Fallen down on the job” doesn’t really cut it.  They didn’t cut corners, or maybe let a few people slip through.  No, they were rubber-stamping applications so fast they needed special software to mark an application as “approved” the minute they came in the door.

Initially, USIS would dump cases manually. Soon after the dumping started, however, USIS began using a software program called Blue Zone to assist in the dumping practices. Through Blue Zone, USIS was able to identify a large number of background investigations, quickly make an electronic “Review Complete” notation indicating that the ROIs at issue had gone through the review process even if they had not, and then automatically release all of those ROIs to OPM with the “Review Complete” notation attached. By using Blue Zone, USIS was able to substantially increase the number of background investigations that could be dumped in a short time period.

Perhaps the private sector isn’t the answer here.  It doesn’t take an economic genius to know that paying per-head fees encourages faster throughput.  And if the government has outsourced most of its capacity to actually do background checks that just makes it harder to audit the contractors.  It’s an excellent combination for some good old-fashioned fraud.

The federal experiment in contracting has had a good long run, but it sure seems the pendulum has swung too far.  When contractors are responsible for huge parts of our national security infrastructure with little to no oversight, the United States is just asking for more Snowden-type incidents.  It seems almost as if the whole affair – this USIS fiasco included – is just designed to swing the pendulum back towards the government doing more in-house.  As USIS shows, the reason to do so goes far beyond just cost.

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