Security Clearances Blocked; Industry Fears Cost The Defense Department has stopped processing security clearances for contractors because it has run out of money to pay for them. The Defense Security Service has exhausted its fiscal 2006 budget for clearance investigations and the moratorium will not be lifted “until the budget issue is addressed,” DSS spokeswoman Cindy McGovern said. The agency said its budget for clearances was cut by $20 million this year. The moratorium “will have a significant impact on mission performance, exacerbate the already lengthy backlog of requirements, and inflate program costs,” said Stan Soloway, president of the Professional Services Council. “Indeed, the marketplace premium for already cleared personnel will rise substantially as a result of this moratorium.” Employees with security clearances typically earn nearly 25% more than those with similar skills and no clearance, according to a survey earlier this year by ClearanceJobs.com, an online staffing agency. In a letter, Soloway urged the undersecretary of defense for intelligence, Stephen Cambone, “to intervene without delay…to find a solution that will enable the process to move forward.” The chairman of the House Government Reform Committee, Rep. Tom Davis (R-VA), called the moratorium “both baffling and disturbing.” He asked DSS for an explanation. The Office of Personnel Management took over responsibility for Defense Department security investigations, as well as most civilian clearances, in February 2005. DOD pays OPM for conducting the investigations. Defense accounts for about 80% of clearances. The DSS spokeswoman said the office received 103,000 applications from contractors in the first six months of the fiscal year. She did not know how that compares to last year. The department recently estimated the backlog of clearances had reached 329,000. A 2005 survey by the Information Technology Association of America found that most of its member companies reported delays of 270 days or more in getting top-secret clearances. Last year the Government Accountability Office placed the DOD security clearance program on its high-risk list of programs that are vulnerable to waste, fraud and abuse. The Office of Management and Budget is scheduled to release a report this spring on its efforts to clear up the backlog. (SAA, 1/16)