Uncle Sam Mires Industry In Red Tape

Reza Zarafshar, president and CEO of Advanced Computer Concepts, knows federal contracting. He knows to nurture relationships with agencies and larger integrators, to lead with successes, to strategically leverage partnerships and to follow contract requirements to the letter. And yet now, because the government couldn't get its act together, Zarafshar may have to sit on his hands and watch some big opportunities slip right through his fingers. That leaves him, and a lot of other government contractors, really angry.

And who can blame them? It's not as though government has offered any fair explanation for why the Defense Security Service suddenly, without warning, stopped processing security clearances. Even the way industry was informed seems bizarre, with nothing more than a brief posting to the agency's Web site saying the moratorium was due to a lack of funding and high volume.

Rumor has it that processing stopped because of what one industry exec calls a "Washington Monument Maneuver" on the part of one employee or a group of employees. That means somebody got frustrated with their workload and threw their hands up in an act of defiance. True? Who knows. For argument's sake, let's assume it's not. That would mean the decision was handed down from someone at the top who should have known better. Somehow that seems worse.

So, how did government attempt to make good with industry? A month after the announcement, the Department of Defense (DoD) managed to identify funds that enabled processing of initial requests for secret clearances, but top-secret requests or requests for renewal remained in limbo at press time. Rep. Tom Davis (R-Va.) and the House Government Reform Committee introduced an amendment to the National Defense Authorization Act that would prevent the DoD from revoking expiring clearances based solely on the Defense Security Service's inability to process them. The legislation was passed in the House and is now awaiting approval by the Senate.

But for Zarafshar and others, the damage is already done. The agencies and larger integrators with which he was in discussions require that all of his people be cleared. With some employees just starting the process, others seeking renewal and more potential hires to come, the opportunities have stalled. And really, that's the least of it. Beyond the loss of any one contract, Zarafshar fears the net effect--that big integrators will get bigger and small companies such as his own will encounter new barriers to expansion. "As if there weren't enough impediments to our progress with the federal agencies, now we have one more huge hurdle to deal with," he says.

In all fairness, though, this debacle isn't good news for anyone. For government agencies, resources will dry up and projects will be delayed. Large systems integrators may not be as greatly affected as their smaller counterparts, but they will face long-term fallout just the same.

SRA International's David Kriegman, who is sitting on resumes, predicts a shake-up in the workforce as cleared employees start to demand salary increases commensurate with their newfound marketability. He also fears a backlog of security-clearance requests, and that will make processes even more inefficient than usual. Those might not be realities as harsh as the one facing Zarafshar, but they're disruptive forces nonetheless.

Now industry has to wait and see what steps government will take to wipe the mess off its face. Sure, funding will be identified to get processes up and running, but that's little more than a Band-Aid. Ideally, the process would be streamlined to require less red tape for industry. Why can't security clearances transfer more seamlessly among agencies, for example, allowing contractors to move employees to new projects? And why isn't clearance linked to the employee rather than the company, so that staffers can maintain that status regardless of job changes? Industry has asked these questions time and time again.

Most likely, nothing will change. After all, it was only five years ago that government scrambled to address the enormous post-9/11 backlog for security clearances. The Defense Department promised improvement, paying $100 million for a computer system that, as it turned out, failed miserably. And here sits industry once again, paying the consequences for government's lack of foresight.