GAO Blasts OPM on Cost of Security Clearance Investigations
The General Accountability Office (GAO) recently released a report on the cost of “Background Investigations” (GAO-12-197) conducted by the Office of Personnel Management (OPM). The first sentence of the report declared:
OPM’s reported costs to conduct background investigations increased by almost 79 percent, from about $602 million in fiscal year 2005 to almost $1.1 billion in fiscal year 2011 (in fiscal year 2011 dollars).
The news media chose to publish articles that focused on the overall increase in the amount spent on background investigations, rather than the actual increase in the price of various investigative products offered by OPM. It’s not until you get down to page 47 of the GAO report that you see the weighted average price increase for investigative products only went up 5.1% per year from 2005 to 2012. 2005 and 2006 were transition years for OPM. In 2005 OPM accepted the transfer of about 1,700 Defense Security Service personnel and the responsibility for all Department of Defense (DOD) background investigations. During 2004 OPM had conducted a portion of DOD’s background investigations and knew that their existing price structure wouldn’t cover the actual cost of these investigations, so they entering into a special agreement with DOD whereby OPM charged DOD an extra 25% over their standard prices. The DOD investigations increased OPM’s caseload by 200%. OPM was able to readjust their prices down a little in 2006. If you back out the two transition years of 2005 and 2006, OPM increased their average weighted price of investigations about 4% per year during the past five years. This was a pretty remarkable feat considering that they significantly reduced turnaround time on their investigations during the same period.
It’s a fallacy to ascribe to OPM the increase in the total cost of all investigations, because OPM has no control over the number or types of investigations they are requested to conduct. GAO also claimed that the total cost of OPM investigations continued to gradually increase from 2005 to 2011, even though the number of investigations conducted by OPM declined about 30% from 2008 to 2011. But GAO failed to report the types of investigations that OPM had conducted. When a Single Scope Background Investigation (SSBI) at $4,005 costs about 14 times more than a National Agency Check with Law and Credit (NACLC) at $228, an increase in the number of expensive investigations can more than offset a large decease in the total number of cheaper investigations.
GAO doesn’t always get it right, and in my opinion this is one of those times that they got it wrong. There may very well be cost accounting and lack of transparency problems at OPM, but GAO failed to focus on these issues.