UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

STATEMENT OF
CHARLES S. PHALEN, JR.
DIRECTOR
NATIONAL BACKGROUND INVESTIGATIONS BUREAU
U.S. OFFICE OF PERSONNEL MANAGEMENT
before the
SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
on
“Security Clearance Reform”
-March 7, 2018

Chairman Burr, Vice Chairman Warner, and Members of the Committee, my name is Charles S.
Phalen, Jr., and I am the Director of the National Background Investigations Bureau (NBIB) at
the U.S. Office of Personnel Management (OPM). I appreciate the opportunity to appear before
you today.
NBIB conducts 95 percent of investigations across the Federal Government. Even those few
agencies that have the delegated or statutory authority to conduct their own investigations, such
as agencies in the Intelligence Community, rely on NBIB’s services in some capacity (e.g.,
NBIB’s electronic questionnaire, national agency record checks, central clearance repository,
etc.). NBIB’s systems and processes are aimed at leveraging automation to the greatest extent
possible, transforming business processes, and enhancing customer engagement and making our
work more transparent to those customers. I strongly believe these efforts are paving the way for
improvement in the efficiency, cost effectiveness, and quality of the investigations across the
Federal Government.

Testimony of Charles S. Phalen, Jr.
Director
National Background Investigations Bureau
U.S. Office of Personnel Management
-March 7, 2018
I would like to address NBIB’s existing investigative “backlog,” which has been the subject of
media attention. The decision to terminate our USIS contract at the end of 2014 meant the loss of
approximately 4,500 investigators, or 64 percent of our investigative workforce at that time. As
we have worked to rebuild that capacity, the investigative workload-in-progress grew
substantially. This was a consequence of the limited number of investigators in the field and was
further exacerbated by increased demand by customer agencies, resulting in the current
inventory. I am pleased the workload-in-progress has stabilized over the past two quarters as a
result of building capacity to meet the increased demand, as well as process improvements. In
2017, NBIB completed 2.5 million investigations across all investigation types. As of today,
NBIB’s inventory is approximately 710,000 investigative products, including simple record
checks, suitability and credentialing investigations, and more labor-intensive national security
investigations. It should be known that not all these investigations should be considered backlog,
as NBIB’s inventory includes 160,000-180,000 investigative products that are considered to be a
steady state inventory for which NBIB can meet timeliness goals with its current workforce
capacity. That number of investigate products, however, is greater than the number of individuals
that are waiting for their first security clearance to begin working for or on behalf of the
Government. Of the total outstanding investigative products, approximately 164,000 are either
simple record checks that move in and out of the inventory daily or investigations that support
credentialing and suitability determinations. The remaining inventory is for national security
determinations or clearances, of which approximately 340,000 are for initial investigations and
206,000 are for periodic reinvestigations.
Looking forward, it is our continued NBIB priority to address the investigative inventory while
maintaining a commitment to quality and returning back to the level of performance realized
from 2009 through 2014. NBIB is working with the Security Executive Agent the Office of the
Director of National Intelligence (ODNI), the Suitability and Credentialing Executive Agent of
OPM, as well as the Department of Defense (DoD), and other customers, to focus our efforts in
primary areas, such as increasing our investigative capacity; re-engineering current processes for
increased transparency and effectiveness for our customers; and reassessing policies to
revolutionize the way we gather and evaluate information.
NBIB has worked to increase capacity and realize efficiencies in as many areas as possible. The
stabilization of the inventory has been attained because NBIB has invested in the necessary
infrastructure. This infrastructure has been built through contractor and Federal workforce
capacities. As of today, there are over 7,200 Federal investigators and investigators who are
employees of OPM contractors working on behalf of NBIB, a number we are continuing to
grow. In the past year, the Federal and contractor workforce capacity increased by over 25

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Testimony of Charles S. Phalen, Jr.
Director
National Background Investigations Bureau
U.S. Office of Personnel Management
-March 7, 2018
percent to address the current investigative inventory. Whenever new investigators come on
board, there is a “ramp up” period during which they acquire the experience to accelerate their
production. As investigators reach maximum productivity, NBIB’s monthly production rate is
projected to continue to increase throughout FY2018.
NBIB also believes that capacity can be increased through smarter use of our workforce’s time.
The less time each investigator needs to spend on each case, the more time the investigator has
for the next case in his or her queue. This truism has led us to streamline processes, reallocate
resources, and amend internal policies for greater efficiencies and effectiveness while
maintaining quality and reciprocity for all of Government. This focus has allowed NBIB to
reform practices that, traditionally, were manually-intensive and reduce the number of hours
each investigator needs to spend on each case. NBIB has improved fieldwork logistics by
centralizing and prioritizing cases; increasing efficiencies of Enhanced Subject Interviews and
reporting; and using more efficient methodologies by leveraging the power of technology to
collect information. NBIB has also increased digitization and automation of data, records, and
information by proactively reaching out to record providers to negotiate direct connections,
access to terminals, and revised interagency agreements to more quickly facilitate downstream
actions, such as case closings and adjudications. This change reduces the number of paper
queries that need to be sent and the time it takes to receive replies, as well as reducing the
number of files that must be maintained on paper, all of which facilitates faster case closings and
adjudications. We also created a Strategy and Business Transformation office to make sure we
execute our plan and continue to work toward long-term solutions to transform our processes.
Some initiatives underway include exploring how we can integrate information collected by
Trusted Information Providers – including agencies and industry – into the process sooner to
reduce duplication of efforts and leverage this data properly. The cumulative impact of these
efforts could free agents to move to other requirements based on the time saved as cases are
more quickly closed.
We are hopeful that the transition to the new information technology system being developed by
DoD, the National Background Investigations Service, or NBIS, will help us increase
efficiencies even further. As a partner to DoD in the build of NBIS, NBIS will serve as NBIB’s
IT system to perform background investigations, as well as offer shared services for the end-toend processes for all government agencies and departments. As NBIS comes online, NBIB will
be able to phase out its legacy system in favor of NBIS. In FY2017, in order to clearly identify
key NBIS requirements and to maximize our existing resources, we began and are continuing to
implement a Business Process Reengineering strategy to clearly define critical process

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Testimony of Charles S. Phalen, Jr.
Director
National Background Investigations Bureau
U.S. Office of Personnel Management
-March 7, 2018
improvements and technology support requirements, and enhance our decisions through better
data analytics.
NBIB, with support from its interagency partners, has made and will continue to make
improvements to the background investigation process. As part of the Performance
Accountability Council (PAC), the interagency group established pursuant to Executive Order
13467 to oversee reform of the Federal Government’s background vetting program, NBIB is
working together with our interagency partners to develop, implement, and continuously reevaluate and revise outcome-based metrics that measure the effectiveness of the vetting
processes (e.g., security, investigative and adjudicative quality, cost, timeliness, reciprocity,
customer service, and other performance characteristics). These efforts include: 1) launching
programs to continuously evaluate personnel with security clearances to determine whether these
individuals continue to meet the requirements for eligibility; 2) enhancing information sharing
among State, local, and Federal Law Enforcement entities when conducting background
investigations; and 3) assessing the quality of background investigations using a standard set of
rules and an automated tool.
NBIB has developed strong interagency partnerships with the broader Security, Suitability, and
Credentialing Line of Business community to identify and implement background investigation
program improvements. As a member of this governance structure, NBIB engages with PAC
Principals and DoD on a daily to weekly basis as the Government’s primary investigative service
provider, and coordinates with the 22 other delegated agencies that leverage NBIB’s
infrastructure in some capacity (e.g., electronic questionnaires, automated record checks,
investigations, clearance repository, training materials, implementation policy guidance, etc.).
NBIB has also continued engagement and provided solutions as part of an interagency initiative
with the Presidentially-delegated Executive Agents (OPM and ODNI), the Office of
Management and Budget, and other stakeholders, including DoD, to reduce the investigation
inventory more quickly. NBIB provided a substantial number of the ideas considered based on
its vast expertise and ability to provide rich, historical data to inform decisions. Many of the
efforts resulting from this idea sharing initiative are already underway by NBIB in close
partnership with NBIB’s 100-plus Federal customers and stakeholders.
NBIB is also supporting the evolving background investigation process by offering our customer
agencies a continuous evaluation product in satisfaction of the guidance issued by the Director of
National Intelligence in his role as the Security Executive Agent. NBIB will continue to expand
coverage to fulfill future requirements and guidance issued by the Director of National
Intelligence.

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Testimony of Charles S. Phalen, Jr.
Director
National Background Investigations Bureau
U.S. Office of Personnel Management
-March 7, 2018
Our operations follow the investigative and adjudicative processes and standards set out by the
Security Executive Agent and the Suitability and Credentialing Executive Agent. It is imperative
this mission evolve by leveraging cutting edge technologies, utilizing shared services
capabilities, and applying automation and innovative solutions to obtain rich and valid
information in support of clearance determinations. It is equally important that process
improvements and methodologies are made across the entire enterprise in a standardized fashion
so that quality is sustained, and quality investigative products facilitate the reciprocity of
clearances across all Government agencies and departments.
As we work to reduce the inventory, we will continue to explore innovative ways to meet our
customer agencies’ needs, leverage their expertise as part of our decision-making processes, and
remain transparent and accountable to our stakeholders and Congress. We recognize that
solutions to reduce the inventory and to maintain the strength of the background investigation
program include people, resources, and technology, as well as partnerships with our stakeholder
agencies and changes to the overall clearance investigation process.
Finally, as the Federal Government works to implement the transition of background
investigations for DoD personnel from NBIB to DoD in accordance with Section 925 of the
FY2018 National Defense Authorization Act (Pub. L. 115-91), NBIB continues to examine our
workforce needs, capacity, and budget as we work to minimize disruptions to our operations, our
contractors, and our customers. Certainly, challenges will present themselves going forward;
however, through an internal working group at NBIB and continued communication with the
members of the PAC Principals and DoD, we have come together to carry out this transition.
NBIB will continue to partner with Executive agents and DoD and other agency partners. We
have a shared interest in not only reducing the inventory, but also in taking steps to effectuate a
smooth transition in operations.
Thank you for the opportunity to be here today, and I look forward to answering any questions
you may have.

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