The Department of Defense is expected to fully take over responsibility for background investigations for federal employees and contractors at the beginning of the 2020 fiscal year starting on October 1.
DoD made the announcement this week. The decision is an “economical, business-smart and process-smart solution,” said one senior defense official during a background briefing at the Pentagon, June 24.
The expectation is that every security clearance investigation will be conducted by a newly-created DOD agency called the Defense Counterintelligence and Security Agency. The DCSA will be formed from the existing Defense Security Services, already part of DOD, and the existing National Background Investigations Bureau, which is part of the Office of Personnel Management.
As part of that changeover, National Background Investigations Bureau employees will become DOD employees, though they will remain working in the same location, and in almost every case, continue under their current chains of command.
The director of the National Background Investigations Bureau at OPM, Charles S. Phalen, has been identified by the secretary to be the acting director of the newly created DCSA agency beginning July 1. Phalen will serve in dual roles until a permanent director can be named.
About 60-65% of security clearance investigations are performed by contractor personnel, and that is not expected to change. It is also not expected that there will need to be any new hires to staff the new DSCA.
Reorganization of OPM
Currently, OPM conducts background investigations through its National Background Investigations Bureau, but language in the fiscal year 2017 National Defense Authorization Act directed the government to move responsibility for the lion’s share of those investigations over to DoD. President Trump also signed an executive order in April that further directed that all of the investigations be done by the DOD.
The Trump administration has been making efforts to reorganize OPM, part of which involves moving the background investigations. OPM’s functions would be divided among DoD, the General Services Administration (GSA) and the Office of Management and Budget (OMB).
The proposal has been met with intense resistance from Congress and federal employee unions, however. A spending bill that recently advanced in the House for example would block any funding for reorganizing OPM. As the tension between Congress and the administration over the issue has intensified, the Trump administration said that OPM employees could eventually be laid off as a last resort if Congress blocks the break up of OPM. The administration said that it is continuing to work with Congress to find a solution, but that the situation leaves OPM with few options.