Flaw In Defense Contracting Of Information Technology Staff
In most industries, the process of hiring qualified technical staff is tied closely [if not solely] to an individual’s technical qualifications and past performance. But, not completely so within U.S. Defense contracting.
A large portion of information technology positions inside U.S. Defense (DOD) rely on security clearances — a must-have requirement to ensure personnel are properly cleared for positions that need access to sensitive information. For potential employees without clearance, establishing one can come with a high price tag.
Where members of the military and civil service see their clearances paid for by the U.S. government — this is not so with a defense contractor — who could see costs spiral upwards of $20K per clearance. The savvy contractor however could turn this $20K into profit; shaving months off human resource and in-processing time. How? By planned hiring of staff who already hold clearances.
Problematic. This type of hiring practice holds the hidden snag of placing an additional [and unexpected] cost on U.S. government. Why-
Permitting the contractor to adjust per-position cost for security clearances — together with having to provide staff with a set of qualifications and past experience — may dilute contractor performance. And as a domino effect may generate a need for additional staff to compensate for any deficiencies. How-
As the life cycle of a service contract progresses from start-up — through staffing adjustments — and then through option renewals — a growing tendency exists to add staff in an effort to counteract failures in meeting tasks or metrics. ‘This is‘ where the dilution of performance and additional cost to government may be incurred.
Is this a risk the government should be prepared to take -or- could they hedge their contract investments by mandating all security clearances be funded and handled in-house — awarding defense contractors only for technical qualifications and past performance.
Note: the comment button on the Mobilepress version of this article did not work from my iPod touch. Had to jump over to the full version. But I was happy to read it in MP format!
I had no idea that clearances could cost so much! However I am not surprised one bit that some managers at defense contractors would put money ahead of quality. Saw evidence of this at my last job, for raytheon on kwajalein, in the south pacific.
As a prior hiring manager for a DOD contractor, I can say that finding and placing cleared individuals is both a critical task and a strategic effort in the contract capture phase.
At the beginning of one contract I was involved with, during the hiring phase, HR provided us with about 5,000 resumes of “qualified” individuals. The first thing we did was move those with clearances to one side of the desk and moved all the other resumes (more than half) into the trash.
This is not the exception, this is the rule among contractors. It is absolutely cost prohibitive to even consider uncleared candidates—you just can't be “competitive”. The bottom line is that over half of the pool of qualified candidates go into the trash before the contractor picks up the phone to start the interviews; disqualifying some darn good candidates.
Not one to defend the contractor world, but this is a government created mess. The contracts are written so that to perform/charge any labor to the contract, an employee must be properly cleared. It is not just the cost of getting the employee cleared, but the overhead costs of keeping the employee on the books while the investigation is being conducted.
To make things worse (for small companies) th National Industrial Security Program (NISP) requires that new companies establishing a security facility clearance must have a sponsor (i.e. a company already possessing a facility clearance) and must have an active contract requiring a facility clearance—a seemingly circular problem.
With these requirements a small company must start out as a sub-contractor, establish a relationship with an “inside company” before they can ever establish a facility clearance of their own in order to bid on a contract requiring cleared personnel. It quickly becomes clear how the current NISP clearance requirements creates a serious impediment to small businesses to break into the industry. This is a seriouse contributing factor to why we are left with a handful of Super-contractors (GD, LM, SAIC, CSC, etc..) who effective rule the the DOD contracting world. Small and Disadvantaged Businesses (SDB) effectively become servants of the giants. SDB B.S. a subject of a whole other blog.
Thanks brutha. I saw that after I installed MP and promptly posted a support note on the WordPress page for the plugin. No answers yet but hopefully the developer will be able to provide a solution. I fear it may have something to do with WP, ID and MP all being wrapped up in to one. Course, I've been wrong before!
I have had similar experiences – companies outright discount highly qualified candidates simply because they do not have clearances, as a way of cutting costs in the short term. If these same companies had any sense of vision they would find the turnover to be a lot smaller had they opted to earmark the requisite funds necessary to conduct background investigations on these highly qualified candidates rather than hiring the barely-qualified-but-holding-a-TS-cleared individual.
Sad but unfortunately a very standard business practice. Short-sightedness seems to be a virus which most contractors are afflicted with.
I see your point about small companies requiring sponsorship (which I was not aware of, so good looking out on the new information) however that does not mean the larger contracting firms like BAH, CSC, SAIC, etc. are simply off the hook. They help perpetuate this problem because they're too interested in making a quick buck rather than investing in the long term.
This is why Wall Street is screwed – too many people want a quick turnaround on their investment so they opt for the short con rather than working the long con. Largely, the long cons work better and yield greater results, but patience is required. Wall Street, by and large, has no patience.
Definitely makes sense from a profitability standpoint. It's too bad though you had to dump good candidates because of the red tape in doing security clearances. 2500 resumes in the trash — wow.
I'm in the camp that government can [and should] make clearances a more transparent routine — taking the burden off the defense contractor — who — for good reason — is looking to make a buck.
What a mess on that sponsor stuff. Government — fully knowing that clearances are mandatory for access to their own facilities — need to fix this kind of goat rope and stop shirking the work.
Scary. Why would a small business need to go to a big business for a government security clearance. Sounds ripe for an audit.
Let me know when you ramp that blog up — I'll be first in line to sign up!
Thanks for the heads up on MP!
Like the old cliche — throwing good money after bad. On Kwajalein, did it look like Raytheon was throwing more bodies at the contract as it progressed?
not particularly, no, but I wasn't paying that much attention to headcount numbers — I was mainly interested in the scuba diving ;) (and I was also pretty much at the bottom of the food chain, working for a very mousy, keep-your-head-down individual)
Scuba? Awesome. I have an old PADI rescue cert. If you're in Japan
next spring/summer/fall — let's dive!
Agreed – check out sites like ClearanceJobs.com and ClearanceJobs.com/salary and you can see the salaries that cleared candidates are getting. Way more than similar candidates without active clearance.
Good site! Those salary figures are outrageous. And all for the sake
of a security clearance?