WASHINGTON — Federal delays in granting security clearances keep 10 percent to 20 percent of U.S. intelligence contractors from doing their intended work, wasting billions of dollars, a new report says.

Contractors — many of whom are former federal employees who held clearances in the past — can wait weeks to months for a security clearance when they take on a new assignment with a different federal agency, according to the report by the Intelligence and National Security Alliance (INSA), a nonprofit group representing federal intelligence and military officials, as well as federal contractors. Agencies typically do not honor security clearances granted by other federal agencies, even though they are supposed to.

“If the person holds the clearances … you shouldn’t have to go through a lot of process,” said Charlie Allen, former homeland security undersecretary for intelligence and analysis, who led the INSA Security Clearance Reform task force. “We think the processes could be greatly improved. Significant savings can be incurred.”

While new employees wait, they still draw the plum salaries reserved for those with security clearances — doing nothing or work that does not require special access.

“They can always do business development. Businesses are always looking at other contracts. I’m sure they’re keeping them busy from the point of the contractor,” Allen said. “And sometimes they really don’t have work. They’re simply in a waiting pool, frustrated and waiting to get on the contract.”

There are roughly 1.1 million contractors holding security clearances who earn on average $98,000 a year, according to recent figures from the Office of the Director of National Intelligence and a compensation survey by ClearanceJobs.com. If the INSA report’s estimates are accurate that 10 percent to 20 percent of contractors are awaiting security clearances at any given time, the cost of wasted contractor man-hours to the government would be roughly between $900 million and $1.8 billion a month.

Agencies are supposed to recognize clearances at comparable levels granted by other agencies, but they often do not, according to Allen and other experts.

The Government Accountability Office found in December 2010 that agencies ask for additional information before granting reciprocity.

INSA sent the report to House and Senate intelligence committees and the Office of the Director of National Intelligence and pressed them to fix the problem by these steps:

  • Adopt a government-wide process that allows for security clearances to transfer between agencies. For example, contractors have documented more than 300 different personnel security clearance processes required by the Air Force, Navy and Marine Corps.
  • Create common, government-wide standards for determining a contractor’s suitability for receiving a security clearance. A federal task force has been looking at the issue since 2008 but standards may not be issued for two more years, the report states.
  • Create an unclassified but controlled database that has basic clearance information to speed up security clearance decisions. Currently, agencies may have access to one of two security databases but not both.
  • Invest in automation technology that will improve the timeliness and visibility of personnel security processes and databases. Agencies have been slow to adopt electronic fingerprint scanning or use electronic case management to move records around quickly, Allen said.
  • Allow contractors to do work for multiple agencies in facilities that have been certified as meeting federal security standards. Currently, one agency could require a company to have special parts of its offices cleared for work with only that agency.
  • Write contracts that do not require companies to hire contractors with clearances in advance of a contract. If the agency does not immediately accept a contractor’s clearance after the award of the contract, the government will still pay for that contractor in the company’s overhead rates.

According to the Office of the Director of National Intelligence, the average government security clearance took 53 days to process in 2010, less than the 60-day goal required by federal law for 90 percent of all applications. That was a huge improvement from the 165-day average processing time only four years earlier.

Budget cuts may drive lawmakers to look more closely at the wasted time of contractors and push agencies to speed up clearances to get contractors to work on national security projects, Allen said.

“One of the challenges the intel community has is being incredibly responsive to the next crisis du jour,” said Tony Cothron, a retired naval intelligence officer who is now vice president of business development for General Dynamics Information Technology. “You’re going to have to shift and create new capacity very quickly, and one of the places you look for that is the industry force.”

Agencies are frustrated and always short of people, Cothron said. But agency leaders rarely get down into the details of why that is happening and at what level delays are occurring, he said.

Agencies sped up investigations and cleared out a backlog of cases largely because the government set performance measures and tracked progress, said Trey Hodgkins, senior vice president of national security and procurement policy at TechAmerica.

If Congress or federal administrators set expectations for interagency clearance transfers and the use of technology, it could push agencies to fix the problems, he said.