HD37 - A Study of the Effectiveness of Privatizing Background Investigations and Security Clearances on Employees and Contractors


Executive Summary:
The purpose of this study was to determine the effectiveness of privatizing "background investigations and security clearance programs" on employees and contractors, hereafter referred to as BISC functions. The project coordinators from DPT, DSP, and CCC agreed at the outset, that because there was no program or operational benchmark in place to demonstrate how this function has been accomplished and how much it costs state agencies, there was no reliable method by which to evaluate the effectiveness of any kind of change, including privatization.

It was further agreed that the study would require the benchmarking of standard "indicators of efficiency" for each agency in order to develop a composite view. This information would also provide the basis for evaluating the feasibility, effectiveness, and overall benefit to the Commonwealth in considering privatization and other alternative options for administering BISC functions. To this end, an agency advisory group was formed to provide insight and information, and to assist in the design of a statewide survey of agency BISC functions (Appendix A).

A survey was designed to enable the collection and analysis of quantitative and qualitative data relative to the efficiency indicators (Appendix B). It was sent to all state agencies including independent agencies and authorities. Participants were asked to provide copies of agency BISC policies, state, federal, and other external requirements, and to comment on the effectiveness of current practices. They were also given an opportunity to address the effectiveness of privatization options for this function. Sixty-three (63) agencies responded to the survey, of which thirty-nine (39) reported administering BISC functions (Appendix C).

The survey data was intended to provide a detailed snapshot of current agency programs, their respective levels of operational activity, and cost. To some extent this has been accomplished. However, because administrative procedures vary widely, so did responses. For this reason, survey results could be summarized but not quantifiably evaluated in a reliable manner.

The survey indicated that agencies administering the largest and most complex BISC functions are generally satisfied with the status quo. They stated a preference for individual agency management of this function and offered few suggestions for operational improvements.

The agencies administering smaller BISC functions that are accessed on a less frequent basis indicated a preference for the development of uniform guidelines for conducting BISC activities. They also advanced numerous recommendations for operational improvements, primarily focusing on reducing processing time and easing restrictions on local direct access to databases.

Eight (8) agencies support privatization options for BISC functions; twenty-four (24) prefer to retain the status quo; and seven (7) indicated that either they could not offer an informed opinion or had no opinion.

The information derived from this study should be considered the first step in a process of assessing the feasibility of privatizing BISC functions. Options for continuing the assessment were presented by the CCC and are included at the end of this report. The Department of Personnel and Training can provide individual agency survey responses upon request.