The delays in processing security clearance applications have serious consequences for contractors. Delays can result in increased costs for performing classified contracts, problems retaining the best personnel, delays in performance, negative past performance ratings, underutilization of labor who are waiting months for their clearances and having discouraged employees seek other employment opportunities. The backlog does not appear to by improving any time soon since The clearance backlog has had a major impact on contractors’ ability to attract and retain qualified personnel where contractors attempt to recruit away competitors’ employees with security clearances. To attract cleared personnel in this highly competitive environment contractors often need to engage in aggressive tactics to attract and retain employees (e.g. bonuses of $10,000). DCAA has recently addressed this issue in a memo to its auditors stating under certain contracts, if a contractor needs to use reasonable bonuses and other incentives they are usually allowable.

To minimize potential financial and performance impacts from the backlog the authors recommend a few approaches to identify, attract and retain cleared personnel. Contractors should try to hire recently retired government employees and former military members who have active security clearances. They should begin the recruiting and security clearance application process as soon as possible for upcoming procurement opportunities. To retain the services of cleared personnel contractors need to ensure these personnel are fairly compensated and that such compensation is compliant with FAR (e.g.. FAR 31.205-6(b)(2)).

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