Pentagon to Tap Private Industry for IT Background-Check System

The Defense Department plans to hire private contractors to develop a $600-million-plus computer system for a new background-check agency being set up after a security breach last year exposed the personal data of nearly 22 million people, a top official told Reuters.

The Pentagon plans to meet interested companies and request proposals before Sept. 30, the end of fiscal year 2016, after finalizing requirements for a more flexible and adaptive replacement, said Richard Hale, the Pentagon’s deputy chief information officer for cybersecurity. In an interview with Reuters given late last week, he said the Pentagon hoped to build the new system as quickly as possible, but its progress would be measured by testing and events rather than preset dates.

Big arms makers like General Dynamics Corp., Raytheon Co., Lockheed Martin Corp. and Northrop Grumman Corp. are expected to bid for the work.

The White House last month set up a new agency, the National Background Investigations Bureau, to replace the Office of Personnel Management’s (OPM) Federal Investigative Services (FIS), which currently handles more than 2 million background checks for federal agencies and industry.

Still reeling from the massive OPM hack, the White House has said the Pentagon would handle the new agency’s information technology (IT) to ensure its security, but gave no details.

The Pentagon’s fiscal 2017 budget proposal includes $95 million in initial funding for the system, and foresees $520 million in additional spending through fiscal 2021, said Pentagon spokeswoman Army Lt. Col. Valerie Henderson.

Hale said the new system would be developed and built over time, with some parts in place by the start of fiscal 2018, or sooner if possible.

Hale said the Pentagon was confident about working with contractors despite last year’s breach.

“We have quite a lot of faith in the cleared defense industry,” he said. “We believe that we can develop this information technology with industry as safely as we could as if we were to do the development entirely in house.”

Hale said the new agency’s IT structure would be designed to be flexible enough to support whatever new investigative process the government settled on for the new background-check agency.

The idea was to continuously evaluate information about people with security clearances, including “all kinds of sources” such as financial and travel records, he said.