02/23/2011 03:13 pm ET | Updated May 25, 2011

DSS Director: Defense Security Service "Remiss" in "Fundamental Oversight Responsibilities"

By Nick Schwellenbach

"We have been remiss in our fundamental oversight responsibilities to the Department and the U.S. Government," read suggested talking points for a speech by Stanley Sims, the new Director of the Defense Security Service (DSS), at a conference last week. POGO obtained the talking points from a Defense Department source who criticized the rationale for this and other DSS conferences scheduled in the near future given the federal government's fiscal bind.

DSS is the government agency primarily responsible for ensuring that government contractors have the systems in place to protect classified information. According to DSS's website, "DSS provides the military services, Defense Agencies, 23 federal agencies and approximately 13,000 cleared contractor facilities with security support services." Last week, from February 14th through the 18th, DSS held a conference at the Westin Riverwalk Hotel in San Antonio, Texas.

Sims's talking points noted that "problems didn't occur overnight" at the DSS and that it was necessary to "understand [the] culture of failed leadership, lack of accountability and failure to communicate."

Sims described some of what he believes has gone wrong at DSS. "I've been told that some of our employees are not carrying their basic responsibilities such as report writing, inspection results letters, etc.," according to the talking points.

This "gives me concern about what they are doing when at contractor facilities by themselves."

According to Sims's talking points, several problems have been identified in DSS field offices, including:

  • "Employee workloads were not managed";
  • "Incorrect security violation processing";
  • "Incorrect FOCI [Foreign Ownership, Control, or Influence] Case processing";
  • "In-process facilities not tracked";
  • "Security review ratings not issued properly"; and
  • "Lack of letters to management or Facility Security Officers (FSO) after reviews."

These problems appear to fundamentally undermine DSS's mission of ensuring the protection of classified information in the hands of contractors (one such case of DSS failures was detailed in a rescinded Pentagon Inspector General report). And it appears these problems still remain.  "Fixes have not been adopted in all field offices," according to Sims's talking points. 

DSS public affairs did not respond to POGO's emailed request for comments and for further details.

Some within DSS blame senior management for many of the agency's problems and point to the conference itself as indicative of management's bad decision-making.

A Defense Department insider, in an email to POGO, shared the following critique of DSS's recent and upcoming conferences:

Here is my analysis of the All Hands and why it should not happen.

1. Cost: $915,000.00 to $1.06 million

2. Value Added to getting the job done: 0 (The main focus is on metrics and CI at the conference)

DSS is going to have two All Hands.  One will be in Jacksonville, FL from March 13th to 18th for half of the Agency and the other will be held (place unknown) from I believe April 10th to 15th.  Having the All Hands in Jacksonville, FL is suspicious to me in that it is in a city where the closest Field Office is about 3 hours away.  Hmm, Florida in the winter.  I guess the HQ people want to get out of the winter weather in VA.

At each All Hands meeting there will be approximately 300 DSS personnel.  I estimate that each person will incur from about $1,300.00 to $1,500.00 in TDY expenses (this includes airfare but not rental car costs).  DSS has already put out the message to not book of flights until the March TDY funding is approved.  This will mean as we get closer to the travel day of 13 March, airline space will be harder to get and airfares may go up.  So the TDY costs could go higher.  But for now the estimated cost of the All Hands for March 2011, not including the conference space and rental cars, will be between $390.000.00 and $450,000.00. 

This amount is only for one All Hands conference for half of the agency personnel.  The second All Hands that the other half of the agency personnel will be about the same.

This week DSS is having a supervisors' conference in Texas.  There are about 90 supervisors and support staff at the conference.  I estimate each person will incur $1,500.00 in TDY costs.  This totals $135,000.00.

So in about a month DSS will have spent between $915,000.00 to $1.06 million not including the conference space costs.

You also recall that DSS had their last All Hands conference in June 2010.  So in less than a year, DSS HQ senior management has authorized between $1.8 million to $2.2 million to hold All Hands conferences that had little to no value.

What is so outrageous about this is that the President has told government leaders to control discretionary spending.

Is the All Hands is discretionary spending? I would say it is based on the last All Hands.   At last the last All Hands in 2010, there were arguments between senior managers of correct policy and procedures.  They did not even have their facts straight.  The then 2nd in command, Vincent Foster, had to pull all the supervisors aside and from what I heard told them to straighten up.

Are our senior management listening to what is going on in the Nation?   The government is on a continuing resolution and we are in a month-to-month budget mode.

I bet if Secretary Gates found out about the way DSS senior management is expending TDY funds he would fire all the DSS HQ staff. 

DSS public affairs did not respond to a query asking for the estimated total cost of the three conferences and the rationale for assembling three weeklong conferences in three consecutive months.

Nick Schwellenbach is POGO's Director of Investigations.