IG: Army is lax in overseeing issuance of contractor ID cards

An Army contractor conducted only cursory background checks on personnel in the Middle East before issuing electronic identification cards that allow access to Defense Department computer networks and facilities, auditors said in a recent report.

Comment on this article in The Forum.As a result, up to 25,428 contract employees may have had unauthorized exposure to Defense installations, resources and sensitive information as of July 2007, posing a national security risk, the inspector general report stated.

Contractors in Afghanistan and Iraq are granted the same type of electronic Common Access Cards as military and civilian Defense employees. Two directives -- Homeland Security Presidential Directive 12 and Federal Information Processing Standard 201-1 -- require contractors to go through an extensive background investigation before IDs are issued.

The background investigations are supposed to cover law enforcement, education and employment records for the past five years and residency history for the past three years. They also should include an FBI name and fingerprint check. But the IG report said foreign nationals hired by Army logistics support contractor KBR Inc. were not subject to any of those checks. U.S. citizens employed by KBR underwent some, but not all, of them.

The Army allowed KBR to conduct the background checks and use the Defense Real-Time Automated Personnel Identification System to issue access cards, the report noted. Kroll Background America Inc., the subcontractor that performed the investigations, only required foreign nationals to provide a seven-year police record from their country of origin, the IG found. The subcontractor conducted a more thorough investigation of contract employees who were U.S. citizens, including a review of federal and criminal records and Social Security number verification. But even this more thorough process short-circuited HSPD-12 requirements.

Steven Aftergood, director of the Project on Government Secrecy for the Federation of American Scientists, said the foreign national policies were particularly troublesome. A police record check amounts "to no real background investigation at all, and allows them unlimited access to sensitive information in [systems] such as Army Knowledge On-Line," he said. "This is a foreign intelligence agent's dream come true."

KBR also did not require employees to use the online Contractor Verification System to apply for the cards, the report noted. That system has built-in safeguards.

Once Kroll completed its background investigation, KBR sent the paper CAC applications and copies of passports to another unspecified contractor at Army Materiel Command headquarters in Fort Belvoir, Va., for review. If the applications passed inspection, they were distributed to Defense employees for their signature. The approved forms were then returned to KBR in Houston, where another contractor, SI International, used the RAPIDS system to issue the cards. Though the Army Materiel Command was supposed to oversee this process, the IG report said that until March 2008, that task was outsourced.

KBR also was supposed to retrieve the access cards when personnel returned to the United States. But the IG found that as of June 30, 2007, Defense had recovered only 957 of 1,966, or 48.7 percent, of the cards for KBR employees whose electronic privileges had been revoked. Even though the cardholders could no longer gain access to Defense computer systems, they could use them as a flash pass to enter military installations worldwide since the IDs were issued for a three-year period, the report stated.

In response, the Army Materiel Command agreed KBR personnel should undergo background checks prior to issuing access cards and said it has instituted procedures to recover contractor ID cards. It also said it will mandate use of the automated Contractor Verification System by KBR.

But Aftergood said the IG report showed that the Army "has made a mockery of the imperative behind HSPD-12," which was to increase control of access to sensitive information. Now "such control has been diminished," he said.