In a Homeland Security and Government Affairs subcommittee hearing yesterday Senator Daniel Akaka raised the question as to whether a one-year “cooling off period” preventing government employees from moving directly into government contract positions should be instituted across the Intelligence Community, in hopes of better balancing the workforce and increasing the government’s ability to retain its best.

The question was posed as panelists fielded Akaka’s questions about the makeup on the IC workforce post-9/11.

“I am concerned…concerned that 10 years later the IC remains too heavily dependent on contractors,” said Akaka. He noted that an “overreliance” on contractors raises concerns that many of them are performing inherently governmental functions. He also cited studies that contractors cost more than government employees.

Akaka drew specific attention to a CIA policy enacted by Director Michael Hayden, which forbids current CIA employees from jumping immediately into government contracting work, and requires a one-year “cooling-off” period. There is an exception for retiring employees. Panelists testifying in the hearing all agreed that the policy should be considered across the IC.

“We need a more stable workforce and occasionally we had contractors recruiting quite actively, some of our best personnel,” said Charles Allen, Senior Intelligence Advisor, Intelligence and National Security Alliance.

The challenges of today’s federal workforce and the difficulty retaining top talent was cited by several panelists. With an aging federal workforce and younger employees no longer willing to spend their entire careers within the same agency, the federal government will struggle to keep a roster of skilled government employees on staff.

“The IC has a large portion of its workforce nearing retirement and replacing such expertise will be a challenge because of a gap in the mid-career population created by the hiring freezes of the 90’s, pre-9/11,” said Mark Lowenthal, President and CEO of the Intelligence and Security Academy. “Conversely, well over 50% of the workforce has been hired since 9/11. These demographics would suggest that the IC will continue to rely on contractors for certain skills, at least until these challenging demographics moderate themselves over time."

Contractors are often brought in because they possess a specific skill set the government doesn’t have, particularly linguists or individuals with information security and IT expertise. Contracting allows those individuals to be brought in on a term basis.

Akaka asked panelists what changes could be made to the security clearance process, and how it could be reformed to make IC contracting more efficient.

Several noted the difficulty in transferring clearances from one agency to the next. Lowenthal said we have to push investigators into a philosophy of risk management rather than risk avoidance, a difficult cultural shift for the IC.

Joshua Foust, fellow at the American Security Project, suggested ending the system where an individual’s clearance is tied to their place of employment. He proposed opening up mobility by considering a system where individuals could retain their clearances even when they leave their sponsoring company. Panelists noted that at the end of the day, it’s not the contractors themselves that are the issue, it’s the system.

“I think we have to recognize why contractors get hired – the budget,” said Lowenthal. “Agencies will spend the money they get in the lanes they get it.” We’re going through a series of fashions concerning contractors, he went on to say, with a back and forth between insourcing and outsourcing.

At the end of the day, it’s about balance.

“We need to clarify the line that has blurred through the years…between work done by contractors and government employees,” said Daniel Gordon, Administrator, Office of Federal Procurement Policy, OMB.