Department of Defense contractors who believe that their security clearances were unfairly denied or revoked will soon all go to the same authority to get reviewed, under a DoD memo quietly issued in the last days of the Trump administration.

The memo instructs all DoD components — including defense intelligence components such as the National Security Agency, the Defense Intelligence Agency and the National Reconnaissance Office — to send all sensitive compartment information clearance final appeals to the Defense Office of Hearings and Appeals.

According to Tully Rinckey security clearance attorney Dan Meyer, that change is significant for creating a single appeals authority for what does and does not disqualify someone for receiving a security clearance at the DoD.

For contractors at any of those DoD components, the change becomes directly significant if they receive a notice of intent to deny their clearance, if applying for a new one, or a notice of intent to revoke their clearance if they already have one.

“If you’re a contractor, you will probably go through first level review at the agency that gave you your clearance, like NSA, and then if you are denied at first level review, you would then have the ability to take your case to a judge who works down in Ballston, Virginia, who works under the Office of the General Counsel of the Defense Department, not the Office of the General Counsel of the NSA,” said Meyer.

Consolidating appeals into one agency means that the consensus over what does or does not disqualify a person for a defense contractor clearance on issues like personal debt or marijuana usage will likely become more uniform over time, as DOHA must issue consistent decisions on similar cases.

“It could actually up the standards to meet the intelligence community’s requirements, and that would mean tighter restrictions on foreign contacts on regular old defense contractors,” said Meyer.

The change could also limit the contractor’s ability to try again for a favorable decision at a different agency.

“[Today], if you got a decision against you at NSA, unless there was some reciprocity, DIA could possibly take you,” said Meyer.

“I think there would be less island-hopping going on, because if you got a ‘no,’ your appeal would go to DOHA and DOHA can see the appeals of all the other agencies. This reinforces reciprocity, because it centralizes the final decision on appeals with the Pentagon.”

On its face, the memo only applies to contractors working at or intending to work at DoD components, though there are non-defense agencies that have agreements with the DoD to appeal their clearance decisions to DOHA, rather than an in-house appeal

But federal employees and military servicemembers could also benefit from watching the decisions.

“Cadre employees, contractors and servicemembers are going to have to start paying a lot closer attention to their security profiles, because the chance of them having to go in front of a judge are going to increase.”

“The immediate effect is not to produce a median rule that is going to tie everyone together under the same system. In general, though, as a body of case law develops that covers all the contractors in the Defense Intelligence components, it will be possible to show when people are being treated disparately. So overall it should lead to a harmonization, even with the military members and the appropriated civilian employees.”

The memo itself states that its purpose is to “simplify, centralize and unify the established administrative process for unfavorable security clearance eligibility determinations for DoD civilians, military members and contractor employees.”

Employees and contractors do have some time to prepare for the decision, however, as the DoD General Counsel must first certify that DOHA is prepared to take on the new workload, though they must do so no later than Sept. 30, 2022.

Jessie Bur covers federal IT and management.

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