The Pentagon decision to suspend security clearance vetting for some defense contractors is likely to have little impact on either the Defense Department or private industry, officials from both said.
On Friday, the Defense Security Service stopped paying for the five-year "reinvestigation" of contractors who hold top-secret clearances. The suspension is to continue through the end of the fiscal year in September.
The Defense Security Service, which oversees the clearance process for defense employees and contractors, blamed the sequester, the across-the-board spending cuts ordered by Congress.
The decision was not related to the recent leak by a National Security Agency contractor exposing the existence of two top-secret eavesdropping programs, a spokeswoman said.
Contractors who are due for their five-year reinvestigation will go to the front of the line when funding resumes at the start of the next fiscal year Oct. 1 and should be able to hold onto their top-secret clearances in the meantime, spokeswoman Cindy McGovern said.
In addition, the Defense Security Service has exempted several categories of contractors — including those identified as "key management personnel," who work on presidential support programs or need access to "mission essential" information — from the suspension.
The move does not affect individuals seeking their first clearance or individuals with clearances below top secret.
More than 1.4 million Americans hold a top-secret clearance, the Office of the Director of National Intelligence reported in October. Of those, 483,000 — more than one-third — work for contractors.
Alan L. Chvotkin, executive vice president and counsel for the Professional Services Council, an industry group representing contractors in Washington, said contractors have lived through this before.
In 2007, the Office of Personnel Management increased the amount that it charges agencies to perform clearance investigations beyond the levels that had been budgeted by the Pentagon.
As a result, the Defense Security Service limited funding for clearances while exempting some categories and allowing most contractors to hold onto their clearances — as is happening now.
"We've seen this movie before, and it has not created a problem for the whole industry," Chvotkin said. "I'm hoping that it won't create a problem for any individual."
Individuals who hold top-secret clearances, whether they're contractors or government employees, are supposed to be vetted every five years. The process is called a PRI or PR, for "periodic reinvestigation."
A clearance does not expire if an individual reaches his of her fifth anniversary before a PRI is completed.
Former Marine Corps Brig. Gen. J. Michael Hayes, who heads the Maryland Office of Military and Federal Affairs, commended the Defense Security Service for prioritizing essential contractors.
"As best as I can tell, it looks like a smart approach," Hayes said.
A spokesman for Northrop Grumman, which has extensive operations in Maryland, declined to comment on the suspension. A spokesman for Bethesda-based Lockheed Martin responded with a statement that stressed the contractor's commitment to protecting classified material.
The move came days after NSA contractor Edward Snowden identified himself as the source of revelations in The Guardian and The Washington Post about NSA eavesdropping programs.
Chvotkin said the news has brought "heightened attention" to contractors.
"In our view, the disclosure, the breach of confidentially, had nothing to do with the fact that he happened to be working for a contractor," Chvotkin said. He noted the case of Army Pfc. Bradley Manning, who was an active-duty soldier when he gave hundreds of thousands of classified documents to the anti-secrecy group WikiLeaks.
"These are all individual events," he said. "I don't see anything that highlights a systemic problem."