Shutdown Threatens Contractor Employees’ Credit, Security Clearances

Key Takeaways for Executives

  • The recent government shutdown has damaged the credit of many contractor employees by causing missed bill payments and other financial hardships.
  • Because financial history is one of the main components of a background check, these employees’ ability to get and maintain security clearances will be jeopardized through no fault of their own.
  • This, in turn, could impact firms’ ability to execute on government contracts.

“Possibly thousands” of government contractor employees might have trouble obtaining or maintaining their security clearances because of the recent government shutdown, Rep. Donald Beyer Jr. told WashingtonExec.

Contractors who employ these individuals could have trouble executing on their contracts as a result, he said.

Beyer said the Office of Personnel Management and Office of Management and Budget should “proactively look for steps they can take to shield federal workers from this and other harmful impacts of any government shutdown.”

Beyer said many contractor employees are at risk of being unable to get or maintain security clearances because of financial hardships caused by the shutdown, such as missed bill payments. That’s because financial history is one of the main factors used to evaluate whether someone should receive a clearance.

If lots of contractor employees experience this problem, they could lose their jobs. This, in turn, “could have the additional and even farther-reaching impact of contractor companies losing their government contracts entirely if they cannot execute due to less manpower,” he said.

Boyer recently co-signed a letter to OMB Acting Director Russell Vought saying it is “crucial that we take whatever steps necessary to ensure that the missed paychecks and wounded credit scores are not detrimental to [employees’] security clearances or security clearance applications.”

“Financial considerations are a central piece of the investigation into an employee’s candidacy for a security clearance, as they indicate reliability and trustworthiness, as well as vulnerability to illegal activities,” the letter said. “And, notably, financial issues historically outpace all other issues as the chief reason cited for security clearance denial.”

The letter asked OMB to issue guidance “as soon as possible” for clearance investigations that “explicitly prohibits agencies from penalizing security clearance applicants and holders for shutdown-induced poor credit.”

The letter was also signed by Reps. Gerald Connolly, Jennifer Wexton, Robert Scott, Donald McEachin, Elaine Luria and Abigail Spanberger.

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