Contractors react to news of NSA leaker

June 16, 2013

With the news that the leak of top-secret National Security Agency documents originated from a Booz Allen Hamilton contractor came plenty of ire directed at contractors and their access to critical information. But it’s not yet clear whether the disclosure will have any effect on the role of contractors or the processes of federal agencies.

Capital Business collected excerpted thoughts from industry executives, federal officials and contracting analysts on how the news might play out for Booz Allen and others:

Defense Secretary Chuck Hagel , at a congressional hearing last week:

“Contractors are part of any institution. We need them, certain skills, certain expertise. But there’s no question that we’re going to have to make some rather significant adjustments, which we are. I think when you look at the buildup over the last 12 years — and I was in this body during a significant amount of that. And as that buildup occurred and the money flowed in to different departments and institutions, because we felt they were required for the national security of this country, there will come a time — and it is now — where we’re going to have to make hard choices in the review of those.”

Leonard E. Moodispaw, president and chief executive of Hanover-based cybersecurity contractor KEYW:

“[There has been] absolutely no slackening in security requirements [and] the vetting process. How a guy like that gets through? He changes his mind. You can’t predict that sort of stuff. We’re all doing self-examination. If something like that had happened to a small company dedicated to the intelligence business and it was our fault — and I’m not suggesting it’s Booz’s fault — we’d go out of business, so that’s why we’ve got to be extra careful.”

Stan Soloway, president and chief executive of the Professional Services Council, an industry group:

“If these were all government employees, what makes us think the process would have been any better — because the clearances are the same? What I would hope for is that knee-jerk reactions give way to really judicious thought, that people step back and if you want to look at the clearance process, that’s perfectly fine. But to extend that into an “Oh my God” moment about the role of contractors really is not going to be productive.”

Robert F. Hale, Pentagon comptroller, at a congressional hearing last week:

“Whether or not a contractor or a civilian is cheaper or better really depends on the circumstances. There are some cases where we simply don’t have the skills in the Department of Defense that we need, or it’s a short-term job and it wouldn’t make any sense to grow them. When I was on the Bowles-Simpson Commission, and the Secretary of Defense came to speak, we asked him how many contract employees worked for the Department of Defense, and he said I can’t tell you. I just don’t know. I know it sounds bad, but it’s partly true because if you do a fixed-price contract, the contractor has no obligation to tell you how many people are doing it. They just do the work. And if they do it satisfactorily, you pay them. We are in the process now of asking all our contractors, probably at some expense to the government, to tell us how many people, even if it’s a fixed-price contract, so we’ll know better.

William Loomis, managing director at financial services firm Stifel Nicolaus:

“If they had the proper systems in place … then [it] will have less serious implications for Booz Allen. This looks to be one of those situations that is very difficult to prevent if you have somebody set on disclosing classified information.

George A. Price Jr., senior equity research analyst for aerospace, defense and government services at BB&T Capital Markets:

“It just kind of seems like bad luck that he happened to be at Booz working on this stuff when he happened to make this decision, I have a hard time seeing that it’s going to taint [Booz Allen] long-term.”

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