FAS Intro: The following report on classification-related costs was released by Congressman David Skaggs (D-CO), who noted that the estimated cost of keeping government documents secret in 1997 was $1 billion lower than the total previously estimated for 1996.
"I originally requested these annual reports, four years ago, because the government had no idea how much it was spending to keep secrets," Skaggs said. "That the reported costs have changed $1 billion in a year mostly from accounting refinements suggests the agencies are still struggling to count their costs accurately. I'm confident that in the long run disclosure of the costs of secrecy will lead to real reforms and savings of taxpayers' money, but these numbers are still too soft to know whether that's begun to happen."
April 29,1998
Dear Mr. Chairman:
On behalf of the Archivist of the United States, I am pleased to provide the total security classification cost estimates for executive branch agencies during Fiscal Year (FY) 1997; the projected security classification cost estimates for executive branch agencies for FY 1998; and the total security classification cost estimate for industry during 1997.(*) House Report 105-240, which accompanied the Treasury, Postal Service, and General Government Appropriations Act for 1998, asked for these estimates.
The security classification cost estimates for executive branch agencies total $3,380,631,170 for FY 1997. This represents a 28 percent increase from the estimates provided you last year for FY 1996. These same agencies project such costs at $3,530,798,565 for FY 1998. The estimate for industry (contractor costs) for 1997 totals $692,823,000. This represents a 73 percent reduction from the estimate provided you last year for 1996. Combining the estimates for Government and industry, the total cost estimate for 1997 is $4.1 billion. This represents a 21 percent reduction from the total cost estimate for 1996 of $5.2 billion.
Within the limits of the brief time that we have had these data, we have attempted to identify any significant reasons for the increase in Government cost estimates and the very large decrease in contractor cost estimates. The former appears to result from the agencies' ability to estimate these costs more accurately rather than from any new programs. A very significant proportion of the increase is reflected in the costs of information systems security.
With respect to the decrease in contractor costs, we have identified two likely reasons. First, the current estimate was based on sampling from a much larger pool of companies than it has been in the past, which suggests greater accuracy. Second, there has been significant consolidation within defense industry, especially among the largest contractors that have accounted for the preponderance of the cost estimates. The reduction in their numbers has had a very significant impact on the total estimate. We believe that the reported reductions represent both savings that result from consolidation, as well as sampling reductions that result from multiplying the sample data by a smaller number of contractors.
Because of expressed interest in the declassification programs established under Executive Order 12958, "Classified National Security Information," we also requested agencies to identify that portion of their cost estimates in the category of classification management that was attributable to their declassification programs. For FY 1997, the agencies reported declassification cost estimates of $150,244,561, or slightly less than five percent of their total cost estimates. For FY 1998, the agencies project declassification cost estimates of $203,204,170, or slightly less than six percent of their projected total cost estimates.
At Tab A, please find enclosed a table listing by agency their cost estimates for FY 1997, and their projected cost estimates for FY 1998. The total for each agency includes costs associated with six categories: (1) personnel security; (2) information security, which includes both classification management and information systems security; (3) professional education, training and awareness; (4) physical security, (5) security management, oversight and planning; and (6) unique items. Neither the enclosed table nor the totals provided in this letter include the cost estimates of the Central Intelligence Agency, which are classified. We understand that these estimates will be made available to the Intelligence Committees of the House and Senate.
At Tab B. we enclose a copy of the Information Security Oversight Office letter dated January 20, 1998, directing departments and agencies to provide cost estimates associated with classifying and safeguarding classified information based upon instructions included with the letter. As was the case in last year's collection, the instructions tell agencies to report any cost for which 51% or more of a resource is used for classification related activities. Some agencies with very small security classification programs again reported costs even though this threshold was not met. Additionally, several of the agencies provided explanatory information concerning their cost estimates in their individual reports. At your request, we will be happy to provide you with the individual report for any or every agency listed on the table.
Steven Garfinkel
Director
cc: The Honorable John W. Carlin
Archivist of the United States
*The 1997 cost estimate for industry pertains to the twelve month accounting period of the most recently completed fiscal year of each company that was part of the industry sample. For most of these companies, their fiscal year ended on December 31, 1997. A projected estimate for 1998 is not available, but will be provided to the Information Security Oversight Office next year.
TOTAL TOTAL
SECURITY CLASSIFICATION SECURITY CLASSIFICATION
COSTS PROJECTED COSTS
FOR FY1997 FOR FY 1998
$3,380,631,170 $3,530,798,565
Reporting Agencies
Department of Agriculture
Department of Commerce
Department of Defense
Department of Energy
Department of Health and Human Services
Department of Justice
Department of Labor
Department of State
Department of Interior
Department of Treasury
Department of Transportation
Department of Veterans Affairs
Environmental Protection Agency
Executive Office of the President, Office of Administration
Export-lmport Bank of the United States
Federal Emergency Management Agency
Federal Reserve Board
General Services Administration
Marine Mammal Commission
National Aeronautics and Space Administration
National Archives and Records Administration
National Science Foundation
Nuclear Regulatory Commission
Office of National Drug Control Policy
Overseas Private Investment Corporation
U.S. Agency for International Development
U.S. Arms Control and Disarmament Agency
U.S. Information Agency
U.S. Peace Corps
U.S. Trade Representative
SECURITY CLASSIFICATION SECURITY CLASSIFICATION AGENCY / DEPARTMENT COST ESTIMATES PROJECTED COST ESTIMATES FOR FY 1997 FOR FY 1998 Department of Agriculture $1,379,000 $1,681,000 Department of Commerce $9,980,185 $9,269,047 Department of Defense $3,145,475,000 $3,284,432,000 Department of Energy $104,830,000 $113,007,000 Department of Health and Human Services $335,800 $209,700 Department of Justice $33,170,000 $32,268,000 Department of State $36,848,000 $38,456,000 Department of Interior $2,477,000 $3,069,000 Department of Treasury $12,618,000 $13,348,000 Department of Transportation $2,329,000 $2,560,000 Department of Veterans Affairs $6,500 $10,500 Environmental Protection Agency $411,000 $475,000 Executive Office of the President, Office of Administration $305,000 $338,000 Export-Import Bank of the United States $92,000 $165,000 Federal Emergency Management Agency $225,858 $243,687 Federal Reserve Board $327,000 $337,000 General Services Administration $531,000 $640,000 Marine Mammal Commission $1,000 $1,000 National Aeronautics and Space Administration $9,000,000 $9,680,000 National Archives and Records Administration $6,736,000 $6,520,000 National Science Foundation $78,500 $86,500 Nuclear Regulatory Commission $2,895,000 $3,095,000 Office of National Drug Control Policy $1,800,000 $2,046,000 Overseas Private Investment Corporation $148,000 $170,000 U.S. Agency for International Development $3,549,776 $3,453,981 U.S. Arms Control and Disarmament Agency $1,576,000 $1,693,000 U.S. Information Agency $2,264,800 $2,769,150 U.S. Peace Corps $136,250 $136,250 U.S Trade Representative $570,000 $419,000 TOTAL $3,380,631,1706 $3,530,798,565