WASHINGTON – Lawmakers are calling for more oversight of the vetting process allowing individuals to access classified information and criticizing the federal government’s lack of standards and lax supervision of security clearances.

In the wake of the NSA scandal in which former National Security Agency contractor Edward Snowden leaked numerous documents about American surveillance operations around the world, two Senate panels held a joint hearing last week to look into the role of private companies in the U.S. intelligence community.

Sen. Jon Tester (D-Mont.), chairman of the Governmental Affairs subcommittee, said that in light of recent events it is essential to determine whether programs carried out by the government in the name of national security “balance our security and our essential liberties.”

“It’s also incumbent upon us to raise critical questions about how our government is vetting the individuals, whether they’re federal employees or contractors who have access to our nation’s most sensitive data,” Tester said.

A January report from the director of National Intelligence showed nearly five million people hold United States security clearances. Personnel security clearances allow government and contractor staff to gain access to the nation’s most sensitive data. They are broken into confidential, secret, and top-secret classifications based on the sensitivity of the information a person is allowed to view. Roughl 1.4 million of these individuals hold a top-secret security clearance, granting them access to information that may cause exceptional damage to U.S. national security if disclosed without authorization.

The Office of Personnel Management‘s (OPM) Federal Investigative Services division conducts over 90 percent of the investigations, including all background investigations for civilians and contractors.

Conducting and managing background investigations costs the federal government over $1 billion per year, up nearly 80 percent since 2005, according to a 2012 report by the Government Accountability Office (GAO). Most of the money goes to private companies hired by the government to conduct investigations for OPM. Private-sector contractors conduct approximately 75 percent of all investigations.

But one company in particular has acquired two-thirds of the contracts to conduct background investigative fieldwork for government agencies. About 65 percent of all background investigations on behalf of the federal government are conducted by US Investigations Services (USIS), a private company established in 1996 as a result of the privatization of the investigative branch of OPM.

According to a report by the Congressional Research Office, USIS was created as part of Vice President Al Gore’s “reinvention program,” which entailed a sizable downsizing of the civil service to make the government work with fewer staff and less funds. At OPM, the security and investigations unit of the agency was the ideal target for the program because of its reduced workload after the end of the Cold War and fewer new hires throughout the federal government at the time. After its creation in 1996, OPM awarded the company a non-competitive, multi-year contract. Others firms have won contracts to perform checks for the federal government, but none of them as lucrative as those obtained by USIS.

The OPM paid USIS more than $200 million last year for its work, said chairman of the subcommittee on Financial and Contracting Oversight Sen. Claire McCaskill (D-Mo.). According to data compiled by Bloomberg, the company received $253 million to conduct background check investigations under a contract with the OPM in fiscal year 2012.

“We received information regarding how the government plans, conducts, oversees, and pays for background investigations. This information portrays a government agency where there is fraud, limited accountability, and no respect for taxpayer dollars,” McCaskill said.