Pentagon reviewing private contractors, Hagel says

Defense Secretary Chuck Hagel says the Pentagon is reviewing all private contractors as the department deals with budget cuts, and as the lucrative payment to an NSA leaker casts a spotlight on the outside work.

Testifying at a Senate subcommittee hearing, Hagel said on Tuesday that the department has no choice as it faces a cut in projected spending of $37 billion this year from automatic, across-the-board cuts.

Democratic Sen. Dick Durbin cited published reports about Edward Snowden, a former employee of Booz Allen Hamilton, who revealed details of two National Security Agency surveillance programs. The reports said the high school dropout received a six-figure salary.

• Edward Snowden fired by Booz Allen after NSA leaks
• How did low-level contractor gain access to NSA programs?

Durbin said private contractors employ 22 percent of the Defense Department workforce but account for 50 percent of the cost for the department.

Following the Sept. 11, 2001 terrorist attacks, hiring private contractors was considered the quickest, most effective way to expand operations in the war on terror, CBS News' David Martin reports. Defense officials have admitted, however, that it got out of hand.

A report from the office of the Director of National Intelligence shows that 483,000 private contractors held top secret clearances last year. Still, that can't explain how a low-level contractor could gain access to the documents Snowden leaked.