The Office of Personnel Management will not renew any of its contracts with USIS, the major Falls Church, Va., contractor that provides the bulk of background checks for federal security clearances and was the victim of a recent cyberattack, officials confirmed Tuesday evening.
A spokeswoman for Sen. Jon Tester (D-Mont.) said the OPM informed the senator’s office Tuesday afternoon that it would not renew the contracts when they expire Sept. 30.
“The news is a welcome sign that the federal government is finally beginning to hold contractors accountable for taking millions in federal money and then failing to get the job done for the taxpayer,” Tester, who has sponsored legislation to overhaul the security-clearance process, said in a statement. “As OPM shifts this workload to federal employees and other contractors, the agency must ensure high-quality and timely investigations. Our national security is too important not to.”
USIS said in a statement that it is “deeply disappointed with OPM’s decision, particularly given the excellent work our 3,000 employees have delivered on these contracts. While we disagree with the decision and are reviewing it, we intend to fulfill our obligations to ensure an orderly transition. The company continues to provide high quality service to its many other valued government customers.”
OPM officials did not immediately respond to requests for comment.
The Associated Press first reported that the OPM would not renew the contracts.
The OPM and the Department of Homeland Security issued stop-work orders last month after the cyberattack, which potentially exposed the records of thousands of government employees.
Since then, the two agencies that suspended the work have been trying to shift the background investigations to other contractors or do them in-house, the OPM has said.
But USIS’s caseload was significant, averaging about 21,000 background checks a month. USIS, which conducted background clearances for National Security Agency leaker Edward Snowden and Navy Yard shooter Aaron Alexis, has come under criticism for allegedly churning through investigations and cutting corners.
The company also faces a whistleblower lawsuit that was joined by the Justice Department and accuses the company of submitting 665,000 background checks that were incomplete.
In recent years, the OPM has scaled back its reliance on USIS, which was paid $417 million in fiscal 2010 and $320 million last year, according to the agency. During that time, more work went to two other contractors: KeyPoint Government Solutions and CACI. KeyPoint’s payments jumped from $85 million to $138 million; CACI’s rose from $17 million to $46 million.
USIS has had a long history of performing background checks for the government. The company was created when it was spun off by the OPM in an unprecedented privatization plan during the Clinton administration in the mid-1990s.
It has been performing the checks ever since.
The company also has come under fire from members of Congress who questioned why the Department of Homeland Security recently awarded it a contract, worth up to $190 million, to provide field support services related to the agency’s immigration system.
That contract is being protested by one of USIS’s competitors.