USIS, the embattled major federal contractor, suffered another blow Monday after government lawyers determined that the Department of Homeland Security recently issued the company a lucrative contract without taking into account allegations of fraud against the company.
The decision by the Government Accountability Office comes a month after the Office of Personnel Management said it would not renew any of its contracts with the Falls Church-based company, which was the victim of a recent cyberattack that left thousands of government workers vulnerable to the theft of some of their personal information.
The company also faces a whistleblower lawsuit that was joined by the Justice Department alleging that it “flushed,” or didn’t fully complete, 665,000 background checks used in granting security clearances.
In a bid protest, one of USIS’s competitors, Ashburn-based FCi Federal, argued that the Department of Homeland Security should have considered those allegations when it awarded USIS a contract worth up to about $200 million to provide field support services related to the agency’s immigration system. The GAO agreed and recommended that DHS take the allegations into account when determining whether USIS is a “responsible” vendor.
“If, at the end of this review, USIS is found to be other than responsible, we recommended that DHS terminate USIS’s contract and make award to FCi, if otherwise appropriate,” Ralph O. White, GAO’s managing associate general counsel for procurement law, said in a statement. “We also recommended that FCi be reimbursed its protest costs.”
GAO’s decisions are only recommendations, but they are followed by federal agencies in nearly all cases.
The award to USIS also infuriated some members of Congress, who demanded to know how a company that was accused of defrauding the government could be awarded another big contract.
Responding the decision, USIS said in a statement that the “ruling flies in the face of the outstanding ratings awarded to” the company by DHS during the award process. The firm said it “won this contract from the incumbent contractor after a rigorous two-year competition, which followed long-standing government procurement procedures.”
USIS also maintained that its professional services division, which was awarded the Homeland Security contract, was separate from the part of the company accused of fraud in the background check lawsuit.
“The decision in the end is contrary to the best interests of the government and the American taxpayer,” the USIS statement said. “We intend to seek reconsideration of GAO’s decision.”
Sharon D. Virts, the chief executive and founder of FCi Federal, said the company was “pleased with GAO’s decision” and that FCi remains “committed to providing the highest level of service in support of this country’s immigration system.”
DHS declined to comment on the GAO’s decision but said it “strives to conduct all procurements in an open and transparent process in accordance with best practices.”