OPM undecided whether to suspend, debar USIS after DoJ complaint

Monday - 1/27/2014, 12:33pm EST

The Office of Personnel Management hasn't decided whether to suspend or debar U.S. Investigative Services, the government's largest contractor for background- investigation services, despite the Justice Department's decision to file a civil complaint against the company last week.

"The case outlined by the Department of Justice is an egregious violation of the public trust and OPM does not tolerate fraud within our programs," said OPM Director Katherine Archuleta in a statement. "From the moment we learned that there might be an issue with USIS, OPM has worked closely with the Department of Justice and OPM's Inspector General, in addition to conducting our own internal reviews. Given the importance of the background security clearance process, it is imperative that we take steps to hold bad actors accountable and to ensure such practices never happen again."

DoJ's complaint alleges USIS began "dumping" or "flushing" cases — transmitting cases to OPM and falsely representing them as completed — in 2008 to maximize the company's revenues and profits. All told, 40 percent of the cases USIS submitted to OPM over a four- year period beginning in March 2008 were the result of "dumping," according to DoJ's most recent filing.

OPM in June 2011 rehired USIS under a five-year contract worth $288 million. OPM renewed USIS' contract in August. USIS conducts investigations for more than 95 agencies.

"The alleged conduct referenced in the civil complaint is contrary to our values and commitment to exceptional service," a spokesperson for USIS said. "These allegations relate to a small group of individuals over a specific time period and are inconsistent with the strong service record we have earned since our inception in 1996. Since first learning of these allegations nearly two years ago, we have acted decisively to reinforce our processes and management to ensure the quality of our work and adherence to OPM requirements... From the outset, we have fully cooperated with the government's investigation and remain focused on delivering the highest quality service under our OPM contracts."

DoJ's allegations come after it was revealed the company performed background investigations of both Edward Snowden and Aaron Alexis. DoJ's complaint, however, is not related to the investigation of either man.

In light of the civil complaint, Archuleta said all of USIS' cases went through quality reviews after they were allegedly dumped and before they went to the agency for adjudication.

"In addition to removing USIS employees from the contract, OPM has already implemented a number of reforms to our contracting oversight and operations to strengthen the process," she said. "As the new director of OPM, I am looking at the role of contractors in our operations and conducting additional reviews to reassure the American people that they can have confidence in the integrity of our program and quality of our products."

An OPM spokesperson said the reforms to prevent dumping in the future include:

  • Significantly increasing the number of government personnel performing contractor oversight by a combination of increasing the staffing levels and realigning existing internal staff.

  • Increasing the on-site inspections with the contractors review including a comparison of their process to the technical proposal requirements.

  • Increasing the frequency of audits of cases closed by the contractor.

  • Developing a new report to detect instances where quality review may not have been performed according to the terms of the contract.

  • Conducting inspections on the average number of reports being reviewed and released by the contractor's review staff for a trend analysis to identify concerns.

  • Removed former USIS officials involved with the misconduct from OPM contract.

  • Looking at options for the current Support Services contract.

"It is important to note that OPM has developed and implemented a proactive integrity assurance program and robust training in this area (background investigations), with strong internal controls to ensure investigators are performing in accordance with the federal standards," the spokesperson said. "Additionally, there is an established process by which federal agencies can request rework if necessary or additional work if desired. Less than 1 percent of OPM investigations are returned for rework each year."

As for the potential debarment or suspension of USIS, Dan Gordon, the former administrator in the Office of Federal Procurement Policy and now associate dean of government procurement law studies at The George Washington University, said while background investigations have improved over the last few years, the USIS case may turn into a study about the cost and benefits of outsourcing.

"The government has changed the way it conducts background investigations over the years, shifting from performance by federal employees to use of contractors," Gordon said. "While contractors apparently helped in reducing the backlog, and some would say that the government benefits from the alignment of the contractor's profit motive with the government's desire for faster action on the cases, it looks like the emphasis on speed and profit may have led to inappropriate cutting of corners."

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