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Vetting Failures Prompt Agency to Reclaim Some USIS Work

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Feb. 6 (Bloomberg) -- A U.S. agency is reclaiming some work from the contractor that vetted national-security worker Edward Snowden and the gunman who killed 12 people at the Washington Navy Yard.

The U.S. Office of Personnel Management on Feb. 24 will begin doing all final reviews of background investigations, taking back the task from USIS, a unit of Falls Church, Virginia-based Altegrity Inc.

USIS has been accused of fraud by the Justice Department in a whistle-blower lawsuit. The government last month claimed the company failed to provide adequate background checks in at least 665,000 instances. Such vetting is a requirement before a federal employee or contractor can be granted a security clearance.

“This decision acts as an internal quality control preventing any contractor from performing the final quality review of its own work,” Katherine Archuleta, director of the Office of Personnel Management, which handles most federal background checks, said in an e-mailed statement.

Final Reviews

Ellen Davis, a spokeswoman at Sard Verbinnen & Co. who is representing USIS, declined to comment on the agency’s decision.

USIS has cooperated with the government’s investigation, appointed new leadership and enhanced oversight procedures, she said in a statement after the complaint was filed last month.

USIS received $295 million from the personnel office for background investigations in the year ended Sept. 30, according to Brian Friel, a Bloomberg Industries analyst.

The agency didn’t say how USIS’s revenue or contracts would be affected. In addition to its background-check work, USIS is responsible for conducting final reviews and closing the investigations performing by all the agency’s contractors, according to the Justice Department complaint filed in federal court in Montgomery, Alabama.

Incomplete Cases

Beginning at least in March 2008 through September 2012, USIS management started “dumping” or “flushing” cases, releasing them to the government for payment without the quality reviews required by the contract, the U.S. said in the complaint citing internal company e-mails.

USIS, created as part of an initiative to reduce the size of the civil service, is facing questions from lawmakers about the company’s vetting of Snowden, a former National Security Agency contractor who exposed secret U.S. spying programs, and Aaron Alexis, who worked for a contractor and killed 12 people at the Navy Yard on Sept. 16. He died in a shootout with police.

USIS’s parent company is owned by Providence, Rhode Island-based Providence Equity Partners LLC.

To contact the reporter on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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