Federal contractor USIS has been in the headlines a lot lately, and not for flattering reasons. USIS, which became a household name as the company that performed the background checks on Edward Snowden and Navy Yard shooter Aaron Alexis, has also been charged by the Department of Justice with attempting to defraud the government by “dumping” at least 660,000 incomplete background checks. Then, after a data breach at USIS compromised the records of up to 25,000 government employees, the Office of Personnel Management (OPM) discontinued its full portfolio of work with the company.
Now the Government Accountability Office (GAO)—the federal government’s in-house “watchdog”—has just ruled that a recently awarded five-year, $190 million Department of Homeland Security (DHS) immigration contract was improperly given to USIS. DHS officials must now decide whether to act on the GAO’s recommendation and withdraw the contract from USIS in light of the company’s past conduct. All of this likely has procurement officials at every federal agency asking themselves whether USIS can perform future government work.
This is clearly on the minds of officials at U.S. Citizenship and Immigration Services (USCIS), the DHS department charged with overseeing the immigration services contract GAO just ruled on. DHS Deputy Secretary Alejandro Mayorkas recently confirmed in a letter to Sen. Claire McCaskill (D-Mo.) that “DHS issued a policy alert to the DHS acquisition workforce affirming that concurrence from the Office of the Chief Procurement Officer and the Office of the Chief Information Office will be required prior to awarding new contracts to any USIS corporate entity.” That DHS letter, coupled with the OPM contract discontinuation, suggests that officials at these agencies are concerned about USIS and could even consider debarment proceedings against the company.
This is not surprising. After all, an agency’s primary responsibility is to protect the taxpayers and ensure that the government deals with only responsible contractors. And, as the GAO’s recent ruling affirms, there are serious questions about whether USIS can be considered a “responsible” entity.
However, if debarment proceedings are initiated, USIS will be entitled to a fair and transparent process that allows the company to present its side of the story. That’s why the procurement regulations include safeguards to ensure that no contractor is debarred arbitrarily or without cause. These same regulations allow agencies to make decisions that are in the best interests of their individual agencies.
In this regard, agencies may also be concerned that Standard & Poor’s recently reported that USIS may run out of money within six months—yet another reason agency officials may consider taking some type of protective action. Take the (now-dubious) $190 million immigration services contract, for example: USIS was just tasked to perform five years of sensitive immigration work for DHS, even as some of the nation’s top financial analysts warned that the company may not even last for one-tenth of that period.
If there has been one positive consequence of the ongoing USIS story, it is that the media and political establishment have been forced to recognize just how vital the work government contractors perform really is. As the Department of Justice continues to prosecute its case against USIS, DHS and other agencies must perform their own due diligence, to ensure that contracts are awarded only to companies that are responsible and financially sound. The American people deserve nothing less.
Burton is a federal procurement attorney and partner with Venable LLP in Washington, DC. He is a 30-year veteran of procurement law and policy development, and served in the Executive Office of the President as deputy administrator of the Office of Federal Procurement Policy.