U.S. government drops top security clearance contractor probed by DOJ

Reuters News
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Posted: Sep 10, 2014 5:58 PM

By Elvina Nawaguna

WASHINGTON (Reuters) - The U.S. government is dropping its largest security clearance contractor, US Investigations Services LLC, which carried out background checks on Edward Snowden and the man who shot 12 people to death at the Washington Navy Yard.

The company, which has handled the bulk of background screenings for government hires for 18 years, said Wednesday that the U.S. Office of Personnel Management had notified it that it would not renew its contract when it expires on Sept. 30.

The Falls Church, Virginia-based company has come under increased scrutiny in recent years. The company is facing fraud charges from the U.S. Justice Department for "dumping" 665,000 background check cases without conducting proper reviews.

It conducted the background checks for former National Security Agency contractor Snowden and Aaron Alexis, who had a Navy security clearance and worked at the Navy Yard. Alexis killed 12 people and wounded four before he was killed in a shootout with police.

US Investigations Services was not accused of wrongdoing in the background investigations of Snowden and Alexis, and neither were factors in the Justice Department probe.

A spokeswoman for the company, Ellen Davis, said in an interview that the Office of Personnel Management (OPM) did not give a reason for terminating its contract.

"We are 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 said in a statement.

The company handles 40 percent of federal employee background investigations across more than 20 federal agencies, a statement from the company said. It conducts about 21,000 background investigations each month.

The Office of Personnel Management, which handles hiring of federal workers, decided to end its relationship with US Investigations Services after a careful and comprehensive review, an agency representative said.

A growing number of lawmakers had criticized the federal government for continuing its relationship with the company.

Last week, U.S. lawmakers pushed the Department of Homeland Security to withdraw a $190 million border security contract awarded to the company in July.

FCi Federal Inc, a smaller vetting firm, has filed a protest against the contract awarded to US Investigation Services by Homeland Security's U.S. Citizenship and Immigration Services. Leesburg, Virginia-based FCi Federal argued that the federal fraud charges filed against its rival should have disqualified it from the work.

(Additional reporting by Andrea Shalal; Editing by Jonathan Oatis)