“WASHINGTON—The Department of Homeland Security has awarded a $190 million contract to the company accused of methodically defrauding the government while carrying out background checks on millions of people, including former National Security Agency contractor Edward Snowden.
The department’s U.S. Citizenship and Immigration Services hired US Investigations Services LLC to help operate the nation’s immigration system.
USIS was able to win the contract because regulations require agencies to follow strict procurement procedures unless a bidder has been suspended or barred by the government from contracts. Despite questions about its work on background checks, USIS was never blocked from federal work.
Unless a company is suspended or barred, “by law and policy, we have to go with the lowest bidder,” said an official with U.S. Citizenship and Immigration Services.
The Department of Homeland Security said it takes “allegations of wrongdoing against its workforce and contractors extremely seriously,” but “at this time there is no conduct that has resulted in suspension or debarment of USIS.” The agency said the contract decision came after an 18-month review.
The Office of Personnel Management, which oversees background-check investigations, indicated that USIS had addressed concerns raised by the fraud allegations. “At this time we are satisfied with the steps taken by USIS to deal with actions by their employees and previous leadership,” the agency said.
USIS, based in Falls Church, Va., declined to comment on the contract award or its work with the U.S. government. After the fraud allegations, which were brought to the government’s attention in 2011 by a company whistleblower, USIS overhauled its management team and said the accusations were inconsistent with the company’s values.
The new contract, disclosed late Tuesday, is the first major federal award USIS has won since it became the focus of scrutiny last summer over its practices as the government’s largest provider of background checks for security clearances.
The Justice Department has accused USIS in a civil suit of cutting corners while conducting investigations of people seeking clearance for sensitive government jobs. Among those it screened was Mr. Snowden, the former NSA contractor who sought sanctuary in Russia after leaking classified U.S. government secrets.
Federal officials alleged that USIS carried out a flawed 2011 background check of Mr. Snowden before he secured an NSA job in Hawaii, where he collected top-secret documents and later gave them to journalists.
USIS also did a 2007 background check of Aaron Alexis, a military contractor who used his security clearance to bring a gun into the Washington Navy Yard last fall and kill 12 people before being shot dead by security officers.
USIS has defended its work investigating Mr. Snowden and Mr. Alexis and noted that the company provides information to government officials who have the final say over who gets security clearance.
In January, the Justice Department joined a whistleblower lawsuit against USIS and accused the company of defrauding the government. In addition, a federal grand jury launched an investigation last summer into USIS practices, according to people familiar with the situation, while some lawmakers have suggested the company be barred from government work….”