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OPM to Federalize Background Checks in Wake of Snowden Scandal/Navy Yard Shooting

Michael J. Graham
Proskauer Rose LLP - Newark Office

February 18, 2014

Previously published on February 11, 2014

On February 6, 2014, the Office of Personnel Management (OPM) announced that the agency will federalize the “quality review process” of its background investigations. OPM had previously engaged federal contractors to conduct agency background investigations, including the quality review procedures and back office support.

The agency’s practice of contracting out portions of the investigation process came under intense scrutiny in the wake of the Edward Snowden scandal and the Aaron Alexis Navy Yard shooting. The Department of Justice (DOJ) brought a False Claims Act suit against U.S. Investigations Services LLC (USIS), the company that conducted OPM’s background investigations of Snowden and Alexis. DOJ alleged that USIS, over a four year period, intentionally returned forty percent of its background checks to OPM without completing the quality review process in order to ensure that the company obtained incentive fees for quickly completing background checks. Internal emails demonstrate that USIS officials often referred to this process as “dumping” or “flushing.” USIS received approximately $11.75 million of incentive bonus payments from 2008 to 2010.

OPM is also reviewing the role of other contractors engaged in the security clearance process. These inquiries may not directly impact federal government contractors that are not involved in investigations for security clearances. However, as OPM continues to review the investigation process and takes it “in-house,” contractors will likely face further delays in receiving or renewing the clearances necessary for personnel to work on federal government contracts.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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