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.