The agency wants the private sector to manage a key part of project.
Groups have 90 days to comment on regulations to implement President Obama’s April executive order.
A coalition of civil rights groups is asking the Defense Department to stop transfers of military equipment to school districts.
Industry and employee representatives say USIS’ removal could backfire.
The GovTech Fund has raised $23 million and invested in four companies.
Omnibus contract open only to small business.
Industry group says the president’s executive order will result in blacklisting some of the best firms for minor infractions.
Falls Church-based USIS had been suspended after breach in computer network.
Most departments failed to assess whether IT vendors took security precautions.
USIS makes the case it should not be banned from continued government work.