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Major Background Check Contractor Furloughs Thousands of Employees

Personnel agency shifts investigations away from USIS following stop-work orders.

The Falls Church, Va., contractor that conducts the lion’s share of federal background checks is now losing work and furloughing employees because of the two stop-work orders issued after an Aug. 6 hacking incident.

The Office of Personnel Management, which halted USIS’ security clearance work to protect federal employees, said in a statement Wednesday that while the suspension remains in effect, the agency is “continuing to process background investigations using other available assets.”

OPM said the investigations assigned USIS when the stop-work order was issued are still pending completion. “We are shifting the fieldwork previously done by USIS to other contractors and federal staff as appropriate,” OPM said. “While this may cause a delay for some investigations as we make the adjustments, we are working to minimize any delays and we remain committed, first and foremost, to the security and quality of our background investigations.”

USIS declined comment, but a source familiar with the firm said that 2,000 employees have recently been furloughed, and that USIS conducts 21,000 background checks a month.

USIS in recent months has irked lawmakers concerned about bonuses to its parent company’s top executives at a time when the firm has been charged by the Justice Department with submitting premature reports on background investigations. USIS was also the company that conducted background checks on National Security Agency contractor-turned-leaker Edward Snowden and Washington Navy Yard shooter Aaron Alexis.

A second stop-work order was implemented by the Homeland Security Department, which did not respond to inquiries. The DHS-run U.S. Computer Emergency Readiness Team in Pittsburgh, however, has reportedly given USIS’ computer security a “clean bill of health,” according to Alan Chvotkin, executive vice president and counsel at the Professional Services Council. “We have not seen immediate harm from the stop-work order to USIS across the broad spectrum of companies. But we’re obviously watching the situation carefully,” he told Government Executive. “We are confident USIS will be able to restart background checks quickly, and that will be the good news for contractors.”

Daniel Stohr, communications director at the Aerospace Industries Association, said that while his group has not polled members on the impact, “the longer this situation goes on, the larger and more significant the impact is going to be. However, the most important thing is that the quality and completeness of the background check process remains intact. We’re confident that all parties involved are working hard to resolve this situation as expeditiously as possible.”

(Image via Andrey_Popov/