For the first time in its 20-year history, a federal contracting firm is filing a bid protest to overturn the $190 million award of a contract to a rival accused of fraud by the Justice Department.
Contractor USIS, which vetted NSA leaker Edward Snowden and Navy Yard shooter Aaron Alexis, won the contract over Virginia-based FCi Federal last month, prompting a bipartisan backlash and demands from lawmakers that Department of Homeland Security chief Jeh Johnson turn over records on the contract.
The contract award by U.S. Citizenship and Immigration Services, came months after USIS was hit with a Justice Department complaint accusing the firm of falsely certifying that hundreds of thousands of background checks were completed.
“This is the first time in our company’s 20-year history that we have challenged a contract award, and we take our decision to file this protest very seriously,” FCi Federal chief executive Sharon D. Virts said in a statement, explaining the bid protest.
“We are surprised that a company under federal investigation for defrauding the government while conducting security-clearance background investigations can bid for and win government contracts, let alone one directly connected with our nation’s border security,” she said.
But USIS officials defended the award Tuesday, saying in a statement that the contract was awarded to the firm’s professional services division after a “rigorous” two-year competition.
The professional services division isn’t involved in the background-check business, which was the subject of the Justice Department complaint, according to the company.
“As we have previously stated, USIS continues to cooperate fully with the government’s investigation and in no way condones the behavior that is alleged to have occurred in the past,” the company said.
“Over the past 2½ years, USIS has implemented extensive changes to business processes, internal controls, organizational structures, management and personnel to insure our business operates in a manner that is 100 percent compliant with federal regulations and our contractual obligations.”
Still, the contract award has prompted questions from Rep. Elijah E. Cummings, Maryland Democrat, and Sen. Tom Coburn, Oklahoma Republican. They sent a letter to Department of Homeland Security officials last week asking how the agency awarded a contract to a firm being sued by the Justice Department.
Mr. Cummings, ranking member of the House Committee on Oversight and Government Reform, and Mr. Coburn, ranking member of the Senate Committee on Homeland Security and Governmental Affairs, also questioned how federal contracting officials deemed USIS to be “low-risk” despite the Justice Department lawsuit.
Under federal procurement law, agencies must determine that contractors are “presently responsible.”
Mr. Cummings has also said company officials have refused to turn over information in response to congressional requests about executive bonuses awarded during the time when the Justice Department says the fraud occurred — from 2008 to 2010.
A statement from the company to The Washington Times said USIS “has been very responsive to the [oversight] committee, including engaging in open discussions in person with committee members and staffers, responding to numerous written requests and providing thousands of pages of materials related to our business and the background investigations process.”
As of 2013, USIS was ranked as the largest provider of background checks for security clearance for the federal government. But its work came under sharp questioning in the wake of its shortcomings in two high-profile cases.