Bid Protest Ruling Deals Blow to Background Check Contractor

This story has been updated. 

The Government Accountability Office on Monday partially upheld the bid protest of a Leesburg, Va., contractor that sought to remove competitor USIS from a $210 million field office award signed in July by the Homeland Security Department’s U.S. Citizenship and Immigration Services.

In a victory for FCi Federal Inc., GAO General Counsel for Procurement Law Ralph White sustained “portions of a protest” filed against the Falls Church, Va.-based U.S. Investigative Services Professional Services Division of USIS, adding to that company’s multiple woes this year.

GAO concluded that “DHS’s affirmative determination of USIS’s responsibility was not reasonable because the agency failed to consider pending allegations of fraud by the awardee’s parent company under another federal contract,” the counsel wrote. “GAO recommended that [DHS] reasonably consider whether USIS can be viewed as a responsible contractor, taking into account USIS’s description of its relationship with its parent company, USIS LLC, as well as the specific allegations of fraud raised by the Justice Department against USIS LLC. If, at the end of this review, USIS is found to be other than responsible, we recommended that DHS terminate USIS’s contract and make award to FCi, if otherwise appropriate.”

GAO also recommended that FCi be reimbursed for its protest costs.

DHS had awarded the Field Office Support Services contract to USIS’ unit in July despite an array of setbacks that recently prompted the firm to lay off 2,500 employees, cancellation of its Office of Personnel Management background check contract and charges of submitting unfinished background check reviews. FCi Federal argued that USIS “should be deemed ‘high risk’ and not a responsible contractor, because, in this country, bad behavior should not be rewarded.”

Asked for a comment, a USIS spokesman said, “This ruling flies in the face of the outstanding ratings awarded to US Investigations Services, Professional Services Division Inc. during the contract award process. PSD won this contract from the incumbent contractor after a rigorous two-year competition, which followed long-standing government procurement procedures, and, since the contract award decision, USCIS has graded PSD’s performance on another significant contract as exceptional or very good across the board.”

The spokesman noted that PSD does not run background checks for security clearances, which has been the subject of some criticism against USIS, and is “not a party to the DoJ civil complaint. The decision in the end is contrary to the best interests of the government and the American taxpayer.  We intend to seek reconsideration of GAO’s decision.” 

FCi Federal founder and CEO Sharon Virts said, “We are pleased with GAO’s decision to sustain our protest of the FOSS contract award to USIS. We believe GAO’s decision is the right one and is in the best interest of U.S. Citizenship and Immigration Services and American taxpayers.”

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