The Northern Virginia contractor that suffered a cyberattack in August and subsequently lost its contracts with the Office of Personnel Management has laid off more than 2,500 employees.
USIS of Falls Church, which performed the bulk of background checks for federal security clearances, said in a statement Tuesday that the loss of two contracts with the OPM led to the job cuts. Both contracts were to expire Sept. 30, and the government agency said it would not renew them.
“The termination of these two contracts eliminates more than 2,500 USIS jobs across the country effective today. For each of the OPM contracts, there are successor contractors who will perform the work. It is our expectation that most, if not all, employees leaving USIS and who are interested will receive job offers by the successor contractors,” a spokesman for USIS said in an e-mailed statement.
OPM has been trying to shift the work done by USIS to other contractors or perform it in-house. A spokesperson for the agency said OPM was “exploring its options,” including placing the work up for bid under a new contract.
CACI International and KeyPoint Government Solutions have seen their background-check work pick up after problems surfaced at USIS.
“CACI is actively expanding our workforce to accommodate the anticipated increased level of support to OPM,” Mike Rhodes, CACI’s executive vice president and general manager of background investigations business, said in a statement. He did not say whether the company might hire the USIS employees, a common practice in federal contracting.
KeyPoint chief executive Eric Hess said “recent changes in the supplier channel” have created new opportunities for his company.
“KeyPoint is currently receiving a tremendous amount of interest from security-clearance professionals who are seeking new, high-quality career opportunities and we have hired those whose skills and experience most closely matched the needs of our federal customers,” Hess said in a statement.
USIS was the victim of a cyberattack during the summer, which potentially exposed the records of thousands of government employees. The OPM and the Department of Homeland Security, another major client, suspended work with the contractor soon after.
A majority of the layoffs occurred in USIS’s Pennsylvania offices, according to news reports in that state. USIS did not specify how many employees were let go in the Washington area.
A former USIS employee filed a class-action lawsuit against the company late last week, claiming that the contractor did not provide employees with a 60-day written notice about the dismissals.
USIS has been in the spotlight for more than the cyberattack. The company is facing a Justice Department lawsuit that accuses it of defrauding the government over incomplete background checks. Lawmakers have criticized the government for awarding new contracts to the company in the wake of the legal actions. A separate division of the company, for instance, won a contract worth up to $190 million from the Department of Homeland Security for work other than background checks after the allegations surfaced.
A competitor protested, and the Government Accountability Office is reviewing it. The agency could rule in December, according to a letter from DHS’s deputy secretary in response to a request by Sen. Claire McCaskill (D-Mo.).
In response to the accusations, USIS hired a new management team and said it has enhanced oversight procedures.
