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OPM contractors in the crosshairs

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Last week, Office of Personnel Management leadership faced the wrath of the House Oversight and Government Reform Committee alone. This week, contractors joined in to receive their own tongue lashings.

In a brutal four-hour follow-up to last week’s inquisition, lawmakers on June 24 shredded the public and private sectors alike for their failures related to the series of breaches that have plagued OPM over the past several years. But despite harsh language and a panel of top leadership, many tough questions – on issues ranging from how the breaches occurred to how many people have been affected – remained unanswered.

KeyPoint gave hackers the key

One thing OPM and contractors did know: KeyPoint Government Solutions is, in some way, at the center of the OPM breaches.

KeyPoint CEO Eric Hess confirmed that the OPM system credentials of a KeyPoint employee were used by hackers to gain access to OPM’s networks, though exactly how those credentials were compromised remains unclear.

KeyPoint, which provided background check services for OPM, was a victim of a hack of its own last year. But while OPM canceled the background check contracts of another private company, USIS, when it suffered a hack, OPM retains KeyPoint contracts to this day.

Asked if OPM should terminate KeyPoint contracts in the wake of the more recent breaches, OPM Inspector General Patrick McFarland defended the deals. “Based on the information I have, I see no reason that we should,” he said.

OPM Director Katherine Archuleta also defended KeyPoint, saying it had updated security and that the company had faced relentless hacking under which even the best firms might crack.

Lawmakers were considerably less forgiving.

Committee Chairman Jason Chaffetz (R-Utah) threatened to subpoena KeyPoint if the firm couldn’t provide previously requested communications records in a timely fashion – Hess tried to avoid giving an estimate of when the records could be ready, but Chaffetz forced him to commit to delivering them “next week” – and ranking Democrat Elijah Cummings of Maryland unleashed his ire on USIS CIO Rob Giannetta.

“[USIS has] finally provided answers to questions I’d asked seven months ago,” Cummings fumed, talking about questions he’d posed about the August 2014 USIS breach that exposed intelligence community and Capitol Police information. “Seven months ago, Mr. Giannetta. Seven. Months. It took them seven months, the night before the hearing, to get me that information!”

“There’s no doubt in my mind that USIS officials would not have provided that information unless they were called here to testify today,” he continued, then questioned why the company paid out millions in bonuses as its systems were breached and “defrauded the government.”

Giannetta said he couldn’t speak to the bonus justifications, but he offered an estimate of his own bonus: $95,000 or so (he couldn’t remember the exact amount).

USIS has filed for bankruptcy, and Giannetta noted he will likely leave the company within the month.

A new ‘shell’ in sketchy hands

Lawmakers also raised questions about OPM’s sole-source award to Imperatis for building its highly touted new database environment, which OPM is calling its “shell.”

“[W]hen it is a sole-source contract, it does beg a lot of questions,” said Chaffetz. He said he’s sure Imperatis can perform the work, but he noted, “this organization has had a lot of problems in the past.”

In 2012, Imperatis, then known as Jorge Scientific Corp., came under scrutiny when video surfaced of its employees performing work while apparently drunk and/or high in Afghanistan.

IG McFarland noted that he has serious doubts about OPM’s systems overhaul, saying that the $93 million cost estimate leaves out important -- and expensive – elements, and that the modernization project lacks a dedicated source of funding.

“It is entirely possible that OPM could run out of funds before completion, leaving its IT more vulnerable than it is now,” McFarland said. “OPM cannot afford to have this project fail.”

He added that the contract award process appeared to lack “full and open competition.”

McFarland has announced a “flash audit” of OPM’s modernization project, sparked by concerns over the initiative’s costs and management.

Archuleta noted that awards for migration and cleanup services have yet to be awarded.

Still no word on total numbers, responsibility

“How many records do you have?” Chaffetz asked Archuleta. “That’s what I’m trying to get here.”

He was addressing the ballooning estimates of the extent of the OPM. OPM has maintained two separate breaches – one of personnel files, one of background check information – took place (though that assertion came under fire as the Wall Street Journal reported officials may have coordinated to label the breaches as two separate incidents and concealed the existence of the second breach for a period of time).

In the first breach, OPM had stood by an affected number of 4.2 million people. But for the background check breach? “I’ll get back to you,” Archuleta said.

“Is it potentially 32 million records that are at play here?” Chaffetz pressed, citing a pre-breach notification letter Archuleta had written detailing how many individuals’ records OPM had.

“I will not give a number that is not completely accurate,” Archuleta insisted, though she eventually relented. “The number of employees’ [records] that we have, yes,” in response to the 32 million figure.

That number, which appeared to include current, former and retired federal employees as well as, possibly, contractors, would mean the breaches could impact one in 10 Americans.

In a statement after the hearing, OPM spokesman Sam Schumach hewed back to the party line: “Until we have conclusive evidence from the ongoing investigation into the second intrusion involving background clearance information, we cannot confirm any number except for the approximately 4 million affected individuals by the breach of personnel records that we announced on June 4. Any numbers being reported are speculative as the investigators have not yet determined the size and scope of the second intrusion.”

And on responsibility for the breach, OPM’s Archuleta still didn’t take personal responsibility for the breaches, though she tried a different tactic from her “blame the hackers” approach of a previous hearing.

“I hold all of us responsible,” she said, noting cybersecurity is an enterprise-wide concern.

Chaffetz didn’t buy it.

“As the head of the agency, Ms. Archuleta is in fact statutorily responsible” for mitigating risks, he said. “The shift in blame is just inexcusable.”

Multiple lawmakers called for a discussion of whether Archuleta and OPM CIO Seymour should keep their jobs.

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Reader comments

Mon, Jul 4, 2016

OPM has to keep the contractors because contractors do ALL the work for way less money than what they pay OPM Investigators. Contractors do 5X the work per day that an OPM Investigator does. They'll never get rid of contractors even if they staffed up to 100% their people are government employees and they aren't expected to work hard.... there you go. Plus they need the contractors around to blame things on when something goes wrong (not being funny this is true) which happens ALL the time in every segment of your fine government. And what can the contractors do when they get blamed?? Absolutely nothing. Just suck it up and keep going waiting for the next beating like a good slave.

Sun, Sep 6, 2015

I worked for both USIS and now KeyPoint as an investigator. Let me tell you, Keypoint is as crooked as a barrel of fish hooks. They lie to the investigators. They expect a full SSBI to be completed in less than 7 days. Seriously. National Security? Please.

Fri, Jun 26, 2015

This would never have happened if OPM had moved all of their important data to Windows, a much more secure system than an worthless dinosaur mainframe.

Thu, Jun 25, 2015

A government contractor bonus of over $95,000? When will congress wake up and return these functions to Federal Employees? Not only are they less expensive, they would likely work a lot harder protect their own personal identification information. Federal contracting is the biggest scam ever perpetrated on American Taxpayers.

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