PAE acquires USIS security unit
Arlington services contractor PAE has acquired the Global Security and Solutions unit of Falls Church-based U.S. Investigations Services, the company announced Friday. Terms of the deal weren't disclosed.
The purchase is meant to strengthen PAE's work with the Department of Homeland Security, as well as give it access to other agencies, such as the Justice Department, the company said. The move is one of the first significant deals in Washington's professional services sector this year, continuing a trend from 2014. Services contractors are competing to stand out in a crowded market with reduced federal spending.
USIS, the contractor that performed the bulk of background checks for federal security clearances, suffered a computer breach last year and lost two contracts with the Office of Personnel Management as a result. The unit that PAE bought doesn't perform background checks, but a majority of its 1,900 employees hold high-level security clearances, PAE said.
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A division of the business unit came under scrutiny last year, when government lawyers concluded that it shouldn't have been awarded a lucrative Homeland Security contract because the agency failed to take into account separate allegations of fraud against USIS. The Justice Department has been investigating the company since 2011 for allegedly conducting incomplete background checks that cost the government millions of dollars. USIS has cooperated with the government's probe.
Based on this history, the Government Accountability Office recommended that Homeland Security reexamine its decision to award USIS a new contract. The department expects to complete its probe by the end of this month, the GAO said.
The USIS unit will be renamed PAE National Security Solutions, and executive Jeremy Wensinger will continue to lead it, PAE said. Employees will stay at the Falls Church and McLean locations, as well as across field sites.
PAE was spun off from defense giant Lockheed Martin in 2011. It is owned by Lindsay Goldberg, a private-equity firm.
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