THE BURNED OVER DISTRICT

And so long as you deliver a reasonable product for the cost, Uncle Sam is a forgiving uncle. When the bulk of your product is fraudulent and your systems are set up to deliver that, you can expect a world of hurt. All the more so if part of your deliverables was a vetting of Edward Snowden.

The federal government is seeking billions of dollars in penalties and damages from the company that did the background check on National Security Agency leaker Edward Snowden.

In a 25-page complaint, the Justice Department said that U.S. Investigations Services, the largest of several firms that have government contracts to investigate current and prospective federal employees, lied about 665,000 checks it conducted between March 2008 and September 2012.

USIS devised an elaborate scheme in which the Falls Church, Va.-based company told the government it had completed probes of people whose backgrounds, in fact, had not been thoroughly vetted, according to the complaint, which was filed Wednesday in a federal district court in Alabama as part of an ongoing civil lawsuit against the firm.

USIS set production quotas – monthly, quarterly and annual targets – and then used a process of “dumping” or “fishing” to submit incomplete background reports in order to meet the quotas, the Justice Department said. The firm used a software system called Blue Zone to help run the fraudulent reports, according to the complaint. It said the U.S. government’s Office of Personnel Management relied on the reports to pay USIS.

“Due to its fraudulent conduct, USIS received millions of dollars that it otherwise would not have received had OPM been aware that the background investigations had not gone through the quality-review process required by the fieldwork contracts,” the Justice Department said in the complaint.

The OPM oversees employment background checks and investigations for security clearances granted to federal employees. It does some of its own probes but hires USIS and other firms to do most of them.

Time for the US government to stop contracting and return all sensitive functions in house. For some reason, that nasty old profit motive keeps dragging the free hand of the market astray.