August is usually a quiet month in Washington, but this summer’s recess was interrupted by news of a data breach at the federal contractor United States Investigations Services. The breach may have exposed the personal information of up to 25,000 government employees, including undercover government investigators and border agents, and has raised alarm on Capitol Hill. The implications for our national security are serious and could get worse.

This was hardly the first negative headline to emerge about USIS. Earlier this year, the government charged USIS with a massive scheme to systematically defraud the government. Engaged by the government to perform background screenings for government employees, USIS allegedly “dumped” at least 660,000 incomplete background checks according to the investigators, obtaining revenue for work USIS didn’t do while creating backlogs in the process.

With USIS in the news for all the wrong reasons, and with senators and congressmen raising serious concerns about the contractor’s conduct, it came as a surprise when the Department of Homeland Security’s U.S. Citizenship and Immigration Services recently awarded the company another support services contract worth $190 million to help prevent criminals and terrorists from applying for citizenship benefits.

With a soaring national debt and the federal government more shackled by bureaucracy than ever, contractors play an essential role in streamlining our government’s operations and saving money. Behavior like what USIS is accused of does the opposite. That is perhaps why one of the company’s largest government clients, the Office of Personnel Management, announced it will discontinue its contracts with USIS for background investigations and support services at the end of September. It has also prompted a new round of bipartisan alarm in Congress, as members question why USIS has just been awarded a new immigration contract.

Until recently, USIS had remained the government’s largest provider of background checks — including, as headlines have reminded everyone, the background checks for NSA-leaker Edward Snowden and Navy Yard shooter Aaron Alexis. In choosing not to “exercise its option” to renew USIS’s contracts, OPM has taken the painless approach to end its contractual relationship with USIS.

So why then, many are asking, did OPM discontinue its contracts with USIS? Was it the data breach? Poor performance? Breach of contract? And why was USIS just awarded a new contract from a different government agency? It is important to look at this situation more closely.

In the aftermath of the data breach, OPM issued a stop work order while it investigated and took steps to mitigate further harm on USIS’s background checks contract. The discontinuance of the relationship, however, extends also to USIS’s separate support services contract.

Delving further brings up more issues. The fraud allegations have led the Department of Justice to sue the company for $1 billion on behalf of the American taxpayers. Criminal charges may be forthcoming as well: the Wall Street Journal reported that a grand jury has “begun issuing subpoenas” to USIS officials over the fraud scheme. While officially this alleged fraud is not the reason, OPM nonetheless has chosen to distance itself from the contractor.

Meanwhile, lawmakers are crying foul as USIS by law is permitted to pursue new government contracts like the USCIS immigration agreement. Curiously, this new contract was issued shortly after the government accused USIS of perpetrating a massive fraud scheme and sued. For the award to go USIS’s way, federal purchasers must have determined USIS to be “presently responsible” and a low risk for this new work based on its past performance.

As this new USIS award draws increased attention and scrutiny, the Department of Homeland Security should review the situation carefully. Putting aside the recent decision by OPM to end its work with USIS, an OPM Inspector General report released earlier this year along with the ongoing DOJ litigation are enough for contracting officers to take pause when considering new work for this contractor.

The controversy surrounding USIS also raises serious questions about the procurement process. In circumstances such as this, it is difficult to understand how contractors can continue to receive high ratings and win awards. Legislation to reform the laws governing background check contractors has already cleared the Senate. This case may suggest that the procurement system itself is in need of further reform.

With our nation facing unprecedented threats at home and abroad, it is imperative our government relies on private sector partners with impeccable records of superior performance. In this regard, Congress must closely examine the problems associated with the USIS contracts and DOJ’s fraud allegations. Our national security depends on ensuring that these problems are never repeated.

Robert A. Burton is a federal procurement attorney and partner with Venable LLP in Washington, DC. He is a thirty-year veteran of procurement law and policy development, and served in the Executive Office of the President as Deputy Administrator of the Office of Federal Procurement Policy.