5 Months after Detecting OPM Hack, Officials Begin Protecting 21.5 Million Victims At a Cost of $330 Million

The 21.5 million victims of the largest known breach of federal personnel data will begin receiving notifications at the end of September -- five months after the government first discovered the incident.

In announcing an initial $133 million award for protection services to a company called "I.D. Experts," U.S. officials said they proceeded with caution to ensure they do not further inconvenience victims. The government plans to offer three years of credit and identity-protection services to impacted personnel, which brings the total value of the contract through December 2018 to more than $329.8 million.

While notices detailing the safeguards will not be sent until the end of the month, affected individuals are covered as of Tuesday, Office of Personnel Management officials said. The attack struck databases maintained by OPM.

Brokering a breach response contract "is something that has taken some time, because we want to do it right,” OPM Acting Director Beth Cobert said in a Tuesday evening call with reporters.

“And we also want to make sure that in the context of the notifications, we don't create any more national security issues than we have through the data that was stolen," she said. "As somebody whose data was stolen in this incident as well as in the previous one, I can understand the frustration that people feel. But we want to make sure that we're doing this right." 

The resources available, as previously announced, include credit monitoring, ID theft monitoring, ID theft insurance and ID restoration services for three years.

The giant hack, allegedly linked to Chinese spies, compromised the personal security of millions of past and present federal employees, personnel applying for "clearances" to handle classified secrets, and their family members. Clearance forms detail the medical histories, sex lives and other sensitive details of government officials who now could be subjected to blackmail, security experts say.

Portland-based I.D. Experts specializes in, among other things, medical identity theft, and the company was tapped by UCLA Health System in July to protect 4.5 million patients affected by a network breach there.

Experts familiar with the national security implications of the government data stolen helped OPM decide which protections to offer, officials said.

OPM “concluded that this was the appropriate set of services to offer for individuals given what has been taken," Cobert said.

Some of the 4.2 million victims of a smaller, related hack of personnel records complained that notifications received in response to that incident looked like malicious emails. The notifications, sent by contractor CSID, came from a dot-com email address and contained a link to a commercial website.

This time, email notifications will come from either a dot-mil or dot-gov address, Cobert said.

The Defense Department -- instead of the contractor -- will be alerting all victims this go-round, officials added.

"We have the infrastructure and the logistics system to be able to accommodate such a massive notification," said Rear Adm. Althea "Allie" Coetzee, principal deputy for defense procurement and acquisition policy. "We believed that it would be a lot better handled and managed if one entity handled it -- coming from a government entity as opposed to a contractor.”

Notification by contractor "was definitely not part of the scope of work" of the contract, she added.

Security controls on the vendors’ own systems was a consideration during the vetting process, officials said.

OPM conferred with a team of cybersecurity, privacy, contracting and legal experts from agencies across the federal government, including the Pentagon and Federal Trade Commission, to help develop security provisions.

Companies competing for the project all submitted formal security plans as a part of their proposals. The government has a right to enter I.D. Experts’ facilities to make sure safeguards comply with the contract specifications, officials said.

"We got the expertise from several different perspectives and through that, we believe that we have the best security protections that are available currently," Cobert said.

The General Services Administration on Tuesday also announced winners of a $500 million five-year award to handle ID protection services for government breaches going forward.

Along with I.D. Experts, agreements were also inked with Bearak Reports, also known as "Identity Force," and Ladlas Prince. Services for OPM victims were purchased through the blanket deal.

(Image via Mark Van Scyoc/Shutterstock.com)