Government Will Actually Spend $330 Million to Protect Victims of the OPM Hack

Federal officials announced Tuesday they had awarded a $133 million contract  to provide identity-theft protections to the 21.5 million federal employees and contractors affected by the hack of background investigation files stored by the Office of Personnel Management.

But the true cost of the contract will actually be well more than double that amount – about $330 million.

Here’s why:

While it’s true that Naval Sea Systems Command, the contracting activity on this procurement, did obligate an initial $133 million on Tuesday, that covers only one year – the base year, in government contracting parlance – of the contract.  

However, OPM has already pledged to provide hack victims three years of protections, which include credit monitoring, identity-theft monitoring and other services. That means the government will have to exercise additional “options” on the contract – again, contracting parlance – bringing the total value of the contract over three years to $329.8 million.

Nextgov's savvy senior correspondent Aliya Sternstein ran this explanation and all these numbers by a NAVSEA official who confirmed them. Check out her article on Tuesday’s contract award here.

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