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FOR IMMEDIATE RELEASE:
January 8, 1998
CONGRESSMAN MICA OVERSEES FEDERAL EMPLOYEES
One of my most gratifying achievements has been the privatization of a federal function under my jurisdiction. The Office of Federal Investigations in the U.S. Office of Personnel Management (OPM) performed background checks on new and current federal employees to ensure their suitability for public service. OPM performed these services for most federal agencies on a cost reimbursable basis, but had been running deficits for a number of years. I worked with the Administration to perfect an employee stock ownership plan (ESOP) to salvage the investigation service. Rather than face additional layoffs, OPM's investigators were given the option to take over the investigative work as employees of a new company, US Investigations Services, Inc. The company was awarded a sole source contract to get them started, and after just one year in business they have turned a profit.
Employee satisfaction is high and in a recent survey nearly 90% responded they preferred private employment and would not return to government service. The employees now earn more money and instead of draining taxpayer funds, the company paid $10.4 million dollars in taxes last year. Management improvements have also allowed the company to reduce its costs which have been passed on to the government in reduced rates for investigative services. This privatization is now projected to save taxpayers far more than the $25 million that the Administration originally projected. The ESOP turned out to be a win-win for taxpayers and the employees. Taxpayers have saved real money without the loss of important services, and the employees have not only salvaged their jobs, they've done it in a way that's improved their work environment. While an ESOP may not be an option in all cases of government privatization, my experience has shown that where it is appropriate the ESOP can be successful.
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