FOR IMMEDIATE RELEASE March 20, 1997

CONTACT: Michael Orenstein (202) 606-1800 mworenst@opm.gov

Washington, D.C. -- After less than one year in operation, the privatization of the U.S. Office of Personnel Managements former federally-employed investigators is poised to realize additional savings for taxpayers. So much so, the new employee-owned firm, US Investigations Services, Inc., is cutting investigative costs ahead of schedule and saving taxpayers more than $1 million over the next 13 months.

OPM will no longer have a major payment obligation to US Investigations Services, Inc. (USIS), due to the success of the privatized, employee-owned companys business plan, positive profit picture and full pipeline of work orders. With revised payment terms requested by US Investigations Services, Inc., effective April 7, 1997, the government will capture an additional $1.2 million dollars in savings by 1998.

Just as the President promised, we are building a government that works better and costs less, OPM Director Jim King said. The predictions of success for US Investigations Services, Inc., are now a reality. Of course, the company is still very young, but the signs of business expansion are nevertheless evident. USIS, Inc., is establishing a record of success for future privatization endeavors and proving that privatization works, and employee-owned, privatized companies can and will be successful.

USIS, Inc., an employee-owned, private company created by the spin-off of an OPM function, conducts background investigations on current and prospective employees for government and business. Oversight of USIS, Inc. remains with OPM. The company is headquartered in Annandale (Butler County), Pennsylvania, and has staff in more than 40 states and the District of Columbia.

Under the contract USIS, Inc., has with OPM, federal agencies receive investigations services through contracts with OPM. Original contract terms stipulated that OPM pay USIS, Inc., in advance of scheduled work through April 6, 1998. Termination of the advance-payment clause comes 13 months ahead of its scheduled expiration. The advance payment plan was agreed upon to help the start-up company raise working capital.

In a letter to OPM, USIS chief financial officer Lawrence Sievers said stronger performance and a surge in business has permitted USIS, Inc., to establish a solid financial base faster than anticipated, and obviates the need for continued advance payments under the Contract.

A USIS, Inc., newsletter cites an investigations workload that is 30 percent above expectations, while new contracts with private employers are being signed faster than anticipated.

USIS, Inc., is permitted to conduct investigations work for non-federal clients, a valuable business option that, by law, was not available to the former OPM investigations unit.

USIS, Inc. was spun-off from OPMs investigations unit on July 7, 1996, in the first-ever conversion to an ESOP (Employee Stock Ownership Plan) of a government function. The success and financial health of the eight-month-old company has been built on its solid reputation as a provider of quality, competitively-priced investigations services to government and business.

As part of the privatization plan, USIS, Inc. offered employment at their government salaries and a comparable benefits package to all OPM investigators and support staff. The overwhelming majority--roughly 93 percent--accepted the offer. Due to the increased business response, the company has added approximately 130 full-time and contract employees.

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