Federal Personnel

In response to a congressional request, GAO provided information on the proposed Federal Employee Direct Corporate Ownership Opportunity Plan (FED CO-OP) that would increase government contracting efforts, focusing on: (1) how FED CO-OP evolved; (2) FED CO-OP status; (3) the Office of Management and Budget's (OMB) future plans for FED CO-OP; and (4) the beneficiaries of any remaining employee stock-ownership plan (ESOP) benefits after former federal employees are terminated.

GAO found that: (1) the Office of Personnel Management (OPM) developed FED CO-OP to increase government commercial contracts to the private sector; (2) OMB was responsible for administering FED CO-OP, and planned to include only those commercial activities that could survive even if their government contract expired; (3) under FED CO-OP, affected employees are provided stock incentives to join government contractors; and (4) OMB has received queries from other federal agencies concerning FED CO-OP, and has identified potential commercial activities for contracting. GAO also found that: (1) the Department of Agriculture contracted with an accounting firm to determine its operating costs under FED CO-OP, but believes that it could not implement FED CO-OP until 1990; (2) OMB is currently looking for potential participants in FED CO-OP, but will have no implementation plan until the new administration has established its policy direction; and (3) it was uncertain whether former government employees working for government contractors should be excluded from ESOP bonuses or that FED CO-OP participants would qualify for certain tax benefits. GAO believes that ESOP stock bonuses should benefit only former government employees working for FED CO-OP contractors.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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