Privatization of OPM's Investigations Service

Pursuant to a congressional request, GAO reviewed issues surrounding the privatization of the Office of Personnel Management's (OPM) Investigation Service. GAO noted that: (1) the privacy act permits disclosure of OPM records to the private firm, since such disclosures would constitute a routine use of the records; (2) OPM plans to create a firewall to prevent the firm from using federal records to provide nonfederal-client services, but certain contract provisions could circumvent this protection; (3) OPM asserts that the individual's explicit consent would still be needed for the release of information for nonfederal purposes; (4) the Federal Bureau of Investigation is concerned about the firm's access its records and wants to bar direct computer access to criminal history information; (5) 7 of the 12 states with which OPM has formal agreements to access their criminal history data would allow such access to contract personnel if the subject of the investigation agrees in writing; (6) the firm is required to set up a quality assurance program, but OPM has not yet determined the extent of its quality checks on background investigations; and (7) the Department of Energy (DOE) revoked former OPM investigators' unlimited access to DOE facilities because the basis for their clearances under a federal security program had changed, but the Department of Defense issued interim secret facility clearances to contract employees in July 1996.