House Restaurant System:

Response to Questions on Service America Corporation's Operations of House Food Services

AIMD-94-32: Published: Apr 8, 1994. Publicly Released: Apr 29, 1994.

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Pursuant to a congressional request, GAO reviewed Service America Corporation's operation of the House of Representatives Restaurant System from January 3, 1987, through August 3, 1991, focusing on: (1) the additional contributions due the federal retirement and savings programs on behalf of contractor personnel who were covered by the programs; (2) the accuracy of vending services fees for the period January 3, 1987, through August 3, 1991; (3) whether reported dining service sales and fees paid the government during the period January 3, 1990, through August 3, 1991, were accurate; and (4) whether certain monies the contractor received and retained from House restaurant customers represented collections due the government.

GAO found that: (1) the contractor owes the federal retirement and thrift savings programs an additional $170,686 in various employer and employee contributions; (2) the contractor disputes $17,507 of the $170,686 that it owes the government; (3) the vending fees due the government for the period January 3, 1987, through January 2, 1984, have been in dispute because the contracts are not clear; (4) the contractor would owe the government $142,970 according to the terms of the 1984 contract, and $3,090 under the terms of the 1986 contract; (5) the contractor owes an additional $1,819 for the period January 3, 1990, through August 3, 1991; (6) the contractor disputes owing the government any additional fees for vending services on the basis that its actions were in compliance with the government's expectations and that its financial reporting was accepted by the government during the period January 3, 1987, through August 3, 1991; (7) although reported dining service sales for the 1989 contract period did not disclose any inaccuracies in the amounts the contractor reported, the fees the contractor paid the government on these sales were slightly lower than they should have been because of discounts it received that had not been allocated; and (8) the effects of contractor discounts were not quantified because the contractor did not provide sufficient information and the discounts were not significant.

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