United Nations: Renovation Planning Follows Industry Practices, but Procurement and Oversight Could Present Challenges

In a November 2006 report (UNITED NATIONS: Renovation Planning Follows Industry Practices, but Procurement and Oversight Could Present Challenges, GAO-07-31) GAO recommended that the Secretary of State and the U.S. Permanent Representative to the United Nations work with other member states to ensure that the Secretariat identifies a procurement strategy for the (Capital Master Plan) CMP to mitigate the impact of weaknesses in UN procurement processes. In a November 6, 2006 letter, the United Nations' Under-Secretary-General for Management stated that the UN was in the process of recruiting personnel with experience in construction management to bolster the capacity of the Procurement Division as it assists the CMP office in the award of contracts. State Department also stated that it was committed to ensuring that the UN takes tangible steps to strengthen procurement processes for the CMP. As of March 2008, the UN had three officials with construction contracting experience and one support staff in the Procurement Division dedicated to CMP-related procurements. Further, because the process outlined in the UN's procurement manual can be time-consuming and project delays could be costly, in November 2007, the UN Controller increased the value of the individual contract amendments that Procurement Division officials may approve without prior review by the Headquarters Committee on Contracts (HCC) from $200,000 to $2.5 million. According to Procurement Division officials, the new authority enables them to process contract amendments without delay while adhering to the principles of transparency and accountability as outlined in the procurement manual. In addition, CMP and UN procurement officials, working with the construction manager, developed a draft subcontracting process for construction which officials told us will cover most remaining contract work. The process would enable UN officials to review subcontractor awards at various points in the procurement process to ensure adherence to the principles of the UN's procurement manual.

In a November 2006 report (UNITED NATIONS: Renovation Planning Follows Industry Practices, but Procurement and Oversight Could Present Challenges, GAO-07-31) GAO recommended that the Secretary of State and the U.S. Permanent Representative to the United Nations work with other member states to ensure that the Secretariat identifies a procurement strategy for the (Capital Master Plan) CMP to mitigate the impact of weaknesses in UN procurement processes. In a November 6, 2006 letter, the United Nations' Under-Secretary-General for Management stated that the UN was in the process of recruiting personnel with experience in construction management to bolster the capacity of the Procurement Division as it assists the CMP office in the award of contracts. State Department also stated that it was committed to ensuring that the UN takes tangible steps to strengthen procurement processes for the CMP. As of March 2008, the UN had three officials with construction contracting experience and one support staff in the Procurement Division dedicated to CMP-related procurements. Further, because the process outlined in the UN's procurement manual can be time-consuming and project delays could be costly, in November 2007, the UN Controller increased the value of the individual contract amendments that Procurement Division officials may approve without prior review by the Headquarters Committee on Contracts (HCC) from $200,000 to $2.5 million. According to Procurement Division officials, the new authority enables them to process contract amendments without delay while adhering to the principles of transparency and accountability as outlined in the procurement manual. In addition, CMP and UN procurement officials, working with the construction manager, developed a draft subcontracting process for construction which officials told us will cover most remaining contract work. The process would enable UN officials to review subcontractor awards at various points in the procurement process to ensure adherence to the principles of the UN's procurement manual.

In a November 2006 report (United Nations: Renovation Planning Follows Industry Practices, but Procurement and Oversight Could Present Challenges, GAO-07-31) GAO recommended that the Secretary of State and the U.S. Permanent Representative to the United Nations work with other member states to ensure that the Office of Internal Oversight Services (OIOS) receives sufficient funding for its oversight of the Capital Master Plan (CMP). While some funding had been provided for OIOS, we raised the concern that OIOS's reliance on funds from the CMP budget may impair its ability to secure sufficient funds. In addition, the extent to which OIOS must negotiate for future funding during the construction phase could affect OIOS's ability to conduct effective oversight. In a November 2006 letter, State stated that it was strongly committed to having the necessary resources allocated for OIOS to review the CMP. In January 2007, the UN's Department of Management made funds available to OIOS at the level OIOS had requested. CMP officials said that they would provide the funding OIOS indicates it needs to conduct oversight. In January 2008, OIOS officials stated that they expect funding to continue, including additional resources for providing increased oversight as CMP activities increase. Although the funding is from the CMP budget, it comes through the Department of Management, which reduces our concern that the CMP team may try to limit funding to OIOS.

In a November 2006 report (United Nations: Renovation Planning Follows Industry Practices, but Procurement and Oversight Could Present Challenges, GAO-07-31) GAO recommended that the Secretary of State and the U.S. Permanent Representative to the United Nations work with other member states to ensure that the Office of Internal Oversight Services (OIOS) receives sufficient funding for its oversight of the Capital Master Plan (CMP). While some funding had been provided for OIOS, we raised the concern that OIOS's reliance on funds from the CMP budget may impair its ability to secure sufficient funds. In addition, the extent to which OIOS must negotiate for future funding during the construction phase could affect OIOS's ability to conduct effective oversight. In a November 2006 letter, State stated that it was strongly committed to having the necessary resources allocated for OIOS to review the CMP. In January 2007, the UN's Department of Management made funds available to OIOS at the level OIOS had requested. CMP officials said that they would provide the funding OIOS indicates it needs to conduct oversight. In January 2008, OIOS officials stated that they expect funding to continue, including additional resources for providing increased oversight as CMP activities increase. Although the funding is from the CMP budget, it comes through the Department of Management, which reduces our concern that the CMP team may try to limit funding to OIOS.