Employment:

Subcontractor Complaints Concerning the D.C. Union Station Renovation Project

GGD-00-13R: Published: Dec 22, 1999. Publicly Released: Dec 22, 1999.

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Pursuant to a congressional request, GAO provided information regarding work done on the Union Station Redevelopment Project by Park Woodworking, Inc., focusing on the: (1) extent of the government's liability, if any, for costs incurred for which Park was not compensated; (2) extent to which Park was not compensated for the work it did; and (3) actions taken by the Secretary of Transportation and the Department of Transportation (DOT) Inspector General (IG) in response to complaints received from Park.

GAO noted that: (1) on the Union Station project, the contractual relationship at issue was between Park, the subcontractor, and the general contractor; (2) since Park, as a subcontractor, had no contractual relationship with the government on its Station subcontracts, the government has no financial liability for any claims arising under these subcontracts; (3) furthermore, in November 1991, Park executed a settlement agreement, with the advice of counsel, with the general contractor and the Union Station Redevelopment Corporation (USRC), a not-for-profit District of Columbia corporation; (4) the agreement provided that, in return for a payment of $235,000, Park would release USRC and the general contractor from all existing and future claims and liability related to Park's performance on the Station renovation; (5) upon payment of the $235,000 agreed to in the settlement, USRC was relieved of all existing and future financial liability for any claims by Park relating to work performed on the project; (6) Park's records indicate that it had submitted payment requests totalling $1,480,370 and had received payments totalling $774,142, leaving an unpaid balance of $706,229; (7) the $235,000 Park received through the settlement agreement reduced the unpaid balance to $471,229; (8) however, because Park signed the settlement agreement, GAO did not do any further analysis to determine whether Park was fully compensated for the work it claimed to have done on the Station Project; (9) Park submitted numerous complaints to DOT officials, including the IG; (10) these complaints focused on allegations of abusive treatment on its subcontracts, the general contractor's failure to address Park's claim for $490,000 for uncompensated work, and the way DOT enforced its minority business subcontracting policies; (11) the DOT officials who responded to these allegations concluded that the evidence presented demonstrated that the complaints represented a series of contract disputes between Park and the general contractor; and (12) further, the IG, after consideration of Park's allegations, concluded that the Federal Railroad Administration, a component of DOT, was in substantial compliance with appropriate law and regulations and that Park's complaints were without merit.

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