Resolution Trust Corporation:

Progress Under Way in Minority- And Women-Owned Business Outreach Program

GGD-91-138: Published: Sep 27, 1991. Publicly Released: Sep 27, 1991.

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Pursuant to a congressional request, GAO reviewed the Resolution Trust Corporation's (RTC) policies and processes to include minority- and women-owned businesses (MWOB) to the maximum extent possible in contracting opportunities, focusing on the: (1) assignment of resources to the MWOB program; and (2) implementation of MWOB program contracting procedures in the field, including certification of MWOB firms and award of technical bonus points and the cost advantage.

GAO found that: (1) RTC got off to a slow start in implementing a MWOB program for asset management contracting; (2) the lack of comprehensive headquarters program guidance and inadequate staff at RTC headquarters resulted in an inconsistent integration of MWOB program requirements into the contracting process and inhibited RTC ability to provide comprehensive MWOB program implementation oversight; (3) lack of comprehensive guidance has allowed field staff discretion to interpret and apply the interim guidance; (4) RTC lacks assurance that self-certified MWOB are actually MWOB and that MWOB always receive the competitive advantage intended by the program; (5) in four of the six offices visited, the minority contract specialists rarely verified the information supplied by firms to support their self-certification as MWOB; (6) RTC field offices did not apply technical bonus points in a consistent manner, thereby precluding some MWOB from final consideration for contracts; and (7) the 3 percent cost advantage often was not applied because MWOB cost proposals were generally not within 3 percent of the cost proposal submitted by the low bidder as required, resulting in the use of only $256,315 of the $4 million available for cost advantages.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: RTC established an office within headquarters to focus exclusively on programs for minority and women-owned businesses and law firms.

    Recommendation: To improve the effectiveness of the MWOB program, the Executive Director, RTC, should assess the adequacy of staff assigned to the MWOB program in headquarters.

    Agency Affected: Resolution Trust Corporation

  2. Status: Closed - Implemented

    Comments: The Director of the RTC MWOB program has allocated additional staff to oversee the certification/verification procedures for MWOB and joint ventures. In October 1992, the Director designated several staff persons to participate in the certification/verification task force responsible for refining the policies and procedures. Additionally, training seminars were held for responsible staff in February 1993.

    Recommendation: To improve the effectiveness of the MWOB program, the Executive Director, RTC, should provide the necessary oversight structure to ensure that the recently proposed MWOB status verification procedures, as well as other aspects of the program, are consistently implemented.

    Agency Affected: Resolution Trust Corporation

  3. Status: Closed - Implemented

    Comments: On August 20, 1992, RTC issued a directive to its field offices describing procedures for the application of technical and cost bonus points to MWOB. In November 1992, the Department of Minority and Woemn contracting began program compliance reviews. A key component of these reviews is to examine each field office's application of the bonus points. On April 16, 1993, RTC issued a series of desk guides to help field staff implement contracting policies and procedures, including the application of technical and cost bonus points to MWOB firms, properly and consistently.

    Recommendation: To improve the effectiveness of the MWOB program, the Executive Director, RTC, should determine at what stage during the contract evaluation process technical bonus points should be applied for MWOB asset management firms and issue guidance to the consolidated offices to consistently implement that policy.

    Agency Affected: Resolution Trust Corporation

  4. Status: Closed - Implemented

    Comments: The RTC Refinancing, Restructuring and Improvement Act of 1991 required RTC to provide a 5 percent cost advantage.

    Recommendation: To improve the effectiveness of the MWOB program, the Executive Director, RTC, should review the cost advantage feature and determine whether the proposed "up to 5 percent" is sufficient to enhance the ability of MWOB to effectively compete for RTC asset management contracts.

    Agency Affected: Resolution Trust Corporation

 

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