Amtrak:

Contracting Improprieties by Chief Engineer

OSI-99-4R: Published: Feb 26, 1999. Publicly Released: Feb 26, 1999.

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Pursuant to a congressional request, GAO investigated allegations received through its FraudNET that Amtrak's Chief Engineer, Allison Conway-Smith, improperly awarded a personal services consulting contract to her neighbor, Chris Leyenberger, focusing on whether: (1) the Chief Engineer followed Amtrak procedures and policies in hiring Mr. Leyenberger; (2) the Chief Engineer had the authority to hire Mr. Leyenberger; (3) the Chief Engineer provided inaccurate information to the Amtrak Board of Directors to obtain contract approval for Mr. Leyenberger's services and, if such information was provided, whether the Board was required to verify it; (4) any problems exist at Amtrak regarding the procurement process as it relates to consultant contracts in general; and (5) the Amtrak President/Chief Executive Officer and Inspector General prefer a central purchasing department at Amtrak.

GAO noted that: (1) Amtrak paid over $2 million to Chris Leyenberger and the companies he represented for consulting work requested by Allison Conway-Smith; (2) instead of identifying the nature and estimated total cost of consulting work needed, determining the best way to obtain these services, and obtaining expenditure approval from an appropriate approving official, Ms. Conway-Smith informally asked her neighbor, Chris Leyenberger, to conduct interviews of her staff to obtain an understanding of how her office was organized so he could serve as her personal services consultant; (3) from September 1996 to January 31, 1997, Mr. Leyenberger provided services on behalf of his employer, Bovis Construction Company, and the firm was paid although there was no written contract during the period; (4) by the time Mr. Leyenberger completed the work in January, he had terminated his employment with Bovis and had created his own consulting firm, CenterLine Associates; (5) Mr. Leyenberger then joined two other former Bovis employees in a company called The Rise Group; (6) Ms. Conway-Smith's arrangements with all of these companies violated numerous Amtrak procurement requirements; (7) in this regard, she failed to: (a) prepare written justifications and agreements that detailed the nature, price, and duration of the work or explained why she needed consulting services prior to the contractor's performance; (b) prepare written sole-source justifications explaining the uniqueness of Mr. Leyenberger's services or capability; (c) ensure the reasonableness and acceptability of Mr. Leyenberger's rates via an audit by the Contract Audit Department or by comparing Mr. Leyenberger's rates with those proposed by other consultants; (d) obtain legal review; and (e) obtain expenditure approval by Amtrak management authorities; (8) in December 1998, after Mr. Leyenberger's total price exceeded $1.2 million, Ms. Conway-Smith entered into a $1.3 million contract with him; (9) in accordance with Amtrak procedures, she requested Amtrak's Board of Directors to approve the contract; (10) the board did not verify the accuracy of the statements within the contract, and accordingly was not aware of the relevant inaccuracies; (11) there is no requirement in Amtrak's bylaws for such verification; and (12) according to the Inspector General, unacceptable risks have been created by establishing a program management section to handle procurement actions within the Chief Engineer's Office and these procurement functions should be part of an Amtrak-wide procurement office.

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