HUD EEO Investigation:

Contracting and Process Irregularities in HUD's Investigation of the IG

OSI-99-6: Published: Sep 8, 1999. Publicly Released: Oct 14, 1999.

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Pursuant to a congressional request, GAO examined the complaint alleging that the Department of Housing and Urban Development's (HUD) Inspector General (IG), Susan Gaffney, had discriminated against the Deputy Assistant Inspector General for Investigations because of his race, focusing on whether: (1) HUD had awarded contracts concerning the Equal Employment Opportunity (EEO) complaint to outside firms in accordance with applicable government standards; and (2) HUD's actions were justified when it deviated from its standard EEO process by contracting with firms not on the General Services Administration's (GSA) schedule of contractors.

GAO noted that: (1) HUD's awarding of contracts to two law firms to investigate the Deputy Assistant IG's EEO complaint deviated from HUD's standard EEO investigation process and did not comply with the requirements of the Federal Acquisition Regulation (FAR); (2) from February 12, 1998, to August 5, 1998, HUD followed its standard EEO process of reviewing the complainant's allegation for acceptance, contracting with a GSA-schedule firm to investigate the accepted allegations and conducting the investigation; (3) on August 5, 1998, however, HUD officials put the investigation on hold; (4) HUD deviated from its normal EEO process and requested proposals from a limited number of non-GSA-schedule firms to conduct this same investigation; (5) HUD violated the FAR when it failed to synopsize this requirement in the Commerce Business Daily and inappropriately limited the competition to seven firms; (6) HUD awarded contracts to two law firms on August 26, 1998; (7) its last-minute amendment to the request for quotations to accommodate a joint proposal from the two firms and other actions by HUD officials contributed to an appearance that HUD manipulated the procurement process in order to direct the contract awards to the firms; (8) Howard Glaser, then Deputy General Counsel for Programs and Regulations, took the lead in suspending the GSA-schedule firm's investigation and contracting with the non-GSA-schedule firms; (9) his actions included compiling the list of potential contractors, contacting the Deputy Assistant IG's counsel to request an extension of time to complete the investigation, evaluating the proposals, reviewing the investigative plan, and consulting with firms during the investigation; (10) HUD officials told GAO that they deviated from the standard EEO process for a number of reasons, including their perception of an environment of pervasive racial discrimination in the Office of the Inspector General and the high rank and unique positions of both the Deputy Assistant IG and IG Gaffney; (11) the justifications HUD provided for deviating from its usual EEO process were largely subjective and therefore difficult to assess; (12) however, information GAO found substantially contradicts several factors cited as justifications for HUD's deviation; and (13) certain HUD officials served to impede GAO's investigation.

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