Resolution Trust Corporation: Western Storm Investigation and Related Contracting Deficiencies

GAO discussed its investigation of the Resolution Trust Corporation's (RTC) contracting procedures, focusing on the RTC Western Storm Project. GAO noted that: (1) RTC does not have a good, sound contracting process because RTC undervalues the significance of contracting; (2) the RTC staff's failure to plan for the project and to follow RTC contracting procedures led to excessive costs and inadequately trained contractor personnel; (3) RTC regional staff bypassed fundamental internal controls and failed to consult RTC legal and contracting experts before writing the contract; (4) RTC project management and oversight were weak because the regional staff failed to budget for each site and to designate sufficient staff to supervise contractor personnel, and headquarters officials did not monitor the project; (5) RTC has no system to provide performance information on contractors; (6) in March 1992, RTC officials agreed to improve its contracting and internal control system and to correct other deficiencies; and (7) although some improvement in the contracting system has occurred, RTC still has deficiencies in its contracting procedures.