[Complaint Against HUD Award]

An organization complained of the award of a cooperative agreement by the Department of Housing and Urban Development (HUD). The awardee, as a result of the HUD acceptance of its unsolicited proposal, will provide technical assistance to Community Development Block Grant recipients on the use of volunteers to supplement grants funds in carrying out their programs. The complainant alleged that: (1) the HUD use of a cooperative agreement was improper because it avoided the application of procurement regulations; (2) the award was based on political consideration, not merit; and (3) the award was contrary to the HUD 1982 Technical Assistance Strategy, which gives priority to working with States and local governments, rather than directly with citizen organizations. The complainant argued that the Federal Grant and Cooperative Agreement Act, which states that contracts are to be used to acquire goods or services for the direct benefit of the Government, mandates use of a contract in this case. HUD stated that GAO should not consider this complaint at all, because it concerned the propriety of an assistance award and because GAO has stated that it will not interfere with the functions and responsibilities of grantor agencies in making such awards. There are two exceptions to the policy of not reviewing the propriety of assistance awards: (1) conflict of interest; and (2) a showing that an agency is using a grant or cooperative agreement to avoid the statutory and regulatory requirement for competition that would apply to a procurement. The Federal Grant and Cooperative Agreement Act gives agencies considerable discretion in determining whether to use a contract, grant, or cooperative agreement, and GAO will not question such determinations unless it appears that the agency disregarded statutory and regulatory guidance or lacked authority to enter into a particular relationship. In the opinion of GAO, since the HUD principal purpose was to acquire the services of the awardee to aid in the delivery of technical assistance, a contract should have been used. Accordingly, the complaint was sustained, although no remedial action was recommended.