Review of Selected Contracts Awarded by the Cincinnati Service Office, Department of Housing and Urban Development
CED-79-67: Published: Apr 12, 1979. Publicly Released: Apr 12, 1979.
- Full Report:
GAO has been conducting an ongoing review of the management and disposition of multifamily housing projects owned by the Department of Housing and Urban Development (HUD). During this review, three contracts awarded by the Cincinnati Service Office for grasscutting, interior painting, and floor tiling were identified as warranting the immediate attention of the Secretary, HUD. For these contracts, HUD paid about $920,000 more than appeared reasonable, and may have paid an additional $100,000 for duplicate services or for work not performed.
Project managers were responsible for this work until that responsibility was assumed by the Cincinnati Office. HUD took over contracting for these services because it was dissatisfied with its handling by the project managers, a move which GAO believes was inappropriate because it weakened the managers' responsibility for, and control over, project operation and maintenance. The contracts which GAO singled out for special attention were awarded at inflated prices and the HUD reviews and records of billed invoices and costs were both perfunctory and inadequate for screening duplicate billings. The specification writers contracted for by HUD performed poorly regarding these contracts and there is strong doubt whether specifications were even necessary for such elementary tasks. Furthermore, specifications for grasscutting were already included in the HUD handbook.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Secretary of HUD should review contract practices of the area offices to determine compliance with HUD contract policies. In addition, the Secretary should impose a moratorium on work orders under the current tile contract, prohibit renewal of the expired grasscutting and painting contracts, return responsibility for these functions to project managers, hold them accountable for performance, and replace those managers found unsatisfactory. The Secretary should also consider severing relations with the contracted specification writers and determine whether all contracting for specification writing in the Columbus Area Office complies with HUD policies and requirements. Payment should be withheld on the painting and tiling contracts until the accuracy of the contractors' area measurements and statements of work performed are verified by project managers. Finally, the Secretary should obtain refunds for unjustified payments to painting and tiling contractors, record contract costs by individual contract, review all contracts awarded by the Cincinnati contract officer during his tenure, and refer questionable matters to the HUD Office of Inspector General for further investigation.