Inadequate Contract Administration on Housing Renovation Project at Malmstrom Air Force Base

PSAD-80-32: Published: Mar 11, 1980. Publicly Released: Mar 13, 1980.

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GAO was requested to investigate the renovation work performed on a housing project at Malmstrom Air Force Base near Great Falls, Montana. The renovation was to provide more modern kitchens and bathrooms, larger dining areas, and improvements to the exterior privacy on about 490 housing units originally constructed in the early 1950's. Scheduled for completion in October 1978, the work is still not fully finished and many work discrepancies remain. As of November 1979, there were 41 contract modifications adding about $263,000 to the original contract price. Estimates to correct the remaining discrepancies and complete the project range from $1.2 million to $1.9 million or from 8 to 12 times the amount the Air Force retained to cover inadequate or complete contractor work. The contractor, Praxis Limited, claimed the Air Force still owed it about $1.9 million because of Air Force caused delays and work it performed outside the scope of the contract.

The Air Force did not follow sound procurement and contract administration practices and procedures or see that they were in place at the Air Force Base when the contract was awarded. Air Force officials compressed the time required for completion of the architect-engineer contract and the award of the Praxis contract in order to use Operation and Maintenance funds that would become unavailable at the end of the fiscal year. The lack of a good, cohesive contract management organization and inadequate staffing of key officials at Malmstrom precluded successful administration of the contract. Contract management also suffered because of poor working relationships between Malmstrom's civil engineering and procurement organizations. Although the project is over 1 year beyond the scheduled completion date, the Government still has not obtained an adequate end product or assurance that it has received appropriate consideration for the money it has spent on the project.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Air Force should see that: an adequately staffed contract management organization is established at base level to administer major housing renovation construction projects such as the Praxis contract; projects are properly planned to eliminate any yearend rush to obligate funds; and proper procedures and regulations are followed and contract decisions are well supported and documented with higher headquarters monitoring.

    Agency Affected:


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