Management Deficiency Report: 

General Services Administration 

Public Buildings Service 

2010 WESTERN REGIONS CONFERENCE 


April 2, 2012 

1800 F Street, NW IWashington, DC 20405 www.gsaig.gov 
U.S. General Services Administration 

Office of Inspector General 

April2, 2012 

MEMORANDUM FOR 	 MARTHA N. JOHNSON 

ADMINISTRATOR (AJ ­

FROM: 	 BRIAN D. MILL 

INSPECTOR GENERAL (J) 

SUBJECT: 	 Final Management Deficiency Report 

Public Buildings Service 

Our final management deficiency report on the Public Buildings Service 2010 Western Regions 

Conference is attached. We will publish the report with your response concurring with our 

recommendations and outlining the steps you are taking to prevent such waste and abuse from 

occurring in the future. 

Thank you for all the assistance and courtesies extended to our staffduring this review. Should 

you have any questions or require additional information, please contact me or have a member of 

your staffcontact Assistant Inspector General for Investigations GeoffCherrington on (202) 50 1­

0035. 

Attachment 

1800 F Street, NW, Washington, DC 20405 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

TABLE OF CONTENTS
 

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
 

Summary of Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
 

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
 

Excessive Spending on Conference Planning . . . . . . . . . . . . . . . . . . . . . . 3
 

Improper Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
 

Original Solicitation and Agreement with M Resort . . . . . . . . . . . . . . 4
 

Revised M Resort Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
 

Contract for Team-Building Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
 

Contract for Audio-Visual Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
 

Excessive Spending on Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
 

Contract Provisions Regarding Food . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
 

Rules Governing Food Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
 

Questionable Expenditures for Food . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
 

Other Impermissible and Questionable Expenses . . . . . . . . . . . . . . . . . 11
 

Individual Impermissible and Questionable Actions . . . . . . . . . . . . . . . 12
 

GSA’s Over the Top Approach to the Conference . . . . . . . . . . . . . . . . . 13
 

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
 

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
 

Management Response. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
 

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EXECUTIVE SUMMARY
 

The Public Buildings Service (PBS) of the General Services Administration (GSA) held its 

biennial Western Regions Conference (WRC), which had approximately 300 attendees, in 

October of 2010, at the M Resort Spa Casino (M Resort) just outside Las Vegas, Nevada. The 

GSA Deputy Administrator requested that the GSA Office of Inspector General (OIG) 

investigate allegations of possible excessive expenditures and employee misconduct in 

connection with the 2010 WRC. 

The OIG found that many of the expenditures on this conference were excessive and wasteful 

and that in many instances GSA followed neither federal procurement laws nor its own policy on 

conference spending. Conference costs included eight off-site planning meetings and significant 

food and beverage costs. The total cost of the conference was over $820,000, broken down as 

follows: 

Phase Description Costs 

Pre-Conference Travel, Catering, Vendors, and Other Hotel Costs $136,504 

Conference Travel, Catering, and Vendors $686,247 

TOTAL $822,751 

Our findings included the following: 

•	 GSA spending on conference planning was excessive, wasteful, and in some cases 

impermissible. To select a venue and plan the conference, GSA employees conducted 

two “scouting trips,” five off-site planning meetings, and a “dry run.” Six of these 

planning events took place at the M Resort (the conference venue) itself. Travel 

expenses

1 for conference planning totaled $100,405.37, and catering costs totaled over 

$30,000. GSA spent money on refreshment breaks during the planning meetings, which 

it had no authority to do, and the cost of catered meals at those meetings exceeded per 

diem limits. 

•	 GSA failed to follow contracting regulations in many of the procurements associated 

with the WRC and wasted taxpayer dollars. GSA actions included: 

o	 Disclosing a competitor’s proposal price to a favored contractor; 

o	 Awarding a $58,000 contract to a large business in violation of small-business setasides; 

o	 Promising the hotel an additional $41,480 in catering charges in exchange for the 

“concession” of the hotel honoring the government’s lodging cost limit; 

o	 Providing free rooms to a contractor’s employees even though the contract cost 

included lodging; and 

1 “Travel costs” or “travel expenses” as used in this report include per diem, lodging, and transportation costs. 

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o	 Disclosing to the team-building contractor the agency’s maximum budget for one day 

of training, then agreeing to pay the contractor that amount ($75,000). 

•	 GSA incurred excessive and impermissible costs for food at the WRC. GSA spent 

$146,527.05 on catered food and beverages during the WRC. That spending included 

$5,600 for three semi-private catered in-room parties and $44 per person daily breakfasts. 

GSA also paid $30,207.60 – or roughly $95 per person – for the closing reception and 

dinner; attendees at that dinner included 27 guests of GSA employees and seven 

contractor employees. GSA obtained repayment for guests’ meals, but only for 23 of the 

guests and not for the entire cost of the meal. 

•	 GSA incurred impermissible and questionable miscellaneous expenses. These 

expenses included mementos for attendees, purchases of clothing for GSA employees, 

and tuxedo rentals. 

•	 GSA’s approach to the conference indicates that minimizing expenses was not a 

goal. The PBS Region 9 Commissioner/Acting Regional Administrator instructed those 

planning the conference to make it “over the top” and to make it bigger and better than 

previous conferences. Several suggestions to minimize expenses were ignored. 

GSA, in its management response, concurred with our recommendations and outlined the steps it 

is taking to prevent future waste and abuse. 

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SUMMARY OF INVESTIGATION
 

BACKGROUND 

PBS Regions 7, 8, 9, and 10 (covering the western half of the United States) have held the WRC 

since the early 1990s and now hold it every other year. The conference typically includes about 

300 people, selected from the participating regions’ thousands of employees. The WRC’s 

purpose has been described variously by different PBS officials as principally offering training in 

job skills; an exchange of ideas between the “higher-ups” in the four regions; and a combination 

of those things. 

The 2010 WRC, which took place from October 25 through October 29,

2 was hosted by Region 

9. PBS chose “A Showcase of World-Class Talent” as its theme; the conference was to 

“celebrate, share, and showcase the diverse professional and personal talents of GSA associates.” 

GSA considered this theme a good match for the Las Vegas location, which, as GSA stated, has 

long “been a destination for talented musicians, dancers, magicians and showmen” to “showcase 

their talents to the international audience Las Vegas attracts.” GSA created an internal website 

with information on the conference, including pictures and videos of conference events, which 

was taken down on March 23, 2012. 

The GSA Deputy Administrator requested that the OIG investigate allegations of possible 

excessive expenditures and employee misconduct in connection with the 2010 WRC. The 

allegations included concerns with the team-building exercise, donation of bicycles to charity, 

and the costs of the conference. In reviewing these allegations, the OIG conducted interviews 

and reviewed contract files, correspondence, invoices, and other documents related to the WRC. 

On May 3, 2011, the OIG provided GSA management an interim presentation communicating 

many concerns regarding the WRC. The M Resort provided the most recent set of documents on 

January 13, 2012. Investigations are ongoing regarding a number of issues addressed in this 

report. 

EXCESSIVE SPENDING ON CONFERENCE PLANNING 

GSA held eight scouting and off-site pre-conference meetings, costing over $130,000, to plan 

this conference. Six were held at the conference site. Below we discuss the pre-conference 

planning trips and their cost. 

GSA published a notice of its planned procurement on February 2, 2009. The subsequent 

conference planning meetings included the following: 

Five GSA employees conducted a “scouting trip” to visit nine Las Vegasarea hotels. 

March ’09 

Fifteen GSA employees returned to visit two of the nine hotels again, 

staying at the M Resort and the Ritz-Carlton. 

2 The morning of Monday, October 25, and all of Friday, October 29, were travel days. 

March ’09 

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August ’09 Seven GSA employees stayed at the M Resort for a planning meeting. 

A second WRC planning meeting, attended by 11 GSA employees, was 

held at the M Resort following Region 9’s leadership council meeting. 

November ’09 

Sixteen GSA employees stayed at the M Resort again for a planning 

meeting. 

March ’10 

Nine GSA employees attended another planning meeting, this one at a 

Marriott Hotel in Denver, Colorado. 

June ’10 

Twenty-one GSA employees attended a conference planning meeting at 

the M Resort. 

August ’10 

Thirty-one GSA employees traveled to the M Resort for a “dry run” of the 

conference to be held later that month. 

October ’10 

These off-site meetings cost the government over $130,000, including: 

•	 A total of $100,405.37 in employee travel costs. 

•	 Significant spending on catered food and beverages during the various pre-conference 

trips to the M Resort, totaling over $30,000 for the scouting trip, four pre-planning 

meetings, and dry run. These charges included $57.72 per head lunches ($44 for lunch 

plus beverages and a 22% gratuity) and $48.80 breakfasts ($40 plus a 22% gratuity). 

•	 Other expenses, such as audio-visual services and printing costs. 

IMPROPER CONTRACTING 

GSA failed to follow contracting regulations in many of the procurements associated with the 

WRC and wasted taxpayer funds. Below we discuss (1) the original solicitation and agreement 

with the hotel, (2) the revised hotel agreement, (3) the contract to provide a team-building 

exercise, and (4) the contract for audio-visual services. 

Original Solicitation and Agreement with M Resort 

On February 2, 2009, PBS posted on the Federal Business Opportunities website a combined 

synopsis and solicitation for its proposed acquisition of hotel space for the WRC. The 

solicitation sought proposals for single-occupancy sleeping rooms and meeting space during 

three possible date ranges, the preferred range being October 25-28, 2010. It specified that a 

“Cyber Café Room” and a conference-style office for 20 people must be available from Sunday 

through Friday, and that Monday through Thursday GSA required a conference room that would 

hold 275-300 people. The solicitation also described food and beverage requirements. This 

included a cash bar on Monday evening, a closing dinner on Thursday evening, breakfast and 

“AM/PM Breaks” Tuesday through Thursday, and a lunch on Wednesday. The solicitation also 

requested that offerors provide their price lists for food and “indicate discount off menu prices, if 

applicable.” The acquisition was open to hotels in Las Vegas and the commuting area of 

McCarran Airport with both sleeping rooms and meeting rooms, and which could offer lodging 

rates “within prevailing Government per diem (currently $105.00/night).” 

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Role of Location Solvers 

Immediately after posting the solicitation on the Federal Business Opportunities site, a GSA 

national event planner sent a copy of it to the sales representatives of national hotel chains and to 

Location Solvers, a private company that assists organizational clients in finding venues for 

conferences. Location Solvers then informed the M Resort and other independent Las Vegas 

hotels about GSA’s interest in acquiring a conference facility. 

In making its proposal, the M Resort contacted GSA through Location Solvers; Location Solvers 

also assisted GSA in negotiating pricing and other terms of the agreements for the various trips 

GSA employees made to the M Resort. In exchange for these services, Location Solvers 

received a $12,601.50 commission from the M Resort. The M Resort’s willingness to pay over 

$12,000 as a finder’s fee strongly indicates that further discounts might have been available to 

GSA if GSA had contacted the hotel directly, rather than working through Location Solvers. 

Since GSA already employs several full-time event planners, the use of Location Solvers seems 

redundant and wasteful. 

Original Agreement 

GSA first entered an agreement with the M Resort on May 8, 2009. The agreement was signed 

by a national event planner, who had a contracting officer’s warrant limited to $100,000. That 

agreement did not comply with the Federal Acquisition Regulation. Weaknesses included the 

following: 

•	 That agreement required GSA to pay a $50,000 fee if the event were cancelled. That fee 

increased to $200,000 (which is above the event planner’s warrant) if cancellation 

occurred after May 1, 2011. Exclusive of lodging costs, which were to be paid by 

individual employees, the original projected cost was $92,720; the final cost was 

$153,975.60. 

•	 The agreement was missing many clauses that statutes and regulations required to be 

included in contracts with the federal government. 

•	 Although the solicitation stated the government-approved lodging rate was subject to 

change, the agreement set forth a nightly lodging rate of $105, without noting the 

approved rate might change.3 

Revised M Resort Agreement 

One month before the conference itself, on September 21, 2010, a contracting officer with a $10 

million warrant (rather than the event planner, who had a $100,000 warrant) signed a revised 

3 As discussed later, the government-approved lodging rate dropped to $93, which led to GSA making numerous 

“concessions” to the hotel to obtain the lodging price reduction. 

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agreement with the M Resort. That agreement stated that the standard commercial agreement 

terms mandated by the Federal Acquisition Regulation took precedence over the M Resort’s own 

standard terms and reduced the nightly rate to $93, because the federal rate ceiling had dropped 

after GSA signed the initial agreement. Because regional officials did not inform the recently 

assigned contracting officer that GSA had published a solicitation in February 2009, he prepared 

a written justification for procuring facilities from the M Resort on a sole-source basis – without 

advertisement or competition. He argued that it was “a very time sensitive procurement” and 

that it would have been too costly “to review each and every site.” That a contracting officer 

prepared a sole-source justification for a procurement that was in fact advertised is indicative of 

the carelessness of GSA’s planning of the conference.4 

Contract for Team-Building Exercise 

GSA awarded a $75,000 contract to Most Valuable Performers (also known as Delta4) to 

provide a morning team-building exercise during the conference, followed by an afternoon 

bicycle-building project that would use the new teamwork skills. As part of the contract, the 

vendor purchased the 24 bikes used for that project. That contract suffered from significant 

irregularities: 

•	 A GSA program director told the vendor that its initial offer of almost $125,000 was too 

high. At the vendor’s request, the program director disclosed that GSA’s maximum 

budget for one day of team-building training was $75,000. GSA then awarded the 

contract at this price. 

•	 The goal of the bicycle-building project was that employees would work together in an 

act of service to those in need.5 Therefore, GSA officials wanted participants to see the 

bicycles donated to the children of the local Boys’ and Girls’ Club during the conference. 

However, if the government acquires property, it may only dispose of that property 

pursuant to the Federal Surplus Property Donation Program – created by GSA itself to 

enable all federal agencies to comply with the Property Act. In order to avoid the 

requirements of the Property Act, GSA specified that the bicycles would remain at all 

times the property of the team-building provider. Even though GSA specified the 

bicycles were the property of the provider, GSA selected the recipient of the bicycles 

(from a list provided by the vendor); this action appears inconsistent with the assertion 

that the vendor owned the bicycles. 

4 In addition, federal conferences may only be held at a hotel that is on FEMA’s list of Fire Safety Act-approved 

accommodations. The M Resort is not. Although the solicitation posted on Federal Business Opportunities required 

that the venue comply with this requirement, GSA’s eventual contract with the M Resort was silent on the subject. 

This requirement may be waived, but we found no evidence of a waiver. 

5 One employee suggested that if GSA wished to indicate its commitment to service, employees should voluntarily 

work on a service project after work hours rather than on the clock; this suggestion was ignored. 

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Contract for Audio-Visual Services 

GSA awarded Royal Productions a $58,808 contract6 for audio-visual services. The flaws in this 

procurement included the following: 

•	 Prior to selecting a vendor for these services, GSA was required to publish a solicitation 

on Federal Business Opportunities, but did not do so.7 

•	 Federal regulation also provides that contracts in this dollar amount are “reserved 

exclusively for small business concerns.” Royal Productions is not a small business for 

purposes of this type of contract. 

•	 GSA personnel provided the quote from the competing offeror for the audio-visual 

contract to Royal Productions, enabling it to present a winning bid. Disclosing source 

information is prohibited. 

•	 GSA paid the housing expenses of Royal Productions employees twice. Royal 

Productions’ contract included $1,962 for “technical crew housing,” comprised of $110 

per night for three rooms at six nights each. However, GSA also provided the Royal 

Productions crew with twenty room-nights (four rooms for five nights each) out of its 

“comped” rooms. (The M Resort contract provided for one free room-night for each 50 

paid room-nights.) Had GSA not provided these rooms to the Royal Productions 

employees, it could have used them for GSA employees, reducing the cost by $1,860 

(twenty room-nights at $93 each). 

EXCESSIVE SPENDING ON FOOD 

GSA expenditures on food, as provided for in the contract and in actuality, were excessive, and 

in several cases, impermissible. 

Contract Provisions Regarding Food 

GSA’s original contract with the M Resort included a food and beverage minimum of $76,000, 

exclusive of gratuity – which was set at 22%. However, in September of 2010, GSA contacted 

the M Resort seeking a reduction of the nightly room rate to the new government rate of $93. 

Recognizing that “this would in essence cost the hotel $16,800.00,” GSA offered the hotel 

“concessions.” These included increasing the food and beverage minimum to $110,000 

($134,200 with gratuity), which included adding a cocktail reception before the Thursday night 

6 This amount was later increased by $3,000. 

7 GSA took disciplinary action against an employee in connection with this failure. 

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dinner and a catered breakfast on Friday morning. GSA also advised the hotel that “[o]ur host[8] 

is having a post function wrap up party in his loft suite after dinner Thursday bringing in 

approximately $2K to the room service team.” As an additional concession, GSA said it would 

attempt to book another event at the hotel in March 2011, noting that “GSA absolutely loves this 

property” and “would gladly share any future leads with M Resort.”9 

The government may not enter into contracts without determining that pricing is fair and 

reasonable. A month before the conference, the contracting officer sent regional personnel an 

email asking whether they had negotiated the food pricing, or determined that the prices were 

fair and reasonable. He also noted that the breakfasts cost $34 or more, while employees’ 

allowances for breakfast are much lower ($12 for Las Vegas). The regional event planner 

responded that GSA had simply accepted the hotel’s menu prices that any customer would have 

paid, as “[w]e used the . . . increase” in catering costs to “justify” the hotel honoring the 

government lodging rate. 

Rules Governing Food Expenditures 

A brief summary of the rules governing food expenditures follows. As discussed below, many 

of the GSA food expenditures violated these rules or were otherwise questionable. 

•	 Federal employees traveling for work are paid for their lodging costs plus a fixed amount 

for meals (“per diem”). In 2010, the meal and incidental expenses allowance for Las 

Vegas was $71 per day. If the government provides employees with meals, they must 

deduct a portion of this amount: $12 for breakfast, $18 for lunch, and $36 for dinner. 

Employees attending the WRC were instructed beforehand to make these deductions for 

the meals provided, and most of them did so. 

•	 GSA policy states that if conference planners use a contract to purchase meals for 

employees (rather than allowing employees to find their own meals), the contract pricing 

may not exceed the regulatory limitations on meal expenses. 

•	 Agencies may pay for meals or “light refreshments” for their employees if these are 

necessary to achieve the objectives of a training program or an official conference. 

Agencies may not pay for food (other than the set meal allowance for employees who are 

traveling) at “‘day-to-day’ meetings” that “involve discussions of the internal procedures 

or operations of the agency.” 

•	 Agencies also may pay for food for nonfederal employees at training, such as conference 

speakers, when necessary to the effective accomplishment of the training function. 

8 Since the party on Thursday night occurred at the behest of the PBS Region 9 Commissioner/Acting Regional 

Administrator, it appears the agency considered this employee to be the conference’s “host.” 

9 Favoring the M Resort in future government procurements would be improper; the agency’s obligation is to 

conduct all conference and acquisition planning so as to minimize costs and act in the best interest of the United 

States. 

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•	 Agencies may pay for food for contractor employees who are traveling to perform their 

duties, to the extent specified in their contracts. 

•	 Agencies may pay for food for agency employees at an award ceremony if this would 

make the ceremony more effective. It is also permissible at an award ceremony to pay 

for refreshments for a guest (for example, a spouse) of an employee who is receiving an 

award. 

Questionable Expenditures for Food 

GSA spent $146,527.05 on catered food and beverages during the WRC itself. That amount 

breaks down as follows: 

Food and Beverage Catering Costs 

Light Refreshments and Breakfast Buffets $ 79,511 

In-Room Parties $ 5,600 

Networking Reception $ 31,208 

Cocktail Reception and Award Dinner $ 30,208 

TOTAL $146,527 

Specific questionable expenditures included the following: 

•	 The “networking reception” on the conference’s first evening included 400 pieces of 

$4.75 “Petit Beef Wellington,” 400 “Mini Monte Cristo Sandwiches” at $5.00 each, 

1,000 sushi rolls for $7.00 apiece, 150 units of a $19 per person “American Artisanal 

Cheese Display,” and 225 units of a $16 per person “Pasta Reception Station.” Also 

during that reception, GSA paid $525 for two hours of “bartender service fees” for a cash 

bar;10 the total cost of the reception was $31,208. We understand commemorative coins 

were presented at that reception. We do not believe this expense can be justified as either 

an award ceremony or light refreshments, based either on the nature of the event or the 

amount spent – over $100 per person. 

•	 Meal expenses exceeded per diem limits. For example, GSA provided breakfast for the 

WRC’s three mornings at a cost of $44 per person, or $32 per person per day more than it 

would have spent had it simply allowed employees to purchase their own breakfasts and 

claim the travel allowance set by regulation – a cost of $29,568 over the per diem 

allowance for breakfasts at the WRC.11 As another example, the total cost for the closing 

10 There is no evidence that GSA paid for any alcoholic beverages during the WRC. Alcohol was apparently 

purchased with personal funds, and is not included in this report. 

11 Twenty-five employees who worked on planning the conference received a $48.80 catered breakfast the morning 

after the conference’s concluding dinner, representing an additional $920 in cost over the individual employees’ 

meal allowances. 

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dinner was $73.20 per person – $37.20 more than the allotted per diem. Moreover, as 

discussed above, a month before the conference GSA added a cocktail reception before 

the closing dinner as a “concession” to offset the reduction in the nightly lodging rate. 

That reception included 300 shrimp at $4.00 each, and 300 items of $5.00 “Boursin 

Scalloped Potato with Barolo Wine Braised Short Ribs.” The total food bill for the 

evening’s events was $30,207.60 (or $95 per person based on 318 attendees), which, 

again, included $525 in bartender service fees for a cash bar. This made the total cost 

$59 per person more than the employee travel allowance for dinner, a total of $18,760 

over the per diem allowance.12 

•	 GSA impermissibly purchased food for non-employees. Examples include the following. 

A total of 299 GSA employees attended the conference but GSA purchased the dinner on 

the final day of the conference for 318 people. The list of attendees GSA prepared 

included 27 personal guests and seven of the agency’s embedded contractor employees in 

addition to 284 GSA employees. Twenty-three GSA employees paid $60 apiece for the 

dinners of their personal guests. This figure did not include the 22% gratuity added to 

each meal, however (a total of $303.60 for the 23 guests). Moreover, GSA paid the M 

Resort for meals for guests who were expected to attend but canceled before the event, 

but did not charge employees for those guests. The seven embedded contractor 

employees did not pay for their dinners. Relatives, who were not employees, also ate 

agency-provided meals throughout the conference. We question whether the meals 

purchased for personal guests and contractor employees were permissible. 

•	 GSA officials also hosted several semi-private “parties” in their own hotel rooms or 

suites, which were catered at taxpayer expense. On the evening before the conference 

officially began, two regional officials hosted a party in an upgraded room. Catering for 

the event totaled $922.90. The stated purpose of the event was for those organizing the 

conference (who had arrived a day early) to become acquainted with one another. Two 

nights later, the PBS Commissioner hosted an essentially celebratory party in his loft 

suite for GSA senior officials, at a cost of $1,960.13 Neither of these parties fit any legal 

authority for GSA to spend funds on food. 

•	 On the last night of the conference, after the closing dinner, the PBS Region 9 

Commissioner/Acting Regional Administrator hosted a third party, in the empty loft suite 

vacated by the PBS Commissioner, who had already departed. GSA had retained the suite 

12 The M Resort did not charge the agency a room rental fee for conference space, either at the pre-planning 

meetings or at the WRC itself. Thus, the catering costs to some extent compensate for usage of the facility as well. 

However, one must also consider that during the WRC itself, the conference occupied 314 of the hotel’s 390 rooms, 

making the agency the only likely user of the meeting space. Moreover, less expensive breakfast and refreshment 

options were available. Agency policy states that if hotels offer “packaged” costs (as here, for meeting space and 

catering), the agency must still obtain “a total cost for subsistence [i.e., food] items,” so the agency can determine 

“that the maximum per diem rates have not been exceeded.” That did not occur here. 

13 As noted previously, these amounts do not include any alcoholic beverages, which were purchased with personal 

funds. 

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for use as a “hospitality suite.”14 This party cost $2,717.09. Conference organizers and 

regional “ambassadors” were invited; regional officials played a slide show of the 

conference, and the ambassadors received awards and “souvenir books.” While 

purchasing food for award ceremonies is authorized, the event’s qualification as an award 

ceremony is weak, at best. 

•	 Because the pre-conference meetings were for planning, not training, GSA was not 

authorized to pay for the refreshment breaks at these meetings. As with the conference 

itself, meal charges exceeded the traveling employees’ meal allowances. 15 

OTHER IMPERMISSIBLE AND QUESTIONABLE EXPENSES 

GSA made various impermissible and questionable expenditures unrelated to food, including 

improperly purchasing mementos for conference attendees. 

•	 GSA policy provides that agency funds “are not available to purchase memento items for 

distribution to conference attendees as a remembrance of an event.” Contrary to this 

policy: 

o	 At the closing-night dinner, all participants received a “yearbook” containing pictures 

of all those attending the conference, taken when they checked into the hotel. GSA 

also printed souvenir books for the regional ambassadors. These costs totaled $8,130. 

o	 GSA purchased numerous other items for distribution to conference participants. 

Canteens and carabiners cost $2,781.50, and shirts for all conference participants for 

the team-building activity were $3,749.40. 

14 GSA selected this suite as one of its “comped” rooms. An internal GSA email to the PBS Region 9 

Commissioner/Acting Regional Administrator noted the options of giving the room to a GSA Associate 

Administrator who was checking in on the same day the PBS Commissioner checked out, or keeping it “as a 

‘hospitality’ suite (where you can have your party Thursday night).”

15 Additional questionable expenses included such items as two birthday cakes, one for $120 and one for $50, for 

pre-conference planning attendees and an ice cream station costing $292.80 for 24 children brought in by the Boys’ 

and Girls’ Club to receive the bicycles GSA employees had assembled. 

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o	 GSA spent $6,325 on commemorative coins “rewarding” all conference participants 

(as well as all regional employees who did not attend the conference) for their work 

on Recovery Act projects, along with velvet boxes to hold the coins. These did not 

qualify as permissible awards because the coins’ design, which appears below, shows 

that they were intended to be mementos of the WRC. 

•	 GSA spent $1,840 for vests for the 19 “regional ambassadors” and other employees, and 

$393.90 for the rental of tuxedos worn by three employees who acted as masters of 

ceremonies at the awards dinner. 

INDIVIDUAL IMPERMISSIBLE AND QUESTIONABLE ACTIONS 

GSA employees may not solicit or accept gifts from any entity doing business with the agency, 

or use their positions to induce another person to provide any benefit, financial or otherwise, to 

themselves or their friends or relatives. Numerous employee actions may have violated these 

prohibitions, including the following: 

•	 Before the original M Resort site visit in March of 2009, Location Solvers emailed the 

hotel to relate that an agency employee would be staying at the hotel on the night before 

the travel days for the scouting trip, and therefore was not entitled to the government rate 

or a complimentary free night. Thus, Location Solvers stated, the employee “needs a 

friend of a friend of the owner rate. (wink).” 

•	 During the second trip in March of 2009, a different employee stayed in a flat suite – with 

a connecting room for her sister and niece, apparently offered at a discount by the hotel, 

which was then working to secure the eventual contract to host the WRC. 

•	 At the behest of the spouse of a senior PBS official, a GSA event planner asked for and 

the hotel provided an adjoining room during the WRC, at the $93 government rate, for 

the spouse’s relatives. Neither the spouse nor the spouse’s relatives were agency 

employees or participants in the conference. 

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•	 During the WRC, a GSA event planner contacted the M Resort’s catering and conference 

services manager and said that she “cannot live without” a $98 purse from the hotel’s gift 

shop, asking whether the manager received a discount and “if so, will you help me?” The 

manager responded, “I can give you a $30 comp,” which was promptly accepted. 

GSA’S OVER THE TOP APPROACH TO THE CONFERENCE 

Federal regulations on conference planning emphasize cost reduction, stating conference 

planners “must minimize all conference costs,” use government-owned conference facilities as 

much as possible, and take into account “all direct and indirect conference costs.” The evidence 

the OIG developed, however, showed the goal was not to minimize costs, but to be “over the 

top.” That evidence included the following: 

•	 The PBS Region 9 Commissioner/Acting Regional Administrator instructed those 

planning the conference to make it “over the top,” bigger and better than previous 

conferences. Several suggestions by regional employees that costs be reined in were 

ignored. 

•	 In planning meetings, GSA personnel discussed that the theme was intended to showcase 

the business talent of the regional offices, but the emphasis was to be split between 

business talent and “theatrical talent.” Thus, the “Capstone Dinner” on the last evening 

of the conference was to have a “red carpet” and “lighthearted awards,” having “more to 

do with contribution at the conference” than job performance. Employees were told that 

the “award” ceremony was necessary so that federal funds could be spent for food; 

several employees indicated this has become something of a running joke in the region. 16 

•	 The in-room “party” on the evening of the closing dinner was hosted by the PBS Region 

9 Commissioner/Acting Regional Administrator. A relative of the host worked closely 

with the agency’s regional event planner on the food items selected for that party. 

Among other things, the employee’s relative, who is not a GSA employee and yet “cohosted” the party, contacted the event planner to add more food items, commenting, 

“Knowing we have a bit more money in the budget helps.” The event planner acquiesced 

and ordered additional food, increasing costs to $2,717.09 at the government’s expense. 

•	 During scouting trips, GSA “VIPs” were shown upgraded suites that they received as a 

perk for GSA contracting with the M Resort for the 2010 WRC. Loft suites have 2,400 

square feet of space, two stories, multiple HD televisions and wet bars, and a going rate 

16 The agenda on the last day included a “Cocktail Reception” at 4:00 pm, a “Red Carpet Show” at 5:30, a “Talent 

Award Showcase” at 5:50, and dinner with a speaker at 6:20. The only “awards” given during these events were 

presented during the Talent Award Showcase. There were four non-monetary awards given at that ceremony for 

musical performances, one for each region. The proper purpose of an awards ceremony is to give out awards 

recognizing significant contributions to the efficiency and effectiveness of government operations, rather than 

holding an event and giving out awards as an ancillary purpose to justify food. We do not believe the expenditures 

at the reception or dinner can be explained as incident to an awards ceremony. 

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of $1,179 per night. Flat suites have 1,440 square feet and cost $449-$599 per night. 

The contract between GSA and the M Resort provided that GSA could have two loft 

suites for five nights each at the government rate for hotel rooms; GSA used all but one 

of those nights. GSA also received six flat suites for five nights each at the government 

room rate, and used 25 of those room-nights. The value of the discount that the M Resort 

offered GSA for these 40 nights was $21,540. 

Luxury suites at Nevada’s M Resort. At left, a loft suite; 

above, a flat suite. 

CONCLUSION 

The excessive pre-conference planning, catering, and other costs, as well as the luxury 

accommodations and overall approach, show that GSA’s planning and expenditures for the 2010 

WRC were incompatible with its obligation to be a responsible steward of the public’s money. 

As the agency Congress has entrusted with developing the rules followed by other federal 

agencies for conferences, GSA has a special responsibility to set an example, and that did not 

occur here. 

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RECOMMENDATIONS
 

The GSA Administrator should take appropriate action to: 

•	 Ensure expenditures at all future conferences comply with all applicable regulations and 

policies, including that costs be minimized and Executive Order 13589 on Promoting 

Efficient Spending, which was issued after the date of this conference; these steps should 

include: 

o	 Minimize planning expenses for all future conferences; 

o	 Ensure food expenditures comply with applicable regulations and are necessary and 

appropriate; 

o	 Do not spend GSA money on mementos; and 

o	 Eliminate extraneous and unnecessary expenses such as vests and tuxedo rentals. 

•	 Ensure events are not improperly designated as award ceremonies in order to justify the 

purchase of food. 

•	 Ensure all regulations are followed in procurements associated with conferences, 

including: 

o	 Do not share proposals with competitors; 

o	 Follow small business set-aside requirements; 

o	 Ensure contracts adequately protect the government’s interests and include all 

required clauses; 

o	 Obtain fair and reasonable pricing on all costs; 

o	 Ensure the contracting officer has an adequate warrant and all relevant information; 

o	 Do not provide benefits to contractors outside the scope of the contract, including free 

rooms when those costs are included in the contract; 

o	 Do not request personal benefits from conference contractors. 

•	 Determine whether GSA can recover funds from Royal Productions based on GSA 

including the cost of rooms in the contract price and subsequently providing the rooms 

for free. 

•	 Determine whether GSA can recover funds improperly paid, such as for meals for nonemployees. 

•	 Hold senior GSA officials responsible for excessive spending at conferences. 

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MANAGEMENT RESPONSE
 

GSA, in its management response, concurred with our recommendations and outlined the steps it 

is taking to prevent future waste and abuse. GSA’s response is contained in the Appendix. 

16
 
Appendix

The Administrator 

April 2, 2012 

MEMORANDUM FOR BRIAN D. MILLER 

INSPECTOR GENERAL (J) 

FROM: 	 MARTHA JOHNSON ~~1"1'1 ADMINISTRATOR (A) 	 '/ 

SUBJECT: 	 Response to the "February 12, 2012 

Draft Management Deficiency Report 

Public Buildings Service" 

Thank you for your response to our request for a review of possible excessive 

expenditures and employee misconduct in connection with the 2010 Western Regions 

Conference (WRC). I appreciate the thoroughness of the Draft Management Deficiency 

Report and your review of this matter. I concur with all of the recommendations in your 

Report. I find the information in your Report to be very troubling as it outlines potential 

violations of federal procurement laws and agency policy. The excessive spending and 

other misconduct described in the report would be absolutely unacceptable under any 

circumstances. But it is especially egregious at a time when the fiscal constraints facing 

our nation demand that every dollar deliver the greatest value to the American taxpayer. 

Such misconduct will not be tolerated at GSA 

I am committed to eliminating excessive spending, promoting efficiency and ensuring 

strict compliance with GSA policies and federal regulations, The Agency has internal 

controls and extensive guidance in place that addresses excessive spending and what 

constitutes serious misconduct. However, we recognize in this situation that the internal 

controls were not adhered to, and the guidance was not followed. In order to ensure 

this situation does not occur again, I have taken proactive steps to implement tighter 

internal controls over conferences, finances, and procurements in order to eliminate 

waste and improper or unnecessary expenditures. In addition, we are taking 

appropriate disciplinary actions where warranted. 

While this document outlines only those steps that address the recommendations made 

in your report, GSA will be taking a number of other decisive actions to address broader 

issues related to other conferences, overall risk management and internal controls, and 

U.S. General Services Administration 

1275 First Street, NE 

Washington, DC 20417 

Telephone: (202) 501-0800 

Fax: (202) 219-1243 
Appendix

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employee ethics. In response to your specific recommendations, the Agency is taking 

the following direct actions: 

IG Recommendation: Ensure expenditures at all future conferences comply with all 

applicable regulations and policies, including that costs be minimized. Additionally, 

ensure that conferences are in accordance with steps and recommendations identified 

in Executive Order 13589 on Promoting Efficient Spending. 

GSA Action: On August 9, 2011, I established the Office of Administrative Services 

(OAS) in order to provide greater oversight and accountability for all administrative 

functions within the agency. In light of your report, I am accelerating and escalating 

changes that were already planned for this year. Effective immediately, functions that 

will be performed by the Chief Administrative Services Officer will include: 

• 	 Oversight of contracting for conference space, related activities, and amenities; 

• 	 Review and approval of proposed conferences for relation to GSA mission; 

• 	 Review and approval of any awards ceremonies where food is provided by the 

Federal government; 

• 	 Review and approval of conference budgets as well as changes to the budget; 

• 	 Oversight and coordination with GSA conference/event planners and contracting 

officers on conference planning; and, 

• 	 Review of travel and accommodations related to conference planning and 

execution. 

• 	 Handling of procurement for all internal GSA conferences 

This is effective immediately and written notice will be sent to GSA Heads of Services 

and Staff Offices and Regional Administrators informing them of these changes. 

The Office of Acquisition Policy, the Office of the General Counsel and the Office of 

Administrative Services will develop mandatory annual training for all employees 

regarding conference planning and attendance. 

These changes are consistent with the OAS's broad range of functional responsibilities 

that are primarily focused on internal GSA administrative policies, programs and 

operations. The OAS's mission is to ensure GSA runs as cost-effectively and efficiently 

as possible by developing and implementing policy and operational programs, including 

but not limited to, Personal Property (Internal) Accountability, Internal GSA 

Procurement, and GSA's Travel Program. 

IG Recommendation: Hold senior GSA officials responsible for excessive spending at 

conferences. 

GSA Action: I have directed the GSA Region 9 Regional Administrator to perform a 

thorough review of the conduct of the Regional Commissioner for the Public Buildings 

Service in Region 9 with respect to the 2010 WRC. The Agency will take any 
Appendix 

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be warranted based on the results of the review. The 

has been placed on administrative leave until 

review. 

I have made a decision to take disciplinary action against several senior management 

officials. This can include a range of disciplinary actions, up to and including 

suspensions or removals. Further, I have directed the appropriate senior management 

officials to vigorously review the matters raised in your report and determine if additional 

policy and organizational changes are necessary, and if additional disciplinary actions 

are warranted against other senior officials and employees. 

In addition to the above, I am taking the following steps: 

• 	 Directing PBS to cancel all future Western Regions Conferences; 

• 	 Reducing PBS travel budgets for FY 2013 in Regions 7, 8, 9 and 10; 

• 	 Shifting reporting and oversight of all Regional PBS budgets to the Central Office 

PBS; and 

• 	 Directing the GSA Chief Financial Officer and Senior Procurement Executive to 

review contracts and expenses not only associated with the WRC, but also all 

conferences currently in the planning phase, but also all conferences currently in 

the planning phase. 

IG Recommendation: Ensure events are not improperly designated as award 

ceremonies in order to justify the purchase of food. 

GSA Action: The ChiefAdministrative Services Officer will review and approve any 

awards ceremonies where food is provided by the Federal government. This topic will 

be covered in mandatory training for supervisors and managers. 

IG Recommendation: Ensure all regulations are followed in procurements associated 

with conferences, including the ones identified in the recommendations. 

GSA Action: I have directed the GSA Office of Acquisition Policy to ensure that the 

proper training courses are mandatory for contracting officers and event planners who 

are tasked with conference planning, contracting and execution. Training will be annual 

and mandatory. Unannounced and random Procurement Management Reviews, under 

the direction of the Senior Procurement Executive, will be conducted at least quarterly. 

IG Recommendation: Determine whether GSA can recover funds from Royal 

Productions based on GSA including the cost of rooms in the contract price and 

subsequently providing rooms for free as well as, determine whether GSA can recover 

funds improperly paid, such as for meals for non-employees. 
Appendix

-4­

GSA Action: I have directed the GSA Senior Procurement Executive to explore all 

opportunities for funds recovery in this matter and take appropriate actions. 

I appreciate your attention to this matter and will continue to work closely with the Office 

of ln,spector General until it is resolved .