On April 17, 1995, the President signed the District of Columbia Financial Responsibility and Management Assistance Act of 1995, P.L. 104-8, which established the Authority to repair the District’s failing financial condition and to improve the efficiency and effectiveness of its various agencies. The Act also permits the Authority to contract for goods and services for its own mission, contract for goods and services on behalf of District agencies, and review and approve contracts processed by District agencies. In addition, on August 5, 1997, the President signed into law the National Capital Revitalization and Self-Government Improvement Act, Title XI of P.L. 105-33. Under the Act, the Authority was directed to develop management reform plans for nine agencies and four citywide functions. The Act also required the Authority to award the management reform consultant contracts within 30 days from the date of its enactment, unless the Authority notified Congress, in which case the Authority could take 60 days. The Authority is an independent entity within the government of the District and is statutorily exempt from adhering to the District’s procurement regulations. In addition, because the Authority is not an agency of the federal government, it does not have to comply with federal procurement statutes or regulations, such as the Federal Acquisition Regulation. In March 1996, the Authority promulgated its own procurement regulations that are intended to permit the procurement of property and services efficiently and at either the least cost to or the best value for the Authority. The Authority’s contracting authority is statutorily vested in its Executive Director, who is also the designated Contracting Officer. According to the Authority’s regulations, the Executive Director may at any time waive any provisions of the regulations, with the exception of the provision regarding the avoidance of conflicts or impropriety and the appearance of conflict or impropriety. The Authority’s regulations prescribe some of the basic procurement principles, including the avoidance of conflicts or impropriety and the appearance of conflict or a preference for competition among potential sources to ensure fair and reasonable prices and best value for the Authority; use of sole source contracting only when it makes good business sense or promotes the Authority’s mission and is justified in writing and, if the contract exceeds $100,000 on an annual basis is approved by the Authority’s Chair; identification of potential sources to achieve the benefits of competition; publication of the Authority’s requirements to make potential qualified sources aware of the Authority’s requirements; preparation of statements of work that include a thorough description of the required services, a delivery schedule, and standards for measuring the contractor’s performance; and monitoring of contractor performance and certification of satisfactory performance prior to payment of contractor invoices. In addition, the Authority’s regulations prescribe procedures for simplified and formal contracting. According to the regulations, the Executive Director shall determine the type of procurement action that is appropriate for the use of simplified contracting procedures. The regulations state that simplified contracting procedures must be used when the value of the procurement is not expected to exceed $100,000 and/or when the nature of the goods or services to be provided is appropriate for these procedures. Under simplified contracting, the regulations prescribe procedures for obtaining competition, preparing written solicitations, evaluating proposals, and awarding contracts. For example, the Executive Director is responsible for making the final determination for contract selection based on the written recommendation of the technical evaluation team. The Authority’s regulations state that formal contracting procedures are mandatory for contract actions that may result in the Authority’s expenditure of $500,000 or more on an annual basis and may be used for competitive contract actions estimated at less than $500,000. Under formal contracting, the regulations prescribe procedures for preparing written solicitations, evaluating proposals, and awarding contracts. For example, the Executive Director’s decision for contract selection is required to be supportable, documented, and based on the evaluation factors. In addition, under the formal contracting procedures, the Executive Director may conduct negotiations with qualified offerors. The regulations also require that the negotiation sessions be fully documented whenever they occur. The Executive Director is also required to perform cost/price analysis when a single offer is received in response to a competitive solicitation or when the contract will not have a fixed price. The regulations further state that when fair and adequate price competition is obtained, a comparison among proposed prices and to the Authority’s estimate is generally adequate to verify that the prices offered are reasonable. Other than some requirements on the preparation and use of statements of work, the Authority’s regulations do not prescribe specific requirements governing contract actions between $100,000 and $500,000, nor do they set forth specific requirements governing contract modifications or contract options. The Authority also promulgated regulations in November 1995 for reviewing and approving contracts submitted by the District government. These regulations describe in detail the proposed contracts that are required to be submitted to the Authority for review and approval. Examples include sole source contracts, contracts for services exceeding $25,000, and any contract proposed as an emergency procurement. The regulations further state that no contract that is required to be submitted to the Authority shall be awarded unless the Authority has approved the proposed contract or unless the Authority specifically declined to exercise its power to review and approve the contract prior to award. Subsequently, most recently on February 26, 1998, the Authority adopted resolutions amending the regulations by modifying the definition of contracts required to be submitted for review and approval. According to the Authority’s procurement regulations, the Executive Director may from time to time delegate specific contracting and procurement responsibility and authority to various members of the Authority’s staff. The Authority’s regulations also require that when authority is delegated to a staff member to serve as a contracting officer, the delegation is to be in writing. Prior to reorganizing in December 1997, the Authority’s contracting staff consisted of a Director of Procurement and full-time complement of five staff persons, including a Procurement Analyst and two Contract Specialists. In early 1998, the Authority changed the scope and magnitude of its procurement operations by reducing the number of procurements done to support its own mission and reducing the number of District contracts to be reviewed and approved. As of April 1999, there were two full-time staff— a Senior Procurement Specialist and an independent contractor who served as the Contract Specialist— involved in the award and administration of Authority contracts. The Authority’s Executive Director, Deputy General Counsel, and Chief Financial Officer also assisted these staff members. In addition, the District’s CPO also awarded and administered several Authority contracts on behalf of the Authority. In January 1998, the Authority hired a CMO to assist the Authority in carrying out its management reform responsibilities. The CMO reported to the Chairperson of the Authority and was responsible for overseeing the management reform efforts for nine District agencies and four citywide functions, including procurement. In February 1999, the CMO resigned from her position. From its inception in April 1995 through September 30, 1998, the Authority reports that it awarded 141 contracts for almost $81 million. These contracts include procurements done by the Authority to accomplish its own mission or done by the Authority on behalf of the District. We reviewed a total of 12 contracts and their associated contract actions that were awarded in fiscal years 1996 through 1998. Ten of the 12 contracts were awarded by the Authority and the other 2 were awarded by the District’s CPO. As stated previously, although we reviewed a total of 10 contracts awarded by the Authority, we assessed compliance with the Authority’s regulations for 9 contracts because 1 contract (Thompson, Cobb, Bazilio and Associates, contract number FY96/FRA#2) was awarded before the Authority’s regulations were adopted in March 1996. As you specifically requested, we focused on the contracts that were awarded for the Authority’s former CMO and to Thompson, Cobb, Bazilio and Associates. According to the Authority, 17 of its 141 contracts were awarded on behalf of its former CMO; we judgmentally selected six of those contracts to obtain a mix of management reform and executive recruitment services contracts. We selected the other six contracts because you specifically requested that we examine them. They include the four contracts awarded to Thompson, Cobb, Bazilio and Associates by the Authority and the two contracts awarded to Smart Management Services by the District’s CPO. Appendix I provides additional information on the contracts we reviewed, and appendix II contains additional information on the award and administration of the contract awarded prior to the adoption of the Authority’s regulations. We reviewed the contract files to determine whether the Authority and the District’s CPO followed applicable procurement regulations when they awarded the contracts we assessed. For example, we reviewed the contract files to determine whether (1) competition was sought, (2) the basis for contract selection was documented, (3) sole source contracts had written justification, (4) contractors’ performance was monitored, and (5) the Authority received the required deliverables before payment of invoices. To supplement our contract file review, we judgmentally selected three of the eight contractors who were retained by the Authority and the District’s CPO to obtain a mix of contractors who were required to provide management reform or executive recruitment services and visited them at their offices to obtain information on the Authority’s procurement process. For the contract that was awarded prior to the adoption of the Authority’s regulations, we reviewed the information in the contract file to determine what information was available to document key contract award and administration decisions, including the basis for contract selection and whether the file contained evidence that the Authority received the services it paid for. As stated previously, the regulations provide that the Executive Director shall determine whether a particular request for procurement is appropriate for simplified contracting. However, we found no documentation in the contract files that this was done. Consequently, it was not apparent which method of contracting was used by the Authority to award Boulware a $105,000 contract because the regulations do not specify which procedures, simplified or formal, apply to contracts that are between $100,000 and $500,000.