Basic Repairs and Alterations Project for the Central Heating Plant in Washington, D.C., Was Not Effectively Managed

Why We Performed This Audit

Since Fiscal Year 2020, we have performed audits of the GSA Public Buildings Service’s (PBS’s) basic repairs and alterations projects. These projects are designed to keep federal buildings reliably safe and in good repair. For Fiscal Year 2023, Congress authorized PBS to spend $399 million for its basic repairs and alterations projects. However, with a deferred maintenance and repairs backlog of approximately $4.6 billion, PBS faces challenges in maximizing the use of these funds to address the needs of its real property inventory. Accordingly, the proper execution of PBS’s selected projects is critical.

We performed an audit of the PBS National Capital Region’s (PBS NCR’s) $840,596 sole-source basic repairs and alterations contract to install variable frequency drives (VFDs) for chilled water pumps and a tower fan at the Central Heating Plant in Washington, D.C. PBS awarded the sole-source contract to a participant in the U.S. Small Business Administration’s 8(a) Business Development program (8(a) program).

Our objective was to determine whether PBS NCR planned, awarded, administered, and closed out the contract for the installation of VFDs for chilled water pumps and a tower fan at the Central Heating Plant in accordance with the Federal Acquisition Regulation, General Services Administration Acquisition Manual, and other applicable policies.  

What We Found

PBS NCR did not effectively award, administer, or close out the contract for the VFD installation project at the Central Heating Plant in accordance with applicable regulations and GSA policies. Specifically, we found that PBS NCR did not maintain a complete contract file. We also found that PBS NCR did not verify that: (1) the contractor and its subcontractor employees were paid in accordance with Construction Wage Rate Requirements, and (2) the contractor complied with subcontracting limitations required for sole-source 8(a) program contracts. Finally, PBS NCR did not follow security requirements for contractor employees and did not ensure accurate contract data was reported in the Federal Procurement Data System-Next Generation (FPDS- NG).

What We Recommend

We recommend that the PBS NCR Regional Commissioner:

1. Improve management oversight to ensure that PBS NCR contracting officers and contracting officer’s representatives:
   1. Maintain complete contract files.
   2. Verify that contractor and subcontractor employees are paid in accordance with Construction Wage Rate Requirements.
   3. Enforce contractor compliance with subcontracting limitations required for sole-source 8(a) program contracts.
   4. Enforce security requirements for contractor employees.
2. Train PBS NCR contracting officers and contracting officer’s representatives on their duties and responsibilities with respect to:
   1. Maintaining complete contract files.
   2. Verifying that contractor and subcontractor employees are paid in accordance with Construction Wage Rate Requirements.
   3. Enforcing contractor compliance with subcontracting limitations required for sole-source 8(a) program contracts.
   4. Enforcing security requirements for contract employees.
3. Establish processes or procedures to ensure contractor information changes are communicated to the contracting officer for timely FPDS-NG updates.
4. Conduct a review of PBS NCR’s current basic repairs and alterations contracts to ensure that:
   1. Contract files are complete.
   2. Contractor and subcontractor employees are paid in accordance with Construction Wage Rate Requirements.
   3. Contractors are complying with limitations on subcontracting for sole-source 8(a) program contracts.
   4. Contractor employees have the required security clearances.
   5. FPDS-NG contains current, complete, and accurate information.

The PBS NCR Regional Commissioner agreed with our recommendations. GSA’s comments are provided in their entirety in Appendix B.