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Audit Shows GSA Violated the Law in Contracting For Poff Renovation

Press Release

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Congressman Bob Goodlatte sent a follow-up letter to Martha Johnson, the Administrator of the General Services Administration (GSA) calling on the GSA to halt the proposed renovation of the Richard B. Poff Federal Building in Roanoke. Congressman Goodlatte cited the General Services Administration Office of the Inspector General report, which arrived unsolicited at Congressman Goodlatte's Washington, D.C. office last week, indicating a clear violation of the Competition in Contracting Act (CICA). The GSA Inspector General's audit shows that the GSA provided the maximum contract amount, in violation of federal contracting law, giving bidders that information and depriving taxpayers of a fair process to determine the true cost of the project.

This report, delivered without a cover letter, addresses an audit of the Poff Federal Building project and the Huntington, West Virginia Building project and the use of Construction Manager as Constructor (CMc) contracts for both projects. In addition to concluding that GSA violated the law in pricing the Poff Federal Building project, the report raises numerous additional questions.

"The IG's report on the GSA audit of the Poff Federal Building project further reinforces my belief that the proposal was ill-conceived from the beginning and improperly pursued once funded by stimulus dollars," said Congressman Goodlatte. "The GSA's own audit has now revealed evidence of the failure of the agency to comply with applicable laws and a breakdown in following standard operating procedures. This compounds previously uncovered evidence of a lack of a cost-benefit analysis of the project that would have compared it to constructing a new building, as well as the enormous cost overruns that have resulted in accommodating the Department of Veterans Affairs at its temporary offices."

The report indicates that the Guaranteed Maximum Price for the Poff Building renovation was based on an internal budget estimate using the feasibility study estimate of $28.9 million. This is the first time that this estimated cost is being revealed. It was never included in the feasibility study that was previously provided to Congressman Goodlatte.

The report also includes a reference to the Guaranteed Minimum Price for the Poff Building project being reduced from $42 million to $39 million. The report mentions options on the project which include security improvements and building code and life safety improvements. It certainly seems that such critical improvements such as these should have been considered requirements to complete the project. This also begs the question, are there any additional options not specified in the report that would further add to the cost of the renovations?

Additionally, Congressman Goodlatte is seeking answers from the GSA about the total cost of relocating and providing temporary office space for the Veterans Affairs Regional Office (VARO) at multiple locations throughout Roanoke while the Poff Building project is underway and the total cost of returning the VARO operations to the Poff Building once the project is complete.

Congressman Goodlatte continued, "Because of the mounting data that continues to reflect poorly on how GSA has handled this taxpayer-funded undertaking I strongly urge the GSA to discontinue the full contract for the project. Taxpayers have been compromised by the lack of competition in pricing the project, leaving no assurances that fair and reasonable prices were reached for such an enormous mission."

Since the announcement over a year-and-a-half ago that the Poff Building would undergo $50.9 million worth of renovations, Congressman Goodlatte has received numerous inquiries from constituents concerned about the excessive price tag for the project, the cost effectiveness of this project relative to alternative construction, and the inability of local businesses to bid on the initial stages of the project. Since that time Congressman Goodlatte has aggressively sought answers from the GSA regarding the cost and scope of this wasteful and misguided project.

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