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B-250941.2 1 (1993-02-19)

handle is hein.gao/gaobadoyv0001 and id is 1 raw text is: Comptroler General of the Unitd States Wahington, D.Q 20648 B-250941.2 February 19, 1993 The Honorable Olympia J. Snowe Ranking Minority Member Subcommittee on International Operations Committee on Foreign Affairs House of Representatives Dear Ms. Snowe: We refer to your letter of September 30, 1992, concerning construction costs incurred by the Department of the Navy under a contract with Entrecanales Y Tavora, S.A., to build the United States pavilion for the Seville Expo. The Navy procured and administered the contract for the United States Information Agency pursuant to an interagency agreement. During discussions with our evaluators, House Committee on Foreign Affairs staff members asked us to determine (1) who was responsible for approximately $2 million in construction costs that exceeded the amount USIA had budgeted and authorized the Navy to spend under the agreement, and (2) whether the Navy or USIA should pay for those excess construction costs. USIA has suggested that the Navy improperly allowed the contractor to spend more money than USIA had authorized, and that the Navy therefore should pay that excess. In our view, both agencies, in attempting to insure timely completion of the Pavilion under difficult circumstances, contributed to the additional costs. For the reasons discussed below, we believe that the contract costs should be paid out of USIA funds, subject to review by the Defense Contract Audit Agency. Background In mid-June 1990, USIA approached the Navy about accepting construction management responsibility for the Pavilion. The Navy, however, was reluctant to do so because of the short construction time-frame; the lack of detailed plans, specifications and, at that point, exhibitors; and uncertainty about the project's costs. Nevertheless, after further consideration the Navy informally agreed to undertake the construction management role, and USIA then formally asked the Defense Department to task the Naval

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