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MWD-76-28 1 (1975-10-21)

handle is hein.gao/gaobabkxc0001 and id is 1 raw text is: io- WD WASHINGTON. O on the b o . . B-182596 OCT 21 1975 The Honorable Carl T. Curtis United States Senate i Dear Senator Curtis: As your November 1, 1974, letter requested, we examined the lease transaction between Nebraska's Department of Labor and the Jado Investment Company. You indicated concern over the fact that no competitive bidding was involved and sug- gested that, if Federal regulations were followed, they may need strengthening to encourage competitive bidding. We examined Federal and State legislation and regulations related to leasing privately owned space for the State's em- ployment security agency. We also reviewed information pertinent to the lease transaction. We discussed the matter with officials of the Department of Labor's Manpower Adminis- tration and its Kansas City regional office, the General Serv- ices Administration, and the Nebraska Department of Labor. Department of Labor regulations provide that States may lease space (1) through competitive bidding, (2) on the basis of a comprehensive survey of available space, or (3) in ac- cordance with Department-approved State practices. The lease with the Jado Investment Company was entered into in July 1971, on the basis of a comprehensive survey of available space in the Omaha area. Labor Department regulations require a State to have a comprehensive survey made and the results reported to the Department for approval of the expenditure of Federal grant funds. The information in the comprehensive survey for the Jado lease was obtained through a partner of Jado and was not independently verified by State personnel. Although the survey information appears to be correct, we are recommending to the Secretary of Labor that regulations be revised to require that surveys used in negotiated leases be made by independ- ent parties. From information we obtained on prevailing rents in the Omaha area, the rate for the Jado lease appears reasonable. In January 1973 Federal standards were established for leasing space with grant funds provided to State and local governments. The .qompetitive bid procedures MWD-76-28 rQ-

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