GSA Chief Scrutinized For Deal With Friend

Then-Sen. William Proxmire (D-Wis.) gave the deal one of his famous "Golden Fleece" awards for the misuse of tax dollars, saying Commerce already had 112 public relations employees.

In the mid-1980s, Fraser turned her attention to helping female and minority entrepreneurs, producing a series of reports about their changing status in the U.S. economy.

Fraser and Doan have appeared on the same panels and lavished praise and awards on each other at conferences. They also served together on the national advisory board of Enterprising Women, a magazine for female business owners. "Lurita Doan is precisely what this nation needs," the magazine quoted Fraser as saying, admiring Doan's business acumen, in 2003.

Last summer, two weeks before Doan signed the contract with the companies run by Fraser, she attended a star-studded gala sponsored by those companies called "Celebrating Diversity -- the Changing Demographics of America."

"It is so important, as women, to extend that helping hand to one another, that we help mentor each other and give us that extra break that we need to move our way to the top," Doan said, according to a copy of her remarks on an event Web page.

The contract Doan signed with the companies directed them to produce a report promoting GSA's "major achievements" in contracting with minority- and women-owned businesses. The contract called for producing a report that would be "approximately 24 pages." It would contain profiles of diversity success stories at the GSA and include "recommendations for how to use the report."

Doan said she did not use the GSA's public affairs division, which has about a dozen employees who develop information about the agency's programs, because she wanted to employ an expert in the diversity field.

"Diversity Best Practices is the industry leader in this area," she said. "They have won countless awards on diversity representation and issues."

The contract should have been competitively bid, according to procurement experts and officials familiar with the arrangement. Under federal regulations, contracts worth more than $2,500 at the time were to have been open to competition, unless there were extenuating circumstances. Those include disasters and instances in which the bidding process could cause "unacceptable delays in fulfilling the agency's requirements," according to the Federal Acquisition Regulation, which governs all federal contracting.

The general counsel of the GSA at the time, Alan R. Swendiman, advised Doan to terminate the contract. It was then terminated by a GSA contracting officer. Swendiman left the agency a short time later and is now a special assistant to the president and director of the White House Office of Administration. He declined to comment.

Contracting experts said Doan should have steered clear of the contract.

"Only contracting officers can sign federal contracts and obligate federal funds," said D. Kent Goodger, a federal contracting official for 38 years who now teaches federal procurement courses for the Agriculture Department and other agencies. "Anyone who assumes that they have that authority, like the administrator of GSA, is wrong."