Federal investigators are examining several million dollars worth of questionable contracts awarded by the District's Youth Services Administration, including contracts that were unsigned, issued without bids or inadequately documented, according to sources close to the investigation.
A federal grand jury is expected to hear testimony next month regarding all contracts awarded by the agency to private firms and individuals in 1984 and 1985. At least 16 District officials, mostly Youth Services Administration supervisors and employes, have been subpoenaed in the investigation and have testified before the grand jury on abuses of overtime within the agency.
The contracts issued during those years totaled $14.9 million and went to 80 firms and individuals. The vast majority of the contracts -- 85 percent -- were awarded without competition and lack any documentation to back up the invoices that contractors submitted to receive payments, according to sources.
Audrey Rowe, D.C. commissioner of social services, said yesterday that it is "not true" that 85 percent of the youth agency's contracts were noncompetitive. "Pat hates sole source contracts," she said of Patricia Quann, director of the Youth Services Administration. Quann could not be reached and Rowe said she did not know the exact percentage of no-bid contracts.
City records show that in several cases, contracts were written months after the work began, giving the District little legal justification to withhold funds if the work was not done properly.
For example, a "letter contract" authorizing a $60,000 year-long contract with a Georgetown consulting firm, Educational Support Systems Inc., for "educational support services" for delinquent girls at Harambee House was not written until Jan. 14, 1985, two months after the contract began. The actual contract was not written until Aug. 29, according to city records.
Mary Wilson, administrator of the Harambee House group home for delinquent girls, which is run by Union Temple Baptist Church, said the home usually houses four to six girls. City contract records show that the church received a second contract last November for $429,000 to operate Harambee House II, a home for 10 delinquent boys. However, the home has not been opened because a site has not been established, Wilson said.
Rowe and other city officials could not say yesterday whether the church has received any money for Harambee House II. Wilson said she could not discuss the issue. She added that a location in Southeast Washington is being considered and the home is scheduled to open in September.
Copies of Youth Services contracts show that several of the belated agency contracts were signed shortly after a congressional hearing on Sept. 10 in which questions about the contracting procedures at the youth agency were first raised publicly.
A contract to Educational Support Systems, $192,142 for "educational assessment, educational advocacy, tutoring and in-home educational services" for delinquent youth, was signed Sept. 16, 1985, two weeks before the year-long contract expired.
Nancy Opalack, director of Educational Support Systems, said she would have no comment on the contracts. Her attorney, Joseph Warin, said, "The only person who can be harmed in that situation was us . . . . We have done absolutely nothing wrong."
Opalack's firm is one of the agency's largest outside contractors. Its contracts with the city have been under investigation by the U.S. attorney's office since last fall.
Rowe said that several contracts won by Opalack's firm were expanded and extended without rebidding the work because the firm could help correct many of the agency's problems that surfaced in the congressional hearing.
"A lot of those amendments were driven by criticisms from the GAO [General Accounting Office] of what we were not doing," Rowe said. The GAO found that delinquent juveniles with learning problems were not receiving proper help or schooling.
"The contractor was right there and we used them," she said.
Delays in writing and signing contracts are a problem throughout the Commission on Social Services, Rowe said. It sometimes takes several months for contracts to make their way to her office from agencies within the commission, Rowe said.
Copies of payment vouchers show they often lack explanations for the services performed. Rowe defended payments the agency made under director Quann, saying Quann is "probably the biggest stickler on contracts."
Sources close to the federal investigation said the youth agency spent nearly a third of its budget on outside contractors, an amount that exceeded the 5 to 10 percent level found in most District agencies.
Rowe said Youth Services, like other human services agencies in her commission, finds greater flexibility in using private firms.
"Philosophically, I have to go for contracting out rather than doing it ourselves," Rowe said. "Government shouldn't deliver all the services itself . . .I moved to contract out all the group homes when I came in just on cost reasons."
However, Rowe said there no longer appears to be a price advantage to hire outside contractors. "We're starting to get to the break-even point, so we're going to start to look at our contracts."
The youth agency's contracts and its excessive use of overtime are under investigation by the FBI, GAO, U.S. attorney's office and the agency's own inspector general.