Last summer the General Services Administration found that, with only two months remaining in the fiscal year, it had spent far less money than Congress had authorized. Unless the rest of its money was spent quickly, it would be returned to the Treasury and future GSA appropriations might be reduced.
So instructions went out from GSA's Public Buildings Service - which owns, leases and maintains federal buildings - to spend more money and do it fast.
As a result, according to a GSA audit, over the next several weeks GSA's spending nationwide increased as much as 40 percent. In fact, the agency ended up overspending some parts of its budget by more than $6 million - a technical violation of federal law.
That same audit revealed that GSA, in its haste to spend money at the end of the fiscal year that ended last September, also:
Authorized workers in certain buildings to clean them on overtime pay when the cleaning could have been done during regular hours.
Awarded contracts for maintenance work without ever specifying the price of the job or exactly what it was that had to be done.
Decided to spend money on low priority projects because there was no time to draw up and award contracts for more important and pressing needs.
The audit report, which was requested by Deputy GSA Administrator Robert T. Griffin and is still in draft form, is being reviewed by GSA's general counsel to determine whether violations of law occured and should be reported to Congress and the Justice Department.
Referring to the findings of the audit, Griffin said, "It's an error that would not be tolerated now and will not happen again."
The kind of free-wheeling spending described in the report has been cited by federal investigators as one of the reasons why GSA, which spends about $4 billion a year supplying other federal agencies with offices and supplies, has been plagued with recurring scandals since its creation in 1949.
Currently, federal prosecutors and grand juries in Washington and Baltimore are probing GSA contracts running into the millions of dollars for maintenance work, repairs and office supplies. Investigators have found that some GSA employes have falsely certified that a number of companies provided GSA with services or goods that in fact were never provided. In return, the GSA employes have been given cash or expensive television sets and stereo equipment by the companies, according to sources.
In the past, GSA has been investigated for similar contract irregularities, as well as for leasing buildings owned by politicians' friends and campaign contributors, awarding contracts to politically connected architects and engineers and spending more than $3 million on the San Clemente and Key Biscayne homes of then president Richard M. Nixon.
In concept, GSA is like a giant corporation with only one customer - the government. GSA is the government's landlord, purchasing agent and archivist. Its annual spending is comparable to the sales volume of Boeing, the 49th largest industrial firm in the country. GSA's work force of 34,000 is comparable to that of Shell Oil Co., the 14th largest industrial company.
GSA was established on the recommendation of the Commission of Organization of the Executive Branch, headed by former president Herbert Hoover, after the commission had found too much waste in the government's management of buildings, supplies and records. All this, the commission said, should be consolidated in an "Office of General Services, under a director appointed by the president."
Today, GSA, through its Public Buildings Service, owns 2,500 buildings and leases space for government offices in another 7,500 privately owned buildings. This portion of GSA's role accounts for about half its work force and 38 percent of its annual spending.
GSA's Federal Supply Service, which spends 45 percent of the agency's money and employs nearly 8,000 workers, supplies more than 6 million different goods and services to government offices and runs an interagency motor pool of 78,000 vehicles.
GSA also runs the government's telephone system, acquires and leases its computers and stores 14 million cubic feet of records and historic documents through its National Archives and Records Service.
Most of GSA's ffunction of awarding contracts is performed in 10 regional offices. Only 8 percent of the agency's employes work at its headquarters building, a drab, seven-storey concrete structure at 18th and F streets NW.
As one of the country's largest builders and purchasers - a single computer it buys for the government may cost as much as $50 million - GSA is in a position to exercise considerable influence. Jay Solomon, who was appointed a year ago by President Carter to head GSA, has complained that the agency has not taken advantage of that influence in the past.
Solomon, 56, formerly was chairman of the shopping center subsidiary of Arlen Realty and Development Corp., one of the largest real estate developers in the country. His present office, located on the sixth floor of GSA's headquarters building, is decorated with black-and-white photographs taken by his wife. His door, he says, is almost always open - he says he closes the door only when Central Intelligence Agency officials come to discuss their office needs.
"GSA," Solomon said in a recent interview, "should be used to help fulfil urban development plans, cut government spending, control inflation, give more contracts to minority groups, help in utilizing land more effectively, communicate cultural concerns, make use of historic buildings, stimulate architecture, conserve energy and improve automobile design."
How far Solomon can push GSA toward these goals is an open question. He has acknowledged being frustrated by the time consumed with having to ddeal with GSA scandals.
Some GSA observers have said that it has sometimes been unclear whether Solomon or his deputy, Griffin, is running the agency. Solomon said, however, that it has taken time to learn how the agency operates. He said he is now fully in command.
Solomon was appointed administration despite efforts by House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) to have his longtime friend, Griffin, appointed to head the agency. Jack M. Eckerd, a Florida drugstore owner who was Solomon's predecessor in the job, resigned when President Carter insisted that he name Griffin his deputy.
In response to a question from a reporter, O'Neill's office said recently the speaker was "agreeable" to having Griffin serve as Solomon's deputy after Carter made it clear he wanted Solomon for the top job.
As this incident suggests, GSA and politics have been inseparable, Solomon said recently he receives 200 letters and calls a week from members of Congress interested in obtaining contracts for particular constituents or winning new building construction for their districts.
"Nobody ever exerts pressure, but they express their opinions," Solomon said. He said the White House, in contrast to Congress, has left GSA alone.
In 1974, however, under pressure from the Nixon White House, GSA traded $27 million in government property for a massive, unused building in Laguna Niguel, Calif., so that the records of former president Nixon could be stored near his San Clemente home.
GSA said at the time the pyramid-shaped building, described by the Office of Management and Budget as a "white elephant," was needed to house increasing federal offices in southern California. Yet seven years after GSA began looking for tenants, the building now is less than a quarter occupied. Nearly all of the space is taken up with GSA records.
"The political pressures are enormous in the job of GSA administrator," said Arthur F. Sampson, who headed GSA when Nixon was president. "It's probably one of the most political areas of government.
"A congressman can make political mileage when a building is authorized, when the engineering contract is awarded, when the ground is broken, when the roof is finished, and when the building is dedicated. The system calls for the GSA administrator to make political decisions whenever you have discretionary power.
"The trick is to avoid lowering your standards when making a political decision. It gets kind of hairy now and then."
During Sampson's tenure, Civil Service Commission investigations showed that candidates referred by White House officials were placed in GSA jobs contrary to government regulations that required hiring on merit alone.
Lyle E. Hutchison Jr., a former Falls Church furniture store owner, was hired by GSA because he had been sponsored by two Nixon political aides and the then chairman of the Civil Service Commission, Robert E. Hampton. Bernard H. Martin, Hutchinson's first boss at GSA, told The Washington Post at the time that Hutchinson had no qualifications for the job he was hired to do and never did any work of value."The whole thing was fictitious from beginning to end," he said.
In 1974, the commission ruled that Civil Service Commission, Robert E. Burger was improperly given a GSA job paying $26,671 a year, but said there was not sufficient evidence warranting disciplinary action against him.
A House subcommittee that looked into the matter reported that a job actually had been "created" for Wade Burger, who still works for GSA but that there was no evidence of outside pressure to hire him. Burger now is paid $35,875 by the agency.
"Administrators (of GSA) have said, 'Get people hired and forget the rules,'" according to one federal investigator. "The people on the sixth floor (where the administrator has his office) say the rules are for little people, and a lot of little people have figured, 'If they break the rules, so can I.'
"Couple the political pressures with the fact that GSA can make someone rich if the proper document is signed, and you have an unhealthy situation."
In theory, GSA makes its purchases through competitive bidding procedures that leave little room for steering contracts to favored companies because of political influence or payoffs. By law, the agency is supposed to publicly advertise its needs, obtain sealed bids from prospective suppliers, and award the contracts to the lowest bidder.
In practice, these procedures more often than not are ignored by taking advantage of exceptions included in the law for unusual circumstances. In its last fiscal year, more than half of GSA's contracts were awarded without use of sealed bids through processes known as "negotiated" or "sole source" procurement.
In a negotiated purchase, GSA officials haggle with a limited number of suppliers, leaving open the possibility that a particular firm may be favored by providing it with prices quoted by competitors, violating GSA regulations. In a sole source purchase, GSA declares that only one company can meet its needs, opening up even more possibilities for favoritism.
Such methods mirror government-wide practices criticized in a report issued last September by the General Accounting Office, the audit arm of Congress. The GAO found that 71 percent of all civilian governmental agency purchases were negotiated rather than obtained through sealed bids.
"Such a high percentage of negotiated contracts warrants additional safeguards to accomplish the full and free competitions the Congress desires and the law stipulates," the GAO said.
GSA, like other federal agencies, has internal auditors who are supposed to detect fraudulent practices. But the agency has admitted in congressional testimony that most GSA operations are audited only once every 20 years.
When the auditors have criticized GSA practices, a source familiar with the current federal investigations said, "GSA management has either excused the violations of regulations on the grounds it was the only way to get the work done or said they would stop and (then) gone right back to doing the same thing."The investigator said the abuses intensified when Congress, trying to make agencies using GSA buildings more cost-conscious, required them to reimburse GSA for the space they use.
"This gave GSA a barrel of money that it didn't know what to do with," the investigator said. "There is a nearly all-pervasive attitude that if the other agencies are reimbursing GSA, it is GSA's responsibility to negotiate the contracts, not to police them. The result is that no one knows who is responsible for making sure the government gets what it pays for."
In the past when abuses have been uncovered, Congress has held hearings.
Eleven years ago, Rep. Jack Brooks (D-Tex.), chairman of a House Government Operations subcommittee, held hearings about painting contractors being paid by GSA for more coats of paint than they actually applied.
"There is no use in paying contractors if they don't do the work," Brooks lectured GSA officials, who dutifully promised to correct the abuses.
The current investigations are finding the same practices, however, and Brooks, who now heads the full committee with responsibility for seeing that GSA spends taxpayer money properly, has not made a public statement about the new findings.
Investigators say the corrupt practice are encouraged by pressures to spend all GSA's money by the end of the fiscal year, pressures they believe stem from a congressional budgetary process that deters agencies from spending less.
Under this system, said Carey P. Modlin, deputy assistant director for budget review at the Office of Management and Budget, "The executive branch has to justify (to Congress) not spending money."
In reviewing GSA's frantic efforts to spend more money last summer, the agency's auditors found that one GSA manager in charge of Department of Health, Education and Welfare Department buildings was told by GSA to spend $400,000 in the last two days of fiscal 1977. The manager complied.
Many of the companies receiving contracts during the spending spree also happen to be among those whose work is now being investigated by the Justice Department to determine whether they performed the work they were paid for.
"Part of the problem," said a high-ranking GSA source, "is that, with some exceptions, no one really gives a damn. It isn't their money they're spending."