The United Nations and its affilates award contracts for hundreds of millions of dollars of supplies and services each year without throwing them open to competitive bids, according to interview with U.N. officials.
Instead of advertising for bids, organizations in the U.N. system select the companies that will be asked to a favored company without asking for other bids.
In may instances, countries that are large contributors to U.N. organizations successfully bring pressure to have contracts awarded to firms from those countries, U.N. officials say.
Just how or why some contracts are awarded is not clear. The contract to clean the U.N. headquarters building in New York has been given to the same company since 1951, when the building was contructed.
The company, Victory Handyman Inc., has a cost-plus contract, meaning it is remibursed by the United Nations for its costs and given a guaranteed profit. This is an unusual arrangement in the building cleaning business.
Victory Handyman has no telephone listing. Its president, Irving Schwartz, lives in Florida. The company's only office is a room in the basement of the U.N. Secretariat building. In fact, Victory Handyman has no other customers besides the United Nations.
Schwartz declined to discuss how he got the contract or how much he is paid. "I'm just a little housecleaner for the U.N." he said.
Another company, B. Eichwald & Co., has had the contract to maintain the United Nations' electrical systems since the headquarters building was constructed. It also is reimbursed for its costs, and given a guaranteed profit.
Bernard Eichwald, president of that firm, similarly declined to discuss the contract. "There's nothing in my contract ot authorize giving out information" Eichwald said.
Dermot Hussey, chief of the United Naions' purchasing service, siad he "guesses" each firm makes a profit of about $100,000 a year.
Hussey and other U.N. officials declined to provide access to documents or files that would show how much the companies are paid or how they got their contracts.
"I would like to inform you that as a matter policy the files of the U.N. on contractual matters are not available for the purposes you have depscribed, and therefore, we are not in a position to comply with your request," Calyton C. Timbrell, assistant U.N. secretary-general for general services, wrote in response to a request to examine contract files for a story.
U.N. financial regulations say all contracts must be awarded through competitive bidding involving advertising of solicitations, but they also provide eight exceptions - including a determination that open bidding would not "give satifactory results."
In practice, says Hussey, the chief of U.N. purchasing, "advertising for bids is rarely used."
George F. Saddler, an official who handles financial matters in the U.S. Mission to the United Nations, said he sees no need for the United Nations to advertise for offers. He said another U.N. regulation says requests for bids may be distributed to particular firms.
Jerome H. Stolarow, director of the procurement branch of the General Accounting Office, the audit branch of Congress, said U.S. policy and law is to buy through advertised, competition bidding.
"You get the best assurance of a reasonable price and the best product," he said. "It also minmizes possiblities for corruption."
In awarding contracts, U.N.system officials say the generally select about five companies and ask they generally select about five companyies and ask them to submt bids.
G. Authur Brown, deputy administrator of the United National Development Program (UNDP), said an effort is made to ask companies from countries that are large contributors.
"The source of the funds is taken into account and (so are) complaints from couctries that they have not gotten enough business for their companies," he said. "The companies bring pressure on the countries." CAPTION: Chart, Who's Got the Deposits, The Washington Post