A State Department office previously tied to Lt. Col. Oliver L. North's secret Nicaraguan contra network has come under new criticism by the General Accounting Office for awarding 25 contracts worth more than $260,000 without seeking competitive bids.
The State Department office, set up in mid-1983 to promote the Reagan administration's Central American policy, regularly justified awarding contracts without competition on the grounds that the work -- often research papers -- was needed urgently and that the contractor was uniquely qualified, the GAO said in a report.
However, the GAO said that in numerous instances the work product was different from what the contracts specified, which appears to undermine claims that competitive bids could not be sought because of an "urgent need" for the material.
Congressional critics have argued that the Office of Public Diplomacy for Latin America and the Caribbean was part of a major lobbying and public relations campaign designed to win support for the contras and that the overall effort was secretly managed by North, while he was at the National Security Council, and by other administration officials.
In outlining a series of contracting irregularities by the office, the GAO said the justifications for awarding contracts without competition were inadequate, that in some instances work was done before contracts were signed, and that in many instances it could not find the contractors' finished product in office files.
Most of the contracts called for private individuals to write reports or analyses on Central America that the office said could not be produced by staff members.
The GAO, the investigative arm of Congress, cited as a typical example a contract for four research papers on different topics. When the GAO examined the finished papers, it discovered that none covered the topics specified in the contract.
"We found no justification that the contractor selected as uniquely qualified to write on the original topic was also uniquely qualified to write on the new topic," the GAO said. "We also found no contract modification to reflect a change in the product."
The GAO report, released Tuesday, follows a GAO finding that the public diplomacy office had run a "prohibited, covert domestic propaganda campaign" in which consultants were hired to plant in major newspapers articles supporting the contras and other administration Central American policies.
In July, the State Department's inspector general criticized the office's procedures in awarding more than $400,000 in noncompetitive contracts to International Business Communications (IBC), a firm headed by Richard R. Miller, a former Reagan campaign aide who has been tied to North's private contra-support network.
Reps. Dante B. Fascell (D-Fla.), chairman of the House Foreign Affairs Committee, and Jack Brooks (D-Tex.), chairman of the Government Operations Committee, said in a statement that they intend to press for reforms in State Department contracting procedures. "I'm not letting up until I see some concrete and orderly changes in the way the State Department does its business," said Fascell, who with Brooks had requested the GAO inquiry.
The GAO report released this week does not cover the IBC contracts examined by the inspector general, but is based on a review of 25 other contracts worth nearly $263,000 awarded by the office between mid-1983 and February 1986.
The GAO reports and the inspector general's review cover the office's operations when it was headed by Otto J. Reich, now U.S. ambassador to Venezuela. The GAO said that under the office's current head, Robert Kagan, work previously contracted-out is being done internally.
Reich, in the GAO report and in a telephone interview this week, repeated earlier statements that he relied on his staff and State Department procurement officials to make sure proper contracting procedures were followed. He said he did not ask any officials to bypass normal requirements.
"There's a heck of a lot of second-guessing involved" in the GAO and inspector general reports, Reich said.
Reich added that "we accounted for everything we paid for."
He said he is not surprised that some work products are missing from office files because numerous investigative agencies involved in the Iran-contra affair have been examining the office's past work.
According to the GAO, State Department procurement officials reported that they felt "under considerable pressure" by Reich's office to sign off on the unit's requests for noncompetitive contracts. The GAO said the procurement officials stated that this pressure included written statements sent to them by high U.S. officials stressing the importance of Reich's operation.
Reich agreed that he and others attempted to speed action on contract requests, but he said such efforts were not designed to persuade procurement officials to violate department rules.