The agency overseeing the region’s two major airports and managing construction of the $5.6 billion Dulles rail project was warned repeatedly over the past 10 years that it was improperly doling out millions of dollars in contracts, but it did little to correct the deficiencies.
The Metropolitan Washington Airports Authority, already under fire for such ethics abuses as taking Super Bowl tickets from contractors, issued several large no-bid contracts that violated federal transit policy, according to reports and audits.
The MWAA changed some of its procedures, but federal officials still say the changes didn’t go far enough and warned in the most recent report that its lack of action would bring on greater scrutiny.
Some of that scrutiny is due Friday, as MWAA officials are scheduled to appear before the House transportation committee, which is making inquiries into the ethics and contracting violations. On Thursday, Del. Eleanor Holmes Norton (D-D.C.) introduced a bill requiring the authority to strengthen its contracting rules after calling the lack of competition troubling.
News of the earlier warnings follows this month’s release of a scathing audit by the U.S. Transportation Department’s inspector general. That long-awaited review marked the most damning account of failings at the MWAA, blasting it for several deficiencies, including nepotism. But it also focused repeatedly on contracting.
In some instances, the audit found, certain contractors appeared to get special treatment. In at least one other, an MWAA board member offered confidential information about a contractor’s bid to a competitor.
In reports over several years, reviewers say they found repeated problems with how the agency doled out money. A 2002 audit by the Government Accountability Office faulted the authority’s procurement practices.
In January 2011, the Federal Transit Administration found, among other things, that the MWAA improperly awarded contracts without seeking bids. The report by a Massachusetts-based consulting company was obtained by The Washington Post under the Freedom of Information Act.
The FTA review, which came more than 18 months before the inspector general’s report, found that the authority lacked even a basic understanding of how it should oversee $975 million in contracts — $900 million in FTA grants and $75 million in federal highway funds. Created by the Airports Act of 1986, the MWAA operates Dulles International and Reagan National airports and the Dulles Toll Road. It is in charge of the multibillion-dollar Silver Line Metrorail extension, the area’s largest public-works project. The FTA reviewed the authority’s procurement practices because the MWAA was new to spending federal transit money.
The 2011 review evaluated whether the authority was complying with FTA contracting requirements. It examined 54 procurements — 29 of which were sole-sourced — related to the Dulles Corridor Metrorail Project. The MWAA was deficient in nearly half of the 60 standards outlined by the FTA, which reviewed money spent from November 2008 to November 2010.
The authority awarded “three of the largest contracts” without knowing in advance how much it ultimately would spend or how long the work would take, the review found.
“Without these controls in the contract, there is no effective contract administration system,” the report says.
The MWAA also made a dozen purchases of less than $3,000 that lacked documentation to show that the authority paid “a fair and reasonable price,” it says.
In another instance, the agency improperly awarded sole-source contracts using a “categorical exception,” which limits bid competition.
“The sole-source method of award was used disproportionately and unnecessarily, limiting competition on a number of large-dollar value contracts for legal and financial services,” the report says.
The report does not disclose who got the sole-source contracts or how much was spent on them.
Lynn Hampton, the MWAA’s former chief financial officer who also served as president and chief executive from June 2010 to July 2011, said the agency was confused about procurement policies.
“The procurement issues for the rail project, I think you’re going to find that they were done by rules that were established by the [Federal Aviation Administration],” Hampton said in an interview. “When we found that the rules we were using did not comply with the FTA, we did go back and change. We had to get all sorts of contracts amended.”
Hampton said the authority’s general counsel “misinterpreted” part of the FTA’s rules.
“We thought we were doing the right thing by not bidding,” she said. “There was a particular clause in the FTA procurement rules that says something like ‘as long as you’ve got rules approved by your board, it’s okay.’ They [the FTA] said no, that’s not the case.”