Alleged Possible Conflict of Interest and Unnecessary Costs Incident to the Leasing of a Building in Bladensburg, Maryland

Published by the Government Accountability Office on 1971-10-06.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                            WASHINGTON.       0.0.     207jm               . ,J..

         B-17340 3                                        \1l\1\\            IllIIllI- I.)--‘j

         Dear Senator      Proxmire:
                                                                                     OCT     6
/- IL.                                                                                                     7
                 You requested     our response     to statements      contained     in a
         letter    dated June 9, 1971, from an anonymous General Services
  !      Administration       (GSA) employee alleging        possible     conflict     of
                                                                         --.i---                     'I
          bp---.       and unnecessary    costs   incident    to   the  leasing    of   a
         building      in Bladensburg,    Maryland.

                 GSA's justification         for leasing       the building       was to con-
         solidate     eight    locations     of the contractual          services     branch
         and the central         repair    shops in Washington,          D.C.,    into one
         central    location.         In response      to a GSA newspaper         advertise-
         ment for blocks         of 60,000,       35,000,    and 10,000 square feet of
         warehouse      space in the Metropolitan             Washington     area, the Carey
         Winston    Company, a realty          firm in Washington         which acted as
         agent for the owner, offered               a building     at 4125 46th Street,
         Bladensburg,       for lease to GSA. This building,                 containing
         about 54,000 square feet of warehouse                   space, was leased by
         GSA effective        April     1, 1971.      The lease is for a S-year period
         with two S-year renewal            options.

                The GSA employee suggested            a possible    conflict        of inter-
         est because the building            was alleged    to be owned by a nephew
         of either     the Administrator         of GSA or Senator Hugh Scott of
         Pennsylvania.        The building       is owned by Superior          Millwork,
         Inc.,    a family-owned       corporation      of which Mr. John M. Ogburn
         is the principal         stockholder.       Mr. Ogburn informed          us that he
         was not related        to any GSA official        or any member of Congress.
         The vice president          of the Carey Winston        Company, who was re-
         sponsible     for listing       the building     and for negotiating            the
         lease,    also informed       us that he was not related            to any GSA of-
         ficial    or any member of Congress and that,              to the best of his
         knowledge,      no officer      or employee of the Company was related
         to such persons.

                 According      to the GSA employee,     the rental    cost of the
         building     will    be over $350,000 a year.       The negotiated-lease
         agreement,        however , provides    for an annual rental,      exclusive
         of services        or utilities,     of $64,260 for the first      S-year pe-
         riod,    $73,899 for the second S-year period,             and $83,538 for
         the third      S-year period.

                                            q Q$A-q@r~
                                       50TH ANNIVERSARY 1921.1971

        The GSA employee stated that the relocation    of the cen-
tral repair    shops to Bladensburg   was not required  at that time
because buildings     74 and 191 which housed the shops were sched-
uled to be torn down in 3 years and that,       if the shops were
moved, the renovation     costs to accommodate new tenants    in the
buildings    would be well over $50,000.

       According  to a GSA 1970 report        on its Federal building
program, none of the three buildings            which house the central
repair   shops are scheduled for demolition            until after 1976.
A GSA estimate    dated May 12, 1971, showed a cost of $54,000
for the renovation     of building     74 to accommodate the new ten-
ant.    We were informed.by      a GSA official      that building  191
would be utilized     without    any renovations.

      We did not request    the formal views      of GSA on the con-
tents of this report,    nor did we release       copies of the report
to the agency.

                                     Sincerely   yours,

                          P     ~7 Comptroller  General          .
                                   of the United States
The Honorable   William   Proxmire
United States   Senate