The VA Office of Inspector General (OIG) reviewed the Wilmington Health Care Center (HCC) in North Carolina in response to a request from Congressman Walter B. Jones, who asked the OIG to determine whether selecting the Wilmington airport site for the HCC was in the best interest of taxpayers. He also asked the OIG to review the offers to develop the Wilmington HCC to determine whether VA officials used appropriate procedures. The OIG determined the selection of the Wilmington airport site was not in the taxpayers' best interest. VA’s Office of Construction and Facilities Management (CFM) changed its requirements, paid more than the appraised value, and used a flawed two-step process. As a result, VA will pay $2.35 million more than fair market rent over the 20-year lease. This occurred because CFM leadership lacked effective oversight of the lease. CFM has since implemented several policies and procedures negating the need for the OIG to make recommendations on some conditions reported. Specifically, CFM established a policy office and made progress in issuing formal policies and procedures; finalized its handbook, which includes oversight procedures for CFM’s leasing processes; issued official policy and procedures related to the two-step process; and implemented policies and procedures for maintaining lease documentation and transferring that documentation between CFM personnel. The OIG did recommend that the Executive Director for CFM establish a formal policy for transferring contract files when transferring responsibilities to a different contracting officer. Because CFM was unable to provide information to the OIG on all the offers for the development of Wilmington HCC, the OIG was unable to determine whether CFM used appropriate procedures during the selection and award process of the $69 million lease.
Wilmington, NC
United States
