The U.S. Department of Housing and Urban Development’s (HUD), Office of Inspector General reviewed HUD’s oversight of contracting for architectural and engineering contracts due to a referral involving a multi-State manufactured home inspection contract awarded by HUD in which the contractor received excessive payments.  Our audit objective was to determine whether HUD properly procured and made reasonable payments for its manufactured home inspection contract.

We found that HUD awarded a manufactured home inspection contract without conducting an adequate price analysis and paid the contractor without adequate support.  Specifically, it failed to conduct an adequate price analysis of all fixed unit price elements, accepted the contractor’s quote without negotiating, and approved and paid vouchers without adequate support for travel costs incurred and for subcontracted work.  As a result, HUD did not pay a reasonable price for three inspections costing $10,000.

This report contains no recommendations.  No further action is necessary with respect to this report because the contract is complete and it did not exceed the minimum contract amount of $10,000.