Subcontractor Complaints Concerning the D.C. Union Station Renovation
Project (Correspondence, 12/22/1999, GAO/GGD-00-13R).

Pursuant to a congressional request, GAO provided information regarding
work done on the Union Station Redevelopment Project by Park
Woodworking, Inc., focusing on the: (1) extent of the government's
liability, if any, for costs incurred for which Park was not
compensated; (2) extent to which Park was not compensated for the work
it did; and (3) actions taken by the Secretary of Transportation and the
Department of Transportation (DOT) Inspector General (IG) in response to
complaints received from Park.

GAO noted that: (1) on the Union Station project, the contractual
relationship at issue was between Park, the subcontractor, and the
general contractor; (2) since Park, as a subcontractor, had no
contractual relationship with the government on its Station
subcontracts, the government has no financial liability for any claims
arising under these subcontracts; (3) furthermore, in November 1991,
Park executed a settlement agreement, with the advice of counsel, with
the general contractor and the Union Station Redevelopment Corporation
(USRC), a not-for-profit District of Columbia corporation; (4) the
agreement provided that, in return for a payment of $235,000, Park would
release USRC and the general contractor from all existing and future
claims and liability related to Park's performance on the Station
renovation; (5) upon payment of the $235,000 agreed to in the
settlement, USRC was relieved of all existing and future financial
liability for any claims by Park relating to work performed on the
project; (6) Park's records indicate that it had submitted payment
requests totalling $1,480,370 and had received payments totalling
$774,142, leaving an unpaid balance of $706,229; (7) the $235,000 Park
received through the settlement agreement reduced the unpaid balance to
$471,229; (8) however, because Park signed the settlement agreement, GAO
did not do any further analysis to determine whether Park was fully
compensated for the work it claimed to have done on the Station Project;
(9) Park submitted numerous complaints to DOT officials, including the
IG; (10) these complaints focused on allegations of abusive treatment on
its subcontracts, the general contractor's failure to address Park's
claim for $490,000 for uncompensated work, and the way DOT enforced its
minority business subcontracting policies; (11) the DOT officials who
responded to these allegations concluded that the evidence presented
demonstrated that the complaints represented a series of contract
disputes between Park and the general contractor; and (12) further, the
IG, after consideration of Park's allegations, concluded that the
Federal Railroad Administration, a component of DOT, was in substantial
compliance with appropriate law and regulations and that Park's
complaints were without merit.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-00-13R
     TITLE:  Subcontractor Complaints Concerning the D.C. Union Station
	     Renovation Project
      DATE:  12/22/1999
   SUBJECT:  Transportation terminals
	     Repair costs
	     Contractor payments
	     Government liability (legal)
	     Subcontractors
	     Minority business contracts
	     Contract disputes
IDENTIFIER:  DOT Union Station Redevelopment Project
	     Union Station (DC)

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United States General Accounting Office
GAO

GAO/GGD-00-13R

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B-282477
Page 11               GAO/GGD-00-13R D.C.Union Station Project
B-282477

December 22, 1999

The Honorable James P. Moran
House of Representatives

Subject: Subcontractor Complaints Concerning the D.C. Union
Station
              Renovation Project

Dear Mr. Moran:

This letter responds to your July 9, 1998, request for
information on certain issues raised by one of your
constituents, Park Woodworking, Inc. (Park), a minority
subcontractor, for work done on the Union Station
Redevelopment Project in the late 1980s. Park alleged, in
material enclosed in your letter, that federal officials were
involved in a concerted effort to delay final payment and
extract an unfair settlement from Park and other
subcontractors, thereby causing the financial ruin of four
minority firms. In discussions with your staff, we agreed to
focus our audit efforts on the following three key questions
related to Park's complaints.

ï¿½What is the extent of the government's liability, if any, for
any costs incurred for which Park was not compensated?

ï¿½To what extent was Park not compensated for the work it did?
ï¿½What actions did the Secretary of Transportation and the
(DOT) Inspector General (IG) take in response to complaints
received from Park?
As agreed with your office, we did not look into the alleged
misconduct or improper actions by federal officials relating
to the work done by the minority subcontractors.

Results

On the Union Station (Station) project, the contractual
relationship at issue was between Park, the subcontractor, and
the general contractor. Since Park, as a subcontractor, had no
contractual relationship with the government on its Station
subcontracts, the government has no financial liability for
any claims arising under these subcontracts. Furthermore, in
November 1991, Park executed a settlement agreement, with the
advice of counsel, with the general contractor and the Union
Station Redevelopment Corporation (USRC), a not-for-profit
District of Columbia corporation. The agreement provided that,
in return for a payment of $235,000, Park would release USRC
and the general contractor from all existing and future claims
and liability related to Park's performance on the Station
renovation. Thus, upon payment of the $235,000 ($200,000 from
USRC and $35,000 from the general contractor) agreed to in the
settlement, USRC was relieved of all existing and future
financial liability for any claims by Park relating to work
performed on the project.

Park's records indicate that it had submitted payment requests
totaling $1,480,370 and had received payments totaling
$774,142, leaving an unpaid balance of $706,229. The $235,000
Park received through the settlement agreement reduced the
unpaid balance to $471,229. However, because Park signed the
settlement agreement, releasing USRC and the general
contractor from all existing and future claims and liability
and accepted the final payment as provided for in the
settlement agreement, we did not do any further analysis to
determine whether Park was fully compensated for the work it
claimed to have done on the Station project.

Park submitted numerous complaints to DOT officials, including
the IG. These complaints focused on allegations of abusive
treatment on its subcontracts, the general contractor's
failure to address Park's claim for $490,000 for uncompensated
work, and the way DOT enforced its minority business
subcontracting policies. The DOT officials who responded to
these allegations concluded that the evidence presented
demonstrated that the complaints represented a series of
contract disputes between Park and the general contractor.
Further, the IG, after consideration of Park's allegations,
concluded that the Federal Railroad Administration (FRA), a
component of DOT, was in substantial compliance with
appropriate laws and regulations and that Park's complaints
were without merit.

Scope and Methodology

To determine the federal government's liability, if any, for
work claimed by Park on its payment requests, we reviewed
contractual and other documents relating to Park's two
subcontracts for work on the Station renovation. We did not
determine whether the government had any contractual liability
with Park under any additional contracts.

To determine the extent to which Park had not been compensated
for work claimed on its payment requests, we reviewed Park's
records showing payments requested and payments received from
the general contractor. Because the relevant events on the
project occurred in the late 1980s, we relied primarily on
existing records held by DOT/FRA and Park rather than oral
statements of federal and Park officials. Further, we did not
attempt to recreate the job-site conditions because of the
elapsed time since such conditions existed, but relied on the
documentation prepared at the time job-site conditions were in
existence as the best evidence available to us. We also did
not contact the general contractor on the project or attempt
to obtain general contractor records relating to the payments
made by the general contractor to Park. These limitations on
the scope of our work are reasonable, in our opinion, because
Park agreed to a financial settlement covering all claims
resulting from its work on the Station project. Consequently,
we did not attempt to determine further specifics as to
whether Park was fully compensated for all the work it claimed
to have done under the Station subcontracts.

To determine what actions had been taken on Park's complaints,
we interviewed DOT and FRA officials associated with the
project during Park's subcontract and obtained pertinent
records from FRA files in Washington, D.C. Our work was
delayed by FRA's inability, due to an office move, to locate,
retrieve, and provide relevant records. We also met with the
president of Park to discuss the issues and review supporting
documents. In the process, we discussed Park's experience of
working on the Station project, the records the firm had
assembled both during the project and through Freedom of
Information Act requests, and its president's perception of
the events that occurred relative to the project that led to
the disputes over payment for work claimed. Finally, we
reviewed, in detail, numerous documents Park made available to
us.

We did our work in Washington, D.C., and Park's office in
Lorton, VA, between September 1998 and October 1999 in
accordance with generally accepted government auditing
standards. We requested comments on a draft of this letter
from the Department of Transportation, the Federal Railroad
Administration, and Park Woodworking, Inc.

Background

Built in 1907 as the "Monumental Gateway to the Nation's
Capitol," Union Station functioned as a rail passenger
terminal until 1968, when Congress designated it as a National
Visitor Center. The Department of the Interior opened the
visitor center in 1976, but the most prominent feature of the
visitor center, the audiovisual presentation of Washington,
D.C., sights, was closed in 1978, when appropriations for
visitor center operations were curtailed. At about this time,
congressional efforts were also under way to (1) return the
Station to use as a train station, (2) finish the visitor
center parking garage, and (3) transfer management
responsibility for the Station to the Secretary of
Transportation. By 1980, however, the Station's physical
deterioration caused Congress to authorize funds to make
emergency structural repairs, including adding a new roof. The
roof repair work was barely under way when a heavy rainstorm
caused severe leaking. The heavy rains dislodged chunks of
plaster from the ceiling and created puddles of water on the
Station floor. For safety reasons, the building was closed to
the public on February 23, 1981.

The Union Station Redevelopment Act of 1981 (Redevelopment
Act)1 assigned responsibility to the Secretary of
Transportation for rehabilitating and redeveloping the
Station, primarily as a multiple-use transportation terminal
and, secondarily, as a commercial complex. The Redevelopment
Act was the fifth statute in 13 years devoted to the Station.
The Redevelopment Act established the following four goals:

ï¿½preservation of the exterior faï¿½ade and other historically
 and architecturally significant features of the Station;
ï¿½restoration and operation of a portion of the historic
Station as a rail passenger station;
ï¿½commercial development of the Station that would, to the
extent possible, financially support the continued operation
and maintenance of the Station; and
ï¿½withdrawal by the federal government from any active role in
the operation and management of the Station as soon as
practical, and at the least possible federal expense
consistent with the goals noted above.

Project History

The Secretary of Transportation delegated responsibility to
FRA for overseeing the work on the restoration project. USRC
was established as a not-for-profit District of Columbia
corporation to undertake major structural and mechanical
improvements and to restore and improve all public spaces
within the Station. The Secretary of Transportation served as
the chairperson of the five-member USRC Board of Directors;
the FRA Administrator was a member of the Board.

To provide day-to-day management of the project, FRA entered
into the Union Station Redevelopment Cooperative Agreement,
dated November 14, 1983, with USRC. The principal parties to
the agreement were the Secretary of Transportation, acting
through FRA; the National Railroad Passenger Corporation
(Amtrak); and USRC.

The Redevelopment Act required the Secretary of Transportation
to do an engineering survey of all the existing Station
structures to (1) determine those actions necessary or
desirable to preserve the long-term structural integrity and
provide functional utility systems; (2) determine, in
cooperation with Amtrak, those actions necessary or desirable
to restore rail passenger handling functions; and (3) prepare
detailed estimates of the costs of such rehabilitation and
improvement. The importance attached to this engineering
survey is reflected in remarks of the Secretary that "These
studies had better be hard-nosed, the answers had better hold
up, and the engineering survey had better be encyclopedic."
Further, the legislative history2 accompanying the
Redevelopment Act indicates that it was the intent of Congress
that "Congress should not be called on to enact further Union
Station authorizing legislation. It is crucial to the
redevelopment plan embodied in the bill that DOT's funding
commitment be credible."

The project funding provision in the cooperative agreement
authorized Amtrak to provide USRC up to $70 million to proceed
with renovation of the Station. However, in June 1985, prior
to the August 1986 award of the contract for general
construction services, the project's construction manager
estimated the Station renovation cost would be between $72.8
million and $76.8 million.

Project Design/Construction Contracts

To design and accomplish the renovation of the Station, USRC
initially engaged the services of an architectural firm, a
construction management joint venture firm, and a developer to
design and manage the project's commercial space.
Subsequently, the developer, Union Station Ventures (USV),
selected an architectural firm to design the commercial space.
On August 13, 1986, USRC executed a contract with a general
contractor for the construction work to renovate the Station;
and on October 19, 1987, the general contractor executed a
contract with USV to do the work in the Station's commercial
space. The general contractor entered into a number of
subcontracts, including two with Park, for portions of the
work. As a subcontractor, Park had no contractual relationship
with USV, USRC, or FRA.

Park participated in the subcontracting process by submitting
a bid to the general contractor for project millwork,
basically finished woodwork. On October 1, 1986, Park signed a
$304,360 subcontract to supply and install finished carpentry
and millwork, wood doors, and custom hollow metal; restore
casework; and remove and reinstall historic hardware and
install new hardware for the renovation. On November 1, 1987,
Park signed another subcontract for $202,000 to supply and
install rough carpentry, finish carpentry, and millwork for
the commercial space. The Union Station grand opening was held
on September 28, 1988.

Starting in mid-1988, disputes arose between USRC, the general
contractor, and various subcontractors, including Park. In May
1991, the general contractor filed a demand for arbitration on
behalf of Park and itself seeking to recover $1,369,725, plus
interest and attorneys' fees, from USRC due to alleged delays,
disruptions, accelerations, and other factors involving the
two Park subcontracts.

By late 1991, all subcontractor disputes, except Park's claim,
had been resolved. On November 14 and 15, 1991, a mediation
session regarding Park's dispute was held. Subsequently, on
November 22 and 25, 1991, the parties to the mediation-Park,
the general contractor, and USRC-executed a settlement
agreement. This agreement provided that in return for a
payment of $235,000 ($200,000 from USRC and $35,000 from the
general contractor), Park would release USRC and the general
contractor from all existing and future claims and liability
for work done on the Station renovation.

Government Has No Current or Future Financial Liability to
Park on These Contracts

On the Station project, the contractual relationship was
between Park, the subcontractor, and the general contractor.
Since Park, as a subcontractor, had no contractual
relationship with the government on its Station subcontracts,
the government has no financial liability for any claims
arising under these subcontracts. Furthermore, under the terms
of the November 1991 settlement agreement executed by
officials of Park, USRC, and the general contractor, Park
agreed to accept payment of $235,000 in full settlement of all
existing and future claims and liability relating to its work
on the Station renovation. This agreement resulted from a
November 14 and 15, 1991, mediation of the claims and disputes
arising from the work done by Park on the project. The
partiesPark, USRC, and the general contractorexecuted the
agreement on November 22 and 25, 1991. On November 26, 1991,
Park received a final payment of $235,000 and released USRC
and the general contractor from all existing and future claims
and liability pertaining to its subcontracts.

The November 1991 mediation resulted from claims filed against
USRC by the general contractor on behalf of Park and itself,
and by USRC against the general contractor. On May 3, 1991,
the general contractor had filed a demand for arbitration on
behalf of Park and itself seeking to recover $1,369,725, plus
interest and attorneys' fees, from USRC due to alleged delays,
disruptions, accelerations, and other factors on the
renovation and commercial portions of the Station project.
USRC, however, had filed a counterclaim seeking to recover
about $10,000 from the general contractor due to increased
costs allegedly associated with certain missing and incomplete
doors.

The November 1991 settlement agreement reflects the stated
intention of the parties to resolve all claims and disputes
with regard to Park's subcontracts with the general contractor
for work on the Station project. Specifically, the agreement
states that the parties

" . . . desire to settle all disputes, differences, claims,
counterclaims, demands, counterdemands, controversies, duties,
obligations, and rights among them in regards to the contracts
between USRC and the general contractor and the subcontracts
between the general contractor and Park relating to
Subcontract I, Subcontract II, the Phase 2 Contract and the
Phase 5 Contract on the terms and conditions set forth in this
Agreement."

The settlement agreement also releases both USRC and the
general contractor from all existing and future claims and
liability, as follows:

"Releases of USRC by Park. Park releases and forever
discharges and covenants not to sue USRC, its partners,
officers, [language then contains a list of parties] for all
causes of action, suits, damages, claims, counterclaims,
demands, counterdemands, actions, covenants, controversies,
debts, duties, rights, liabilities and obligations of any
nature whatsoever, whether presently known or unknown, arising
from all matters or actions, in regard to the Subcontract I,
Subcontract II, the Phase 2 Contract and/or the Phase 5
Contract."3

Park officials told us that improper financial pressure was
exerted on them to execute the settlement agreement.
Nevertheless, the fact remains that Park voluntarily signed
the agreement with the advice of counsel. The provisions in
paragraph 21 of the agreement states that the parties to the
agreement

" . . . through their respective agents, declare that they are
represented by counsel; that they fully understand all the
terms and conditions of the Agreement; that they possess the
right and exclusive authority to execute this Agreement; that
they are competent to execute this Agreement; and that they
voluntarily execute this Agreement."

Therefore, because Park voluntarily entered into the
agreement, it is bound by the terms and conditions of the
settlement agreement whereby it agreed to relinquish all
existing and future claims and liability against USRC and the
general contractor in return for a payment of $235,000.

Uncompensated Payment Requests

The November 1991 settlement agreement was the final financial
disposition related to Park's work on the Station renovation.
Using Park's records, we determined the extent to which Park
had not received reimbursement for payments requested.

We reviewed Park's records of invoices submitted for payment
and reimbursements received. Park officials told us that the
difference between the amounts billed and the payments
received represented payment for work for which Park had not
been reimbursed. They agreed that the unreimbursed amount
should be reduced by the $235,000 Park received under the
settlement agreement.

We compared the periodic subcontract payment requisitions Park
submitted to the general contractor to the payments Park's
records indicated it received. Table 1 shows that, including
the settlement agreement payment, Park had been reimbursed
about $1,009,141 of the approximately $1,480,370 requested for
work done on the renovation and commercial space at the
Station. Thus, about $471,229 of the requested compensation
remained unreimbursed after Park received the claim settlement
payment.

Table 1: Summary of Requests for Payment and Payments Received
Description        Requests for        Payments  Uncompensated
                        payment        received         amount
Restoration            $958,356        $404,975       $553,381
Commercial              522,014         369,166        152,848
space work
Claim                                   235,000       -235,000
settlement
Total                $1,480,370      $1,009,141       $471,229
Source: Park Woodworking, Inc.

We did not attempt to determine how much Park may have been
entitled to receive for each payment request Park submitted
because its records did not provide a rationale or explanation
for the differences between the amounts reflected on Park's
initial requests and the amounts approved by the general
contractor. As shown in enclosures I and II, the general
contractor did not always reimburse at 100 percent of the
requested amount. Further, we did not believe that we could
arrive at an amount due Park relative to each payment request
given that more than 10 years have elapsed since the work was
undertaken, our belief that we could not verify the job-site
conditions that existed at the time the work was done, and our
belief that we could not determine with sufficient reliability
whether the amounts paid to Park by the general contractor
were appropriate on the basis of work done by Park.
Furthermore, such an analysis of the payment history was
unnecessary, in our opinion, since Park had entered into the
November 1991 settlement agreement and had accepted the
accompanying payment of $235,000, thereby releasing USRC and
the general contractor from all existing and future claims and
liability relating to the project.

DOT Responses to Subcontractor's Complaints

The problems surrounding Park's contractual situation on the
Station project are documented in three official complaints
filed with the Secretary of Transportation. In addition, Park
forwarded several pieces of correspondence to DOT officials,
including the Office of the IG, outlining Park's alleged
contracting problems.

First Complaint

On July 26, 1989, Park filed a formal complaint with the
Secretary of Transportation against USRC and the general
contractor. In the complaint, Park asked the Secretary to (1)
investigate abusive treatment against it by USRC and the
general contractor and (2) monitor and investigate USRC's and
the general contractor's failure to address its claim for
$490,000. The complaint characterized the basis of the
allegations as abusive and discriminatory actions that Park
believed an investigation would demonstrate violated
established policies and procedures to support and foster the
participation of minority-owned firms in DOT financially
assisted projects.

In its complaint, Park stated its opinion that DOT's minority
business policies were not intended to create a situation
where large well-financed firms could take economic advantage
of smaller minority companies with limited financial
resources. Park alleged that this was in fact exactly what
happened on the project and that negotiations constituted
unilateral offers that Park was forced to accept or be
"starved out."

In a letter dated August 15, 1989, the FRA Administrator
concluded that Park's complaint detailed a fairly commonplace
series of construction contract disputes among parties to a
complex job. The Administrator stated that Park's

"proper remedy is the construction claim process working
through the prime contractor to USRC or USV, as the case may
be. I am informed that the prime contractor has included your
claims among those it is presenting to USRC and that USRC and
the prime contractor are addressing those claims and USRC's
counterclaims in an orderly manner."

Further, the Administrator noted that Park neither submitted
evidence nor claimed that it "was treated differently than
other subcontractors or that discriminatory animus was
involved. Without evidence of that sort, you have no case
under our minority business program."

Second Complaint

On October 12, 1989, Park filed another formal complaint with
the Secretary. Again, Park detailed its allegations, which
included economic coercion, predatory business practices used
by the general contractor, and slow payment by USRC. In
addition, the July 26, 1989, complaint was incorporated into
this complaint.

In a December 6, 1989, letter, the Secretary notified Park
that its complaint would be promptly investigated and that
Park would be informed of the results in writing. The letter
also noted that the particulars included in the package
submitted with the complaints substantially elaborated on the
information previously provided that was the basis for the FRA
Administrator's August 15, 1989, response. Specifically, the
December 6 letter noted that "The additional materials which
you have now presented raise serious allegations, and your
specific documentation provides a basis for further
investigation that was not available before."

However, the December 6, 1989, letter also cautioned that if
the investigation disclosed violations of the rules pertaining
to participation by minority-owned firms in DOT financially
assisted projects, such violations could only result in
sanctions against the general contractor and not direct
enforcement of Park's specific claims for damages against the
general contractor. Further, the letter advised Park that its
claims could only be enforced against the general contractor
in an action brought by Park under the terms of its contract
with the general contractor.

In its report dated September 14, 1990, FRA outlined the
results of its investigation of Park's complaint without
directly discussing each of Park's individual complaints. FRA
concluded that the allegations by Park concerning economic
coercion, predatory business practices, and slow payment
represented a series of contractual disputes between Park and
the general contractor. Specifically, FRA's report stated:

"No compelling evidence has been presented to demonstrate that
the complaint by Park represents anything other than a series
of contract disputes between Park and the prime contractor.
Park's complaint alleged economic duress by the prime
contractor, but did not make a case for discrimination on any
of the bases contained in the regulation. The investigation
did not establish any evidence of conduct by the prime
contractor against Park or any of the other minority
subcontractors based on any discriminatory grounds prohibited
by the regulations."

Further, FRA's report concluded that the conciliation and
enforcement procedures of minority business regulations were
not appropriate and recommended that the parties engage in
informal sessions to resolve their differences short of formal
disputes resolution.

Third Complaint

On September 24, 1990, Park lodged what it termed "the
strongest possible protest" with the Secretary of
Transportation concerning the quality and thoroughness of the
investigation that produced the September 14, 1990, report.
Park, while stating that it had supplied FRA with irrefutable
evidence supporting its complaint, alleged that FRA, instead
of conducting an "intense, professional investigation and
report proceeded with a series of half-hearted interviews and
a compilation of hearsay with little or no substantiation of
facts or testimony." Further, Park noted that the
investigating official interviewed Park employees without the
use of a tape recorder or stenographer. Yet, the question and
answer section of the investigation report quoted each
individual's personal reply. This resulted in allegations by
Park employees that they were misquoted and/or their actual
testimony was misrepresented.

In a letter dated October 26, 1990, the Chief of Staff, Office
of the Secretary of Transportation, informed Park that, after
careful review of the allegations, no basis for intervention
by the Secretary could be found because the complaint had been
appropriately handled at all levels of DOT.

Inspector General Responses

On several occasions, Park requested audits of various issues
by the DOT IG. For example, the various issues raised included
audits of (1) the implementation of the minority business
program by FRA, (2) Park's claims of delays in settlement of
its claims by USRC, (3) the apparent relationship between USRC
and FRA that presented an appearance of a conflict with FRA's
duty to oversee the minority business program, and (4) FRA's
inability to conduct a quality and impartial investigation
into Park's minority business complaints.

The IG responded to Park's complaints after considering the
documentation supporting the allegations as well as additional
information provided by Park during hotline complaints. In a
letter dated June 1992, the IG advised Park that its previous
review of FRA's minority business participation program, in
response to Park's May 15, 1990, letter, found FRA to be in
substantial compliance with appropriate laws and regulations
relating to minority business participation in DOT programs.
Further, in correspondence dated September 7, 1993, the IG
noted that "your complaints have received an inordinate amount
of attention over the last four years and have been handled
appropriately at all levels within the Department." In the
same correspondence, after listing all of the DOT offices
involved in review of Park's complaints, the IG wrote " . . .
and this office have all reviewed your complaints and
allegations and advised that they are without merit."

Agency Comments and Our Evaluation

On October 27, 1999, we provided a draft of this letter to the
Secretary of Transportation; the Administrator, Federal
Railroad Administration; and the President, Park Woodworking,
Inc.

On November 5, 1999, the Administrator, Federal Railroad
Administration, provided oral comments for DOT and FRA. The
Administrator concurred with our report.

On December 9, 1999, the President, Park Woodworking, Inc.,
provided written comments in which he expressed concern
because our investigation did not include (1) his allegations
of misconduct and improper actions by certain federal
officials in an effort to delay settlement of his claim for
work performed on the Station, (2) his allegation that his
signature on the settlement agreement was coerced, and (3) his
allegation that federal officials did not comply with agency
minority business regulations.

Our letter discusses the specific issues that we agreed with
you to address. The matters raised in Park's comments
involving the alleged role of federal officials in an effort
to delay settlement of Park's claims and their alleged
noncompliance with agency minority business regulations were
not among the specific issues we agreed to address. Regarding
the circumstances in which Park's president executed the
settlement agreement, we note again that the text of the
agreement states that it was executed voluntarily, with advice
of counsel, and that Park agreed to release the parties to the
dispute from any current or future liability. Although the
president of Park claims that his signature was coerced in
that he either had to sign the agreement or face bankruptcy,
his comments do not dispute that he was represented by
counsel, that he executed the agreement, and that he
subsequently accepted the payment specified therein. Under
these circumstances, there is no basis for us to question the
validity of the settlement agreement. Because Park's written
comments focused on issues outside the scope of our review, we
have not included them as part of this report.

We are aware of Park's position regarding the negative
financial impact on its operations resulting from alleged
improper actions of certain federal officials and mistreatment
of minority contractors on the Station project, and appreciate
its discontent. However, on the basis of our discussions with
Park and federal officials and a review of documents obtained
from them during the course of our work, we do not believe
that it would be possible for us, or anyone else, to
reconstruct events that occurred in the late 1980s and early
1990s with sufficient confidence to evaluate the veracity of
the allegations raised by Park. Further, as noted above, the
settlement agreement signed by Park compensated Park for its
claim and released the parties from any current or future
liability.

We are sending copies of this letter to Senator Charles E.
Robb; Representative Eva Clayton; the Honorable Rodney E.
Slater, Secretary of the Department of Transportation; Ms.
Jolene M. Molitoris, FRA Administrator; Park Woodworking, Inc;
and others upon request.

If you have any questions, please call me or Ronald King on
(202) 512-8387. The key contributor to this assignment was
Thomas Johnson.

Sincerely yours,

Bernard L. Ungar
Director, Government Business
 Operations Issues
 
Enclosures - 2

_______________________________
1 Public Law 97-125, 95 Stat.1667 (1981) (40 U.S.C.  801
note, 802, 811 to 819; 45  582 note).
2 S.Rep. No. 97-269, page 13.
3 Identical language is included in the settlement agreement
releasing the general contractor by Park.

                                                 Enclosure 1
Restoration Payment Requests and Payments Received
Page 13               GAO/GGD-00-13R D.C.Union Station Project

  Number      Date     Amount      Date       Amount Date paid
                      requested  approved       paid
    1       2/25/87  $13,500.00  3/13/87  $10,366.06  3/27/87
    2       3/25/87   27,000.00  4/10/87        0.00      
    3       4/25/87   15,300.00  5/10/87   11,253.92   6/2/87
    4       7/24/87   32,453.55  8/17/87    8,961.08  8/31/87
    5       8/27/87   62,354.34  9/21/87   62,354.34  10/5/87
    6       9/24/87   42,831.90  10/20/87  12,898.66  11/3/87
    7       10/23/87   3,512.16  11/13/87   3,512.16  11/30/87
    8       11/25/87  51,944.04  12/18/87  13,370.30   1/4/88
    9       12/24/87  40,388.94  1/22/88   23,087.94   2/5/88
    10      1/25/88   22,423.54   reject                  
    10      1/25/88    5,772.60                           
                                           24,867.00  3/10/88
    11      2/25/88   82,482.39  3/15/88   32,086.89  3/21/88
    12      3/24/88   38,947.36  4/18/88   17,922.15   5/6/88
    13      4/22/88   47,871.57   6/9/88   30,154.05  6/13/88
                                            9,000.00  6/17/88
    14      5/24/88   28,328.40  6/22/88   20,066.40   7/7/88
    15      6/24/88   11,605.50  7/19/88    3,325.50   8/4/88
    16      7/26/88   41,441.40  8/17/88   26,727.30  8/19/88
    17      8/23/88   13,077.00  11/3/88                  
            9/30/88   19,623.60     No                    
                                 Decision
                     311,573.36   Direct   18,000.00  10/11/88
                                  Labor
                                Liquidity  28,000.00  10/28/88
                                Agreement
            10/28/88  11,126.57   Direct   11,126.57  10/28/88
                                  Labor
            11/4/88    5,858.39   Direct    5,858.39  11/4/88
                                  Labor
            11/9/88   10,073.54   Direct    6,755.14  11/10/88
                                  Labor
            11/18/88  18,865.93   Direct   18,865.93  11/18/88
                                  Labor
            11/29/88   6,415.62   Direct    6,415.62  11/30/88
                                  Labor
  Total              $958,356.0           $404,975.4      
                              8                    0
Source: Park Woodworking, Inc.

                                                 Enclosure 2
Commercial Space Work Payment Requests and Payments Received
Page 13               GAO/GGD-00-13R D.C.Union Station Project
 Number    Date    Amount     Date   Amount   Amount    Date
                  requeste approved approved   paid     paid
                      d
   1              $9,090.0                   $9,090.0  4/13/88
                         0                          0
   2      3/24/88 16,030.8  4/20/88 12,394.8 12,394.8  4/29/88
                         0                 0        0
   3      4/22/88 36,110.8  5/4/88  34,552.8 34,552.8  5/27/88
                         8                 0        0
                                             5,591.00  6/13/88
   4      5/24/88 8,474.76  6/17/88 8,474.76 8,474.76  6/28/88
   5      6/24/88 25,200.0  7/20/88 25,200.0 25,200.0  7/29/88
                         0                 0        0
   6      7/22/88 54,281.7  8/15/88 48,688.7 48,688.7  8/25/88
                         9                 4        4
   7      8/23/88 65,023.9  9/21/88 51,824.7 7,181.60  8/30/88
                         2                 0
                  6,267.88            Direct 24,490.2  9/7/88
                                       Labor        4
                                      Direct 21,394.0  9/9/88
                                       Labor        0
                                      Direct 6,720.84  9/15/88
                                       Labor
                                      Direct 18,505.0  9/19/88
                                       Labor        0
                                      Direct 23,046.2  9/23/88
                                       Labor        2
                                                39.62  9/23/88
                                             1,181.00  9/23/88
   8      9/25/88 40,527.0 10/28/88 35,904.0              
                         0                 0
                  261,007.            Direct 23,262.2  9/29/88
                        03             Labor        0
                                      Direct 8,259.35  9/29/88
                                       Labor
                                      Direct 7,944.87  9/29/88
                                       Labor
                                      Direct 10,434.2  9/29/88
                                       Labor        8
                                      Direct 4,428.87  12/2/88
                                       Labor
                                      Direct 7,114.81  12/8/88
                                       Labor
                                      Direct 7,581.99 12/16/88
                                       Labor
                                      Direct 4,961.26 12/27/88
                                       Labor
                                      Direct 3,830.00  1/4/89
                                       Labor
                                      Direct 1,571.44  1/31/89
                                       Labor
                                      Direct 3,000.00  2/22/89
                                       Labor
                                      Direct 5,003.69  3/14/89
                                       Labor
                                      Direct 2,882.55  4/10/89
                                       Labor
                                      Direct 5,734.47  4/30/89
                                       Labor
                                    Settleme 26,606.0  7/16/89
                                          nt        0
                                     Payment
                  $522,014                   $369,166     
                       .06                        .40
Source: Park Woodworking, Inc.

*** End of Document ***