Summary

This briefing report examines the Resolution Trust Corporation's (RTC) development and administration of ethics and conflict-of-interest policies as they relate to independent contractors. GAO found that RTC has established policies and procedures to ensure that these contractors meet minimum standards for fitness and integrity. The Contractors' Conflicts Committee, along with the various RTC program ethics offices, has begun establishing operational guidelines by using a case law approach to determine fitness and integrity issues as they apply to independent contractors. A goal of RTC's fitness and integrity policies is to disseminate as widely as possible the bases for decisions. Such dissemination increases the potential for contractor understanding of RTC's operational guidelines. However, the current backlog of cases raises concerns that contractors may not be getting all the information they need in a timely manner. Also, RTC is now in the process of revising the procedures used to assess fitness and integrity issues before a contract is awarded. RTC needs to formalize these screening policies and procedures.

GAO found that: (1) the Contractors' Conflicts Committee, along with the various RTC program ethics offices, has begun to establish operational guidelines by using a case law approach to determine fitness and integrity issues as they apply to independent contractors; (2) about 67 percent of the contractors the Committee interviewed have been registered under discretionary authority; (3) procedures have been established, but not finalized, for the suspension and exclusion of contractors that do not meet minimum standards of fitness and integrity; (4) one contractor's awards were rescinded and the contractor was excluded from providing services to RTC because it failed to meet the minimum required standards; (5) RTC has not published and made available to the public all cases that have been decided, thereby creating a backlog of issued decisions; and (6) RTC is revising the procedures used to assess fitness and integrity issues before a contract is awarded, but still needs to formalize these screening policies and procedures.