Memorandum: Allegations of Contract Mismanagement in the Trust Territory Administration
Hughes, Royston C. (1972-07-21). Memorandum: Allegations of Contract Mismanagement in the Trust Territory Administration. Department of the Interior.
- Has attachment: File:QZS6TXB6.pdf
Abstract: Administratively Confidential Memo for Deputy Assistant to the President from the Assistant to the Secretary (and Director of Congressional Liaison) of the Department of the Interior.
Lawrence D Morderosian was employed as a GS-13 Contract Specialist by the Administration of the Trust Territory of the Pacific Islands (TTPI) from April 15, 1970, to February 25, 1972, when his employment was terminated by a reduction in force action which is presently under appeal with the Civil Service Commission.
In the course of his employment, Morderosian made a series of allegations regarding contract irregularities and personal misconduct on the part of TTPI employees. These allegations centered largely around two contracts awarded to the AMELCO Engineering Company (AMELCO), Honolulu, Hawaii for construction of a major water and sewer system for the island of Saipan. These contracts totaled $2,946,000.
Specifically, Morderosian charged: Contract mismanagement including approval by the TTPI of a large number of questionable "change-orders" which substantially increased the cost of the contracts to the U. S. Government; Violations of Federal Procurement Regulations. 3. Personal misconduct by TTPI employees. As a result of these allegations, the Department of the Interior on August 26, 1971, launched a detailed investigation conducted by its Office of Survey and Review. This investigation was completed on March 27, 1972. A copy of this report is available for your review. The key conclusion of the report is as follows:
"In summation, this investigation tended to confirm charges of confusion, irregularity, and failure to adhere strictly to Federal Procurement Regulations in Trust Territory construction contracts. Public Works officials defended the results they have obtained and attributed mistakes and failures to overwork, understaffing, and inadequately trained personnel. Other witnesses suggested that factors in the situation are the discharge of the former Director of Public Works, Colonel T. M. Nosek in September 1970, for allegedly being unable to get along with contractors; the delay in replacing him, during which time Roy Lo Plhak, present chief of Design and Engineering was Acting Director, and the fact Adrian K_yff, Chief of Construction, and a key man in dealing with AMELCO_ had two heart attacks during the construction period and allegedly became unwilling to oppose the contractor. Apart from inferences which might be drawn from AMELCO's alleged poor contract performance, questionable use of facilities and equipment, inflated or unsubstantiated monetary claims, and failure to meet contract obligations for public safety and convenience; investigation developed no proof of exercise of undue or improper influence by AMELCO manager Joseph Bollinger, or any other contractor representative; and no evidence was developed showing acceptance of bribes or gratuities by Trust Territory officials and their families, or graft and corruption of any other kind in the Trust Territory Administration."
Morderosian has made known his allegations to a large number of people, including apparently Jack Anderson, members of Congress and other public figures. The House Appropriations Committee conducted a separate investigation of his charges in January - February 1972. While this report has not been made available in full to the Department of the Interior, Congress- woman Julia Hansen read excerpts to two senior Interior officials which confirmed, in essence, irregularities in contract administration in the TTPI, but failed to develop any evidence of malfeasance or misconduct.
As a result of the Interior investigations, the following steps have been taken to i. 2. correct the situation...
