Summary: Pursuant to a congressional request, GAO reviewed the Resolution Trust Corporation's (RTC) contracting procedures, focusing on whether RTC uses an approach that allows it to select between contractors and RTC staff for the most advantageous approach to handle asset management and disposition.
GAO found that: (1) RTC does not justify decisions to hire private contractors based on comparison of in-house and contractor costs since the applicable law does not require it to prepare justifications to support its contracting procedures; (2) although the RTC policy to use only private-sector asset management and disposition contractors for real estate and problem loan assets may not be the most cost-effective approach, most RTC staff believe that a change in its contracting policy would divert the staff's attention from its primary goal of contracting for such services; (3) some RTC staff said that a more flexible approach for contracting decisions could be more effective than the current RTC policy; and (4) some RTC staff believe that in some situations, RTC staff could manage and dispose of assets more effectively than a contractor, particularly where RTC developed expertise on a complex asset or package asset, or expected to sell an asset through a RTC-sponsored bulk sale, auction, or other expedited selling technique.
