Martha Johnson, the head of the U.S. General Services Administration, fired two of the agency’s senior leaders, placed four conference organizers on administrative leave, and submitted her own resignation as a result of a report by the GSA’s Inspector General on excessive spending at GSA’s 2010 Western Regions Conference near Las Vegas.

In addition, all future Western Regions Conferences have been canceled; travel budgets have been cut for some regions; oversight of contracting, procurement, and budgets for conferences has been restructured, and GSA employees will be required to attend annual training on conference planning and attendance.

“When it was brought to her attention that a potential misuse of funds may have occurred with regard to the Western Regions Conference, the GSA Deputy Administrator [Susan Brita] asked GSA’s Inspector General to look into the matter. The IG spent over a year conducting this inquiry. Having now received the IG’s report, GSA concurs with the IG’s recommendations and is appalled by its findings,” said Greg Mecher, acting press secretary at GSA.

“The [Office of the Inspector General] found that many of the expenditures on this conference were excessive and wasteful and that in many instances GSA followed neither federal procurement laws nor its own policy on conference spending,” according to the OIG report.

The five-day, 300-attendee training conference, held at the M Resort Spa and Casino in Henderson, Nev., cost the GSA $822,751. This included $136,504 on pre-conference expenses (including eight planning meetings, six of which were at the resort) and $686,247 on travel, catering, and vendor expenses. The OIG cited excessive spending on F&B ($146,527), noting $44 per person spent on breakfasts and $30,000, or $95 per person, on a reception, exceeding established per diems of $71. The OIG also pointed to impermissible and questionable miscellaneous expenses, such as mementos for attendees ($6,325 on commemorative coins), clothing for GSA employees, and tuxedo rentals. The conference also featured a $3,200 mind reader, according to reports.

The report also noted a number of contracting missteps:

  • disclosing a competitor’s proposal price to a favored contractor;
  • awarding a contract to a large business in violation of small-business set-asides;
  • providing free rooms to a contractor’s employees even though the contract cost included lodging; and
  • disclosing to the teambuilding contractor the agency’s maximum pay for one day, $75,000, and then paying that amount to the vendor. The teambuilding exercise was a project in which teams get together to build bicycles that would be donated to a local Boys’ and Girls’ Club.
The report also noted that GSA promised the hotel an additional $41,480 in catering charges for the hotel honoring the government’s lodging cost limit. “GSA’s original contract with the M Resort included a food and beverage minimum of $76,000, exclusive of gratuity—which was set at 22%. However, in September of 2010, GSA contacted the M Resort seeking a reduction of the nightly room rate to the new government rate of $93. Recognizing that ‘this would in essence cost the hotel $16,800,’ GSA offered the hotel ‘concessions.’ These included increasing the food and beverage minimum to $110,000.” A reception, dinner, and breakfast were added.

The conference did not meet the federal government’s goal of cost reduction and minimizing costs. In fact, according to the report, the regional administrator in charge of the conference instructed planners to make it “over the top” and bigger and better than previous conferences, despite suggestions to rein costs in from some regional employees.