Peggy E. (Peg) Gustafson was sworn in as the Inspector General of the U.S. Small Business Administration on October 2, 2009. Ms. Gustafson previously served as General Counsel to Senator Claire...
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Advisory Memorandum 7-32
On September 28, 2007, the OIG issued Advisory Memorandum 7-32 related to a surety’s selection of a replacement contractor to finish contracts on which the original contractor defaulted. The OIG noted that the selection of a replacement contractor did not require due diligence checks to determine the character and reputation of the replacement contractor.
The OIG recommended that the Director, Office of Surety Guarantees (OSG), require a surety to perform one or the other of the following actions before hiring a replacement contractor:(a) ensure that the prospective replacement contractor's work on a project is covered by a non-SBA guaranteed bond, or (b) exercise due diligence when selecting a replacement contractor.