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OIG Reports

Advisory Memorandum 7-32

Date Issued: 
Friday, September 28, 2007
Report Number: 
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.

File Attachments: 
Attachments Size
[c] Audit Report 7-32 Advisory Memorandum 9 198Kb