April 30 (Bloomberg) -- Lurita Doan resigned as head of the General Services Administration following criticism from Democrats about her political activity and handling of contracts.

A House committee has investigated whether Doan used her office to support Republican political candidates and the awarding of a contract to a company that had been accused of fraud in earlier contracts. In a letter to GSA staff, Doan said she had been asked to resign without saying who asked her to step down.

GSA spokeswoman Lindsey Willis referred calls to the White House. White House spokeswoman Emily Lawrimore said in a statement that President George W. Bush ``is grateful for her service.'' Doan's resignation is effective today.

GSA, the government's acquisitions and property management agency, awards approximately $69 billion in contracts each year.

Doan has been investigated for allegedly asking GSA officials during a briefing how they could ``help our candidates,'' referring to Republicans, win the next election.

The Hatch Act prohibits partisan activity on government property. Six GSA political appointees who appeared before the House Oversight and Government Reform Committee voluntarily testified that she made the statement about helping Republicans. Doan has denied wrongdoing.

The Breach

During the investigation, Doan told investigators that the employees who testified she committed the breach had ``poor to totally inferior'' performance records and were unlikely to be promoted ``until extensive rehabilitation of their performance occurs,'' Committee Chairman Henry Waxman said last year.

Senator Charles Grassley of Iowa, the top Republican on the Senate Finance Committee, last year criticized her awarding of a contract to Santa Clara, California-based Sun Microsystems Inc. after what he described as warnings from GSA officials that the company was under investigation for allegedly committing fraud in earlier government contracts.

The new contract also was ``negotiated on terms that are extremely unfavorable to the government,'' Grassley said. Doan said she wasn't told by the inspector general or the Justice Department of the investigation into Sun Microsystems. A Sun spokeswoman at the time denied the company committed any fraud and said the GSA contract wasn't unfavorable to the government.

To contact the reporter on this story: Christopher Stern in Washington at Cstern3@bloomberg.net.

Last Updated: April 30, 2008 12:58 EDT