Senators Collins and McCaskill Calls On OIG To Review USPS Contracting Policies

Cite huge annual deficit, conflict of interest concerns

WASHINGTON – Citing concern about its huge annual deficits, Senators Susan Collins, R-Me., and Claire McCaskill, D-Mo., today sent a letter to the U.S. Postal Service (USPS) Inspector General, asking for a review of the service’s procurement policies and regulations.

Senator Collins is Ranking Member of the Senate Homeland Security and Governmental Affairs Committee and Senator McCaskill is Chairman of the Subcommittee on Contracting Oversight.

Their concern stems from three contracts that USPS awarded as sole-source contracts. “Not only did these contracts, totaling more than $1.3 million, lack sufficient competition, but also they were awarded to individuals or entities that appear to have had prior business relationships with the senior official responsible for the program and oversight of the contract,” the Jan. 14, 2010 letter from the Senators said.

“In light of its dismal financial situation, USPS must employ policies and regulations to ensure the best value from its contracts. Reports of several recent contract awards have led us to question USPS’s procurement policies and regulations. We are writing to request that your office review USPS’s contracting practices, policies, and regulations.”

The letter said that the Postal Service functions as a quasi-governmental entity, which, “coupled with its current financial crisis, demands that it conduct business in a manner beyond reproach, avoiding unauthorized preferential treatment for any contractor. Conflicts of interest must be avoided, and USPS must take steps to prevent activities that present even the appearance of impropriety.”

The letter noted concern that the current policies and regulations governing USPS contracts may “not go far enough in protecting USPS’s interests. Therefore, we request that you conduct a review of USPS’s procurement policies and regulations in order to maximize competition and ensure the best value for its contracts.”

4 thoughts on “Senators Collins and McCaskill Calls On OIG To Review USPS Contracting Policies

  1. Anyone know if this letter is actually posted somewhere. I am curious which contracts she has referenced.

  2. Mr. Smith has some good ideas, but if I can go one step further, I work in a Vehicle maint. Facility. We contract out a ton of work at an exhorbitant rate. We could save at least 1 million dollars, yes that is right, 1,000,000.00! Let us do our jobs and help the P.O. save some cash. Can these two senators check into VMF’s? Call me and I will certainly put you on the right path.

  3. Sirs,
    I believe that Congress has finally found the tip of the iceberg. The contracting situation should lead to other questionable business decisions by Postal Service national management that seem, at least on the surface, to be counterproductive to the best interest.and the survival of the Post Office. Some examples of these decisions, in no parricular order are :
    1 ) Removing blue collection boxes from residential areas and either scrapping them of warehousing them. The reason cited by postal officials for removing them is labor costs. the Post Office says it wastes too much time for the carrier to empty the box. Watching a letter carrier empty a mailbox one day I thought it took about two minutes. The question is, how can bringing in revenue be deemed too costly by management ?
    2) Removing self serve postage machines from postal lobbies. The idea here was that the self serve postage machines would reduce the lines in lobbies and reduce labor costs by essentially replacing the labor cost of hiring another clerk..
    The reason cited by postal officials for removing them was that they were too costly to maintain. I heard from one of the clerks working the counter that, city wide, the machines brought in ober $600,000 in revenue and cost about $60,000 to maintain. That gave the USPS a profit of over $500,000. How would any company NOT consider that profitable ?
    3) Refusing to utilize a highly profitable new idea. The letter carrier’s union came up with the idea of going back into the package business by utilizing the letter carriers basic door to door delivery system. Because of the internet there are many peopleacross the country who have started home based business that the USPS could serve both inexpensively and effectively, which would bring in substantial revenue, and yet postal management refuses to put the program in place. One six month trial program in Arizona using a letter carrier as the coordinator was wildly successful yet dropped a few months later. Why ?
    4) Refusing to honor their own programs such as the employee suggestion programs. Every successful business depends on the people who do the jobs to come up with ideas that improve the way the job is done either by saving costs or innovations. The USPS has a program for that called the E- Ideas Program that is the paperless version of a prior hard copy program, yet they refuse to participate in it. Employees are able to put in their idea but the program is unresponsive; even when the idea is directly and obviously beneficial to the USPS. Why ?
    5) The management to employee ratio for most businesses across the country has been averaged out to be approximately 1 manager for every 25 employees. The USPS manager to employee ratio is approximately i for every 8 employees ! That seems extraordinarily top heavy for a company that seems to have constant struggles to stay solvent. Why ? I suggest that the USPS look at the recent downsizing of United Parcel Service where they were forced to layoff administration and managerial employees. Former Postmaster General Marvin Runyan said that ” anyone that DOES NOT touch the mail is overhead “. If that is the case then WHY does the USPS have such a high manager to manager to employee ratio, particularly when their financial state is so poor ?
    5) Lastly, if all the the thoughts submitted above are true, why has the USPS done nothing about them ? Must not any responsible CEO ac in both ant appropriate and timely manner to protect his company ? Is not the position commensurate with the responsibility in terms of action ?
    These are some of the impediments that the USPS has hampered itself with that bring into question what direction postal management is really taking the USPS in ? There are more questionable decisions and programs that the USPS seems to blindly support that seem to be poklitically flavored as the programs, while seemingly workable on paper fail in the field; yet they continue to be utilized and supported. Why ?
    My recomendation is that a committee be assembled to gather, from the employees, instances and information concerning, what seems to be a conscious effort from USPS management to force unneccessary and unwarranted changes to the postal system for reasons of their own. Even the appearance of discretionary behavior on the part of postal officials would have the effect of causing chaos within the system, would be contrary to the responsibility fo managing officials, and may cause irreperable harm to the nations most respected federal institution.
    I would ask that the above comments be investigated and reviewed for the future well being of the United States Postal Service.

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