OIG: USPS Noncompliant, Insufficiently Supported Contracts Totaled $218,940,344

Excerpts from a report issued by the USPS Office of Inspector General:

We also found that 24 of the 68 (or 35 percent) of the noncompetitive contracts we reviewed were not sufficiently supported per Postal Service policy. Policies contain
minimum requirements for noncompetitive justifications, market research, and endorsement and approval requirements. Compliance with these requirements is
essential to ensuring fair treatment of suppliers, adequate competition, and the best value to the Postal Service.

Our review included seven contractual actions identified in a recent investigation of a former Postal Service executive who exerted undue influence on the contracting
process in their negotiation and award, and four professional services contracts with description codes similar to the contracts identified during the investigation. None of
these 11 contracts met the minimum requirements for noncompetitive justification. Finally, we also evaluated contracts awarded noncompetitively to former Postal Service
employees. By matching Postal Service vendor file information to employee file information, we identified 2,788 contracts in the Contract Authoring Management
System with current and former Postal Service employees with separation dates dating back to August 31, 1991, and 359 of those were awarded to employees with separation
dates in the last 3 years (October 1, 2006, to September 30, 2009).

We focused our testing in this audit on contracts with former executives because the Postal Service has very specific requirements regarding these awards. We found 17
contracts that were awarded noncompetitively in the last 3 years to former Postal Service executives. We analyzed three of those and found that they were awarded for
“knowledge transfer” and other duties related closely to their former Postal Service position. None of the three contracts met the minimum requirements for noncompetitive
justification. We will review more broadly the propriety of Postal Service contracts with former employees and the control environment surrounding them in fiscal year (FY)

The noncompliant, insufficiently supported contracts totaled $218,940,344. These costs are questioned because their noncompetitive justifications do not contain all the
required elements and/or approvals/endorsements prescribed by Postal Service policy. These amounts are not necessarily actual losses incurred by the Postal Service. Also, because data used to support management decisions is incomplete and/or inaccurate and the existence of unethical appearances could result in negative publicity to the Postal Service, we are also reporting non-monetary impact for data integrity10 and goodwill/branding.11 See Appendix B for our detailed analysis of these topics and Appendix C for a discussion of the monetary and non-monetary impacts reported.

see full OIG report (PDF)

3 thoughts on “OIG: USPS Noncompliant, Insufficiently Supported Contracts Totaled $218,940,344

  1. PMG.Potter should be fired! He is cutting service and jobs. There is so much waste and theft going on with higher management personal! You hear rumors and a top manager disappears but nothing is done. They never have to make good or do time like the little guys do!

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