OIG Recommends Outsourcing USPS Custodial and Motor Vehicle Jobs

Congressman Darrell Issa (R-CA) asks the OIG to review savings if USPS did not have to comply with McNamara-O’Hara Service Contract Act (SCA) of 1965.

The report responds to a request from Representative Darrell E. Issa. Our objective was to review Postal Service’s market research to determine if potential savings could be realized if they did not have to comply with the SCA. In addition, we identified positions for which Postal Service labor rates exceeded the SCA rates and barriers to outsourcing those positions.

Title 39 of the U.S.C. requires the Postal Service to follow the requirements of the SCA.2 The SCA requires general contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality as determined by the U.S. Department of Labor (DOL) or the rates contained in a predecessor contractor’s collective bargaining agreement. The SCA applies to every contract the U.S. or the District of Columbia enters into with the principal purpose of furnishing services to the U.S. through the use of service employees.3
Postal Service market research indicated that opportunities exist for cost savings if the agency did not have to comply with the SCA. In addition, our analysis showed that Postal Service wages for cleaning/janitorial and postal vehicle service (PVS) driver positions were higher than SCA rates. We estimate the Postal Service could save approximately $675 million annually if it outsourced cleaning/janitorial and PVS driver positions. Barriers to outsourcing the positions include labor union agreements, concerns that new unions will be formed, workforce retention issues, fluctuations in market or economic conditions, and the potential for congressional constituency concerns.

We recommended the Postal Service seek exemption from the SCA to allow flexibility to negotiate contract rates closer to market rates. We also recommended the Postal Service review the benefits of outsourcing cleaning/janitorial service positions and Postal Service vehicle driver positions and restructure those positions to achieve the most cost effective solution. Lastly, we recommended that the Postal Service ensure that appropriate financial data is collected to aid in making in-sourcing/outsourcing decisions.

Management did not agree or disagree with recommendation 1 but stated Supply Management believes that removing the Postal Service from the requirements of the Davis Bacon Act and SCA should allow for more efficient and cost effective contracting. Management also stated that recommendation 2 accurately describes what the Postal Service has already done and what it is continuing to do. Specifically, management stated the report and associated calculation of monetary impact fail to consider the impact of the Postal Service’s labor agreement with the American Postal Workers Union (APWU) that became effective May 23, 2011. They stated the new agreement provides for the establishment and use of non-career employees on a much wider scale than previously permitted and new employees will be paid at rates much lower than current career rates and, in some cases, lower than SCA rates. In addition, management stated the new APWU career employees will be paid less than career employees. Management stated the new provisions impact the report in two fundamental and significant ways:

Management needs to develop and fully implement plans to work with Congress to seek exemption from the SCA, for reviewing the benefits of outsourcing cleaning/janitorial and PVS driver positions, and to collect the financial data needed for insourcing/outsourcing decisions.

USPS OIG Recommends Outsourcing Custodial and MVS Jobs

23 thoughts on “OIG Recommends Outsourcing USPS Custodial and Motor Vehicle Jobs

  1. Calm down people, I assure you that none of this outsourcing will be done under this contract. These fools won’t do anything to screw up re election. I’m sure there is a compromise coming, but the bottom line will be csrs workers need to go soon. At our plant there’s about 20 over 40 years service, and they don’t do anything physical, except walk to break and lunch. These people come to work for about 10k more a year than they can get sitting on the couch, oh by the way one of them died last week by trying to stay 1 more year longer to get 80 %, and he was 72 yrs old!

  2. In the long run, this would not be any mioney saved from resourcing the custodial jobs out. Contract companies are expensive also. You have to pay the company, and the workers as well for the work to be done. This is not a good idea. This is a way to employ disabled veteran also. Men and women who have served this country! Why take their jobs away! OPM, come up with another idea! I do not see you trying to outsource you jobs out! Oh, but they are probably government funded, unlike the Postal Service!!

  3. OIG duplicates Postal Inspection Service, basically, including the 50 year old retirement age they get because of all the overtime they work. And carriers who work outside, especially in walking routes, probably get more overtime forced on them over their careers, but no mandatory early retirement. Plus, you can bet that when early retirement offers come in the next few years they will mostly be for management,
    Custodians are quite often military veterans, too. But, lets hire more management and OIG and PIS to keep an eye on all us low-life craft workers (in their arrogant minds),

  4. Is this also some of your OIG work?

    Senator says USPS used outdated info in Alaska PO closing decision

    WASHINGTON, D.C. – Senator Lisa Murkowski questioned the United States Postal Service’s decision-making process behind the proposed closure of the Eielson Air Force Base, Fort Wainwright and Elmendorf Air Force Base post offices. In a letter to Postmaster General Patrick Donahoe, she pointed out that not only is the USPS using 17-year old population data to make the determination, but also that both Fairbanks locations made money last year, calling the entire process’ accuracy into question.

    Senator Murkowski wrote, “I understand that the initial decision to evaluate these post offices… was based on data for revenue and volume that was available at the time. I do not understand, however, why either Eielson or Fort Wainwright are still being considered for closure given the current revenue and profit figures.” In August, data became available that showed the Fort Wainwright revenues increased by $160,334. Despite a 6.6% decrease in revenues, Eielson Air Force Base’s post office still made the USPS $54,536. Discrepancies noted for the Fairbanks base caused Senator Murkowski to question whether discrepancies exist in the Elmendorf AFB data as well.

    As for the outdated information being used in terms of the number of service members, families, and others who rely on these post offices, Senator Murkowski also wrote “Basing the important decision of whether or not to close a post office on data from the Clinton Administration is unthinkable, and does not account for the nearly doubling of active duty soldiers in Alaska since 2003.”

  5. outsource congress these guys get a ful years pay for working 4 months out of the year and it was a study done just a few months ago that contracting out cost more wax on wax off, if you dont like the results just have another one done until you get the results desired right mr issa you can continue to pay for your desired results but the facts dont change mr issa or is it assi sir.

  6. Whom will the Democrats run against Issa in his northern San Diego County district in 2012? Someone who might take advantage of an opportunity to beat an incumbent congressman? All districts in all states big enough to have congressional districts are being redrawn this year after reapportionment by state legislatures, something that happens every decade after the census. Issa’s district may have been extensively redrawn (even gerrymandered) by the Democratic Senate and Assembly in Sacramento. Between redistricting and the issue of Issa’s war against postal workers, it could be a different ball game this time around in November 2012 in that particular congressional district.

  7. HHHMMM can tell Issa has no clue about the Post Office. He is suppose to be a Republican who usually supports vets and disabled vets in which most of the custodian jobs are held for vets or vets already have the job as myself. So now he wants to add to the more unemployed veterans…..Issa needs to be voted out but people in California will never do that even though they have many military bases. Someone needs to inform Issa that this will leave many veterans without jobs and be forced to do jobs that some of them cann’t do due to a disablity they received from the service which means they will get let go because they cann’t do the duties of the new jobs they will be given. Where is our Union explaining this to him and other politicians? Ohhh forgot too busy lobbying in DC to pad their paychecks and save their jobs first.

  8. I think issa’s mom had a fling with the mailman and he still carries a grudge! Wonder if there is a resemblence between issa and his childhood letter carrier!! His dad must’ve been a tiny piece of work to!


  10. I am waiting for the bonus amounts paid to the top brass, normally $4 miilion dollars, just 5 people=$4 million dollars. I know we have a financial crisis but hey, it’s management’s money and they will reward themselves.
    It is interesting the OIG (Office Incompetent Goofs) will never investigate management structure , or bonus’s or no bid contract’s with former postal executives. Remember, OIG answers to management, akin to a bank being robbed and asking Willie Sutton who did it?

  11. Aw! that hit the spot. Who can we Audit today guys?

    Audit Audit who were going Audit?

    The border patrol! Way to many – pay cuts!

  12. Damm it! its just business.

    Someone get me a Caffe Latte NOW! INTERNS!

  13. when cat and mouse is in disagreement (employees and management) … some one inbetween could savour the pie ( outsoursed private companies and politicians, (Mr.Issa bill)

  14. Post office paid approx. 800 million for law suits this year..preventing that could save 600 million( thousands of jobs)…

    OIG report should mention the reason for outsoursing..if it is $ how much could present craft modify that .. or inefficiency.. should negotiate with union’s . there is no negotiaitons… at all… unions dont talk with every one… there is a communication breakdown.. who regulates this ?! no one wants finger pointing ..could lead to problems…

    but if they out source all they have to deal with is talking to CEO’s who are like them , with whom they can identify themselves! …a perk in itself… gratifying ..

    I think this should change.. unions, members, ceo’s should negotiate, communicate… otherwise … no otherwise..
    during difficulty employees and management should take responsibility and erase loss. rather we see people who want to get rid of one another..

  15. I agree also! Time to outsource the OIG,

    This Audit report dated November 2, 2011

    States on page 13 this draft report is out dated and the potential savings of $675 million is grossly overstated.

    So what are your OIG yearly salaries and how long did it take for you guys/gays to put this piece of, (IF USPS did not have to comply with McNamara-O’Hara Service Contract Act (SCA) of 1965). out dated material together for out dated Issa.

    May i recommend try clicking your heels together three times for accurately review savings recommendations starting with your own paper dolls making office.

  16. ISSA is dertermined to dismantle and ruin the USPS.
    It’s not a money thing with him, its POWER. He is pissed because he missed the audition with the Deleverance flick a few years ago, no weasels will apply, we need real men to star in this show. Keep trying Issa, maybe next time.

  17. Barriers to outsourcing the positions include labor union agreements, concerns that new unions will be formed, workforce retention issues, fluctuations in market or economic conditions, and the potential for congressional constituency concerns.

    Not to mention alot of veterans hold these jobs. So do away with that for them.

  18. I agree! Time to outsource the OIG and for that matter outsource the whole of washington. Then we could tell the clown issa(small letters because he is a small man licking the boots of his big money masters) you are fired–clean your desk out now. I will never understand why these people have to STEAL money from hard working middle class workers.

  19. OIG is a Latino club, asian and whatever , maybe if they were citizens they would see the light, delayed mail all over the country, abusive, hostile work environments, ready to explode, and the OIG wants to outsource janitors, try the corruption in the WNYD , includes the OIG and Inspection Service turning their heads from managements criminal acts, taking a piece of junk mail or disposing of it is a crime of the craft, but managers stealing, falsifying statistics, manipulating TACS , using postal credit and cash for drinking, dinners, lunches etc., and the PMG acting in a self destructive manner, but it is the custodians that are the evil, no it is the OIG.

  20. I recommend we outsource the OIG. Get some minimum-wagers who don’t speak English. Any foreign country will do. How much would that save?

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