The Postal Service Should Increase Competition and Reduce Costs When Buying Vehicle Batteries

GGD-82-14: Published: Nov 6, 1981. Publicly Released: Nov 6, 1981.

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GAO reported on the restrictive conditions and specifications in Postal Service solicitations. Specifically, GAO addressed the Service's formally advertised solicitation for six types of vehicle batteries. This solicitation could have produced a single national supplier for each type of battery, resulting in a maximum of six awards. GAO met with Service officials to discuss several conditions and product specifications contained in the solicitation. Later, the Service canceled the solicitation because it was impossible to determine from the face of the bids if the product offered was the product specified.

A GAO analysis of the original solicitation indicated that the Service needed to revise the contract conditions and product specifications to: (1) allow separate awards for supplying all battery types in each geographical zone or alternative geographical areas such as the Service's five regions; (2) limit the awards to a single year or use a periodic price adjustment clause to reduce the cost uncertainty caused by fluctuating lead prices; and (3) allow bids for batteries which use either the Society of Automotive Engineers or Battery Council International size descriptions. GAO stated that the Postal Service has corrected some but not all of the problems found in the original solicitation. As a result, GAO believes that a new solicitation issued in September 1981 still restricts competition and will result in increased costs to the Government.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Postal Service should allow separate awards for all battery types in each of the nine geographical zones, or alternatively in each of the Service's five regions. This will increase the number of local bidders, enhance competition, and reduce transportation costs.

    Agency Affected: United States Postal Service

 

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