Postal Procurement: An Assessment of Postal Purchasing Practices
GGD-88-65
Published: May 12, 1988. Publicly Released: May 12, 1988.
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Highlights
In response to a congressional request, GAO reviewed the procurement policies, processes, and practices of the U.S. Postal Service (USPS) and its Board of Governors to determine the: (1) controls USPS applied to large contracts to help deter fraud and ensure that the government was getting what if paid for; and (2) extent to which members of the Board of Governors were involved in selecting contractors.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by requiring written justification approving sole-source procurements to include information on: (1) the efforts to find competition and the circumstances that prevented a competitive award; (2) reasons why only one contractor was determined to have the capability and experience required; and (3) plans to ensure future purchases are made competitively. |
Closed – Implemented
USPS issued an instruction on May 17, 1989, that requires a thorough justification review and specific approval for all noncompetitive contract awards. The Office of Procurement initiated a process that requires a structural review of the requisitioning activity's sole-source justification, endorsement by the contracting officer, and clearance through the Director before submitted for approval.
|
| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by strengthening review procedures and criteria to ensure that MBE contracts will not result in unwarranted costs. |
Closed – Implemented
USPS is developing a MBE program to obtain a better balance between MBE contracting and good business decisions. A management instruction was issued on February 1, 1989, that will discourage the practice of subcontracting a substantial portion of MBE contracts to non-MBE firms. Past policy of allowing MBE contracts to be awarded when the price is 110 percent of postal estimate has been eliminated.
|
| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by establishing maximum order limitations for BOA, and publicizing orders over a stated limit in CBD to provide other firms the opportunity to compete. |
Closed – Implemented
USPS has established a maximum order limitation for office equipment BOA and is establishing limits for all BOA by commodity class. To ensure competition, a minimum of three qualified firms are required when BOA are used.
|
| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by emphasizing the need to include convincing evidence in the contract file that the price of negotiated contracts is fair and reasonable. |
Closed – Implemented
The new USPS Procurement Manual advocates internal focus on steps to systemize, standardize, and document negotiated contract cost and price analysis techniques. USPS is also establishing a new Contract Pricing Division that is expected to provide additional staff and expertise in cost/price analysis techniques.
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| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by reinforcing the requirement that specifications used should be accurate, complete, and current. |
Closed – Implemented
USPS assigned the new Office of Technical Support responsibility for the adequacy and quality of specification packages. USPS has also hired a consulting firm to improve the technical data packages used for large dollar recurring procurements.
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| United States Postal Service | The Postmaster General should direct the Assistant Postmaster General, Procurement and Supply, to take action to improve USPS purchasing practices for large-dollar contracts by emphasizing that use of brand name purchase descriptions restricts competition and requiring explicit justification for specification of brand names. |
Closed – Implemented
To enhance competition, the new USPS Procurement Manual calls for the contracting officer to identify at least those acceptable brands for standard, commercially available products.
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Topics
Basic agreementsContract costsFraudInternal controlsNegotiated procurementPostal servicePostal service contractsProcurement evaluationProcurement practicesProcurement