Postal Service Procedures for Acquiring and Altering Leased Space Need Revision

PLRD-82-79: Published: Jun 16, 1982. Publicly Released: Jun 16, 1982.

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GAO made a review of the problems the Postal Service has experienced in acquiring and altering leased space. The Postal Service leases about 89 million square feet of space at an annual rental of about $234.6 million. During fiscal year 1981 approximately $27 million was spent on alterations of leased space.

GAO found that the Postal Service: (1) paid rent over extended periods for space not ready for occupancy in 10 major leased facilities; (2) frequently did not advertise its space requirements and obtained only limited competition in acquiring leased space; and (3) frequently did not prepare proper independent detailed cost estimates when it contracted with lessors for alterations on a sole-source basis.

Recommendations 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 Postmaster General should issue instructions requiring the Postal Service to avoid paying rent for space before it is ready for occupancy. Leasing as is should only be allowed in unusual situations and should be supported by a written determination that suitable space was not otherwise available. Accompanying the determination should be a fully documented rationale which considers the economics of the case and other pertinent factors.

    Agency Affected: United States Postal Service

  2. 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 Postmaster General should issue instructions that, where it may be necessary to lease space as is, subsequent administration of the lease should ensure that alterations are completed promptly.

    Agency Affected: United States Postal Service

  3. 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 Postmaster General should monitor the leasing program to ensure that space requirements are advertised and maximum competition is obtained in acquiring leased space.

    Agency Affected: United States Postal Service

  4. 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 Postmaster General should revise the Postal Service Realty Acquisition and Management Handbook and the Postal Service Contracting Manual to require independent detailed cost estimates based on final plans when the Postal Service contracts on a sole-source basis with lessors for alterations work.

    Agency Affected: United States Postal Service

 

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