Procurement Reform:

New Concepts Being Cautiously Applied at the Postal Service

GGD-91-103: Published: Aug 6, 1991. Publicly Released: Aug 6, 1991.

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Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's (USPS) new procurement rules.

GAO found that: (1) USPS purchasing practices closely resembled federal agency practices; (2) the key difference between federal and USPS procurement policies is the new USPS policy that allows the contracting officer discretion in determining the measures taken to obtain competition; (3) the contracts examined showed that use of the increased discretionary judgment resulted in competitive procurements that satisfied the department that requested goods or services; (4) each of the three USPS purchasing organizations used the increased discretion provided by the procurement manual differently, with the Procurement and Supply Department eliminating the use of sealed bids and using competitive negotiation to award its contracts, the Facilities Department restricting the bidders on less than 2 percent of its construction contracts to prequalified contractors, and the Office of Transportation not changing its contracting practices; (5) USPS has not collected data that show the extent to which procurement personnel have used the added discretion permitted by the new rules; (6) the new USPS procurement rules have had little effect on the volume of contracts awarded to small and minority firms; (7) procuring officers did not widely use the simplified procedures for large-dollar purchases due to their interpretation of the guidance; and (8) USPS protest resolution procedures offer a simplified, inexpensive, and expedient means to respond to contractor complaints about USPS procurement practices.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: In April 1991, USPS awarded a contract to study how the more flexible procurement rules have been used by the Procurement and Supply Department. This study, completed in November 1991, reports the views of key postal officials, but does not contain specific examples of benefits resulting from the more flexible procurement rules nor the extent the greater discretion has been used to make purchases.

    Recommendation: The Postmaster General should systematically develop data on the extent of use and the specific advantages and disadvantages that have resulted from using more flexible USPS procurement procedures, such as prequalification and large-dollar commercial item purchases.

    Agency Affected: United States Postal Service


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