Postal Procurement:

Ethics Violations Did Not Invalidate an Automation Contract

GGD-92-119: Published: Aug 13, 1992. Publicly Released: Aug 13, 1992.

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J. William Gadsby
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Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's (USPS) acquisition of an image processing subsystem, focusing on the propriety of the contract that USPS awarded.

GAO found that: (1) the vendor that USPS selected was eligible to compete for the contract; (2) USPS officials committed ethics violations on several procurement-related trips, but those violations did not invalidate the contract award; (3) USPS officials visited all competing vendors' manufacturing sites; (4) before proposals were submitted, USPS added three evaluation criteria to the solicitation, which was allowed under USPS procurement regulations; (5) the signing of the licensing agreement between the vendor and the equipment's original manufacturer after the due date for proposals did not legally affect the award of the production contract; (6) the USPS attorney who denied the protest of the contract award did so objectively and independently of the procurement process; (7) USPS published adequate notices of the solicitation for the production contract; (8) the vendor and its licensing partner have received 65 percent of USPS mail automation contracts since 1983, while other federal agencies have awarded few contracts to them; (9) USPS recordkeeping concerning the solicitation and contract award met USPS procurement regulations; and (10) USPS did not violate its procurement regulations and could have awarded the production contract to the winning vendor under federal procurement regulations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On September 2, 1992, the Postal Service sent a letter to contracting officers and procurement specialists reiterating the prohibitions against accepting anything of value from any person seeking or doing business with the Postal Service.

    Recommendation: To lessen the likelihood of further ethics violations on future USPS business trips, the Postmaster General should take action to better ensure that USPS employees comply with the provisions of USPS and governmentwide standards of conduct that prohibit accepting anything of value from vendors doing business with USPS.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: The individuals involved have been given counseling with regard to the requirements of the ethical conduct standards.

    Recommendation: To lessen the likelihood of further ethics violations on future USPS business trips, the Postmaster General should direct the USPS Designated Agency Ethics Official to take appropriate action with respect to those who committed the ethics violations.

    Agency Affected: United States Postal Service


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