Postal Service:

Issues Related to Settling a Disputed Contract for Air Transportation

GGD-94-92: Published: Mar 24, 1994. Publicly Released: Mar 24, 1994.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information on the U.S. Postal Service's (USPS) court-approved settlement of a disputed contract for air transportation services, focusing on whether the: (1) payments to the awardee were legitimate; (2) settlement served the best interest of USPS; and (3) USPS followed proper contracting procedures by settling the dispute instead of resoliciting the procurement.

GAO found that: (1) the awardee's settlement payments represented the full settlement costs that might be due it under the contract's termination provisions and did not reflect any real work completed by the awardee; (2) the awardee used the settlement payments to cover its bid preparation and start-up costs, attorneys' fees, and commitment to purchase 23 Boeing 727 aircraft; (3) the awardee agreed to release the remaining litigants from any claims because one of the litigants agreed to purchase most of the aircraft; (4) USPS reasonably determined that the settlement would be less costly and quicker than resoliciting the procurement; (5) the financial benefits expected from the settlement were overstated because start-up operations after settlement took longer than expected; (6) no significant changes occurred between the time of the original award and the settlement that would have made resolicitation preferable; (7) the decision to resolve the procurement through litigation and a court-approved settlement was reasonable and in accordance with procurement regulations, and enabled USPS to satisfy its own needs and the interests of the litigants and the court; and (8) USPS would have been required to resolicit the procurement if it had not reached a settlement with the parties.

Mar 2, 2021

Feb 3, 2021

Jan 29, 2021

Jan 19, 2021

Jan 13, 2021

Dec 16, 2020

Dec 9, 2020

Dec 3, 2020

Looking for more? Browse all our products here