Summary: 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.
GAO found that: (1) USPS normally applied generally accepted controls to the 109 large contracts it reviewed; (2) all of the 48 negotiated contracts reviewed had written approvals at a level above the contracting officer; (3) USPS used the Commerce Business Daily (CBD) to publicize 82 of the 92 contracts it was required to; (4) contracting officials determined contractors' responsibility in terms of productivity and financial strength before awarding contracts in all cases; (5) USPS performed audits of contractors' prices, when warranted, to determine price reasonableness; (6) contract files included the documents used to justify accepting the contract price for all 48 negotiated contracts; and (7) 59 of the 61 formally advertised solicitations received multiple bids. GAO also found recurring weaknesses in USPS procurement practices in 44 of the 109 contracts, including: (1) lack of data justifying its sole-source contracts; (2) unwarranted costs incurred for minority business enterprise (MBE) contracts; (3) the use of basic ordering agreements (BOA) for large orders without competition; (4) lack of documentation of fair and reasonable prices in its negotiated contract files; and (5) use of restrictive, incomplete, or outdated specifications. In addition, GAO found that: (1) Board members were generally not involved in contractor selection; and (2) USPS implemented a 3-year plan to improve procurement and supply, including a new procurement manual.
