The U.S. Postal Service manages about 30,000 contract actions (awards and modifications), and spends roughly $13 billion on contracts annually. The sheer volume of contracts and the huge dollar amounts involved make it an area to regularly monitor for fraud, waste, and abuse.

It also means USPS contract officers (COs) have a big responsibility given the essential role they play in the contracting process.

COs are responsible for solicitation, award, management, and termination of contracts. COs can extend contracts when there is a good reason for it, such as when there is a continuing need for goods or services or when maintaining the current supplier would represent the best value for the Postal Service.

Our recent audit report found COs were not consistently extending contracts according to policies and procedures.

We selected for review 62 contracts out of 313 open contracts over eight years old, for which the Postal Service paid over $520 million. We found COs:

  • Added options after contract award that continuously extend 14 contracts.
  • Inconsistently used option clauses when exercising options for 39 contracts.
  • Improperly extended 33 contracts by repeatedly using one-time renewal clauses.
  • Failed to incorporate required contract extension clauses into the contract language for 46 contracts.

Our report noted that without adequate processes over contract administration, the risk of not complying with policy increases and contracts can be improperly extended. This hinders competition, reducing the opportunity to get the best value, and may impact the continuity of goods and services. Also, contracts not closed properly may still have funds obligated that the Postal Service could use for other purchases.

We recommended management revise policy and strengthen training and communication around the proper use of option and renewal clauses.

Do you have any ideas for ways to improve the Postal Service’s contract program? Have you seen indications of misuse? Are there ways that the program can be more efficient?

Comments (4)

  • anon

    i recently renewed my CDS contract and i completly understand why they are cutting back on salaries, but after 15 years it's hard to believe that they will tell me that over 600 stops and a higher parcel volume --working six day a week is worth only 41,000.00. You will need a right hand drive vehicle, that cost about 500.00 per month----insurance about 190.00 per month----fuel to run the route around 400.00 per month and the service on your vehicle.Sometimes you have to look at the quality service that the indivual is giving over what you think they should be paid. I have been the kind of person to go out of my way for the customer.

    May 16, 2018
  • anon

    In Dallas Motor vehicle, drivers are not being utilized in an effective manner. HCR Contractors are being given more and more PVS work as extra trips. Management refuses to operate according to the Postal Operations Manual 701 to create equitable routes. PVS drivers are being used to take mail to stations that are serviced by HCR contracts. The unscheduled trips PVS drivers performs are not being documented, management has failed to perform an actual route observation to see what the truck and route is actually doing. The utter mismanagement in the Dallas PVS is costing the postal service a fortune.

    May 10, 2018
  • anon

    Custodial Cleaning Service Contracts for small postal facilities are required to specify the frequency and nature of cleaning responsibilities to be performed by the contract personnel.. Many of these contract / subcontract personnel fail to perform all the requisite tasks, and there is little or no accountability for failure to provide the services, as the contract personnel do not report to USPS Management, they report to the contract holder. Monetary compensation from USPS contracts and failing to provide all of the contract service provisions is misuse, hold providers accountable for all service responsibilities contained in the contract.

    Apr 09, 2018
  • anon

    its a waste to have contractors doing express mail, with the decline of the mail volume and the possible lost of amazon.

    Apr 08, 2018