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Audit Reports

Jun
17
2015
Report Number:
SM-AR-15-005
Report Type:
Audit Reports
Category: Contracting

Award of Agilex Technologies, Inc. Contracts

Background

U.S. Postal Service customers and employees increasingly rely on mobile devices to meet their business needs. To address this growing demand, the Postal Service awarded three contracts to Agilex Technologies, Inc. (Agilex). Agilex provides mission and technology consulting, software and solution development, and system integration.

The first contract, valued at $389,871, was noncompetitively awarded in September 2009 for program management services. The second contract, valued at $512,710 and competitively awarded in August 2012, was for mobile computing strategy development. A third contract, valued at $8 million, was noncompetitively awarded in October 2013 to address immediate and future Postal Service mobile computing needs.

When soliciting requests for proposals, contracting officers must ensure contract requirements correctly and clearly describe the Postal Service’s expectations. The requirements must be outlined in enough detail to ensure a best value decision and effective contract performance.

Our objective was to determine whether the Postal Service properly administered the Agilex contracts.

What The OIG Found

The Postal Service did not properly administer one of three Agilex contracts. Specifically, contracting officials awarded a contract to develop a mobile computing strategy without ensuring the contract requirements clearly described the Information Technology department’s expectations. This occurred because the contracting officer did not work with the Information Technology department to clearly define its needs.

Because these requirements were unclear, contracting officials incorrectly approved additional requirements without treating them as a new purchase. As a result, the Postal Service spent over $3.8 million for work that was outside the scope of the original contract requirements.

Contract awards that do not clearly define requirements pose an increased financial risk to the Postal Service. When contract requirements are vague, prospective suppliers may make assumptions in their proposals that lead to higher costs. Such awards are not in the best interest of the Postal Service and may negatively impact the brand.

What The OIG

Recommended We recommended management reiterate to contracting officers the importance of collaborating with their internal business partners prior to solicitation to obtain clearly defined requirements.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

R - 1 -- Reiterate to contracting officers that contract solicitations must correctly and clearly describe the Postal Service’s requirements and emphasize to them the importance of collaborating with Postal Service internal business partners prior to solicitation to obtain these requirements.

Closed $0 Agree