Our objective was to determine whether the Postal Service provided advance approval for a supplier to charge overtime hours as required.
The Postal Service established its Enterprise Technology Services indefinite delivery indefinite quantity contract to increase staff to support Information Technology (IT) operations nationwide. The contract defines overtime work as hours in excess of a 40-hour work week. The supplier’s contract employees record their workhours in the Program Cost Tracking System (PCTS), a timekeeping application contract employees use to enter hours for tasks performed. IT program managers and contracting officer representatives (COR) review, validate, and approve timecards for invoice payments to the supplier in PCTS.
The Enterprise Technology Services statement of work requires the Postal Service program manager who is funding the specific work to approve overtime hours prior to the supplier’s contract employees working overtime. In fiscal years 2019 and 2020, Enterprise Technology Services contract employees worked about 20,000 hours of overtime. As a result, the Postal Service spent about $2.5 million in overtime costs for the Enterprise Technology Services contract over that time.
The Postal Service did not always provide advance approval of overtime prior to contract employees working overtime hours, as required. Specifically, we determined that 120 of 198 (61 percent) timecards we reviewed reflecting overtime hours did not have documented advance approval. Additionally, the contracting officer (CO) did not maintain approval documentation in the contract award file as required.
These issues occurred because Postal Service managers did not review the overtime requirements in the statement of work, adhere to the requirement to document and maintain advance approvals, or document verbal approvals given to the supplier. In some instances, managers stated they believed approval in PCTS met the prior approval requirement, while others stated that emails with documented approvals were lost due to various IT issues. Additionally, the CO did not retain overtime approval documentation in the contract award file because the CORs did not provide a copy.
During the audit, management within the Supply Management organization partially implemented corrective actions to address the issues we identified. Specifically, they provided a copy of the overtime approval requirements to management of some CORs and requested they remind their staff and CORs to provide approval documentation to suppliers with a copy to the CO.
We questioned $750,000 annually in costs that did not comply with contract requirements for documented approval of overtime hours.
We recommend management:
- Reiterate the requirement for all program managers and CORs to review Enterprise Technology Services contract requirements, maintain approval documentation of overtime hours, and provide a copy of the approval documentation to the CO.
- Reiterate to the CO the requirement to store overtime approval documentation in the contract award file.