Objective

Our objective was to review the Next Generation Delivery Vehicle (NGDV) contract to determine if there are opportunities to better protect the U.S. Postal Service from fraud, waste, and abuse.

In February 2021, the Postal Service awarded an indefinite-delivery/indefinite[1]quantity contract to Oshkosh Defense for the production and delivery of 50,000 to 165,000 NGDVs—right-hand drive vehicles for mail and package delivery. The first task order is for non-recurring expenses, with a period of performance from February 23, 2021, to August 4, 2023, and a value of $482 million. The recommended total award amount is a minimum of [redacted] with an estimated maximum of [redacted].

The Postal Service is not required to comply with all federal contracting requirements and instead uses the Supplying Principles & Practices (SP&P), its internal policies and procedures. Because the NGDV contract involves a large, unique acquisition, the audit team researched other federal agencies to determine common practices and requirements used in large acquisition contracts to protect against fraud, waste, and abuse.

 Since 2008, federal government contractors have been required to report fraud and significant overpayments in connection with their contracts to the federal government. From 2008 to 2021, the Contractor Disclosure Program cases accounted for over $355 million in recoveries and fines.

Findings

The Postal Service incorporated internal policies, special provisions and clauses, and special agreements into the NGDV contract to mitigate fraud, waste, and abuse based on the unique NGDV acquisition program. With that said, the Postal Service has opportunities to strengthen the NGDV contract by including language requiring contractor self-reporting of fraud and fraud hotline posters to be displayed in the supplier’s locations.

Currently, the SP&Ps do not require contracting officers to consider inclusion of certain federal contract clauses. These types of federal contracting provisions could help the Postal Service with contract oversight by requiring contractor cooperation and enhancing employee awareness and education for reporting fraudulent activities, putting equal responsibility on the supplier.

Recommendations

We recommended management:

  • Include self-reporting of fraud protection in the Next Generation Delivery Vehicle contract through a mutual agreement contract modification.
  • Provide and validate that posters advertising the U.S. Postal Service Office of Inspector General (OIG) Hotline are displayed at the Next Generation Delivery Vehicle supplier facilities through a mutual agreement contract modification.
  • Develop a contract clause to include in applicable future contracts that requires suppliers self-reporting of fraud and advertising of the U.S Postal Service OIG Hotline on suppliers premises.

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