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Oct
14
2016
Report Number:
CP-AR-17-002
Report Type:
Audit Reports
Category: Cost & Pricing

Use of Independent Contractor Studies

Background

The U.S. Postal Service paid over $5.6 billion for contracts under the commercial products and services portfolio between fiscal years (FY) 2009 and 2015. This portfolio purchases a range of goods and services, including strategic consulting, logistics and fulfillment, market research and brand management, and financial and accounting services.

Within this portfolio, the Postal Service contracts for these services (external studies) when an external vendor can provide more insight, expertise, opinions, and recommendations on topics in different business areas.

We initiated this audit in response to a request from the U.S. Senate Committee on Homeland Security & Governmental Affairs. The request asked the U.S. Postal Service Office of Inspector General’s (OIG) to review how the Postal Service uses external studies, including the amount spent on these studies and any duplication on the topic being explored. Our objective was to determine if the Postal Service effectively manages external studies performed by vendors.

What the OIG Found

The Postal Service did not effectively manage external studies. There is no formal process to identify and catalog the universe of external studies. As a result, over a 6-week period, the Postal Service could not locate 30 of 97 requested studies (or 31 percent) valued at over [redacted] from FYs 2009 through

2015. This occurred because the Postal Service’s current contract catalog system does not provide an efficient method for searching for external studies. During the exit conference on September 13, 2016, and days after, the Postal Service provided 26 of the remaining 30 studies valued at [redacted]. The four remaining studies conducted were valued at about [redacted].

The Postal Service also did not have a formal, consistent process to store, share, and retain external study results. The results of external studies are managed by the requestor and sometimes stored on the functional area’s internal web pages; however, this practice is inconsistently followed and done at the discretion of the requestor. This practice also does not allow access or visibility throughout the organization without special permission. In fact, other functional areas may not even be aware that a study relevant to their area has been conducted.

The Postal Service’s retention policy for contract administration and related records is 6 years; however, the policy is silent on contracted external studies. Therefore, we could not adequately assess the Postal Service’s obligation in retaining the results of the external studies.

Although we found similar studies, we did not identify any duplicate external studies. Without formal processes to share, store, and retain information, there is a risk of duplicating contract topics and resources and of the reports losing their value.

What the OIG Recommended

We recommended management develop a method to efficiently identify and access external studies. We also recommended management store and share final study results in a centralized location accessible to an identified level of management. Finally, we recommended management establish a retention policy for contracted external studies.