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Contract Delivery Service Costs

Audit Reports

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Report Number:
Report Type:
Audit Reports
Category: Contracting

Contract Delivery Service Costs


The U.S. Postal Service uses contracted delivery suppliers to support mail delivery needs and ensure it meets its universal service obligation. CDS is a contractual agreement between the Postal Service and an individual or company for the delivery and collection of mail for customers. CDS is considered one of the Postal Service’s three primary carrier delivery types (city and rural carriers, and contracted delivery suppliers). CDS suppliers1 are not Postal Service employees, but independent contractors who provide delivery service on specific routes not serviced by city or rural carriers.

The objective of our audit was to assess the effectiveness of controls over CDS and its costs.

Report Recommendations

# Recommendation Status Value Management Response OIG Response USPS Proposed Resolution

Develop a process for monitoring extra trip costs and significant contract cost variances to identify contracts that may need modification to better align with operational requirements.

Closed $0 Agree

Direct the Manager, Transportation Contracts, Contract Delivery Services, to include the 120 cubic feet minimum vehicle requirement in contracts or, as appropriate, identify reasonable exceptions to the 120 cubic feet minimum vehicle requirement and document those exceptions in applicable contracts.

Closed $0 Disagree

Develop guidance and mandatory training on the proper application of contract and
special rates for extra trip payments and disseminate to current and new administrative

Closed $5,375,720 Agree

Monitor extra trip costs to identify and correct overpayments.

Closed $0 Agree

Direct the Manager, Transportation Contracts, Contract Delivery Services (CDS), to update the communication platform to (1) monitor and respond to requests from administrative officials (AO) to ensure timely, organized responses; and (2) provide AOs with timely notifications of CDS contract changes.

Closed $0 Disagree

Enhance communication channels and training that help AOs (1) address contract delivery service issues and challenges and (2) provide contract delivery service supplier performance feedback.

Closed $0 Agree