A Whistleblower Blows Lid Off USPS Contract Fraud
As you’ll soon read in our upcoming Fall Semiannual Report to Congress, our OIG Hotline received over 90,000 complaints in the second half of this fiscal year. One of them led to a contract fraud investigation that returned a sizeable amount of money to the Postal Service.
It all started when someone blew the whistle on a contractor, alleging it had been delivering regular diesel fuel to a USPS Processing and Distribution Center instead of the contracted biodiesel fuel — and allegedly doing so with full awareness. Our special agents immediately investigated the allegation for potential contract fraud violations. They quickly collected and analyzed records revealing that a subcontractor charged the higher biodiesel rate for diesel fuel deliveries and pocketed the difference.
Once our special agents referred the case to the Department of Justice, the contractor was served with a subpoena for information. The contractor agreed to initiate a civil settlement based on the information discussed with our agents and the results of an internal audit. The Postal Service approved the settlement, which awarded the United States more than $650,000 and USPS more than $455,000.
The Postal Service maintains thousands of contracts with private vendors to support its massive operation. Cases like these highlight the vital role whistleblowers and our special agents play in maintaining the integrity of USPS’s contracts. Together they help hold vendors accountable and prevent Postal Service overpayments that, when unchecked, could cause millions of wasted funds.
If you suspect or know of contract fraud involving the Postal Service, please report it to our Hotline.