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Audit Reports

Aug
17
2022
Report Number:
21-261-R22
Report Type:
Audit Reports
Category: Human Resources

Management of Suppliers’ Contractual Performance

Background

The U.S. Postal Service has essential business relationships with its suppliers to perform many functions that closely support Postal Service operations. The Postal Service aims to build and maintain these relationships based on the potential impact suppliers’ performance has on the Postal Service’s operational and financial position. From fiscal years (FY) 2019 to 2021, the Postal Service’s managed spend for goods and services was about $17 billion on contracts distributed throughout ten Supply Management Category Management Centers and four Portfolios.

 

What We Did

Our objective was to determine if the Postal Service evaluates and manages risks associated with suppliers’ performance to fulfill contractual requirements successfully. We reviewed a judgmental sample of 94 Postal Service suppliers with a managed spend of $1 million and above per contract from FYs 2019 to 2021.

 

What We Found

Supply Management uses specific policies and procedures, contract clauses, metrics, market trends, and past performance to evaluate and manage risks associated with supplier performance. However, we found areas where contracting professionals can improve application of their policies and procedures for managing contracts. Additionally, contracting officers did not always include required, accurate, or complete information in the contract files to support contract management decisions.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

Revise the Supplying Principles and Practices to require contracting professionals to confirm the supplier's eligibility for award by including specific written confirmation of award eligibility, or screenshot evidence of a webpage search from the System for Award Management and the USPS Decline to Accept or Consider Proposals list in the contract files for all purchases.

 Closed $0 Agree
2

Reinforce the Supplying Principles and Practices for contracting officers to conduct supplier performance reviews at the end of the contract life.

 Closed $0 Agree
3

Clarify and update specific lessons learned criteria in the Supplying Principles and Practices as to when to conduct and formally document lesson learned workshops that may be in the best interest of the Postal Service.

 Closed $0 Agree
4

Update its Supplying Principles and Practices to require contracting officers to obtain either Digital Signature or original signature on fully executed contract awards, purchase plans, award recommendations, and orders placed under ordering agreements, and require these documents to be filed in the Contract Authoring Management System.

 Closed $0 Agree
5

Reinforce to contracting officers the requirement to provide administrative oversight of contracting files to ensure they include all pertinent documentation, such as contract modifications - including supporting documents with justifications and higher-level reviews and approvals - and correct labeling of documents in the Contract Authoring Management System.

 Closed $0 Agree