Survey of Contract Award and Administration Procedures, United States Postal Service

Published by the Government Accountability Office on 1971-08-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             UNITED STATES GENERAL ACCOUNTING OFFICE       .
                                      WASHINGTON, D.C.   20548

ZIVIL DIVISION   t   .   '
                                 ''~""~"""~S                     .     AUG i8   1971

         Dear Mr. Hargrove:

              In fiscal year 1971, the General Accounting Office initiated
         a survey of the policies, procedures, and practices for awarding
         and administering contracts throughout the Post Office Department. tA         )OsZ
         This survey was undertaken because of the significant dollar amounts
         of the Department's annual contractual obligations--more than $1.3
         billion in fiscal year 1970--and because our prior reviews of various
         Department activities had identified questionable contracting prac-
         tices and the wide dispersal of authority and responsibility for
         awarding and administering contracts among a number of Department

              As examples of identified questionable contracting practices,
         in our review of air taxi mail service we found that the Department
         had (1) inappropriately used emergency contracts for such service,
         (2) awarded contracts without obtaining formal competitive bids and
         without adequate assurance that bidders were qualified, and (3) granted
         questionable contract rate increases. At the Postal Service Manage-
         ment Institute we found (1) extensive use of sole source procurement
         contracts without adequate justifications for such contracts and
         (2) the award of a large number of contracts and contract modifications
         before a determination was made that funds were available to pay for
         them. In reviewing the Postal Source Data System, we noted, among
         other things, that detailed system specifications had not been prepared
         and site surveys had not been made to determine equipment needs prior
         to awarding the multi-million dollar contract to acquire the system.

              The purpose of this letter is to notify you that we are suspending
         our survey because of recent actions taken in connection with the
         reorganization of the Post Office Department into the new United States
         Postal Service. These actions include the centralization, within
         one headquarters Department, of all procurement responsibility for
         the Postal Service, except for mail transportation contracts,
         and the preparation of a Postal Contracting Manual setting forth
         for the first time Service-wide contracting policies and procedures.
         On the basis of the information thus far made available to us regarding
         these actions, it appears that significant efforts are being made
         to establish an improved organizational structure and a uniform set
         of policies and procedures for the contractual activities to be under-
         taken by the new Postal Service and that, therefore, it would be
         inappropriate for us to continue our current survey.

                                 - 50TH ANNIVERSARY      1921-1971
     If, after the Postal Service has had an opportunity to gain
contractual experience'under the new organizational structure and
the new policies-and procedures, we decide to resume our survey
of contract award and administration procedures, we will notify you

     We would appreciate being furnished copies of the new Postal
Contracting Manual and of the functional statements for each organ-
izational unit within the new Administration Department as soon
as they become available.

     We appreciatethe cooperation extended our representatives during
our survey.

     A copy of this letter is being sent to the Deputy Postmaster
General's office.

                                   Sincerely yours,           ,       ,",

                                   Max A Neuwirth
                                   Associate Director

The Honorable James W. Hargrove
Senior Assistant Postmaster General for Support
United States Postal Service
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