The Postal Service Should Increase Competition and Reduce Costs When Buying Vehicle Batteries

GAO reported on the restrictive conditions and specifications in Postal Service solicitations. Specifically, GAO addressed the Service's formally advertised solicitation for six types of vehicle batteries. This solicitation could have produced a single national supplier for each type of battery, resulting in a maximum of six awards. GAO met with Service officials to discuss several conditions and product specifications contained in the solicitation. Later, the Service canceled the solicitation because it was impossible to determine from the face of the bids if the product offered was the product specified.

A GAO analysis of the original solicitation indicated that the Service needed to revise the contract conditions and product specifications to: (1) allow separate awards for supplying all battery types in each geographical zone or alternative geographical areas such as the Service's five regions; (2) limit the awards to a single year or use a periodic price adjustment clause to reduce the cost uncertainty caused by fluctuating lead prices; and (3) allow bids for batteries which use either the Society of Automotive Engineers or Battery Council International size descriptions. GAO stated that the Postal Service has corrected some but not all of the problems found in the original solicitation. As a result, GAO believes that a new solicitation issued in September 1981 still restricts competition and will result in increased costs to the Government.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Arnold P. Jones Team: General Accounting Office: General Government Division Phone: (202) 512-7797