The Postal Service's Sole-Source Contract With Perot Systems Corporation

Gao ID: T-GGD-88-50 August 10, 1988

GAO discussed the Postal Service's (USPS) sole-source contract award for efficiency improvements in postal telecommunications, delivery services, revenue protection, and transportation. GAO found that the contract failed to adequately protect the government's interest, since it: (1) limited USPS ability to independently implement any portion of the proposed projects without prior approval from the awardee; (2) did not specify any limit to the awardee's share of savings from the projects; (3) did not contain a cost limit provision and limited USPS authority to terminate the contract for convenience; and (4) was awarded on a sole-source basis without adequate justification. GAO also found that although there were precedents for the shared savings concept in federal contracts, the USPS contract differed significantly, since it: (1) was a noncompetitive award; and (2) provided for reimbursement of all approved costs.



The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.