Postal Procurement

The U.S. Postal Service (USPS) announced in October 1991 that it had chosen Indianapolis as the permanent hub for its Eagle Air Network, which sorts and ships express and priority mail for about 30 cities around the country. This competitive procurement generated 14 offers from airports in Illinois, Indiana, Kentucky, and Ohio. Although USPS' criteria for selecting a permanent site for its Eagle Air Hub were valid and credible, its scoring plan did not reflect the importance placed on delivery time and move-in date. In addition, the USPS selection committee did not properly consider all the award factors in the selection decision because it compared the technical scores and proposed costs of only the top two technical proposals rather than all of the seven proposals deemed competitive. GAO concludes that USPS does not really know if it awarded the contract to the best offeror. GAO does not dispute that Indianapolis was one of the top technical competitors and might have won anyway if the solicitation requirements had been followed. Because of deficiencies in the cost estimates and the selection process, however, GAO was unable to determine which competitor would have won had the evaluation been consistent with the solicitation. GAO did find that USPS disallowed the bid protest of the award without satisfactorily resolving a key issue being protested--that the scoring plan did not follow the solicitation's stated evaluation criteria. GAO summarized this report in testimony before Congress; see: Postal Service: Express Mail Hub Contract Award Was Flawed, by L. Nye Stevens, Director of Government Business Operations Issues, before the Senate Committee on Governmental Affairs. GAO/T-GGD-92-70, Sept. 24, 1992 (six pages).

GAO found that: (1) the evaluation criteria were valid and credible, and no offeror objected to them; (2) USPS selected Indianapolis based only on technical criteria, contrary to the solicitation's evaluation scheme, and the selection committee assigned improper scores for one technical award factor; (3) cost estimates USPS used to calculate net present values were inconsistent and erroneous; (4) USPS did not properly resolve the bid protest, which questioned the evaluation process, particularly the weight assigned to one award factor; (5) although USPS did not and was not required to advertise the solicitation for the hub facility, it obtained adequate competition by following a permissable alternative; and (6) it could not find any evidence that undue political influence affected the award.