Postal Service

Congress has raised concerns that five purchases by the Postal Service did not reflect favorably on the Service's procurement policy or the wisdom of exempting the Service from many of the purchasing rules that apply to other federal agencies. The purchasing problems covered by this report focus on seven cases, ranging from ethics violations in an automation contract to the purchase of a site in Queens, New York, that is unusable because of toxic contamination. Given the circumstances of the seven purchases, GAO does not believe that the problems were due to causes that should be addressed through legislation. GAO attributes the problems to poor judgement and decisions to circumvent existing internal controls to meet perceived operational exigencies. Nevertheless, the Postal Service can improve its purchasing organization and methods to help safeguard against such future occurrences, and the Service has taken steps to do so.

GAO found that: (1) the problems encountered during the seven purchases reviewed were due to Postal officials' poor judgment, circumventions of existing internal controls, and failure to resolve conflicts of interest; (2) many contracting officers could not exercise independent judgment, since they reported directly to those officials who required the products or services; (3) the Service has taken action to increase oversight and accountability over its purchasing process and to safeguard against such future occurrences; (4) in response to recommendations by the Office of Government Ethics, the Service has outlined actions it is taking to improve its ethics program which should help prevent the recurrence of such purchasing problems; (5) a formal ethics education and training program for contracting officers and personnel is underway; (6) the Service has established one purchasing executive with management authority over the three separate Postal purchasing groups; and (7) the Service plans to adopt a requirement for more explicit documentation of and rationale for contracting officers' business and policy actions.