U.S. Postal Service
Status of Inspector General's Recommendations on the Supplier Diversity Program Gao ID: GAO-04-57R October 6, 2003This report supplements our previous report responding to a Congressional request for current information on the representation of minorities and women at the U.S. Postal Service (USPS). USPS's program to attract and award contracts to small, minority, and women-owned businesses is referred to as supplier diversity. In recent years, the USPS Office of Inspector General (OIG) has questioned the reliability of data related to the Supplier Diversity Program, such as the dollar value of contracts awarded to small, minority, and women-owned businesses. In a September 2001 report, the OIG made nine recommendations that it said would improve the reliability of this data. Our objective was to determine the status of USPS efforts to address the recommendations contained in the OIG report. To address our objective, we obtained, reviewed, and analyzed documentation from USPS and interviewed USPS and OIG officials concerning the status of these recommendations.
USPS has addressed the nine OIG recommendations. According to USPS officials, they have taken actions to implement the OIG's nine recommendations, and they consider the recommendations closed. USPS believes that the actions taken have addressed the OIG's concerns and have strengthened the reliability of data related to its Supplier Diversity Program. The OIG agreed that its recommendations have been implemented and, as a result, it also believes that the reliability of USPS supplier diversity data has improved. Furthermore, USPS provided us with documents showing the actions that it has taken to address the OIG recommendations. However, we did not independently determine whether the actions taken by USPS improved the reliability of its supplier diversity data.
GAO-04-57R, U.S. Postal Service: Status of Inspector General's Recommendations on the Supplier Diversity Program
This is the accessible text file for GAO report number GAO-04-57R
entitled 'U.S. Postal Service: Status of Inspector General's
Recommendations on the Supplier Diversity Program' which was released
on November 05, 2003.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
October 6, 2003:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Danny K. Davis:
Ranking Minority Member:
Subcommittee on Civil Service and Agency Organization:
Committee on Government Reform:
House of Representatives:
Subject: U.S. Postal Service: Status of Inspector General's
Recommendations on the:
Supplier Diversity Program:
This report supplements our previous report to you responding to your
request for current information on the representation of minorities and
women at the U.S. Postal Service (USPS).[Footnote 1] USPS's program to
attract and award contracts to small, minority, and women-owned
businesses is referred to as supplier diversity. In recent years, the
USPS Office of Inspector General (OIG) has questioned the reliability
of data related to the Supplier Diversity Program, such as the dollar
value of contracts awarded to small, minority, and women-owned
businesses. In a September 2001 report, the OIG made nine
recommendations that it said would improve the reliability of this
data. As agreed with your offices, our objective was to determine the
status of USPS efforts to address the recommendations contained in the
OIG report. To address our objective, we obtained, reviewed, and
analyzed documentation from USPS and interviewed USPS and OIG officials
concerning the status of these recommendations.
Results in Brief:
USPS has addressed the nine OIG recommendations. According to USPS
officials, they have taken actions to implement the OIG's nine
recommendations, and they consider the recommendations closed. USPS
believes that the actions taken have addressed the OIG's concerns and
have strengthened the reliability of data related to its Supplier
Diversity Program. The OIG agreed that its recommendations have been
implemented and, as a result, it also believes that the reliability of
USPS supplier diversity data has improved. Furthermore, USPS provided
us with documents showing the actions that it has taken to address the
OIG recommendations. However, we did not independently determine
whether the actions taken by USPS improved the reliability of its
supplier diversity data.
Background:
According to USPS, its Supplier Diversity Program seeks to provide
suppliers with equal access to contracting opportunities. The program
is intended to promote supplier participation reflective of the
American supplier community and to encourage economic development. Its
premise is that effective supplier diversity ensures that no suppliers
are excluded from competition on the basis of race, color, religion,
sex, age, or national origin. USPS has identified the program as a
strategic business initiative vital to the success of the Postal
Service. As such, USPS said that it must ensure that it is taking full
advantage of the entrepreneurial spirit, capabilities, competitive
pricing, products, and innovations offered by small, minority, and
women-owned businesses.
Additionally, according to USPS, to demonstrate its commitment to
reaching small, minority, and women-owned businesses, it has developed
a 5-year supplier diversity plan. The plan focuses on maintaining a
strong supplier base that includes small, minority, and women-owned
businesses. While it does not set specific dollar goals, the plan is
intended to ensure that USPS spends an increasing amount of its
procurement dollars on goods and services from diverse businesses
through fiscal year 2003. To monitor its progress, USPS tracks--yearly-
-the number of transactions and dollars awarded to small, minority, and
women-owned businesses.
In 2001, the OIG conducted a review of the Supplier Diversity Program,
specifically addressing contracting for supplies, services, and
equipment purchases. The objectives of this review were to assess the
reliability of supplier diversity data from fiscal year 1999 and to
evaluate USPS's effectiveness in achieving supplier diversity spending
plans. The OIG found that the supplier diversity data for fiscal year
1999 were unreliable because prime-contracting dollars awarded to
small, minority, and women-owned businesses were overstated and
subcontracting data were unsupported and unverified. Due to the
unreliability of the supplier diversity data, the OIG could not
determine whether the USPS was achieving its supplier diversity
spending plans. The OIG concluded that supplier diversity data could
not be used for tracking general trends, management diagnostics,
benchmarking, and reporting. As a result, the OIG made nine
recommendations that it said would improve supplier diversity data
reliability and correct the errors identified.
USPS Has Implemented Supplier Diversity Program Recommendations:
According to USPS, it has taken actions to address the OIG report's
nine recommendations and considers the recommendations closed. In
addition, we confirmed with the OIG that it considers the
recommendations closed. Furthermore, USPS provided us with documents
showing the specific implementation actions that it has taken in
response to each OIG recommendation.
Table 1 shows each of the recommendations, the specific actions taken,
and the dates that the actions taken to implement the recommendations
were completed.
Table 1: USPS OIG Recommendations, USPS Actions, and Completion Dates:
[See PDF for image]
Source: GAO analysis of USPS data.
[End of table]
A USPS official told us that implementing these recommendations has
helped to improve overall supplier diversity data.
According to the OIG, it received and reviewed documentation of USPS
actions taken to address the nine recommendations. The OIG said that it
has closed all nine recommendations because it believes that the
actions taken by USPS were responsive. The OIG also said that it
believes that the reliability of USPS supplier diversity data has
improved as a result of implementing the recommendations.
We reviewed documents USPS provided us showing the specific
implementation actions that it has taken in response to each OIG
recommendation. The documentation shows that USPS has addressed each of
the nine recommendations. However, we did not evaluate whether the
implementation of the recommendations has improved the reliability of
the USPS supplier diversity data.
Agency Comments:
We requested comments on a draft of this report from the Postmaster
General. We received comments from USPS Vice President, Supply
Management, that USPS agrees with the report's description of the
actions USPS has taken to improve the reliability of its supplier
diversity data. Further, he stated that USPS would continue to maintain
an active supplier diversity program, which provides small businesses
an opportunity to compete for its business. Additionally, he said that
USPS is committed to improving and maintaining purchasing system data
integrity to ensure accurate reporting and analysis of results.
Finally, he said that as part of a recent restructuring, a team was
created that is solely dedicated to the furtherance of data integrity
within the Supply Management organization, and USPS continues to review
data accuracy as part of its internal review program.
Scope and Methodology:
To address our objective, we obtained, reviewed, and analyzed data and
documentation from USPS and interviewed USPS officials about the
Supplier Diversity Program and the actions the USPS has taken
concerning data reliability issues. We obtained and reviewed the USPS
Purchasing Manual describing the purpose, goals, and objectives of the
Supplier Diversity Program. In addition, we obtained and reviewed
information from the USPS Audit Tracking System regarding the status of
OIG recommendations related to the Supplier Diversity Program. To
determine whether the OIG had closed related recommendations, we
interviewed the OIG and obtained relevant documentation. We performed
our work from July 2003 through September 2003 in accordance with
generally accepted government auditing standards.
Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days from its issue date. At that
time we will send copies of this report to the Chairman, House
Committee on Government Reform, and the Chairman, Subcommittee on Civil
Service and Agency Organization; the Chairman and Ranking Minority
Member, Senate Committee on Governmental Affairs; the Postmaster
General; and to other interested parties. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at www.gao.gov.
If you have any questions about this report or the enclosed data, you
may contact me on (202) 512-4232 or at ungarb@gao.gov. Major
contributors to this assignment included Sherrill Johnson, Dwayne
Curry, and Tanisha Stewart.
Bernard L. Ungar:
Director, Physical Infrastructure Issues:
Signed by Bernard L. Ungar:
FOOTNOTES
[1] See U.S. Postal Service: Data on Career Employee Diversity, GAO-03-
745R (Washington, D.C.: Sept. 15, 2003).
