Objectives, Scope, and Methodology

Concerned about the adequacy of the Postal Service’s procurement program, the Chairman of the former House Post Office and Civil Service Committee asked us to determine (1) if previously reported problems with several Postal Service purchases were due to any underlying causes that should be addressed through a legislative solution, and if not, (2) whether additional procedural safeguards could be employed by the Service to minimize future occurrences of such problems. Insufficient Attention to Some Practices Contributed to Risk of Contractual Problems

The problems encountered in the seven purchases we reviewed had various causes, but certain practices recurred. The study also found that contracting officers were not sufficiently independent because many of them reported directly to those officials who required the contracted products or services. The study recommended that the Postal Service establish a single purchasing executive, reporting to the Postmaster General, with management authority over the three separate purchasing groups. According to the Office of Government Ethics, the Postal Service’s control of its ethics environment has been of concern. Recognizing the need for additional review and other processes to reduce errors, the purchasing office plans to adopt additional higher levels of review, including requirements for contracting officers to document the policy and business rationales for the particular purchasing decisions. The consolidation of the three independent purchasing units under a single responsible purchasing executive should help ensure more consistent management of major purchases, as should the other plans to improve the purchasing process and the training and ethics awareness of purchasing personnel.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed whether changes are needed in the Postal Service's purchasing program, focusing on whether: (1) certain problem purchases were due to some underlying causes that should be addressed through legislation; and (2) the Service should implement additional procedural safeguards to minimize future occurrences of such problems.

What GAO Found

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.