Federal Manager's Daily Report

The Postal Service awarded a contract to CB Richard Ellis, Inc. to be the sole provider of its real estate management services, but allowing it to negotiate deals on behalf of the USPS and also prospective buyers and lessors, the USPS inspector general has said in a management alert.

In June 2013, management implemented a maximum contract amount and appointed contracting officer’s representatives to monitor contract performance and approve payments in response to previously voiced concerns on management of the contract, according to the alert.

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CBRE is responsible for soliciting appraisals to determine the fair market value of the properties that it then sells and leases, and given the multiple roles CBRE plays within the real estate industry (it did $190 billion in sales and transactions in 2012), USPS should take steps to lessen the potential for CBRE to engage in transactions that create conflicts of interest by disallowing dual representation, the IG said.

USPS management rejected the recommendation, pointing out that not only is dual representation legal, but it enables wider exposure to interested parties and that dual representation is permitted under CBRE’s contract with GSA is a common business practice in real estate.