The Postal Service did not award a contract with Diebold to repair and change locks in the Western Area in accordance with Postal Service policies and procedures, the USPS inspector general has said in calling for additional training for contracting officials.
It said officials did not develop a purchase plan or conduct a price analysis before awarding the contract, awarded to Diebold in order to reallocate USPS maintenance mechanics from the field to mail processing facilities. (An arbitrator would later decide in favor of the American Postal Workers Union in a grievance and ordered USPS to terminate the contract, under which USPS paid Diebold $18,399,448 between January 2012 and November 2013.)
According to the IG, contracting officials did not assess price reasonableness or obtain higher-level review and approval as required when awarding the contract. The Postal Service also did not conduct an analysis to establish that the contract provided the best value, although this does not necessarily indicate the Postal Service incurred losses, the IG said.
Further, it said officials inadequately analyzed Postal Service internal lock repair and maintenance costs and overestimated the annual cost savings by $6,839,456 per year and outsourced the work to Diebold based on this inflated cost savings assumption.
The IG called on management to train contracting officials on Postal Service policies and procedures for developing purchase plans and conducting price analysis, as well as to develop a process to capture and analyze applicable data to support internal cost estimates when considering outsourcing in the future.
