The Postal Service IG has started to investigate whether contractors are practicing labor substitution, which it says is “a scheme that harms organizations from both a cost and quality perspective” government-wide.
The practice “can occur when contractors use lower qualified employees (i.e., employees who do not have the background, experience, or education specified in contract requirements) instead of higher qualified employees and then bill organizations at the higher rates,” it said in announcing the study.
That’s especially a concern regarding IT services, it said, where the Postal Service—like other governmental entities—“must ensure it receives the quality of labor and services it pays for.”
In questions whose answers could be valuable information for other agencies as well, the IG said it wants to learn how to detect whether contractors are substituting labor and how agency management can prevent it. It also is seeking illustrative examples of the practice.
