The United States Postal Service (USPS) did not do enough to ensure that some of its main IT contracts were well-managed and remained competitive, bringing spending under the contract into question, according to a report from the USPS Office of Inspector General.

The report, released December 29, takes issue with USPS management of its Accenture Enterprise Technology Services (ETS) contract. The OIG does not call the company into question, but instead focuses on USPS actions that didn’t fulfill the requirements for contract management and went against internal advice. The report highlights the lack of a cost management plan, the lack of a recompete over 11 years, and the lack of contract clauses meant to limit losses in case of problems.

“These issues occurred because the Supply Management group did not enforce the internal controls outlined in the policy to develop a cost management plan and evaluate cost variances,” the OIG states.

Confusion also confounded USPS’ efforts, with different components not communicating clearly.

“There was also uncertainty among the Supply Management group, IT organization, and contracting officer representatives about who was responsible for developing the cost management plan and evaluating cost variances,” the report states.

Amid these deficiencies, the OIG raises concerns about USPS’ decision to continue the contract for its full length of 10-year options and to raise the contract ceiling from $750 million to $1.95 billion, despite the internal competition advocate recommending a contract recompete to evaluate competitive pricing. The contract also lacked a quality assurance plan, which limited the evaluation of the IT services delivered.

“The Postal Service is at risk of becoming overly dependent on a specific vendor for its IT services,” OIG warns.

Finally, the contract did not include clauses around reimbursement for Postal Service testing or limitation of damages and warranties, which led the OIG to label all spending audited under the contract as “questioned.” USPS disagreed with the questioning of all contract costs, but agreed with the rest of the report and adopted the OIG’s recommendations to remedy the existing issues.

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MeriTalk Staff