The U.S. Postal Service (USPS) Supply Management function is composed of five purchasing portfolios that manage contracts for goods and services to meet operational needs. For fiscal year (FY) 2016, the total spend for these portfolios was about $13 billion. Contracting officers (COs) manage a majority of contracts across the portfolios in the Contract Authoring and Management System (CAMS), USPS’ primary contracting system.
As of June 22, 2017, there were 132 COs responsible for managing and overseeing contract administration in all five portfolios. To assist with these responsibilities, COs may appoint contract officer representatives (CORs). COs make COR appointments based on subject matter expertise and appointees must meet certain training and certification requirements. For COR appointments to be official, a COR letter of appointment (letter) has to be executed and signed by both parties.
Our objective was to determine whether COs in the Technology Infrastructure portfolio properly appointed CORs in compliance with USPS policies and procedures.
In FYs 2015 and 2016, there were 1,142 open contracts in the Technology Infrastructure portfolio, with purchasing activity valued at $1.9 billion. We selected this portfolio due to the volume, spend, and risk associated with information technology contracts. For our review, we selected a statistical sample of 109 of these contracts valued at $1.4 billion and managed by 51 CORs.
What the OIG Found
COs in the Technology Infrastructure portfolio did not always properly appoint CORs in accordance with USPS policies and procedures.
- Of the 109 contract files reviewed, 71 percent (or 77) did not have the required COR letter.
- Of the 32 COR letters on file, 69 percent (or 22) did not have required CO and COR signatures.
- Of the 51 CORs managing the 109 contracts reviewed, 31 percent (or 16) did not have evidence of required training and certification.
Additionally, we were unable to obtain a complete listing of COR appointments from COs or in CAMS. In some instances, COs disclosed they were not aware of the COR managing their respective contracts. Of the 1,142 open Technology Infrastructure contracts in CAMS:
- Sixty-five percent (or 744) did not have an assigned COR; and
- Seventeen percent (or 191) had an incorrect CO assignment.
These conditions occurred because COs are not being notified when CORs are reassigned or have resigned. Four of the six COs we interviewed indicated they were not aware that their signature was required on the COR appointment letter. In addition, COs did not validate COR training and certification requirements or adhere to the contract file transfer process. Two COs stated that updating CAMS is a low priority as outdated contract assignment information is a low risk.
If CORs are not properly appointed, there is an increased risk that unqualified personnel are managing contracts and/or that contract administration roles and responsibilities are not clearly defined. This led to about $362 million in improper authorization of invoices for FY 2016 in Technology Infrastructure contracts without required documentation (COR letters).
What the OIG Recommended
We recommended management validate current COR training and certification, ensure current COR appointments are official via COR appointment letters, and reiterate requirements for appointing CORs. We also recommended management update CAMS with current information and establish communication protocols to ensure timely notification to COs when CORs are reassigned or have resigned.