Audit Report SM-AR-14-008 – 8/14/2014

Competitively bid contracts can be critical to ensuring a large organization like the U.S. Postal Service gets the best value for its money – but there are cases when noncompetitive purchases make the most sense.  The Postal Service recently established a competition advocate (advocate) to improve its noncompetitive purchasing practices. Unlike in other federal agencies, the Postal Service’s advocate does not approve large noncompetitive purchases. Instead, the advocate independently reviews these purchases when they exceed $1 million and offers feedback on them.  From October 1, 2012, to December 31, 2013, the Postal Service had 74 noncompetitive contracts, totaling more than $416 million, that exceeded $1 million.

Our recent evaluation of the advocate could not determine the effectiveness of this position because there was no standard for measuring performance. For example, the advocate offered feedback on 35 of the 74 contractual actions, but there are no metrics to determine the impact of this advice. We recommended management establish metrics to gauge the impact of the advocate on promoting competition and offered additional suggestions to improve the advocate process.

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