Postal Service contracting highlights in 2011, and a look ahead to 2012, will be the focus of a complimentary webinar presented by Husch Blackwell on Tuesday, February 7, 2012 at 1 p.m. EST.
Postal contractors continue to be impacted by USPS cost-cutting efforts, reductions in requirements, and a renewed emphasis on obtaining competition. These pressures, …
New mandates on how evaluation criteria must be stated in Postal Service solicitations are required by the recently revised USPS Supplying Principles and Practices (SPP) manual. The SPP revisions were issued on December 12, 2011. The full text of the new SPP is available by clicking here. In addition to these changes, the Postal Service has introduced a new “Simplified Purchasing” method. Simplified Purchasing will be more streamlined than the traditional method, will commonly use oral solicitations, and may be used on procurements valued at up to $1 million.
Procurement spending by the U.S. Postal Service declined slightly in 2011, but capital spending was anemic, according to the agency’s recently released Form 10-K report. Capital expenditures experienced a 15% drop from 2010 levels. This comes on top of a 24% decline in capital spending a year ago. Transportation spending was once again the leading procurement category, totaling $6,389 million — an increase of $511 million, or 8.7%, compared to 2010. More expensive fuel accounted for much of this increase, as diesel fuel prices rose 26.6% from a year ago.
Doing business with the U.S. Postal Service has always been different from contracting with other federal agencies and commercial entities. As a starting point, the Postal Service is exempt from most federal procurement laws and regulations. such as the Federal Acquisition Regulation (FAR) and the Competition in Contracting Act (CICA). The Postal Service has its own special purchasing policies called the Supplying Principles and Practices. On top of these differences, the Postal Service is on the brink of insolvency. To help contractors understand and succeed within this special environment, our firm is presenting a full-day seminar on October 21, 2011 in Chicago on “What Every Postal Service Contractor Should Know.”
The USPS Office of Inspector General (OIG) recently announced that it will be auditing the Postal Service’s Suspension and Debarment program. Debarments most frequently result from a criminal conviction of a company, or its employees. But a contractor can be debarred for any type of improper conduct that negatively reflects on its honesty, ethics, or competence. Resulting debarments have government-wide impact. The thrust of the audit appears to be whether USPS is debarring enough contractors. Read on for more details about OIG’s upcoming audit.
Contractors beware: the U.S. Postal Service Office of Inspector General (OIG) thinks that $1 out of every $20 spent by USPS on its contractors is fraudulent, and OIG is itching to find it. According to a July 18, 2011 OIG blog article, “conservative business estimates project up to 5 percent of contracted dollars are lost to fraud, meaning $1.45 billion of Postal Service funds are potentially at risk.” While these numbers are fanciful, there is no doubt that the OIG is taking this seriously. Read on for more details.
Sounds crazy, but with a bit of accounting help from Congress, the U.S. Postal Service could go from pauper to prosperous faster than an Express Mail package. Even though the Postal Service is $13 billion in debt, has stopped making certain payments into the federal retirement system, and is projected to become insolvent and lose another $8 billion this year, it could happen. Because over the last 40 years, USPS has overpaid between $50 and $70 billion into the U.S. Treasury, or so says the agency and its independent regulators. Several bills are pending in Congress that could release these funds to the agency. Read on for the details.
Saving the Postal Service also requires reforming its contracting policies, according to a bill introduced by Rep. Issa (R-Calif.) on June 23, 2011. Prompted by the Postal Service’s decision to stop paying into the federal retirement system and $27 billion in projected losses over three years, the bill would enact sweeping reforms. The “Postal Reform Act of 2011” would create two separate oversight bodies that would have broad, receivership-type authority to impose cost-cutting measures on the agency. While curing postal deficits is the primary goal, the bill specifically addresses postal procurement practices and would impact postal contracting in significant ways. Read on for the details.
Did the U.S. Postal Service’s lack of procurement regulations inadvertently help USPS officials carry out a $13 million bribery scheme over several years? Five Postal Service employees were indicted in May 2011 by a Detroit, MI grand jury for taking bribes and steering as much as $13 million in vehicle maintenance work to a private contractor. Could this scheme have been prevented, or caught earlier, if USPS had not abolished its procurement regulations in 2006?
What’s more likely to sustain the default termination of your government contract—poor performance on your current contract or omitting a fact about your prior employment? According to a recent decision by the Postal Service Board of Contract Appeals, the latter is enough. A contractor’s omission of key prior employment history was, by itself, a sufficient basis to terminate the contract for default.
