According to Sen. Chuck Grassley, a new report confirms the U.S. Postal Service mishandled $18.4 million in contract payments to maintain and change the locks on Postal Service-owned mailboxes in the Western Area including Iowa..
Grassley received information from an Iowa whistleblower and made a request to the Postal Service Office of Inspector General in October 2012. The whistleblower alleged that the Postal Service’s contract with Diebold, Inc., to repair and change locks in the Postal Service’s Western Area disregarded many Postal Service rules and procedures.
The inspector general found the Postal Service did not award the contract in accordance with Postal Service policies and procedures and did not develop a purchase plan or conduct a price analysis before awarding the contract.
As a result, contracting officials did not assess price reasonableness or obtain higher level review and approval as required, and the Postal Service did not conduct an analysis to establish the contract payments of $18,399,448 provided the best value, although this does not necessarily indicate the Postal Service incurred losses.
Based on inspector general’s calculations, the Postal Service overestimated the annual cost savings by $6,839,456 per year and awarded the contract based on this inflated cost savings assumption.