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I.i'/*=]' _COMPTROLLER GENERAL OF THE UNITED STATES ,
fiA WASHINGTON, D.C. 20540
B-114874 RELEASED o 02 7 121974
The Honorable Alan Cranston
United States Senate REsTpCT, E
Accowitung ofs- e e ,cp on0 f3 pv
Dear Senator Cranstoay the ifgo 0 ,z Co e
Your November 15, 1973, letter requested that we investigate several
areas of the operations of the United States Postal Service. It was agreed
that separate reports would be issued as our work on the various matters
was completed. This report deals with the allegation in an article in the
August 24, 1973, Wall Street Journal that a contract was awarded to
Mr. Charles N. 13urnaford, a friend of the Postmaster General, without
competitive bidding.
As your office agreed, the scope of our work on this item was lim-
ited to (1) evaluating the information in a report already prepared on
this matter by the Postal Service's internal auditors and (2) determining
whether the contracts comply with Federal Procurement Regulations
and the Postal Contracting Manual (PCM).
There was no evidence that the Postmaster General interceded
with postal contracting officials in behalf of Mr. Burnaford. It is
likely, however, that the actions of these officials in awarding these
contracts were influenced by their awareness of the Postmaster Gen-
eral's high regard for Mr. lBurnaford, We noted (1) questionable Justi-
fication for the use of sole-source contracting, (2) circumvention of
the use of contracts by treating work performed as claims, and (3) the
failure to verify the contractor's costs. The Postal Service's internal
auditors have recommended strict enforcement of PCM requirements
and revisions of existing procurement policy and practices, if needed.
We believe compliance with these recommendations would be helpful
in preventing the questionable procurement procedures we noted.
These matters are discussed below.
ALLEGATIONS CONCERNING
NON-COMPETITIVE CONTRACTING
The Wall Street Journal article contends that a $821, 000 contract
was let without competitive bidding to a friend of the Postmaster
General--Mr. Charles N. Burnaford.
Available information shows that Mr. Burnaford's involvement in
postal matters began before the Service was established. Since June
1970, he has received about $815, 000 for advertising and promotional
work performed for the Service. (See enclosure. )
During an interview conducted by the Service's internal auditors,
Mr. Burnaford stated that his first contact with the Postmaster General,
as a postal official, probably took place in the middle of 1969. He stated](ViewImageLocal?handle=hein.gao/gaobaaefi0001&div=1&collection=&method=preview&ext=.png&size=3)