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B-114874 1 (1974-06-12)

handle is hein.gao/gaobaafon0001 and id is 1 raw text is: z P, 4, - .. COMPTROLLiR GEPICRAL OF THE UNITED STATES Ij WASHINGTON. D.C. Z0548 B-114874 RELEASED JUN IZ Io Cfif The Honorable Alan Cranston 7 United States Senate Dear Senator Cranston: Your November 15, 1973, letter requested that we investigate several areas of the oeraions of the Uttited tates-PBosi.a Senvice. 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 cpt~t was awarded to Mr. Charles N. Burnaford, a friend of the Postmaster General, without cope tiy bi dding. 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 Ivir. 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. Burnaford. We noted (1) questionable justi- fication for the use of -nfr c actn n, (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 PC.A 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-COIMPETITIVE CONTRACTING The Wall Street Journal article contends that a $821, 000 contract was let without competitive bidding to a friend of the Postmaster General--MT, r. 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

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