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GGD-82-14 1 (1981-11-06)

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                                Uv(,her 6, 1981
GENERAL GOVERNMENT
    DIVISION

                                                             LM116877



The Honorable Francis X. Biglin
Senior Assistant Postmaster
  General
Administration Group
U.S. Postal Service                                        116877

Dear Mr. Biglin:

     Subject: The Postal Service Should Increase
               Competition and Reduce Costs When
               Buying Vehicle Batteries (GGD-82-14)

     This report, one in a series addressing restrictive
conditions and specifications in Postal Service solicitations,
concerns the Service's formally advertised solicitation for firm
fixed price bids to supply its fiscal years 1982 and 1983 re-
quirements for 6 types of vehicle batteries. This solicitation
could have resulted in a single national supplier for each type
of battery--a maximum six awards. The Service expected to buy
about 60,000 batteries at an estimated cost of $2 million.

     Beginning in June 1981, we met with Service officials to
discuss several conditions and product specifications contained
in an April 29, 1981 solicitation. On July 16, 1981 the Service
cancelled this solicitation because it was impossible to deter-
mine from the face of the bids received if the product offered
was the product specified. A new solicitation issued on
September 18, 1981, corrected some but not all of the problems.
Both solicitations, we believe, restrict competition and increase
costs.

     Our analysis of the original solicitation indicated the
Service needed to revise the contract conditions and product
specifications to:

     --Allow separate awards for supplying all battery types in
       each geographical zone (9) or alternative geographical
       areas such as the Service's 5 regions.

     --Limit the awards to a single year or use a periodic price
       adjustment clause to reduce the cost uncertainty caused by
       fluctuating lead prices.

     --Allow bids for batteries which use either the Society of
       Automotive Engineers (SAE) or Battery Council International
       (BCI) size/capability descriptions.

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