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GGD-82-67 1 (1982-09-02)

handle is hein.gao/gaobabmod0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. Z0548 GENERAL GOVENMEN1 DIVISION B-114874 SEPTEMBER 2,1982 The Honorable William F. Bolger Postmaster General / Ill II~119345 lD I United States Postal Service Dear Mr. Bolger: Subject: An Opportunity to Continue Increasing Competition and Saving Money on Large Postal Service Procurements (GAO/GGD-82-67) This report summarizes our review of large, repetitive, open-market purchases of essential commodities by the Postal Service's Procurement and Supply Department. Since February 1981 we have issued five reports which focus on unduly restrictive contract conditions and product specifications which have limited competition for awards and increased procurement costs. In each of the five cases, adequate market research could have provided a better knowledge of industry capabilities and limitations, en- abling the Service to make better use of available commercial products and to ask only for what the industry is able to provide. We estimate that the Service, by implementing the recommenda- tions in these five reports, has saved about $1.7 million in fiscal year 1982. When the remaining recommendatidns are implemented in fiscal year 1983, these savings will increase significantly. We believe that by expanding competition and improving product specifications Service-wide, the Service will continue to reduce procurement costs. The Service shares with the Federal Procurement Regulations a policy of maximizing competition. The Postal Contracting Manual also emphasizes the need to consider the marketplace for its pro- ducers' capabilities and limitations so that Service needs can be effectively met without incurring unnecessary costs. For most of the contracts we reviewed, this could have been done more effec- tively. SCOPE AND METHODOLOGY The Service spent about $1.7 billion in fiscal year 1981 on goods and services. These purchases were made for real estate ($203 million), transporting mail ($639 million), and operations ($888 million). For this review we excluded the first two cate- gories of specialized procurements and concentrated on the pro- curement of the basic commodities used in Service operations. (019009)

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