The U.S. Postal Service moves 44 percent of the world’s mail and despite its massive size, it must rely on thousands of contracts worth billions of dollars each year. The sheer volume and huge dollar value of these contracts also make USPS susceptible to fraud. This makes the oversight work of our Contract Fraud Investigations Division a high priority in our mission to prevent fraud, waste, and abuse within the Postal Service.
A recent OIG contract fraud investigation helped return over $350,000 in damages to the U.S. government, of which more than $187,000 went to the Postal Service. More importantly, it helped USPS address issues with an internal system that had blindsided the agency to the fraud.
The case involved a commercial air carrier that moved mail between San Juan, PR, St. Thomas, and St. Croix. The company had been manipulating its data for about four years when billing USPS for its services. On paper, the carrier was meeting the contract terms for deliveries when, in fact, it consistently failed to do so.
The work of our Contract Fraud Investigations Division goes beyond helping the Postal Service recover damages from fraudulent contractors: it also helps the agency address vulnerabilities that prevent schemes from going undetected.
– Tammy Hull
Inspector General,
U.S. Postal Service
Our special agents conducted a thorough investigation, collecting evidence that showed how the carrier was manually changing the data. They also found the company had deliberately altered a software program to automate its false reporting. But that wasn’t the whole picture.
Part of the problem was on the Postal Service’s side — a system should have been flagging discrepancies between the bills and delivery data, but it wasn’t. Instead of charging penalties for failures in service, USPS paid the vendor in full whenever the bill came. Thanks to this investigation, the Postal Service re-prioritized the system fix and worked with one of the world’s leading computing companies to get it done.
