USPS OIG – Noncompetitive Contracts


Our objective was to determine if the Postal Service has adequate controls over awarding noncompetitive contracts and whether business scenario justifications were adequately supported.

The goal of the Postal Service’s supply chain activities is to obtain the best value, which is generally achieved through competition. Competition brings market forces to bear and helps purchase/supply chain management teams compare the relative value of proposals and prices. Competition also encourages the adoption of innovative ideas and solutions and promotes fairness and openness that leads to public trust. However, there are business situations when the noncompetitive purchase method better suits or is needed to meet the business objectives of the Postal Service.

From fiscal years (FY) 2018 through 2020, about 28 percent of contract dollar commitments were made noncompetitively. Specifically, Supply Management had annual contract commitments of $5.7 billion in FY 2018, $8.7 billion in FY 2019, and $7.3 billion in FY 2020. Of those, the Postal Service had noncompetitive contract commitments of $1.5 billion, $2.8 billion, and $1.7 billion, respectively.


We found that contracting officers (COs) did not always adhere to policies and procedures to ensure noncompetitive contract awards valued at $1 million or more were publicized as required.

We selected a statistical sample of 157 noncompetitive contracts, valued at about $895 million, for adherence with Postal Service policies and procedures. Of these 157 contracts, we identified 16 which were each valued at $1 million or more. Specifically, we found that 14 of the 16 (88 percent) noncompetitive contract awards valued in total at over $803 million were not publicized by the COs as required.

Additionally, in our review of all 157 noncompetitive contracts, we found 14 in which the COs did not follow Supply Management policies and procedures for awarding noncompetitive contracts. In these instances, COs did not either confirm that Noncompetitive Purchase Requests (NPR) were completed and properly supported or perform a CO evaluation that included the supplier’s past performance and financial capability along with price reasonableness determination in the award recommendation. We also determined that five of the 157 noncompetitive contracts did not have NPRs with adequate business scenario justifications.

The noncompetitive contract awards valued at $1 million or more were not publicized as required because COs misinterpreted the publicizing policy, believed that publicizing was not a common practice, or were unaware of the policy itself. COs also stated that recently they did not publicize the contract awards because they lacked time due to the COVID-19 pandemic or did not request a waiver from publicizing.

COs managing noncompetitive contracts did not ensure that NPRs and CO evaluations were complete or consistently uploaded into the Contract Authoring and Management System. Additionally, documents were misplaced or missing. These issues occurred because COs experienced increased workload due to manpower shortages and conflicting responsibilities and priorities due to the COVID-19 pandemic. Contracts sometimes did not have fully supported NPRs because some internal business partners who originated them lacked the knowledge or experience to gather the necessary information to correctly complete the documents.

Publicizing noncompetitive contracts awards as required informs the public of unique Postal Service requirements when competition is not used.

Ensuring evidence of required documents and reviews is maintained is important to support proper awarding of noncompetitive contracts. Vetting for past performance and financial capability as well as price reasonableness reduces supplier fulfillment risk and risk of overpayment for goods and services.


We recommended management:

  • Review the policy for publicizing noncompetitive contract awards valued at $1 million or more and modify to provide clarity for its intent and application.
  • Augment the contracting training curriculum to reinforce the requirement to publicize noncompetitive contract awards.
  • Update Supply Management’s Noncompetitive Contract Award File Review Checklist to include reviewing for publicizing requirement.
  • Develop and implement a Noncompetitive Purchase Checklist to ensure required elements and documents are included in noncompetitive contracts and properly and timely uploaded into the contracting system.
  • Update Management Instruction, SPS2-2015,1, Noncompetitive Purchases, to provide more specific guidance to assist internal business partners in completing and fully supporting documentation submitted to the contracting officer.

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