Background
On September 2, 2009, the U.S. Postal Service awarded an Indefinite Delivery, Indefinite Quantity contract to an Information Technology services contractor. The contractor is responsible for assigning qualified personnel to labor categories that have specific qualification requirements. The contract contains individual task orders classified as either fixed price or time and materials. During the audit scope period — fiscal year (FY) 2021 — the total amount invoiced and paid was $29.1 million.
What We Did
Our objective was to determine whether costs incurred by the Postal Service, as they relate to contractor employee labor qualifications for paid invoices, conform to contract requirements. For our audit work, we randomly selected and reviewed 92 time and materials invoices from FY 2021. We tested to determine if labor categories upheld contractual terms, employees’ experience complied with the proposed labor categories, labor billing rates aligned with contractual terms, and the Postal Service approved excess hours worked.
What We Found
The Postal Service was improperly charged by the contractor for incurred costs for 23 out of 92 unqualified contractor personnel (resources). Additionally, the contractor did not maintain adequate documentation to support resource qualifications for time and materials task orders and created or revised resumes in response to the audit team’s request for resource resumes. Further, the contractor did not always receive written approval from the Postal Service prior to resources working additional hours, which may result in the Postal Service incurring unauthorized additional charges. These issues occurred because the Postal Service did not have a policy in place to verify the contractor supplied qualified resources assigned for time and materials task orders, nor did staff receive training on the proper way to approve additional hours. When unqualified resources are used on task orders, it may reduce the efficiency or quality of work on the contract, and the Postal Service may pay for services that are not necessarily meeting their requirements.
Recommendations
We recommended the Vice President, Supply Management, update policies to require the periodic review of contractor personnel qualifications to verify that qualified resources are assigned to time and materials contracts; seek reimbursement for services received on task orders with unqualified resources; and update training to include the proper way to approve additional hours, including not using blanket approvals.