Background
In fiscal year (FY) 2025, the U.S. Postal Service spent over $15 billion to buy a wide variety of products and services, ranging from delivery vehicles to common office supplies, to help fulfill its mission. Given the Postal Service’s challenging financial position and with contract spending increasing by roughly $3.4 billion since FY 2016, effective management of procurement portfolios is increasingly critical to the organization’s financial stability.
What We Did
Our objective was to evaluate the Postal Service’s oversight and management of its contracts, including pre-award and post-award processes. We analyzed key contracting processes and related requirements, assessed how the Postal Service monitors its contracts, and identified use cases for improving automation of contract management.
What We Found
We found that the Postal Service does not consistently collect and maintain required information to support informed contract decisions, which limits oversight and increases exposure to improper payments and fraud. Missing or incomplete evidence to justify invoice payments and gaps in critical unauthorized contractual commitment and noncompetitive purchase information weakens oversight. We identified $271,916,465 of monetary impact where required processes were not followed from FY 2024 to FY 2025. These gaps are compounded by the limited availability of automation tools across contracting systems. While some automation in support of contract management exists, many workflows still rely on manual processing, uploading, and verification. Contracting officers reported that these manual steps contribute to errors, inconsistent practices, and heavy workloads. However, there are opportunities to integrate Artificial Intelligence monitoring tools and automation to strengthen contract execution, improve efficiency, and reduce the risk of waste or mismanagement.
Recommendations and Management’s Comments
We made nine recommendations to address the issues in the report, and the Postal Service agreed or agreed in part with all recommendations. The U.S. Postal Service Office of Inspector General considers management’s comments responsive to recommendations 4, 5, 7, 8, and 9, as corrective action should resolve the issues identified. We view management’s responses to recommendations 1, 2, 3, and 6 as unresolved and will work with management through the audit resolution process. A summary of management’s comments and our evaluation are at the end of each finding and recommendation.
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