Your Taxpayer Dollar$ at Work: Volume I – Follow Up

I recently started a new piece here on the The Acquisition Corner, as a result of the complete fiscal mismanagement of the U.S. Postal Service (USPS).

The Federal Times reported this week that the issues with the USPS are not only severe, but at the point that radical change is necessary if the USPS is to survive:

…Postmaster General John Potter warned Friday that the U.S. Postal Service could go broke by next September.

"If things go as expected, we will perhaps be able to get through the year and literally run out of cash in September of 2011 because we will have exhausted all of our borrowing authority," he said at a news conference.

He said losses in the fiscal year ending yesterday widened to about $6 billion…

It gets worse:

…This has been a devastating week for the Postal Service. Besides ending the year with a $6 billion loss, the agency's bid to raise stamp rates was rejected by the Postal Regulatory Commission on Thursday. The proposed rate hike would have increased first-class stamps from 44 cents to 46 cents starting in January.

Potter said the agency is studying its options in the wake of that decision. Among those options: Appeal the decision to a federal court; refile the rate request; or seek to raise rates by an amount tied to the inflation rate. That last step would not require the PRC's approval, although the commission would have to verify that the increase is no higher than a cap linked to the Consumer Price Index. According to the latest available numbers, that formula would permit an average rate increase of about 1.5 percent, a PRC spokesman said today…

What about consolidating operations, cutting costs, and other tools to improve performance to help the fiscal crisis facing the USPS? Perhaps it was not reported, but I have not seen much effort coming from USPS management on these issues other than possibly cutting Saturday delivery. The forever stamps may be an option as I commented, but hopefully they will still have utility.

Your Taxpayer Dollar$ at Work: Volume I

As reported by the Washington Post, there seems to be a culture of corruption and massive waste, fraud, and abuse according to several Inspector General reports investigating operations of the U.S. Postal Service (USPS).

Upon reading this article and other IG reports, the waste, fraud, and abuse that seems to be cultural at USPS is hard to swallow. However, I have been inspired to start a new piece here on The Acquisition Corner: Your Taxpayer Dollar$ at Work. My first edition!

…Dozens of former top executives and hundreds of former employees have returned to the agency in recent years as private contractors, sometimes making double the salaries they made as full-time workers, according to one of three watchdog audits released late last week…

I do not believe anything is really wrong with that, per se. Many federal government employees leave their federal positions, start companies or work as contractors, and make more money doing so. There are conflict of interest laws in place. What is wrong with that?

…"It appears unethical to hire back former executives at nearly twice their former pay to advise new executives who were placed in their position based on their expertise and years of Postal Service experience," the report said…{Emphasis mine}

…The Postal Service has awarded more than 2,700 contracts to former employees since 1991 and awarded 17 no-bid deals to former executives between 2006 and 2009, according to one of the audits. Most of those executives earned six-figure sums, the report said. One unnamed executive received a $260,000 no-bid deal in July 2009 to train his successor just two months after retiring...{Emphasis mine}

Hired as a contractor to train and get up to speed your replacement? How does that even happen?

…The reports said the cash-strapped Postal Service is doing a poor job tracking its use of no-bid contracts, contributes more to worker health and life insurance benefits than other federal agencies and should consider closing more of its regional offices to help address an expected $230 billion, 10-year budget gap.

…The Postal Service is set to report billions of dollars in losses this week because of declining mail volume. It is also awaiting permission from regulators to raise postage rates and is locked in negotiations with two of its largest unions…

…Beyond employment contracts, the Postal Service improperly classified the status of 5 percent, or $910 million, of its $18 billion annual contracting costs, according to the report…

What a mess. It seems that that the mechanisms to provide contract oversight and surveillance are not only negligently poor and inadequate, but actually appear to make the oversight mechanisms for Iraq and Afghanistan sound like the equivalent of a well-oiled machine. Further, the USPS unions appear to be also obstinate and inflexible, in the face of a needed overhaul in how the USPS does business. Not just to improve, but to survive.

Better go out and get those “Forever” stamps, as postage rate hikes will be going up, in perpetuity.