APWU Requests Investigation Of Private Contractors’ Use of USPS Property

APWU President William Burrus has asked USPS Inspector General David Williams to conduct an audit of the postal practice of permitting subcontractors to park trucks and store equipment on USPS property free-of-charge. The practice raises USPS operating costs and defers potential revenue, Burrus charged in a Feb. 22 letter to the Inspector General (IG).

“There is no uniform policy to determine when this added benefit will be afforded,” Burrus wrote, noting that the value of using USPS property is not considered when contracts are negotiated. He requested that the IG conduct an immediate review of the “economies and efficiencies” associated with management’s ad hoc arrangements.

“The postal policy of granting this perk is significant,” Burrus explained later, “because it obscures the true cost of subcontracting.”

In his letter to the IG, Burrus also charged that “the Postal Service has routinely accepted amendments increasing the costs of contracts that have been bid upon and finalized.” The practice avoids transparency in the bidding process and provides a competitive edge to the original bidder, he said.

Raising the Bid 

Burrus cited a 1997 contract that showed dramatic increases in cost over a short period of time, without the benefit of a competitive bid. Postal documents [PDF] reveal that just 17 days after the bid was submitted, the cost of the Phoenix AZ subcontracting agreement increased from more than $151,000 to more than $509,000; five-and-a half months later it ballooned to more than $845,000. The cost of the contract exceeded $1.098 million in November of 2000, before settling down to more than 300 percent of the original bid in 2001. Each price change was accepted and paid by the Postal Service without additional competitive bidding. 

“The costs and the deferred potential revenue associated with these actions are borne by Postal Service stakeholders,” the union president wrote to the IG. “So in keeping with your obligation to postal rate-payers and the public, I request that you consider conducting an audit of these activities to determine compliance with federal and postal contracting procedures and the potential savings to American households.” 

Before writing to the Inspector General, Burrus questioned USPS Labor Relations officials about the practice of allowing contractors to use postal property without compensation. “This issue has been brought to the attention of local managers without resolution,” he wrote on Oct. 18, 2007, “allegedly because there are no national guidelines. 

“Permitting the staging and storing of private equipment on postal property,” Burrus wrote, “raises a number of issues relative to liability, safety and conformance with contractual terms.” 

No Property-Use Guidelines 

Management’s Feb. 20 response was brief and to the point: “There are no national guidelines regarding Highway Contract Route (HCR) employers staging and storing private equipment on postal property.” The policy in place, the USPS wrote, is that “HCR employers make their request(s) for available space for staging and storing equipment at a postal facility to the appropriate installation head. 

“Based on space availability and other local circumstances, the installation head has discretion to make a case-by-case decision,” the vice president for labor relations wrote. 

As a result, subcontractors are able to submit bids in a competitive process without incurring the expenses associated with owning and operating truck terminals or yards, APWU Motor Vehicle Services Director Robert Pritchard noted. 

Meanwhile, when the bids of these private contractors are compared to the costs the Postal Service would incur for the same work, the USPS includes the overhead costs associated with maintaining its own terminals and yard, Assistant Director Michael Foster added. 

“This tips the scales in favor of subcontractors at the expense of postal employees,” Pritchard said. “And the costs to the Postal Service and the mailing public are exorbitant.” 

“These issues are critical to postal workers — especially Motor Vehicle Services employees — and to the American people,” Burrus said. “They are also important to competing subcontractors who are unfairly disadvantaged in the bidding process.

“I hope the Inspector General will live up to his responsibility to investigate these matters,” he continued. “The IG has shown little enthusiasm for monitoring excessive worksharing discounts that also deprive the Postal Service of needed revenue, while displaying great interest in examining employees’ benefits and their medical records.”

Burrus and the Inspector General have had sharp exchanges over these issues, and in January the APWU and the National Association of Letter Carriers filed suit against the Postal Service and the IG for systematic and widespread intrusions into the medical records of postal employees.

“The Inspector General needs to adjust his priorities. I hope he will begin here,” Burrus said.