- The Washington Times - Monday, March 22, 2010

The U.S. Postal Service’s president of shipping signed off on a no-bid, $4 million consulting contract to a firm partly because it employed a former associate from his days as an executive at pickle producer Vlasic Foods and lawn care giant Scotts Miracle-Gro, records show.

The decision to bar other companies from bidding on the contract was made months after postal officials warned that the nation’s mail service risked running out of cash for the first time in history.

Robert F. Bernstock, the U.S. Postal Service’s $232,500-per-year president of the shipping and mailing services division, endorsed the contract to Tatum LLC on May 11 to help manage a Postal Service technology project.

Records and interviews show the Postal Service gave the contract to Tatum partly because a Tatum official named Elizabeth Shuttleworth had worked with Mr. Bernstock at Vlasic and Scotts Miracle-Gro, where Mr. Bernstock held top corporate posts.

In contract documents justifying the decision against putting out the contract for open, competitive bids, postal officials cited Ms. Shuttleworth’s more than 20 years of business experience. “The other unique value is that Ms. Shuttleworth has worked with the USPS Shipping and Mailing Services President, Mr. Bernstock,” contract documents obtained by The Washington Times state.

The contract, reported by the Federal Times on Friday, notes that Mr. Bernstock “is confident of Ms. Shuttleworth’s knowledge, value, qualifications and ability.”

But Steve Ellis, vice president at the nonpartisan Taxpayers for Common Sense, said noncompetitive contracts should be used only in rare cases, and the USPS-Tatum arrangement raises serious questions about whether the cash-strapped Postal Service is getting the best deal for its money.

“Simply because you’ve worked with the someone in the past and liked their work product generally doesn’t rise to the level of being a noncompetitive contract,” Mr. Ellis said. “It shouldn’t be personality-driven.”

He said sealed, competitive awards with multiple contractors bidding on a project are preferable to no-bid arrangements, which he called “very risky” and usually more costly.

Tatum declined requests for comment and to interview Ms. Shuttleworth. Tatum, a consulting firm with dozens of offices nationwide, separately is temporarily engaged by the parent company of The Washington Times.

Postal Service spokesman Gerald J. McKiernan said USPS officials made sure the contract costs were fair. He also said Tatum already had been under contract on another matter in which Ms. Shuttleworth was involved.

In a written statement to The Times on Thursday, Mr. McKiernan said Tatum is one of more than a dozen companies involved in the Postal Service’s “Project Phoenix,” a $147 million, three-year technology project. Mr. McKiernan said the project will improve “online, call center and mobile experiences” for customers.

“The goal is to improve customer satisfaction, grow revenue, reduce costs and create a more efficient operation for transactions and inquiries,” he said.

Mr. McKiernan said an ethics official in the Postal Service’s office of general counsel reviewed the Tatum contract and determined that Mr. Bernstock had no ethics conflict.

He said the USPS hired Tatum because “while the Postal Service has many talented people, we did not have the kind of expertise in-house to get this done.”

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