- The Washington Times - Wednesday, June 4, 2014

Neither snow nor rain will stop the U.S. Postal Service. But poor calculations could make it waste millions of dollars.

The nation's mail delivery service has been underestimating the miles-per-gallon of the private contractors it pays, the agency’s Inspector General said, and is paying $48.3 million too much annually.

USPS is calculating vehicle MPG at a rate much lower than the industry average, investigators said. That’s led officials to think the contractors are burning more gallons of gas than they actually are, and are paying for more gallons of gas than the contractors use.

“This can create an environment for fraud, waste, and abuse,” the IG said. “The risk is that suppliers may use excess gallons for non-Postal Service operations, which is prohibited.”

Using more up-to date calculations and putting the excess fuel to better use could save the Postal Service nearly $200 million over the next two years, investigators said.

Postal Service officials disagreed with the IG’s concerns over waste.

“The report does not provide specific data to support these conclusions regarding potential savings in fuel costs,” a response from the agency said.

Officials added that making vehicles more fuel-efficient would cost private contractors money, which could raise the amount USPS would need to pay them.

“Supplier’s investment in these technologies will have a cost impact and may be reflected in higher prices to the Postal Service ,” the response said. “We will continue to work with our suppliers and explore various options that enhance sustainability while exercising prudent cost control.”

But investigators warned that the calculations used by the Postal Service are an average of 2.2 miles-per-gallon below the industry average for what vehicles actually get. Among the most efficient vehicles, the calculation is short by 4.1 miles-per-gallon.

The IG is concerned that private contractors have no incentive to upgrade to more fuel efficient vehicles, since they have been able to just pass their extra fuel costs onto the government.

 

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