Ex-workers get first-class deals with Postal Service

By Ed O’Keefe
Washington Post / October 3, 2010

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WASHINGTON — Who says you can’t go back? Apparently you can at the US Postal Service.

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.

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 recently reported billions of dollars in losses because of declining mail volume. But last week, the Postal Regulatory Commission rejected its request for a 2 cent increase in the price of a first-class stamp, from the current 44 cents to 46 cents. It is locked in negotiations with two of its largest unions.

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.

“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. “There is also employee morale and public image issues management must consider when the Postal Service is closing post offices and seeking a reduced delivery schedule.’’

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.

“The Postal Service, like the federal sector and private industry, will use non-competitive purchases in those instances when a non-competitive purchase is the best contracting method to meet our business needs,’’ Postal Service spokeswoman Joanne Veto said.

The mail agency is also reviewing its deals with former employees and has instituted new policies to guard against potential conflicts of interest, Veto said.