Anthrax Cleanup Under Scrutiny - Postal Service Criticized On Costs, Procedures
September 1, 2002
By DAVE ALTIMARI, Courant Staff Writer
Private contractors hired to decontaminate postal facilities last fall cleaned up more than just anthrax: They billed the government for at least $50 million in unexplained cost overruns and $40 million for mail-irradiation machines that have yet to be used, federal auditors found.
In addition, one company got $600,000 for work it never did, while another $1 million went into preparing decontamination facilities that were never used. That's because local officials in the two Maryland communities where the facilities were located didn't want anthrax-contaminated mail in their towns.
The findings by the postal service's inspector general come as postal officials are asking Congress for nearly $700 million in emergency funding to help cover costs incurred during the anthrax attacks. They also offer a glimpse of what is likely to come from a separate review by the General Accounting Office, which has been asked to examine the postal service's anthrax response before Congress releases the emergency funding .
Part of that report by the GAO is due early this month, and sources familiar with it say it will be critical of how the postal service awarded some anthrax-cleanup contracts, as well as other actions it took.
Critics of the postal service, which has long been bedeviled by accusations of financial mismanagement, say the emergency nature of the anthrax response simply made an already bad situation worse.
"Purchasing methods are atrocious to begin with, and then you add in the pressure from politicians and the public of dealing with the anthrax crisis," said Rick Merritt, executive director of PostalWatch, a citizens' watchdog group. "Then their answer is to just go to Congress and ask to have more money thrown at them."
The inspector general spent five months examining 11 contracts, totaling $104 million, awarded last fall during the height of the anthrax crisis. The inspector general was careful to point out that the postal service was under intense pressure to protect its own workers after two died of inhalation anthrax, and also to assure everyone the mail was safe.
But the reports conclude that the postal service cut corners unnecessarily, saying "contracts and delivery orders were awarded using deviated purchasing procedures" that "exposed the Postal Service to increased financial risk."
"The Postal Service's response to the initial threat of anthrax and its continuing efforts are commendable," wrote Assistant Inspector General Ronald K. Stith. "However, our reviews identified four areas that warranted management's attention. These areas were contracting, transportation, contractor oversight and mail delivery."
Specifically, the reviews find that:
The cost of three contracts increased by nearly $54 million over the original bids, with no documentation to explain why. For example, a contract with Clean Harbors, hired to decontaminate the Morgan Street Distribution Center in New York, went from $5 million to $22.8 million. A contract with IT Corp. for testing various facilities went from $3.3 million to $30.2 million.
IT Corp. was paid $598,780 to clean the Morgan Street facility - but the cleanup was never performed. The company was replaced after postal officials determined it was moving too slowly, but the money was never refunded.
The company that decontaminated the Pentagon's internal post office was also retained to verify the results of the decontamination. The contractor did not complete the work, as it had claimed to have done in its final report. Pentagon officials spent an additional $27,000 to finish the job.
Postal officials spent $181,000 on trailers that sat idle. Trailers were supposed to help move mail from the Brentwood facility in Washington, D.C., to Lima, Ohio, to be irradiated, but postal officials overestimated what they needed.
In addition, the postal service ran into trouble after it tried to put eight new irradiation machines it purchased for $40 million from Titan Scan Technologies in new facilities in Temple Hills and White Oak, Md. The plan was to bring in contaminated mail from New Jersey and Washington, D.C., to be irradiated.
But the postal service failed to consult local officials. A week before the process was to begin, local officials objected, upset that the postal service intended to bring potentially contaminated mail into their towns. Postal officials backed off, never opening the buildings or using the eight machines.
"The postal service still has the machines but hasn't used them," Titan Technologies spokesman Will Williams said. "It's our understanding that, now that the original threat has subsided, they are determining the best way to use them.
"They were responding to a terrorist attack, and it is easier to sit back months later and criticize what was done," he said. "Let's not be penny-wise and pound-foolish when it comes to something like anthrax."
Postal service spokesman Jerry Kreinkamp said officials realized the machines aren't viable long-term solutions for securing the mail nationally. They are trying to rework the contract with Titan, he said.
"We based the purchase on what we knew at the time," Kreinkamp said. "As months progressed, things changed."
Government auditors are less sanguine about the episode and what it says about postal service management.
"Without proper planning, they went out and acquired $40 million of equipment," GAO Senior Technologist Madhav Panwar said. "They are just not doing any long-term planning, only short-term thinking in some of the purchases."
Spokesmen for the companies that rang up the $53.7 million in cost overruns cited in the postal service inspector general reports declined to comment, referring questions to the postal service.
"We've been instructed by postal officials not to discuss our contracts, or what we did, with the media," said Judith Lillard, spokeswoman for URS Group Inc., whose $525,000 contract to do testing and sampling at post offices ballooned to $9.5 million.
In responding to the audits, postal officials acknowledged that some mistakes were made, but said the unprecedented nature of the anthrax attacks caught many government agencies off guard. The officials also said they were under intense pressure from everyone, from the White House to the postal union, to react quickly.
"While it is easier when looking back to see what could have been done or done better, the fact remains that in spite of these unprecedented conditions, the contracts were awarded timely and provided the labor, material and expertise necessary," said Keith Strange, the vice president of purchasing and materials for the postal service.
In addition to contractual difficulties, the inspector general's reviews also point out logistical problems, such as trailers full of irradiated mail piling up at the V Street Postal Service in Washington, D.C., because some federal agencies refused to accept them.
Even after White House officials assured everyone the mail was safe, and postal officials personally visited every federal department in Washington, D.C., to explain the irradiation process, three agencies refused to take their mail.
By the end of February, 30 trailers full of mail for the three agencies sat behind the V Street facility. The postal service finally notified the agencies at the end of March that the mail would be marked refused and returned to the senders.