No-bid Contract Delivers Bad News to Postal Service

Government-contracting rules are, to say the least, complex, particularly when it comes to "sole-source" awards. These are contracts that are not open to competitive bidding, but given to a company.

In theory, this should only happen when the work is urgent, the cost is low and the number of companies able to meet the requirements is limited. In fact, sole-source decisions often lead to protests, investigations, bad publicity and sometimes criminal cases. Take, for example, the U.S. Postal Service's award of a Web site contract to Tatum LLC.

This $4.5 million contract was a sole-source award directed by the Post Office's Mailing and Shipping Services President, Robert Bernstock. He has worked in the past with an executive of Tatum who now manages the effort, raising concerns that Bernstock steered the contract to a buddy.

The Postal Service says the award was reviewed and found to be acceptable and that Tatum had the necessary expertise and ability. Of course, many companies have Web site expertise. The decision is being reviewed.

Not for the first time, a sole-source award might end up delaying, rather than accelerating, a project. In the case of a recent award to make anthrax vaccine to PharmAthene, this also happened. The company announced that due to a protest filed by a competitor the work has been placed on hold.

Sole-sourcing is sometimes appropriate, but it must be done judiciously - not least to avoid appearances of favoritism or impropriety. In this case, the Postal Service didn't pass the smell test.