Share

Policy: Environment & Energy

USPS overpaid for gas by nearly $100 million: report

By |
Watchdog,Kelly Cohen,Inspectors General,Follow the Money,Energy and Environment,Gas Prices,USPS

Add gas to another one of the U.S. Postal Service's pile of problems.

The way the agency calculates how much it pays its mail-hauling contractors for fuel has caused it to overpay more than $48 million a year in 2012 and last year, according to its inspector general.

The Postal Service pays its contractors for fuel based on the miles they must drive — but the contractors' trucks are more fuel-efficient than what the Postal Service goes by.

When calculating vehicle miles-per-gallon, the Postal Service uses a rate as much as 2.2 miles lower than the industry average, the inspector general said. Thus, the Postal Service believes the contractors are using more gas than they really are, causing the agency to pay for more gas than the contractors use.

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

Updating its fuel calculations and better using the excess fuel could save the Postal Service $190 million over the next two years.

The Postal Service rejected this claim, saying the IG doesn't provide enough data to support it.

The IG also recommended the Postal Service work with its contractors to make them more fuel-efficient, something the agency said would cost the contractors more money, thus raising how much they would demand to be paid.

The Postal Service could use some money saving tips, however — its 2014 second-quarter loss reached $1.9 billion.

View article comments Leave a comment
Author:

Kelly Cohen

Staff Writer
The Washington Examiner