USPS - Postal Service contracts questioned

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The Postal Service defended the decision-making of one of its top officials Monday following reports that he awarded non-competitive contracts to former colleagues who had worked with him in the private sector.

The Federal Times reported Monday that Robert Bernstock, who heads the Postal Service's mailing and shipping division, has awarded three consulting contracts totaling $1.3 million to three former colleagues since joining the Postal Service in July 2008. The six figure deals were all designed to boost sagging revenues, according to the Federal Times.

• A $600,000 contract was awarded to Lynne Alvarez, a one-time colleague of Bernstock's at Vlasic Foods International.

• Kimberly Wolfson received a two-year $324,975 deal to analyze potential partnerships and new customers for the service. Wolfson met Bernstock when she did contract work for Nutrisystem, and Bernstock serves on the Nutrisystem board of directors.

• Bernstock approved a one-year $412,500 contract to Richard Sorota to develop a new marketing plan. Sorota and Bernstock worked together as top officials at Scotts Miracle-Gro Company from 2004 to 2006, according to the Federal Times.

The Postal Service's general counsel reviewed the contracts after being contacted by Federal Times and concluded there was no wrongdoing. The Postal inspector general continues to investigate the matter.

"A follow up review of the process used to secure these contracts by the Office of the General Counsel and the Office of Supply Management indicates the Postal Service’s processes for securing sole source contracts were followed," said Postal spokesman Gerald McKiernan. "The sole source justifications were in place and the necessary approvals were obtained."

"Bob needed a few people of needed capabilities and skill sets...to meet pressing challenges and opportunities," McKiernan said. "Management believes that the results to date have validated the contributions of these contractors."

Bernstock's division is responsible for more than $70 billion in postal revenues and recently started selling greeting cards in some stations as a way to earn more money. The Postal Service lost $3.8 billion during the fiscal year that ended in September and anticipates losing at least another $2.8 billion this year.

Bernstock was also in the news last week when The Washington Times reported that he earned more than $270,000 in cash and other compensation in fiscal 2008 for serving on the corporate boards of Nutrisystem Inc. and Pantry Inc. Postal officials approved Bernstock's outside corporate work as part of his hiring agreement in June 2008. Bernstock also earned an $85,000 hiring bonus in fiscal 2008 and an $85,000 retention bonus for fiscal 2009, The Washington Times reported.