Report cites wasted money in response to anthrax threat

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 ask 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 a bad situation worse.

Five months later

The postal service's inspector general spent five months examining 11 contracts, totaling $104 million, awarded last fall during the height of the anthrax crisis. The inspector general pointed 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.