Wednesday, May 18, 2011

U.S. Postal Service Audit Reveals Errors in Contract Management System

Software-based contract management systems serve a critical role in the efficiency, accuracy, and analysis of the contracting processes. However, a system that is poorly designed or unfamiliar to its users can introduce unreliable data, jeopardizing the system's usefulness - to say nothing of any decision-making that relies on its accuracy.

Numerous Errors: The U.S. Postal Service recently underwent an audit by its Office of Inspector General, which found pervasive errors throughout its primary contract management software. The audit focused on the Contract Authoring and Management System (CAMS), which holds nearly three quarters of USPS contracting actions. Of the 139 contracting actions the audit examined for accuracy across nine "critical" data elements, all but two contained at least one error - and 60% had three or more errors.

Risks of an Off-The-Shelf System: The audit found that as an off-the-shelf system CAMS "is not specifically tailored to the Postal Service’s contracting practices." Of the errors identified in the audit, 73% were due to "system design limitations" and the remainder were employee errors (many caused by inadequate CAMS documentation and training). The primary corrective measures mentioned in the audit focused around customizing the system to fit USPS contracting practices, providing more consistent employee training, and developing processes and policies for how data is entered into the system.

Practical Tips: Software contract management systems are an important tool, but like any other tool they require proper use:
  • Fit the System: Make sure the contract management system conforms to agency contracting policies and procedures. Often, systems will require some customization to make them work effectively with unique requirements or processes.
  • Develop Policies to Ensure Accuracy: It's not enough to have a system in place - to maintain accurate and complete data, there must be clear roles and responsibilities for entering, validating, and reviewing data.
  • Employee Training: All employees who will be using the system should receive training on its proper use.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

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