U.S. Postal Service

As the Postal Service prepares to enter the 21st century, it faces significant challenges as it strives to sustain and expand on reported performance improvements. In fiscal year 1997, the Postal Service ended another year of overall high performance in some of its operations, sustaining three years of encouraging results. With reported net income of more than $1 billion and increasing on-time delivery scores for First-Class Mail, the Service has shown that it can maintain a high-income level while providing its customers with better service. Also, in some management areas, such as automation of mail processes and labor-management relations, progress has been made. This testimony (1) discusses the Service's overall performance during fiscal year 1997, including its successes and remaining challenges; (2) discusses work that GAO has completed since GAO testified at a Postal Service oversight hearing in the spring of 1997; and (3) provides information on ongoing GAO work involving issues of competition and diversity.

GAO noted that: (1) as the Postal Service stands ready to enter the 21st century, it faces significant challenges that call for vigilance and attention as it strives to sustain and expand on reported performance improvements; (2) in FY 1997, the Postal Service ended another year of overall high performance in some of its operational areas, sustaining 3 years of encouraging results; (3) with reported net income of over $1 billion and increasing on-time delivery scores for first-class mail, the Service has shown that it can maintain a high income level while providing its customers with improved service; (4) also, in some management areas, such as automation of mail processes and labor-management relations, GAO acknowledges that some progress has been made; (5) however, challenges remain for the Service to sustain performance and continue on a progressive path toward accomplishing established goals and objectives and improving operations; and (6) sustaining and expanding on recent progress will be dependent upon the extent to which Congress, the Service, and other major postal stakeholders continue to focus attention on key issues, particularly: (a) labor-management relations, in which efforts to address persistent problems continue, although the sometimes adversarial nature of the relationships among the Service and many of its labor unions can affect progress in implementing improvements; (b) postal reform, in which fundamental issues are still being considered, such as defining universal service obligations and the scope of the postal monopoly; (c) competition, in which the Service is continually striving to deal with competitors so that it can maintain a firm position in a dynamic communications environment; and (d) the effectiveness with which the Service implements the Government Performance and Results Act, particularly with respect to the implementation of its strategic plan and the development and execution of its 1999 and beyond annual performance plans.