U.S. Postal Service Facilities
Improvements in Data Would Strengthen Maintenance and Alignment of Access to Retail Services Gao ID: GAO-08-41 December 10, 2007Continued financial challenges and increased competition call for the U.S. Postal Service to manage its 34,000 facilities as efficiently and cost-effectively as possible. GAO and others have identified key facility management challenges, including the need to (1) capture and maintain accurate facility data, (2) adequately maintain facilities, and (3) align retail access with customer needs. This report assesses Postal Service efforts to overcome these challenges and implement leading federal practices. To conduct this study, GAO analyzed postal data and documents, visited 58 facilities, and interviewed postal officials.
To address the challenge of capturing and maintaining accurate facility management data, the Postal Service developed the Facility Database, but the database does not conform to the Postal Service's goals or to leading federal practices; specifically, it does not include data needed to measure performance on managing facilities or have the capacity to track such data over time. Further, a database analysis by GAO revealed data reliability problems, including duplicative and contradictory data. In addition, major Postal Service departments do not use the database as a consolidated data source for managing postal facilities. The Postal Service has attempted to improve the database, but many problems remain. To address the challenge of maintaining its facilities, the Postal Service has begun assessing the condition of the facilities but has neither determined the extent of its maintenance projects nor strategically prioritized the projects. A Postal Service inspection of 651 randomly selected postal facilities revealed that two-thirds were in less than "acceptable" condition, but the Postal Service had not documented the full extent of its maintenance projects backlog. After the inspection, the Postal Service initiated a program to assess the condition of all of its facilities--a necessary first step to improving their condition. In addition, the Postal Service lacks the data needed to implement leading federal practices, such as considering a facility's importance and value when prioritizing its maintenance projects. Due to funding constraints, the Postal Service currently focuses exclusively on emergency and urgent repairs--at the expense of a less costly preventive maintenance approach. To address the challenge of aligning access to postal retail services with customer needs, the Postal Service has expanded access in underserved areas but has done less to address overserved areas. Leading federal practices identify criteria for "rightsizing" facility networks--such as considering facilities' importance and utilization--but the Postal Service does not consider these criteria. GAO's analysis shows wide variation in the number of postal retail facilities among comparable counties, and a number of facilities GAO visited appeared to merit consideration for closure based on one or more of the federal criteria. If the Postal Service begins collecting data that reflects criteria based on leading federal practices, it may be able to close facilities and adjust access to retail services according to customer needs.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-41, U.S. Postal Service Facilities: Improvements in Data Would Strengthen Maintenance and Alignment of Access to Retail Services
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
December 2007:
U.S. Postal Service Facilities:
Improvements in Data Would Strengthen Maintenance and Alignment of
Access to Retail Services:
GAO-08-41:
GAO Highlights:
Highlights of GAO-08-41, a report to congressional requesters.
Why GAO Did This Study:
Continued financial challenges and increased competition call for the
U.S. Postal Service to manage its 34,000 facilities as efficiently and
cost-effectively as possible. GAO and others have identified key
facility management challenges, including the need to (1) capture and
maintain accurate facility data, (2) adequately maintain facilities,
and (3) align retail access with customer needs. This report assesses
Postal Service efforts to overcome these challenges and implement
leading federal practices. To conduct this study, GAO analyzed postal
data and documents, visited 58 facilities, and interviewed postal
officials.
What GAO Found:
To address the challenge of capturing and maintaining accurate facility
management data, the Postal Service developed the Facility Database,
but the database does not conform to the Postal Service‘s goals or to
leading federal practices; specifically, it does not include data
needed to measure performance on managing facilities or have the
capacity to track such data over time. Further, a database analysis by
GAO revealed data reliability problems, including duplicative and
contradictory data. In addition, major Postal Service departments do
not use the database as a consolidated data source for managing postal
facilities. The Postal Service has attempted to improve the database,
but many problems remain.
To address the challenge of maintaining its facilities, the Postal
Service has begun assessing the condition of the facilities but has
neither determined the extent of its maintenance projects nor
strategically prioritized the projects. A Postal Service inspection of
651 randomly selected postal facilities revealed that two-thirds were
in less than ’acceptable“ condition, but the Postal Service had not
documented the full extent of its maintenance projects backlog. After
the inspection, the Postal Service initiated a program to assess the
condition of all of its facilities”a necessary first step to improving
their condition. In addition, the Postal Service lacks the data needed
to implement leading federal practices, such as considering a
facility‘s importance and value when prioritizing its maintenance
projects. Due to funding constraints, the Postal Service currently
focuses exclusively on emergency and urgent repairs”at the expense of a
less costly preventive maintenance approach.
To address the challenge of aligning access to postal retail services
with customer needs, the Postal Service has expanded access in
underserved areas but has done less to address overserved areas.
Leading federal practices identify criteria for ’rightsizing“ facility
networks”such as considering facilities‘ importance and utilization”but
the Postal Service does not consider these criteria. GAO‘s analysis
shows wide variation in the number of postal retail facilities among
comparable counties, and a number of facilities GAO visited appeared to
merit consideration for closure based on one or more of the federal
criteria. If the Postal Service begins collecting data that reflects
criteria based on leading federal practices, it may be able to close
facilities and adjust access to retail services according to customer
needs.
What GAO Recommends:
To improve facility management, GAO recommends that the Postal Service
consider whether it is more cost-effective to make its Facility
Database reliable or to replace it. If the Postal Service chooses to
retain the database, GAO recommends that it establish internal
controls, measure facility management performance, and track trends.
GAO also recommends better prioritization of maintenance projects and
initiating a criteria-based approach to assist in identifying and
closing unneeded retail facilities consistent with leading federal
practices. In its comments, the Postal Service chose to retain the
database and establish controls but not to track performance or trends.
It agreed in principle to prioritize maintenance but not to initiate a
criteria-based approach to identify and close unneeded retail
facilities.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-41]. For more information, contact
Katherine A. Siggerud at (202) 512-2834 or siggerudk@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
FDB Does Not Meet the Postal Service's Goal or Leading Federal
Practices for Capturing and Maintaining Accurate Facility Management
Data:
The Postal Service Has Initiated Actions to Assess the Condition of Its
Facilities but Lacks a Strategic Approach for Prioritizing Maintenance
Projects:
The Postal Service Has Expanded Alternative Access to Its Services but
Lacks Performance Data to Identify Potentially Unneeded Retail
Facilities for Closure:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Executive Order 13327: Federal Real Property Asset
Management:
Appendix II: Objectives, Scope, and Methodology:
Appendix III: Comments from the Postal Service:
GAO Comments:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Facility Database Entries for the Lubbock (Texas) Main Post
Office as of July 2007:
Table 2: Postal Areas, Districts, and Cities Visited:
Table 3: Regression Coefficients Used to Establish the Average Number
of Retail Postal Facilities in Counties Based on Each County's
Population, Land Area, and Degree of Urbanization:
Figures:
Figure 1: Types of Facilities Operated by the Postal Service:
Figure 2: Postal Service Area and District Boundaries:
Figure 3: Vacant, Possibly Leasable Space in Postal Service Facilities
Not Listed in the Facility Database:
Figure 4: Sources of Facility Information in the Postal Service's 2006
Annual Report:
Figure 5: Illustration of the Postal Service's Three-Part Facility
Condition Assessment Program:
Figure 6: Examples of Maintenance Issues at Postal Facilities We
Visited:
Figure 7: Pictures Illustrating the Size, Condition, and Utilization of
the Downtown Fort Worth Station, Texas, as of February 2007:
Figure 8: Distribution of Owned, Leased, and Contracted Postal Retail
Facilities by County Based on Population, Land Area, and Degree of
Urbanization:
Figure 9: Examples of Privately Owned Businesses That Contract to
Provide Retail Postal Services:
Figure 10: Automated Postal Center with Signage Advertising Its Around-
the-Clock Availability:
Figure 11: Examples of Damage Resulting from a Partial Roof Collapse in
December 2005 That Caused an Emergency Suspension of Operations at the
Central Station in McKeesport, Pennsylvania:
Figure 12: The "Store of the Future" Located behind Security at the
Pittsburgh International Airport, Pennsylvania:
Abbreviation:
FDB: Facility Database:
Federal Council: Federal Real Property Council:
Postal OIG: U.S. Postal Service Office of the Inspector General:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
December 10, 2007:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Thomas R. Carper:
Chairman, Subcommittee on Federal Financial Management, Government
Information, Federal Services, and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
With about 34,000 owned and leased facilities, the U.S. Postal Service
is the third-largest landholding entity in the federal government. Most
of its facilities provide retail services, such as mail and package
delivery, consistent with its mission to make postal services
accessible to everyone in the country. Other facilities house the
Postal Service's mail processing, mail delivery, vehicle maintenance,
and administrative functions. This expansive facility network is costly
to operate and poses significant property management challenges.
Changes in mail volumes, increasing employee compensation and benefits
costs, a more competitive marketplace, and legislative reforms enacted
in December 2006 have necessitated that the Postal Service increase its
efficiency and cut costs. The Postal Accountability and Enhancement
Act, enacted in December 2006,[Footnote 1] provided tools and
mechanisms that can be used to establish an efficient, flexible, and
financially sound Postal Service, but also introduced a rate cap for
many postal services. Traditionally, the Postal Service set rates based
on costs, but now an annual limitation will be placed on percentage
changes in rates for market-dominant (as opposed to competitive)
products, linked to the change in the Consumer Price Index--All Urban
Customers.[Footnote 2]
Real property management is a challenge not only for the Postal Service
but also for other federal agencies. In 2004, an executive order
established the Federal Real Property Council (Federal Council)--an
interagency group of federal landholding agencies--to collect and
disseminate information on leading practices for managing federal
facilities. One such leading federal practice requires federal agencies
bound by the executive order to establish a current and reliable
inventory of their facilities. Furthermore, these agencies are required
to capture and report performance-related data about their facilities
in four areas: (1) importance to achieving the agency's mission, (2)
utilization rate (extent to which the facility is fully utilized), (3)
physical condition, and (4) annual operating costs. These data, termed
"facility management performance measures," are used to measure an
agency's performance in managing its facilities. Although not bound by
the executive order,[Footnote 3] the Postal Service has voluntarily
assigned a representative to the Federal Council and adopted some
leading federal practices. Additional information on the executive
order and the Federal Council is available in appendix I.
Previous analyses by GAO and others have identified a number of key
challenges to managing federal facilities, including a lack of reliable
and useful data on facilities, facilities in disrepair, and facility
networks that are not properly aligned with customer needs.[Footnote 4]
You requested that we analyze these challenges as they apply to the
Postal Service. Accordingly, this report addresses the Postal Service's
efforts to (1) capture and maintain accurate facility data, (2)
adequately maintain the condition of postal facilities, and (3) align
access to retail services with its customer needs. This report
identifies the Postal Service's goals and actions for managing each of
these challenges and assesses the Postal Service's progress in
overcoming the challenges and, as applicable, its implementation of
leading federal practices.
To accomplish our objectives, we visited 58 postal facilities,
interviewed postal officials to learn about postal facility management,
reviewed relevant postal documents, and assessed the Postal Service's
implementation of relevant leading federal practices for managing its
facilities. The observations derived from our site visits cannot be
generalized to the population of postal facilities nationwide. We chose
the facilities we visited to achieve balance with regard to geographic
location, area demographic trends, facility type, revenue, and physical
condition. Our work also included the following:
* To assess the Postal Service's progress in overcoming the challenge
of capturing and maintaining accurate data on its facilities, we
analyzed the Postal Service's Facility Database (FDB) and assessed the
reliability of the data it contained on two dates--October 5, 2006 and
July 7, 2007. To assess FDB data, we interviewed postal officials to
obtain an understanding of the data, the structure of the database, the
sources of the data, and known database issues and limitations;
reviewed related Postal Service documents and reports by the Postal
Service's Office of the Inspector General (Postal OIG); and
electronically tested the database for completeness, obvious errors,
and inconsistencies. In addition, we attempted to verify selected
facility data as of October 5, 2006, during our visits to 58 postal
facilities. Our assessment of FDB data as of July 7, 2007--our second
assessment--was designed, in part, to determine the impact of the
Postal Service's efforts to improve FDB.
* To assess the Postal Service's progress in overcoming the challenge
of maintaining its facilities in adequate condition, we analyzed
maintenance data nationwide and attempted to validate maintenance data
at the 58 facilities that we visited.
* To assess the Postal Service's progress in overcoming the challenge
of aligning access to its retail services with customer needs, we
assessed the extent to which the number of retail postal facilities
varies among counties with similar attributes. To do so, we first
identified the number and location of Postal Service retail facilities
at the county level. Then, we statistically compared the number of
postal retail facilities in each county, given the county's population,
land area, and degree of urbanization, with the number of retail
facilities in comparable counties. The variation in the number of
postal retail facilities was determined by subtracting the number of
retail facilities in a county with the number of facilities in
comparable counties, as determined by the statistical comparison.
However, we excluded counties without an urban center of at least
10,000 people from the output of our analysis because the Postal
Service may need to maintain more postal retail facilities in these
counties to fulfill its mission of providing universal access to postal
services. Our statistical analysis explains almost 80 percent of the
variation in the number of retail postal facilities among the counties.
We conducted our work from July 2006 through December 2007 in
accordance with generally accepted government auditing standards.
Appendix II contains additional information on our scope and
methodology.
Results in Brief:
The Postal Service developed the Facility Database (FDB) in 2003 to
address the challenge of capturing and maintaining facility data, but
it has not accomplished this goal. The FDB data that we assessed are
not reliable, and FDB is not used as a centralized source for facility
data as planned. We found numerous data reliability problems, including
duplicate facility entries, multiple facility entries with the same
function at the same address, and inconsistent information on square
footage and ownership. We determined that these problems had three
basic causes. First, the two primary Postal Service systems that feed
data directly into FDB--the Address Management and the Facility
Management Systems--contain inaccurate information. Second, data from
both of these systems were incorrectly linked, creating incorrect data
in FDB. For example, we found a post office that had four different
entries in FDB because the facility entry was incorrectly linked to
multiple facility entries in the Facility Management System that were,
in reality, located elsewhere. This error, and others, occurred because
FDB does not have internal controls, such as edit checks, to preclude
obvious mistakes, and a planned effort to correct these linking errors
has not yet begun. Third, we found that local employees often make
mistakes when they enter facility data directly into FDB. Major
departments within the Postal Service do not use FDB data to manage
postal facilities, in part, because of reliability problems. The Postal
Service has attempted to improve the reliability of FDB data by
requiring local postal employees to validate FDB data for each
facility, planning to correct incorrectly linked facility entries and
eventually automate the linking process, training FDB users, and
issuing a new FDB user's guide, but data reliability problems remain.
Moreover, even if the data in FDB were reliable, FDB would not meet
leading federal practices for facility data because FDB does not
contain needed data fields for tracking facility management performance
and does not archive data at regular intervals, as is necessary for
tracking trends. Specifically, the Postal Service does not track the
four performance measures recommended by the Federal Council--facility
importance, utilization rate, condition, and annual operating costs--to
assist agencies in strategically managing their facility networks. We
are recommending that the Postal Service consider whether FDB is useful
as a consolidated facility data source and, if so, improve its
reliability and usefulness by establishing internal controls, such as
edit checks. In addition, we recommend that the Postal Service conform
to leading federal practices by measuring facility management
performance and tracking trends.
To address the challenge of adequately maintaining its facilities, the
Postal Service has initiated actions to better understand the
facilities' condition but does not know the magnitude of its
maintenance backlog or how to strategically prioritize its maintenance
projects. Postal Service officials said the Postal Service has
historically underfunded its maintenance needs, resulting in the
deterioration of its facilities. A 2005 contractor assessment of 651
randomly selected postal facilities revealed that two-thirds of these
facilities were in less than "acceptable" condition, including 22
percent that were rated in "poor" condition. However, the Postal
Service does not know the magnitude of its maintenance challenge
because it has not yet fully assessed the condition of its network of
about 34,000 facilities. As a first step toward learning more about the
condition of all postal facilities, locally based Postal Service
employees completed self-assessments of over 29,000 facilities in 2007.
In addition, over the next 3 years, the Postal Service plans to conduct
more comprehensive assessments of its larger facilities. Numerous
Postal Service officials told us that insufficient funding has caused
the Postal Service to focus exclusively on reactive maintenance--that
is, "emergency" and "urgent" repairs--at the expense of routine
maintenance to prevent problems. A reactive approach is ultimately more
expensive, in part, because it shortens the useful life of equipment
and facilities and necessitates more costly future repairs. Consistent
with leading federal practices, the Postal Service recently recognized
the need for a preventive approach to maintaining its facilities,
including regular assessments of their condition. However, the Postal
Service has not adopted leading federal practices by systematically
incorporating facility management performance measures--facility
importance, utilization rate, condition, and annual operating costs--
into its maintenance prioritization process. Because the facility
assessments will provide the Postal Service with more complete
information on its facility needs, we are recommending the Postal
Service prioritize maintenance projects based on a facility's overall
performance.
To address its challenge of aligning access to retail services with
customer needs, the Postal Service has taken steps to expand access to
its services in underserved areas but has not achieved a goal
established in its 2002 Transformation Plan (a plan that identified
steps to guide future Postal Service operations) of proactively
identifying unneeded retail facilities in overserved areas consistent
with leading federal practices. The persistence of this alignment
challenge is demonstrated by our analysis of the location of postal
facilities nationwide, which shows wide variation in the number of
postal retail facilities between counties of similar population, land
area, and degree of urbanization. Specifically, our analysis shows that
many counties with at least one urban center with a population of at
least 10,000 people have far fewer or far more postal retail facilities
than the average for comparable counties. To address this challenge,
the Postal Service has expanded access to its retail services in
underserved areas by establishing retail alternatives and setting goals
for the use of those alternatives, such as the sale of postal services
through privately operated contract facilities, the Internet, and
automated postal centers. However, the Postal Service does not
proactively identify and close unneeded retail facilities in overserved
areas. Postal officials said the Postal Service is not pursuing its
2002 Transformation Plan goal of identifying and closing low-value,
redundant postal retail facilities because of legal and political
restrictions[Footnote 5] on closing post offices. Instead, the Postal
Service only considers closing postal facilities under emergency
circumstances, such as a forced evacuation due to a natural
disaster.[Footnote 6] The Postal Service could better identify
potentially unneeded retail facilities for closure consistent with its
goals and leading federal practices by assessing each facility's
importance to the Postal Service's mission in conjunction with the
facility's utilization rate, condition, and annual operating costs.
During our site visits, we identified a number of facilities that did
not appear critical to the Postal Service's mission and that also
merited consideration for closure based on the other leading
performance measures for federal facilities. We are recommending that
the Postal Service institute a more proactive, criteria-based approach
to assist in identifying and closing unneeded retail facilities.
In its written comments on a draft of this report, the Postal Service
agreed with our two recommendations regarding FDB; agreed, in
principle, with our recommendation to prioritize maintenance projects
based on facility performance; but disagreed with our three remaining
recommendations. In agreeing with our two recommendations regarding
FDB, the Postal Service indicated that it (1) had already decided to
retain FDB rather than to replace it with a new, more reliable database
and (2) would establish additional controls to improve its reliability.
Furthermore, although the Postal Service stated that it prioritizes
maintenance projects adequately, it agreed, in principle, with our
recommendation related to the need to prioritize maintenance projects
based on a facility's overall performance. The Postal Service disagreed
with our two recommendations related to adopting leading federal
practices for measuring facility management performance and tracking
performance trends over time, noting that it had concerns about
adopting these practices due to the challenges created by its unique
mandate to provide universal mail service on an almost daily basis and
its provision of services and products that are in direct competition
with the private sector. We revised our recommendations to emphasize
that the Postal Service should develop performance measures that may
better meet its needs as long as the measures are consistent with the
spirit of those developed by the Federal Council. Finally, the Postal
Service disagreed with our recommendation to institute a criteria-based
approach to identify and close unneeded retail facilities as part of
the congressionally required June 2008 facility plan in part because of
the difficulty in establishing criteria that could be applied to all
retail locations. Recognizing that closure decisions involve case-by-
case considerations, we clarified our recommendation to indicate that
the results of a criteria-based approach would "assist" the Postal
Service in identifying candidate retail facilities for possible
closure. The Postal Service's comments are reprinted in appendix III.
In separate correspondence, the Postal Service also provided minor
technical comments, which we incorporated, as appropriate.
Background:
To provide, consistent with its mission, postal services to everyone in
the United States, the Postal Service operates an expansive network of
facilities throughout the nation. Our analysis of Postal Service data
shows there are approximately 34,000 active owned or leased postal
facilities, most of which provide retail services. The Postal Service
2006 annual report indicates that its facilities are valued at
approximately $21 billion. In addition, according to the Postal
Service, it paid approximately $860 million for capital projects and
maintenance repairs in fiscal year 2006. About three-fourths of postal
facilities are leased, and in fiscal year 2006, the Postal Service paid
over $1 billion to lease these facilities. The Postal Service is
responsible for maintaining all of its owned facilities and many of its
leased facilities, but maintenance responsibilities vary with the
specific lease and can change when a lease is renegotiated.
Employees at postal retail facilities provide services related to First-
Class Mail, Insured and Registered Mail, Parcel Post, Priority Mail,
and other services, such as post office box rentals and money- order
purchases. Some retail facilities also provide space for other
functions, such as receiving and sorting mail for delivery. Retail
facilities--whether owned or leased--fall into one of three categories:
(1) main post offices, where local postmasters oversee retail
operations in the geographic area; (2) postal stations located within a
municipality's corporate limits; and (3) postal branches located
outside a municipality's corporate limits. According to Postal Service
data, main post offices account for almost 75 percent of all retail
facilities, but in large communities there may be more stations and
branches. The Postal Service also operates nonretail facilities, such
as mail processing facilities, vehicle maintenance facilities, and
administrative offices. Figure 1 provides information on the different
types of postal facilities.
Figure 1: Types of Facilities Operated by the Postal Service:
[See PDF for image]
This figure contains six photographs that depict the following
information:
Main post offices:
Main post offices house a community‘s postmaster and serve as the
primary retail facility in a community.
Postal stations and branches:
Postal stations and branches provide additional access to retail
services within a community. Personnel in these facilities report to
the postmaster at the area‘s main post office.
Carrier annexes:
Carrier annexes provide space for mail carriers to sort mail for their
routes. Some main post offices, stations, and branches also provide
space for carrier operations.
Mail processing facilities:
At mail processing facilities (including processing and distribution
facilities, bulk mail centers, and air mail centers), postal personnel
process mail prior to delivery.
Vehicle maintenance facilities:
At vehicle maintenance facilities, postal personnel service Postal
Service vehicles.
Administrative and other facilities:
Administrative and other facilities provide office space for such
purposes as administrative, management, customer service, and training.
Source: GAO.
[End of figure]
Besides the retail facilities it owns or leases, the Postal Service
reported in its 2006 annual report that it operates about 3,950
privately owned and operated facilities, known as either "contract
postal units" or "community post offices," which provide retail postal
services. Contract postal units are operated by nonpostal employees in
privately operated businesses, such as convenience stores, grocery
stores, greeting card stores, and pharmacies. Community post offices
are contract postal units that are located in small communities and
function as main post offices. The Postal Service reported that there
were 3,014 contract postal units and 937 community post offices
throughout the nation. The Postal Service has no responsibility for
maintaining these privately operated retail facilities.
Responsibility for managing postal facilities is distributed across the
Postal Service.
* Three Postal Service departments in headquarters share responsibility
for managing data on postal facilities--(1) Delivery and Retail, (2)
Facilities, and (3) Intelligent Mail and Address Quality. Each of these
departments tracks different data on postal facilities depending on its
needs. Delivery and Retail manages FDB, which was developed to
consolidate information on all postal facilities. Facilities manages
the Facility Management System, which is used to manage facility
acquisitions and capital and expense projects. Intelligent Mail and
Address Quality administers the Address Management System, which
contains the addresses of about 160 million delivery locations
nationwide, including postal facilities. Both of these systems feed
information directly into FDB.
* The Postal Service's Vice President for Facilities oversees the
maintenance of facilities nationwide in conjunction with eight
regionally based Facilities Service Offices,[Footnote 7] which manage
the maintenance activities in the Postal Service's areas.
* The Postal Service's Vice President for Delivery and Retail--in
conjunction with the nine area vice presidents, 80 district managers,
and almost 24,000 local postmasters throughout the country--has
nationwide responsibility for aligning the Postal Service's retail
network with customer needs (see fig. 2). The district managers are
responsible for making recommendations to open or close a postal retail
facility, while the Vice President for Delivery and Retail is
responsible for acting on the recommendations.
Figure 2: Postal Service Area and District Boundaries:
[See PDF for image]
This figure is a map of the United States depicting the following
postal service areas and district boundaries:
Northeast;
New York Metro;
Eastern;
Capitol Metro;
Southeast;
Great Lakes;
Southwest;
Western;
Pacific.
Source: U.S. Postal Service (information); Map Resources (map).
[End of figure]
In 2001, we placed the Postal Service on our list of agencies and
programs designated as high risk due to, among other factors, financial
and operational challenges.[Footnote 8] The Postal Service responded by
issuing a plan to "transform" its operations--the 2002 Transformation
Plan. Specific strategies outlined in the plan called for the Postal
Service to align its retail network with customer needs by promoting
alternative access to retail services and closing "low-value,
redundant" postal retail facilities in overserved areas. To obtain
information needed to align access to retail services with customer
needs, the Postal Service indicated that it would establish a national
facility database and develop a criteria-based methodology to determine
which facilities to close. The criteria were to include factors, such
as a facility's proximity to other postal facilities, the number of
households and delivery points in a community, and indicators of retail
productivity. In 2004, we reported that the Postal Service had not yet
developed criteria for making changes to its retail facility network,
including facility closures and consolidations.[Footnote 9] The Postal
Service updated its Transformation Plan in 2005 for fiscal years 2006
through 2010, indicating that it intended to reduce its long-term
facility repair costs by doing more focused, routine facility
assessments and preventive maintenance.
The postal reform legislation enacted in December 2006 provided
additional opportunities to address the challenges the Postal Service
faces in adapting to an increasingly competitive environment. The act
provides tools and mechanisms to help control costs, including the
costs of aligning its facility network with its customer needs. The act
also requires the Postal Service to develop a plan by June 2008 to
"rationalize" its network of facilities, remove excess capacity from
the network, and identify anticipated cost savings and other benefits
associated with network rationalization. In 2007, we removed the Postal
Service's high-risk designation because the Postal Service addressed
several concerns we raised when we originally placed the Postal Service
on the high-risk list in 2001 and because of the passage of postal
reform legislation.
FDB Does Not Meet the Postal Service's Goal or Leading Federal
Practices for Capturing and Maintaining Accurate Facility Management
Data:
Developed in 2003, FDB has not achieved the Postal Service's
anticipated goal or conformed to a leading federal practice that calls
for a consolidated source of accurate facility data because the data
entered into FDB are not reliable. As a result, the Postal Service
indicated that several major Postal Service departments do not use FDB
for aggregate facility information, partly because of concerns about
its reliability. These concerns result from, among other things,
inaccurate data entered into the systems that feed into FDB, problems
with how the systems are linked to form an FDB facility entry, and
mistakes in entering data directly into FDB. The Postal Service has
taken steps to improve the database, but systemic problems remain. In
addition, FDB does not meet leading federal practices for tracking
facility management performance and trends because FDB does not include
facility management performance measures or provide for tracking trends
over time.
FDB Does Not Meet the Postal Service's Goal Because the Data Are Not
Reliable:
While the Postal Service created FDB in 2003 to achieve its goal for a
consolidated source of accurate facility data, it has not achieved that
goal due to data reliability problems. According to the Postal Service,
it established FDB because its prior use of multiple databases caused
confusion, data inaccuracies, problems in decision making, and higher
costs. However, based on our analysis of selected data fields, FDB data
problems make it unreliable as a centralized source of aggregate
facility data even after performing data-cleaning techniques on the raw
data. Specifically, our assessment revealed the following nationwide
problems with the data's reliability as of October 5, 2006:[Footnote
10]
* 145 facility entries were exact duplicates of another facility entry
(all data fields were the same);
* 1,931 facility entries had multiple retail facilities listed at the
same address (e.g., a main post office and a station were listed with
the same address);
* 1,288 facility entries had different amounts of square footage listed
for the facility;[Footnote 11]
* 892 facility entries had conflicting information on whether the
facility is owned or leased;[Footnote 12]
* 1,216 facility entries had conflicting data on the amount of the
facility's rent; and:
* 509 facility entries listed as having staffed more retail windows
than reportedly exist at the facility.
The Lubbock (Texas) Main Post Office illustrates several of the data
reliability problems we found. Specifically, in FDB data reported as of
July 2007, the main post office is listed four times--each with
different (1) square footage amounts, (2) ownership information, and
(3) lease payment amounts. Except for information on the annual rent--
which the Postal Service considers sensitive--table 1 displays these
FDB fields for the Lubbock Main Post Office.
Table 1: Facility Database Entries for the Lubbock (Texas) Main Post
Office as of July 2007:
Name: 1; Lubbock;
Subtype: Main Post Office;
Address: 1515 Crickets Ave., Lubbock, TX 79402-9998;
Interior square footage: 85,257;
Owned or leased: Owned.
Name: 2; Lubbock;
Subtype: Main Post Office;
Address: 1515 Crickets Ave., Lubbock, TX 79402-9998;
Interior square footage: 7,896;
Owned or leased: Leased.
Name: 3; Lubbock;
Subtype: Main Post Office;
Address: 1515 Crickets Ave., Lubbock, TX 79402-9998;
Interior square footage: 5,600;
Owned or leased: Leased.
Name: 4; Lubbock;
Subtype: Main Post Office;
Address: 1515 Crickets Ave., Lubbock, TX 79402-9998;
Interior square footage: 50;
Owned or leased: Leased.
Source: U.S. Postal Service FDB.
[End of table]
We discussed several specific examples of the data reliability problems
we found with postal officials who, after researching multiple data
sources, provided explanations for the specific examples we found. For
example, with respect to the Lubbock Main Post Office, postal officials
said that the first entry in table 1 is correct while the other three
entries actually represent other postal facilities at different
locations in Lubbock. In addition, using another data source, they told
us that entry 2 is actually a carrier annex; entry 3 is a warehouse;
and entry 4 is a postal vending machine. Using other data sources, the
Postal Service officials also provided explanations for other specific
problems we identified. However, without additional site visits, we
cannot determine whether the explanations provided were
accurate.[Footnote 13]
We also identified incorrect FDB information for 24 of the 58 postal
facilities we visited. For example, during our sites visits, we found
that information on vacant leasable square footage, which the Postal
Service asks local employees to document, was inaccurate in FDB. At
least six of the facilities we visited had vacant space that local
employees said could be leased, but these facilities were not listed as
having vacant, leasable space in FDB. These facilities and their vacant
space are shown in figure 3. Postal officials acknowledged our examples
and noted there are few incentives for local officials to report
facilities' vacant, leasable space in FDB.
Figure 3: Vacant, Possibly Leasable Space in Postal Service Facilities
Not Listed in the Facility Database:
[See PDF for image]
This figure contains six photographs that depict vacant, possibly
leasable space in Postal Service Facilities not listed in the facility
database:
Circle City Station, Indianapolis, Indiana:
* Vacant area: A large portion of the second floor;
* Status: Postal officials said the Postal Service never built out the
second floor because the space was not needed and could be subleased or
returned to building owner;
* Status listed in FDB: No vacant leasable space.
Denton Main Post Office, Texas:
* Vacant area: Entire second floor of the large post office;
* Status: Postal officials said half of the building was occupied by
other federal agencies that moved out about 10 years ago and that the
space could be leased;
* Status listed in FDB: No vacant leasable space.
Downtown Finance Station, Gary, Indiana:
* Vacant area: The basement (pictured) is completely vacant, and the
second floor is used once per month or less for training;
* Status: Postal officials said the Postal Service never used more than
just the main floor and could lease the excess space;
* Status listed in FDB: No vacant leasable space.
Fort Worth Downtown Station, Texas:
* Vacant area: Second floor (pictured) and basement are vacant. Third
floor used periodically for storage and training;
* Status: Postal officials said most of the building has been vacant
since the mail processing function was removed years ago;
* Status listed in FDB: No vacant leasable space.
Richland Station, Dallas, Texas:
* Vacant area: Much of the second floor of this 53,000-square-foot post
office;
* Status: Postal officials said the office space has been vacant for
years, and another portion (pictured above) has not been occupied since
the Postal Service purchased the building in 1989;
* Status listed in FDB: No vacant leasable space.
East Chicago Main Post Office, Indiana:
* Vacant area: The entire second floor, which consists of several
offices;
* Status: Postal officials said it has been vacant for years and could
be leased;
* Status listed in FDB: No vacant leasable space.
Source: GAO.
[End of figure]
Postal officials acknowledged that the Postal Service has not analyzed
the reliability of FDB data but expressed confidence that the problems
we found affect a small percentage of the Postal Service's facilities.
While we cannot definitively determine the overall magnitude of FDB's
data reliability problems, the cumulative effect of the problems we
found could significantly distort the reporting of aggregate facility
statistics. For example, conflicting ownership data in FDB, as
illustrated for the Lubbock facility in table 1, could cause the Postal
Service's annual rent obligation in FDB to vary by as much as $82
million, or more than 8 percent of the Postal Service's reported rent
obligation for fiscal year 2006. Inaccurate ownership data are of
particular concern because the Postal Service used FDB for its
aggregate ownership statistics in its 2006 annual report.
Postal Officials Do Not Rely Exclusively on FDB for Reporting on the
Postal Service's Facilities:
Although the Postal Service developed FDB over 5 years ago to provide a
consolidated source of facility data, the Postal Service continues to
operate and use various facility data sources. Furthermore, while
postal officials acknowledged that postal staff did not use FDB
initially because the data were not reliable, our analysis demonstrates
that FDB is still not sufficiently reliable for use as a consolidated
data source for postal facilities. The Postal Service indicated that
several major Postal Service departments do not use FDB for aggregate
facility information, partly because of concerns about its reliability.
Thus, as shown in figure 4, instead of exclusively relying on FDB for
facility information in its 2006 annual report, the Postal Service used
multiple sources of data, including its Address Management System, for
quantifying its retail and delivery facilities by type.
Figure 4: Sources of Facility Information in the Postal Service's 2006
Annual Report:
[See PDF for image]
This figure is an image of a portion of the Postal Service's 2006
Annual Report, showing sources of information. The following data is
depicted:
Financial Section Part I:
Available Information:
The United States Postal Service is not subject to the informational
requirements of the Securities Exchange Act of 1934 (Exchange Act). We
do not file periodic reports, proxy statements or other information
with the SEC.
Financial and other information can be accessed on the "About USPS and
News" section of our website at [hyperlink, http://www.USPS.com].
Information on our website is not incorporated by reference in this
document.
We make available, free of charge, copies of our annual report, as soon
as reasonably practicable after it is produced. Requests for copies
should be sent to:
United States Postal Service:
Public Affairs and Communications:
475 L'Enfant Plaza, SW:
Washington, DC 20260-3100:
Item 2 ” Properties:
Real Estate:
Our facilities range in size from 50 square feet to 34 acres under one
roof, and support retail, delivery, mail processing, maintenance,
administrative and support activities.
Real Estate Inventory (Actual numbers):
Leased Facilities, 2006: 25,567;
Leased Facilities, 2005: 25,772.
Real Estate Inventory (Actual numbers):
Owned Facilities, 2006: 8,437;
Owned Facilities, 2005: 8,399.
Real Estate Inventory (Actual numbers):
GSA/Other Government Facilities, 2006: 408;
GSA/Other Government Facilities, 2005: 417.
Real Estate Inventory (Actual numbers):
Total Real Estate Inventory, 2006: 34,412;
Total Real Estate Inventory, 2005: 34,588.
Real Estate Inventory (Actual numbers):
Annual Rent Paid to Lessors (dollars in millions), 2006: $1,002;
Annual Rent Paid to Lessors (dollars in millions), 2005: $934.
Source:
Facility Database (as fed from the Facility Management System):
The majority of our small and medium sized facilities support the
retail and delivery operations located in virtually every community
across this country. Our retail and delivery operations are supported
by 32,875 leased or owned facilities. We also provide retail services
through 3,951 Contract Postal Units and Community Post Offices where
the facility is owned and maintained by the contractor.
Retail and Delivery Facilities (Actual numbers):
Post Offices, 2006: 27,318;
Post Offices, 2005: 27,385.
Retail and Delivery Facilities (Actual numbers):
Classified Branches, 2006: 1,522;
Classified Branches, 2005: 1,540.
Retail and Delivery Facilities (Actual numbers):
Classified Stations, 2006: 3,457;
Classified Stations, 2005: 3,498.
Retail and Delivery Facilities (Actual numbers):
Carrier Annexes, 2006: 578;
Carrier Annexes, 2005: 584.
Retail and Delivery Facilities (Actual numbers):
Contract Postal Units, 2006: 3,014;
Contract Postal Units, 2005: 3,116.
Retail and Delivery Facilities (Actual numbers):
Community Post Offices, 2006: 937;
Community Post Offices, 2005: 1,019.
Retail and Delivery Facilities (Actual numbers):
Total Retail and Delivery Facilities, 2006: 36,826;
Total Retail and Delivery Facilities, 2005: 37,142.
Source: Address Management System.
Our larger facilities typically support mail processing operations
which move millions of pieces of mail across the country on a daily
basis.
Processing Facilities, (Actual numbers):
Processing and Distribution Centers, 2006: 269;
Processing and Distribution Centers, 2005: 269.
Processing Facilities, (Actual numbers):
Customer Service Facilities, 2006: 195;
Customer Service Facilities, 2005: 195.
Processing Facilities, (Actual numbers):
Bulk Mail Centers, 2006: 21;
Bulk Mail Centers, 2005: 21.
Processing Facilities, (Actual numbers):
Priority Mail Processing Centers, 2006: 11;
Priority Mail Processing Centers, 2005: 11.
Processing Facilities, (Actual numbers):
Annexes, 2006: 66;
Annexes, 2005: 66.
Processing Facilities, (Actual numbers):
Surface Transfer Centers, 2006: 17;
Surface Transfer Centers, 2006: 14.
Processing Facilities, (Actual numbers):
Airmail Processing Centers, 2006: 77;
Airmail Processing Centers, 2005: 79.
Processing Facilities, (Actual numbers):
Remote Encoding Centers, 2006: 12;
Remote Encoding Centers, 2005: 15.
Processing Facilities, (Actual numbers):
International Service Centers, 2006: 5;
International Service Centers, 2005: 5.
Processing Facilities, (Actual numbers):
Total Processing Facilities, 2006: 673;
Total Processing Facilities, 2005: 675;
Source: Physical count of facilities.
We also have approximately 1,000 other types of facilities including
administrative, vehicle maintenance and miscellaneous support
facilities.
Sources: U.S. Postal Service (information); GAO (analysis).
[End of figure]
FDB Reliability Problems Are Caused by Inaccuracies in Feeder
Applications, Application Linkage Problems, and Data Entry Mistakes:
We found that FDB's data reliability problems were caused by (1) errors
in the systems that feed into FDB, (2) problems with how the systems
are linked to form an FDB facility entry, and (3) errors in inputting
FDB data. First, as stated earlier, some information is fed directly
from both the Address Management and Facility Management systems into
FDB, causing errors in either system to automatically feed into FDB.
While we did not fully evaluate the Address Management System--the
Postal Service's database for all delivery points in the country--we
found errors in the Address Management System data that the Postal
Service used in its 2006 annual report. Specifically, we found
instances of (1) duplicate entries for the same facility; (2) multiple
facilities with the same function (e.g., main post office) listed at
the same address; and (3) contractor and Postal Service-operated
facilities listed at the same address. During our site visits, we also
found that the address contained in the Address Management System and
fed into FDB for the O'Hare Terminal 2 Finance Station in Chicago,
Illinois, was incorrect. In addition to containing errors, in December
2006, the Postal OIG reported that the Address Management System was
incomplete because it did not contain information on all postal
facilities.[Footnote 14] During our site visits, we also found errors
that were fed directly into FDB from the Facility Management System.
For example, the square footage in FDB for the Colleyville Main Post
Office in Texas was incorrect because it did not reflect the sale of a
significant portion of land that occurred 3 years prior to the entry.
Postal Service officials acknowledge that errors in the Address
Management and Facility Management systems feed directly into FDB.
Second, many of the FDB errors we found resulted when facility entries
in the Address Management and Facility Management Systems were
incorrectly linked to create an FDB facility entry. FDB facility
entries are created by linking facility entries in the Address
Management and Facility Management Systems. However, these systems do
not use the same convention for naming facilities, and therefore, they
cannot be linked automatically to create an FDB facility entry.
Instead, according to Postal Service officials, postal employees must
manually link facility entries in the two systems. In some instances,
the manual process resulted in linkage errors which, according to
postal officials, caused some of the duplicate facility entries and
contradictory information in FDB that we identified. For example, the
Cumberland Main Post Office in Maryland, which we visited, had four
entries in FDB--one for the Main Post Office and the other three for
other postal facilities in Cumberland that were incorrectly linked to
the main post office's address. The Postal Service corrected the FDB
entry for this facility when we brought this problem to the Postal
Service's attention, but the problem remains at other locations. For
example, the Lubbock Main Post Office, which was discussed previously
(see table 1), was incorrectly linked to multiple facility entries
within the Facility Management System. The error occurred because FDB
lacks internal controls, such as edit checks, to prohibit postal staff
from linking an FDB facility to multiple facility entries in the
Facility Management System. According to Postal Service officials,
there were 762 facilities in FDB as of September 2007 that were
mistakenly linked to multiple Facility Management System facility
entries.
Third, we found that some of the errors in FDB were caused by local
employees entering incorrect information directly into FDB. Although
information on a facility's address, size, and ownership is fed
automatically into FDB from the Address Management and Facility
Management Systems, other data are entered manually into FDB by local
postal employees. For example, local employees enter the number of
retail windows (e.g., sales areas) at each facility and the number of
those windows that are typically staffed. Our analysis revealed that
local officials make numerous mistakes entering this and other
information into FDB. For example, 509 retail postal facilities are
listed in FDB as staffing more retail windows than reportedly exist at
the facility. Implementing an edit check in FDB would eliminate this
type of reporting error. As shown in figure 3, FDB data on vacant,
leasable space entered by local employees are also often in error.
The Postal Service Has Taken Actions to Improve FDB Data, but Problems
Remain:
While postal officials are aware of errors in FDB and have taken
several actions to improve the quality of the data, these actions have
not yet corrected all of the problems we identified. First, in response
to a 2006 recommendation by the Postal OIG,[Footnote 15] the Postal
Service has started requiring local employees to validate and correct
FDB data periodically for their facilities. While this validation
process could, in our view, help identify and correct some of the
errors we found, the Postal Service's validation completed in February
2007 was not entirely successful for a number of reasons. Specifically,
mistakes that could have been corrected locally were often not
corrected. For example, the retail postal facility data available as of
May 2007, that had been validated by a postal employee on February 7,
2007, indicated the facility staffed twice as many retail windows as
exist at the facility. We discussed this data discrepancy with Postal
Service officials, and they corrected the facility's FDB entry. While
this specific discrepancy was corrected, our assessment of FDB data as
of July 7, 2007, identified 354 instances of this problem. However,
even if local employees corrected these and other inaccuracies,
problems would remain because local employees cannot correct errors in
FDB fed directly from other systems, such as Facility Management System
data on square footage and ownership status. Errors of this type can
only be corrected by personnel administrating the Facility Management
or Address Management Systems.
Second, to avoid manual linking errors and to improve the accuracy of
the linkage used to create FDB facility entries, postal officials are
planning to automatically link the Address Management and Facility
Management Systems' facility entries. According to the Postal Service,
Address Management System administrators must first apply the standard
facility naming convention used by the Facility Management System and
thus create a unique identifier for linking facility entries in the
Address Management and Facility Management Systems. Automation could
help reduce the frequency of future linking mistakes, but the Postal
Service must correct existing errors before automating the process.
Postal officials had expected to begin correcting existing errors in
October 2006; however, as of September 2007, the effort has not yet
begun.
Finally, the Postal Service responded to a Postal OIG recommendation
[Footnote 16] for improving the quality and completeness of data
entered into FDB by completing field training sessions for FDB users
and issuing a new FDB user's guide in 2007. These actions are too
recent to gauge their effectiveness.
The Postal Service's Facility Data Do Not Meet Leading Federal
Practices for Tracking Facility Management Performance and Trends:
Even if the data in FDB were reliable, they would not meet leading
federal practices for facility data because FDB (1) does not contain
fields for the four performance measures recommended by the Federal
Council--a facility's importance, utilization rate, condition, and
annual operating costs--and (2) does not allow for tracking trends. The
federal leading practices are intended to, among other things, help
agencies measure their progress in managing their facilities and
identify properties for disposal or investment. Postal Service
officials said none of the Postal Service's facility databases,
including FDB, were designed for these purposes. In addition, they
noted the Postal Service is not bound by the executive order on federal
real property asset management and, consequently, is not required to
adopt leading federal practices, such as the implementation of
performance measures. Even if the Postal Service collected data on its
performance, it could not measure its performance over time because it
does not retain or archive FDB data at regular intervals (e.g.,
annually).
The Postal Service Has Initiated Actions to Assess the Condition of Its
Facilities but Lacks a Strategic Approach for Prioritizing Maintenance
Projects:
The Postal Service has initiated actions to assess the condition of its
facilities, but has not yet assessed the magnitude of its maintenance
backlog or strategically prioritized its maintenance projects--a
leading federal practice. According to postal officials, the Postal
Service has historically underfunded its maintenance needs, resulting
in the deterioration of its facilities. While there is some evidence
that many postal facilities are in less than acceptable condition, the
magnitude of the challenge is unknown. To learn more about the
condition of all its facilities, the Postal Service has started
implementing self-assessments conducted by local employees for small
facilities and more intensive assessments for larger facilities.
Numerous Postal Service officials told us that insufficient funding has
caused the Postal Service to focus solely on urgent repairs--instead of
routine, preventive maintenance--which could lead to more costly
repairs over time. Consistent with a leading federal practice, agencies
can maximize the value of maintenance funding by using facility
management performance data to identify and prioritize their greatest
maintenance needs, but the Postal Service cannot adopt this practice
because it does not systematically capture the necessary data.
The Postal Service Does Not Currently Know the Extent of Its
Maintenance Needs but Has Initiated Actions to Assess the Condition of
Its Facilities:
The Postal Service has not comprehensively assessed the condition of
its facilities, but the amount it has recently spent on facility
maintenance--$712 million from fiscal year 2003 through fiscal year
2006--has been insufficient, postal officials said, to address its
facility maintenance needs. Postal officials also said several years of
underfunding have caused postal facilities to deteriorate and many are
in need of repairs. Evidence supporting the officials' statements
includes a 2005 assessment conducted by a contractor of 651 randomly
selected owned and leased postal facilities. According to this
assessment, two-thirds of the facilities were in less than "acceptable"
condition, including 22 percent that were in "poor" condition.[Footnote
17] However, the Postal Service will not know the magnitude of the
deterioration or the extent of its maintenance backlog until it fully
assesses the condition of all its facilities.
In 2007, to begin assessing the condition of its facilities, the Postal
Service requested local employees to conduct self-assessments of their
facilities. Local employees responded to the request by assessing over
29,000 facilities and identifying 73,500 maintenance needs estimated to
cost $236 million. While these assessments provide additional
information on the condition of postal facilities, they are not
comprehensive because thousands of facilities were not assessed and the
local employees are not formally trained to conduct facility
assessments.
Over the next 3 years, the Postal Service plans to conduct a more
comprehensive, three-part program to assess the condition of all its
facilities. The first part of the program involves facilities that are
less than 6,500 square feet. For these facilities, the Postal Service
plans to ask local employees to complete annual self-assessments
similar to the ones completed in 2007. The second part of the program
involves facilities with 6,500 to 100,000 square feet of interior
space. For these facilities, the Postal Service plans to conduct more
detailed condition assessments once every 3 years using contract
building inspectors beginning in the summer of 2007.[Footnote 18]
According to Postal Service officials, the Postal Service established
the 6,500-square-foot threshold because the most complicated, important
facilities are generally larger. The third part of the program involves
the Postal Service's largest mail processing facilities. For these
facilities, the Postal Service plans to use on-site postal maintenance
staff to conduct annual physical assessments of the buildings and, once
every 5 years, employ architectural and engineering firms to conduct
more thorough assessments.
According to the plans for the program, local Postal Service employees
or facility inspectors will enter information collected from each
assessment into a new database called the Infrastructure Condition
Assessment Model, which will allow contract facility inspectors to
estimate the urgency and cost of each identified repair project. The
new database will feed into the Postal Service's existing maintenance
tracking system and, according to postal officials, will be used to
budget and prioritize urgent maintenance projects for repair. Figure 5
illustrates the Postal Service's three-part facility condition
assessment program.
Figure 5: Illustration of the Postal Service's Three-Part Facility
Condition Assessment Program:
[See PDF for image]
This figure displays photographs of the three-part facility condition
assessment program, and depicts the following data:
Facilities with less than 6,500 square feet:
* Annual self-assessment performed by local postal employees.
Information is fed to the Infrastructure Condition Assessment Model
database:
Contract facility inspectors:
* Review maintenance projects;
* Estimate repair costs.
Facility service office staff:
* Review and prioritize maintenance projects;
* Determine maintenance responsibility;
* Track and oversee repairs.
Facilities with 6,500 to 100,000 square feet:
* Physical inspections by contract building inspectors;
* Facilities to be inspected once every 3 years.
Information is fed to the Infrastructure Condition Assessment Model
database:
Contract facility inspectors:
* Review maintenance projects;
* Estimate repair costs.
Facility service office staff:
* Review and prioritize maintenance projects;
* Determine maintenance responsibility;
* Track and oversee repairs.
Largest mail processing facilities:
* Annual inspections by postal maintenance staff;
* Physical inspections by contracted architectural and engineering
firms once every 5 years;
Information is fed to the Infrastructure Condition Assessment Model
database:
Contract facility inspectors:
* Review maintenance projects;
* Estimate repair costs.
Facility service office staff:
* Review and prioritize maintenance projects;
* Determine maintenance responsibility;
* Track and oversee repairs.
Source: U.S. Postal Service (information); GAO (analysis).
[End of figure]
The Postal Service Reacts to Emergency and Urgent Maintenance Issues
but Recognizes the Need for More Preventive Maintenance:
Postal Service officials with responsibility for facility maintenance
at the national, area, and district levels said that the Postal Service
has underfunded its maintenance for years and suspects that this
underfunding has resulted in deteriorating facilities and a large
maintenance backlog. Postal officials told us that this insufficient
funding has caused the Postal Service to focus exclusively on reactive
maintenance--that is, "emergency" and "urgent" repairs--at the expense
of routine repairs. In addition, according to the Postal OIG,
insufficient funding for repairs and maintenance may be hampering the
Postal Service's ability to adopt a preventive maintenance
approach.[Footnote 19] A 2000 Postal OIG report described the Dallas
Downtown Station in Texas as deteriorated and attributed its
deterioration to deferred maintenance that "increased the risk of
injury to Postal Service employees and customers, and has compromised
Postal Service property and the safety and security of the
mail."[Footnote 20] The Postal OIG recommended immediate evacuation of
the facility until needed repairs could be made. When we visited the
Dallas Downtown Station in 2007, the Postal Service had repaired the
facility at a cost of $12 million. The Postal Service may have avoided
some of those costs if it had done more preventive maintenance. Other
facilities we visited had not yet been repaired--including facilities
with chronically leaking roofs and visible interior and exterior
damage. Figure 6 illustrates maintenance issues we observed during our
site visits:
Figure 6: Examples of Maintenance Issues at Postal Facilities We
Visited:
[See PDF for image]
This figure shows four photographs, with the following captions:
Photo #1: Back door of the West Indianapolis Finance Station,
Indianapolis, Indiana.
Photo #2: Evidence of a leaking roof in Tollston Station, Gary,
Indiana.
Photo #3: Damaged ceiling tiles in the 15th Avenue Station, Gary,
Indiana.
Photo #4: Damaged floor in the Carnegie Main Post Office, Carnegie,
Pennsylvania.
Source: GAO.
[End of figure]
In its Strategic Transformation Plan for 2006 through 2010, the Postal
Service established a goal of reducing its repair costs "through more
focused routine building assessments and better planning to fix small
problems as soon as possible."[Footnote 21] In a May 2007 report, the
Postal OIG concurred with this approach, recommending that the Postal
Service adopt more preventive maintenance practices by, among other
things, regularly assessing postal facilities to identify repair needs
and better leverage the Postal Service's limited financial
resources.[Footnote 22] This approach is consistent with a
recommendation made by the National Research Council of the National
Academies[Footnote 23] in 1990 that suggested federal agencies
regularly assess the condition of their facilities and do preventive
maintenance to avoid costly future repairs.[Footnote 24] A reactive
maintenance approach is ultimately more expensive, partly because it
shortens the useful life of equipment and facilities and necessitates,
among other things, more costly future repairs. To that point, a 2004
National Research Council study cited an estimate that each dollar in
deferred maintenance results in a long-term liability of $4 to $5 for
future repair costs.[Footnote 25]
The Postal Service Has Not Established a Strategic Facility Maintenance
Approach in Accordance with Leading Federal Practices:
The Postal Service bases maintenance priorities on urgency. For
example, roof issues take priority over nonstructural interior
maintenance needs. While urgency is important for prioritizing
maintenance spending, leading federal practices consider other
important measures, such as a facility's (1) importance to an agency's
mission, (2) utilization rate, (3) condition, and (4) annual operating
costs. The Postal Service's three-part assessment program will provide
data on the condition of its facilities, but the Postal Service will
not be able to prioritize repairs strategically since it does not
capture data on its facilities' importance, utilization rate, and
annual operating costs to inform its maintenance decisions. For
example, a Postal Service official who is responsible for managing
maintenance throughout a large geographic area told us that he cannot
consider a facility's importance to the Postal Service's mission when
prioritizing maintenance projects because the Postal Service does not
capture this information. Furthermore, the Postal Service does not
currently know the replacement value of its facilities--essential
information for evaluating a facility's overall condition. Adopting
federal facility management performance measures would help the Postal
Service establish a strategic approach to facility maintenance by
allowing the agency to better identify its most important facilities,
prioritize its maintenance needs, and allocate its maintenance funds
accordingly. The consequences of not considering a facility's
importance, utilization rate, and annual operating costs were evident
at the Downtown Fort Worth Station in Texas, which we visited. The
Postal Service spent about $1 million to repair it in fiscal year 2006
even though the station remains in deteriorating condition, is largely
vacant, and does not appear critical to the Postal Service's mission
since the remaining retail and carrier functions could be housed
elsewhere in a smaller facility. Local postal officials said the Postal
Service has considered disposing of the station for years but, instead,
repaired it because no decision had been made on whether to retain it.
Figure 7 illustrates the size, condition, and utilization of the
Downtown Fort Worth Station at the time of our visit.
Figure 7: Pictures Illustrating the Size, Condition, and Utilization of
the Downtown Fort Worth Station, Texas, as of February 2007:
[See PDF for image]
This figure is a display of five photographs, with the following
captions:
Photo #1: The Downtown Fort Worth Station. The Postal Service primarily
occupies only the first floor.
Photo #2: Plywood, partially secured by a wood plank, covers a broken
window.
Photo #3: Vacant work floor space with obsolete processing equipment.
Photo #4: Vacant work floor space.
Photo #5: Obsolete mail sorting equipment fills an unused room.
Source: GAO.
[End of figure]
The Postal Service Has Expanded Alternative Access to Its Services but
Lacks Performance Data to Identify Potentially Unneeded Retail
Facilities for Closure:
To address the challenge of aligning retail access with customer needs,
the Postal Service has expanded alternative access to its services in
underserved areas but has done less to curtail services in overserved
areas. Our analysis shows wide variation in the number of postal retail
facilities among counties of similar population, land area, and degree
of urbanization--demonstrating the Postal Service's challenge of
placing facilities where they are needed. To address this challenge in
underserved areas, the Postal Service has expanded access to retail
services through alternative access options and has set goals for the
use of these options. However, the Postal Service has not actively
pursued a goal in its 2002 Transformation Plan to proactively identify
and close unneeded retail facilities in overserved areas. This inaction
does not conform to leading federal practices, which suggest that an
agency consider closing facilities that are not critical to achieving
the agency's mission, are in poor condition, are not fully utilized, or
are costly to operate relative to their revenue.
Number of Postal Retail Facilities Varies among Counties with Similar
Characteristics:
The number of facilities that provide postal retail services varies
widely among counties of similar population, land area, and degree of
urbanization, according to our statistical analysis of the distribution
of postal retail facilities nationwide.[Footnote 26] Specifically, we
developed a regression model to determine the average number of post
offices for counties of comparable population, land area, and degree of
urbanization. To determine the extent of variation among counties, we
compared the actual number of post offices in each county with the
averages derived from our regression analysis.[Footnote 27] While our
analysis was not intended to consider all relevant factors, including
retail sales volumes or the capacity of postal retail facilities, it
does explain almost 80 percent of the variation in the number of retail
postal facilities between counties. According to our analysis, some
counties have far fewer or far more postal retail facilities than other
counties of comparable population, land area, and degree of
urbanization. For example, Hoke County, North Carolina, has 1 retail
postal facility, whereas the average comparable county has 10 such
facilities. Conversely, Fayette County, Pennsylvania, has 63 postal
retail facilities--over 400 percent more retail facilities than the
average county of comparable population, land area, and degree of
urbanization. The wide variability in the number of retail postal
facilities in comparable counties suggests that access to postal
services among comparable counties also varies. Such variation is
inconsistent with the Postal Service's Transformation Plan goal and the
leading federal practice of aligning access to facilities with customer
and service needs. Figure 8 shows the distribution of owned, leased,
and contracted postal retail facilities by county based on population,
land area, and degree of urbanization.
Figure 8: Distribution of Owned, Leased, and Contracted Postal Retail
Facilities by County Based on Population, Land Area, and Degree of
Urbanization:
[See PDF for image]
This figure is a map of the United States indicating the distribution
of owned, leased, and contracted Postal Retail Facilities by county
based on population, land area, and degree of urbanization. Counties on
the map are shaded to indicate their inclusion in one of the following
categories:
1) Counties without an urban center of 10,000 people or more were
excluded from this analysis;
2) Approximately the same number of postal retail facilities as
comparable counties: 1,313.
3) Fewer postal retail facilities than comparable counties: 280[A].
4) More postal retail facilities than comparable counties: 260[B].
Source: GAO (information); Map Resources (map).
Note: Appendix II contains additional information on our scope and
methodology.
[A] Counties with "fewer" facilities than counties with comparable
population, land area, and degree of urbanization have 9 fewer postal
retail facilities on average than comparable counties, which represents
the lowest 10 percent.
[B] Counties with "more" facilities than comparable counties have 14
more postal retail facilities on average than comparable counties,
which represents the highest 10 percent.
[End of figure]
The Postal Service Has Expanded Access to Alternative Retail Options in
Underserved Areas:
Aware that some communities, particularly in growing areas, have
insufficient access to postal retail services, the Postal Service
established a goal in 2002 for increasing access to postal services
through alternative options. The Postal Service favors alternative
retail options over building new postal-operated facilities because the
Postal Service does not incur construction or operating costs when
providing services through these alternative access options. Thus, in
its 2006 annual report, the Postal Service indicated it had contracts
with almost 4,000 private operators to provide access to postal retail
services.[Footnote 28] While contract postal units are not always
located in underserved areas, our analysis shows that their presence
increased access to postal services in hundreds of counties nationwide.
Without contract postal units, these counties would have had fewer
retail facilities than the average for counties of comparable
population, land area, and degree of urbanization. For example, Butler
County, Ohio, had 16 retail facilities operated by the Postal Service-
-7 fewer than the average for comparable counties. However, the Postal
Service's agreement to operate seven contracted facilities there
brought the total number of retail postal facilities in the county to
23, which was the average for comparable counties. Figure 9 shows a
variety of examples of privately owned businesses that contract to
provide postal services.
Figure 9: Examples of Privately Owned Businesses That Contract to
Provide Retail Postal Services:
[See PDF for image]
This figure is a display of four photographs depicting examples of
privately owned businesses that contract to provide Retail Postal
Services. The four businesses shown are:
* Sweet Time Café and General Store;
* Simpson Realty;
* Denton Mail-n-More;
* Shop-n-Save.
Source: GAO.
[End of figure]
Other alternative retail access options include the Postal Service's:
* stamps on consignment program, which allows businesses, such as drug
stores and grocery stores, to purchase stamps from the Postal Service
and retain a share of the proceeds;
* package pickup and stamps sold online, which are available through
the Postal Service's Web site; and:
* automated postal centers, which provide access to most postal
services from 2,500 centers located in postal-operated retail
facilities; some automated postal centers are available 24 hours a day,
7 days a week, as indicated by the signage for the automated center
shown in figure 10.
Figure 10: Automated Postal Center with Signage Advertising Its Around-
the-Clock Availability:
[See PDF for image]
This figure is a display of four photographs which depict various
Automated Postal Centers with signage advertising its around-the-clock
availability.
Source: GAO.
[End of figure]
To improve its efforts to increase retail access for communities with
insufficient access, the Postal Service is developing a model that will
identify underserved areas--called the Model to Optimize Retail
Effectiveness. According to Postal Service officials, the Postal
Service developed the model in response to our 2004 recommendation that
it develop criteria for making changes to its retail network[Footnote
29] and expects to finalize the model by the end of 2007. Postal
Service officials also said the model will take several factors into
consideration--including the relative location of competitors, costs,
the extent of customer satisfaction, and population growth--in order to
target areas that would benefit most from increased access to postal
services. According to postal officials, FDB is an important source of
information for this effort, which suggests FDB data reliability
problems could adversely affect the model's output. Postal officials
said the local Postal Service employees would verify the model's
findings to ensure their accuracy.
Once it identifies and verifies the underserved areas, the Postal
Service could decide to, among other actions, increase facility hours,
expand advertising of existing alternative access options, add
automated postal centers, or contract with a private business to open a
contract postal facility. While the Postal Service could also acquire
new postal retail facilities, Postal Service officials said this is the
least preferable option given the high costs of traditional postal
facilities. To emphasize the importance of expanding alternative
options for postal services, the Postal Service set a goal to
accomplish at least 40 percent of its retail transactions through
alternative access options by 2010.
Postal Service's Actions to Align Retail Access in Overserved Areas Are
Limited to Closing Some Vacated Facilities and Reducing Staff:
From 2002 through the end of 2006, the Postal Service closed 795
facilities after placing them on emergency suspension. The Postal
Service places a facility on emergency suspension when, among other
reasons, severe maintenance problems create health or safety risks to
employees and customers that require the Postal Service to vacate the
facility. Other reasons for an emergency suspension include the
retirement or resignation of a community's sole postal employee; a
building owner's decision not to renew the Postal Service's lease; or a
forced evacuation due to fire, flood, or other natural disaster. When a
postal retail facility is placed on emergency suspension, the district
has 90 days to decide whether to reopen, close, or consolidate the
facility. However, the actual closure can take years. Specifically, 44
of the 159 facilities under emergency suspension that were slated for
closure as of May 2007 have had their operations suspended for more
than 5 years. In addition, it is not clear what criteria local managers
apply when deciding whether to reopen or close a facility that is on
emergency suspension. We visited one of these stations, the McKeesport
Central Station in Pennsylvania, which had been on emergency suspension
for over a year following a partial roof collapse in December 2005 (see
fig. 11). The local postmaster told us the Postal Service planned to
reopen the station once the landlord repaired the roof, even though the
sole employee assigned to the station has been reassigned, customers
have not complained about the lack of service, the station had low
revenue, and the station is located approximately 1 mile from the
McKeesport Main Post Office.
Figure 11: Examples of Damage Resulting from a Partial Roof Collapse in
December 2005 That Caused an Emergency Suspension of Operations at the
Central Station in McKeesport, Pennsylvania:
[See PDF for image]
This figure is a series of three photographs depicting examples of
damage resulting from a partial roof collapse in December 2005 that
caused an emergency suspension of operations at the Central Station in
McKeesport, Pennsylvania. The pictures depict damage around a wall and
pipes, a damaged rest room, and the front door to the facility with a
notice of closing posted.
Source: GAO.
[End of figure]
In locations where demand for postal services is low (as measured by
low revenue), the Postal Service sometimes chooses to reduce operating
costs by reducing the staffing to just one postal employee--an approach
that could place postal employees at risk unless the Postal Service
installs needed security upgrades. We visited some single-employee
facilities that had not received upgrades the Postal Service identified
as necessary in order to protect the safety of its employees and
customers. For example, when staffing at the two postal stations we
visited in Indiana was reduced to one employee, the Postal Service
inspected the facilities and identified numerous security deficiencies
at both. More than 6 months after the inspections, however, none of the
identified security upgrades had been completed and several of the
upgrades were listed as deferred. The sole employee at another postal
station we visited in Indiana complained in a 2001 letter to her
supervisor about the lack of postal-identified security measures, such
as security cameras, at her facility. Six years later, no actions have
been taken to install additional security measures, such as a video-
monitoring system or a pull-down gate to help secure the front register
when the employee goes to other areas of the station. According to the
manager of the station, who is located at a nearby postal retail
facility, installing security systems at the station would increase
costs--a result that would be incompatible with the goal of decreasing
the station's operating costs.
Lack of Criteria and Facility Management Data Limits the Postal
Service's Ability to Proactively Identify Unneeded Retail Facilities
for Possible Closure:
In 2002, the Postal Service established a goal of reducing the number
of "redundant, low-value" retail facilities in order to lower its
operating costs. Establishing such a goal suggests that these
facilities are less important to the Postal Service's mission of
providing universal access to postal services than other facilities. To
implement this goal, in 2002, the Postal Service lifted a moratorium on
closing retail postal facilities but has not (1) provided a definition
for "redundant, low-value" retail facilities; (2) established a goal
for their reduction; or (3) identified unneeded facilities for possible
closure, including those with low revenue. According to Postal Service
officials, pursuing retail facility reductions is difficult because of
legal restrictions on and political pressures against closing retail
facilities. For example, legal restrictions preclude the Postal Service
from closing a small post office solely because it is operating at a
deficit. To close a post office, the Postal Service is required to,
among other things, formally announce its intention to close the
facility, analyze the impact of the closure on the community, and
solicit comments from the community.
While the Postal Service closes some retail facilities placed on
emergency suspension, its reliance on other factors, such as the loss
of a lease or severe maintenance problems, to drive decisions about
closing retail facilities is inconsistent with leading federal
practices which call for a targeted, criteria-based approach to closure
decisions. More specifically, leading federal practices require
applicable agencies to "rightsize" their facility holdings by, among
other things, closing facilities that are (1) not critical to their
mission, (2) in poor condition, (3) not fully utilized, or (4) costly
to operate relative to their revenue. While considering these criteria
is essential for rightsizing a facility network, the Postal Service
cannot consider them because it does not capture the data needed to do
so. During our review, we visited a number of postal facilities that
appeared to merit consideration for closure based on one or more of
these criteria. Furthermore, none of these facilities housed carriers
or mail processing functions and each had low sales and was located
near other retail facilities. Our site visits included the following
types of facilities in urban locations:
* Facilities that contribute little to the Postal Service's mission of
providing universal access to postal services. For example, Station C
in downtown Dallas, Texas, provides access to postal services only for
the people that work in the secured federal building, and the station
is located just 1 half-mile from another retail facility in downtown
Dallas. Consequently, Station C's annual retail sales of about $282,000
in fiscal year 2007 ranked among the lowest in the Dallas District.
* Facilities in poor condition. We observed maintenance issues at a
number of postal stations that do not appear critical to the Postal
Service's mission based on their low revenue and proximity to other
retail facilities. For example, the Postal Service recently renewed the
lease for the Wilkinsburg Station in Pittsburgh, Pennsylvania, even
though the facility's façade is starting to pull loose from the
building, the roof has numerous leaks, and sewage backs up throughout
the facility's plumbing system. Postal Service officials said the
Postal Service did not consider closing the station before renewing the
lease, even though it does not appear critical--as it earns below-
average revenue and is located about 2 miles from another retail
facility in Wilkinsburg.
* Facilities not fully utilized. One example is the Downtown Station in
Fort Worth, Texas--a large, four-story building where the Postal
Service conducts retail and carrier operations on the main floor but
does not use the other floors (see fig. 6).
* Facilities that are costly to operate relative to their value. We
visited several postal stations with annual sales below $200,000, which
is approximately what the Postal Service requires from each of the
2,500 automated postal centers located within postal retail
facilities.[Footnote 30] For example, the Gary Downtown Finance
Station, Indiana, which is one of seven postal retail units operating
in the city, had annual revenue of $163,000 in fiscal year 2006.
Exclusively retail, this station does not support any mail delivery
functions beyond some post office boxes.
* Facilities with high operating costs relative to their revenue. For
example, the "Store of the Future" in the Pittsburgh International
Airport, Pennsylvania (see fig. 12), costs more per square foot ($95)
for the Postal Service to lease than any other facility in the
Pittsburgh District, yet it has below-average sales revenue. Postal
Service officials said the facility's revenue is low because it is
located behind airport security check points.
Figure 12: The "Store of the Future" Located behind Security at the
Pittsburgh International Airport, Pennsylvania:
[See PDF for image]
This figure is a photograph of the "Store of the Future" inside the
Pittsburgh International Airport.
Source: GAO.
[End of figure]
Conclusions:
The Postal Accountability and Enhancement Act has significant near-and
long-term financial implications for postal operations. Consequently,
it is imperative that the Postal Service manage its facilities as
efficiently and cost-effectively as possible. However, the Postal
Service cannot begin to overcome its facility management challenges
until it improves the quality of its facility data. To date, FDB has
failed to serve as a reliable system for inventorying postal facilities
or for measuring their performance, and its weaknesses are so great
that it cannot be reliably used for basic facility management purposes,
such as the Postal Service's annual reporting. While efforts are under
way to improve FDB, it remains unreliable and unusable for measuring
performance. Instead of solving the Postal Service's problem of having
multiple, overlapping databases, FDB appears to have compounded the
problem by adding an additional data source to those already available.
Postal officials with responsibility for facility maintenance at the
national, area, district, and local levels said that the Postal Service
has underfunded its maintenance for years and suspects that this
underfunding has resulted in deteriorating facilities and a large
maintenance backlog. However, the Postal Service does not know the
extent of the problem because it has not comprehensively tracked and
analyzed data on the condition of its facilities. This situation may be
changing because the Postal Service has recognized the importance of
compiling data for facility maintenance and has initiated a
comprehensive facility assessment. Conducting a comprehensive facility
assessment is a necessary first step toward improving the condition of
postal facilities, but it will initially add tens of thousands of new
maintenance projects to the Postal Service's maintenance backlog.
Funding constraints will require the Postal Service to take an
incremental approach in order to reduce the backlog. The Postal Service
will have to make difficult choices about what repairs to make and what
repairs to defer. These choices would be easier if the performance data
on the Postal Service's facilities, such as a facility's importance,
utilization rate, or costs, were reliable.
One way to minimize maintenance costs is to reduce the number of
facilities that must be maintained. In locations where new services are
needed, the Postal Service is developing alternative access options to
avoid new facility costs, but it has not identified or closed
unnecessary postal retail facilities. Moreover, although the Postal
Service has set a goal of shifting 40 percent of its retail sales to
alternative access options, it has not set any similar targets for
reducing its vast network of post offices, stations, and branches.
Instead, it relies on emergency suspensions and staffing reductions to
curtail operations at some facilities. However, this approach does not
conform to leading federal practices because the closures are not
linked to the facilities' performance. In addition, the staffing
reductions potentially place the remaining postal employees at risk.
The expected increase in the use of alternative access options,
combined with financial necessity, suggests the need to consider
additional closures of brick-and-mortar postal facilities. To properly
consider the closure opportunities, the Postal Service will need to
know which retail facilities to retain and which facilities are no
longer important to its retail mission. With improved facility data,
the Postal Service could assess a facility's importance and information
on other relevant factors, such as a facility's utilization rate and
condition, to identify closure possibilities and justify any closure
decisions.
Recommendations for Executive Action:
To improve the Postal Service's management of its facilities, we are
making the following six recommendations:
* To strengthen the reliability and usefulness of the Postal Service's
facility data, the Postmaster General should (1) direct the Vice
President of Delivery and Retail to determine, in consultation with the
Vice Presidents of Facilities and Intelligent Mail and Address Quality,
whether it is more cost-effective to make FDB a reliable source for
consolidated data on its facilities or to replace it with a new, more
reliable database. If the Postal Service decides to retain FDB, the (2)
Postal Service should take steps to improve its reliability and
usefulness by establishing internal controls, such as edit checks, to
preclude obvious mistakes.
* To conform to leading federal practices, the Postmaster General
should direct the Vice President for Delivery and Retail to (3) measure
facility management performance consistent with the spirit of those
developed by the Federal Council; and (4) begin tracking facility
management performance trends.
* To improve facility management and reduce long-term facility costs,
the Postmaster General should, consistent with leading federal
practices, (5) direct the Vice President for Facilities to prioritize
maintenance projects based on a facility's overall performance,
including measures consistent with the spirit of those developed by the
Federal Council; and (6) direct the Vice President for Delivery and
Retail to institute a proactive, criteria-based approach to assist in
identifying unneeded retail facilities for possible closure as part of
the June 2008 facility plan required by the Postal Accountability and
Enhancement Act.
Agency Comments and Our Evaluation:
The Postal Service provided its written comments on a draft of this
report by letter dated November 19, 2007. These comments are summarized
below and are included, in their entirety, as appendix III to this
report. The Postal Service agreed with our two recommendations to
improve FDB's reliability; agreed, in principle, with our
recommendation to prioritize maintenance projects based on a facility's
overall performance; but disagreed with our three remaining
recommendations. In separate correspondence, the Postal Service also
provided minor technical comments, which we incorporated, as
appropriate.
In agreeing with our two recommendations regarding FDB, the Postal
Service indicated that it had already determined that it is in its best
interest and more cost-effective to retain FDB rather than to replace
it with a new, more reliable database. Second, while the Postal Service
believes FDB is, as a whole, very reliable, it agreed to establish
additional controls to improve its reliability and usefulness.
Furthermore, although the Postal Service stated that it prioritizes
maintenance projects adequately, it agreed, in principle, with our
recommendation to prioritize maintenance projects based on a facility's
overall performance. The Postal Service also reiterated actions it has
taken, including the initiation of its Facility Condition Assessment
program, to better identify and prioritize the agency's maintenance
workload and budget.
The Postal Service disagreed with our three remaining recommendations,
including our two recommendations to conform to leading federal
practices by measuring facility management performance and tracking
performance trends. Regarding these two recommendations, the Postal
Service noted that it considers leading federal practices developed by
the Federal Council, but reiterated that it is not required to adopt
them.[Footnote 31] The Postal Service also noted that its mandate to
provide universal mail service on an almost daily basis and its
provision of services and products that are in direct competition with
the private sector pose unique challenges for the Postal Service. Thus,
the agency indicated that it had concerns about adopting leading
federal practices. We continue to believe that measuring and tracking
performance in such areas as a facility's importance, utilization,
condition, and operating costs are critical to effective facility
management. We also recognize the uniqueness of the Postal Service's
business and mission. Consequently, we revised these recommendations to
emphasize that the Postal Service should develop and track performance
measures that may better meet its needs--as long as the measures are
consistent with the spirit of those developed by the Federal Council.
Finally, the Postal Service disagreed with our recommendation to
institute a criteria-based approach to identify and close unneeded
retail facilities as part of the June 2008 facility plan required by
the Postal Accountability and Enhancement Act. The Postal Service
stated that it had purposely removed mention of retail facility
closures from its 2005 update of its Transformation Plan due to its
difficulty in establishing criteria that could be applied to all retail
locations. Instead, the Postal Service indicated that it intends to
continue to assess its retail facilities on a case-by-case basis. We
agree that developing criteria for identifying unneeded retail
facilities is difficult and that such criteria cannot be uniformly
applied to the universe of all postal retail facilities. As a result,
we clarified our recommendation to indicate that the results of a
criteria-based approach would "assist" the Postal Service in
identifying candidate retail facilities for possible closure. The
Postal Service further indicated that the focus of its forthcoming
facility plan is on its mail processing network, not its retail
facilities. While the Postal Service does not currently envision
developing such a criteria-based approach as part of its
congressionally required facility plan, we continue to believe that
doing so would provide an excellent opportunity for the agency to begin
pursuing its 2002 goal of identifying and closing redundant, low value
retail facilities.
We are sending this report to the congressional requesters and their
staffs. We are also sending copies to the Postmaster General and other
interested parties. We will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions regarding this report, please
contact me at siggerudk@gao.gov or (202) 512-2834. Contact points for
our Office of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff that made key contributions
to this report are listed in appendix IV.
Signed by:
Katherine A. Siggerud:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Executive Order 13327: Federal Real Property Asset
Management:
In 2004, the President signed Executive Order 13327: Federal Real
Property Asset Management in response to our designation of federal
real property as a governmentwide high-risk area.[Footnote 32] The
executive order and the initiative to implement the order were intended
to ensure that agencies maintain facility inventories appropriate to
their needs, cost, and physical condition to support each agency's
mission and objectives. This order applies to 24 executive departments
and agencies,[Footnote 33] but not to the Postal Service.[Footnote 34]
The executive order established the Federal Real Property Council
(Federal Council), which includes representatives from the Office of
Management and Budget and applicable agencies. The Federal Council
develops guidance, serves as a clearinghouse for leading federal
practices, and facilitates agency efforts to implement the executive
order. Although not bound by the executive order, the Postal Service
has voluntarily adopted some of the Federal Council's leading
practices. Specifically, the Postal Service submits some data to the
General Services Administration for its annual real property inventory
and has designated an individual to represent the Postal Service on the
Federal Council.
The Federal Council has developed guidance that, among other actions,
requires applicable agencies to collect 24 data elements for
transmission to the General Services Administration to use in compiling
an annual inventory of federal facilities. This data collection is
intended to, among other things, provide agencies with data needed to
assess their performance based on four key performance measures and
determine whether their facilities are properly aligned with customer
and service needs. The following four performance measures are intended
to help agencies determine if the continued use of each of their
facilities is justified based on their:
1. importance to achieving the agency's mission;
2. utilization rate (extent to which the facility is used);
3. physical condition as measured by a "condition index";[Footnote 35]
and:
4. annual operating costs, including the recurring maintenance and
repair costs for each facility in an agency's inventory.
[End of section]
Appendix II: Objectives, Scope, and Methodology:
Our overall objectives were to identify the Postal Service's efforts to
address three key facility challenges related to (1) capturing and
maintaining accurate facility data, (2) adequately maintaining postal
facilities, and (3) aligning access to retail services with customer
needs. Specifically, this report identifies the Postal Service's goals
and actions for managing each of these challenges and assesses its
progress in overcoming the challenges and, as applicable, in
implementing leading federal practices.
To address these objectives, we visited 58 postal facilities and 4
contract postal facilities in nine districts covering three of the
Postal Service's nine areas. The observations derived from our site
visits cannot be generalized to the population of postal facilities
nationwide. We chose these locations to achieve geographic balance and
to include areas with growing and declining populations. We chose the
specific facilities within these areas to achieve a range in the type,
revenue, condition (indicated by the number of open maintenance
requests in the Postal Service's maintenance tracking system), and
size. This selection process led us to visit of each of the following
types of postal facilities: main post office, postal station, postal
branch, contract postal facility, carrier annex, processing and
distribution center, air mail center, bulk mail processing center,
vehicle maintenance facility, and administrative facility. We toured
each facility, interviewed local employees, and collected data on
facility operations. Table 1 identifies the specific areas, districts,
and cities we visited.
Table 2: Postal Areas, Districts, and Cities Visited:
Postal area: Eastern;
District: Greensboro;
City and state: Greensboro, NC.
Postal area: Eastern;
District: Greensboro;
City and state: Chapel Hill, NC.
Postal area: Eastern;
District: Greensboro;
City and state: Carrboro, NC.
Postal area: Eastern;
District: Greensboro;
City and state: Durham, NC.
Postal area: Eastern;
District: Baltimore;
City and state: Cumberland, MD.
Postal area: Eastern;
District: Pittsburgh;
City and state: Uniontown, PA.
Postal area: Eastern;
District: Pittsburgh;
City and state: McKeesport, PA.
Postal area: Eastern;
District: Pittsburgh;
City and state: Pittsburgh, PA.
Postal area: Eastern;
District: Pittsburgh;
City and state: Carnegie, PA.
Postal area: Great Lakes;
District: Chicago;
City and state: Chicago, IL.
Postal area: Great Lakes;
District: Central Illinois;
City and state: Bedford Park, IL.
Postal area: Great Lakes;
District: Northern Illinois;
City and state: Lombard, IL.
Postal area: Great Lakes;
District: Northern Illinois;
City and state: Palatine, IL.
Postal area: Great Lakes;
District: Greater Indiana;
City and state: East Chicago, IN.
Postal area: Great Lakes;
District: Greater Indiana;
City and state: Gary, IN.
Postal area: Great Lakes;
District: Greater Indiana;
City and state: Indianapolis, IN.
Postal area: Southwest;
District: Forth Worth;
City and state: Colleyville, TX.
Postal area: Southwest;
District: Forth Worth;
City and state: Forth Worth, TX.
Postal area: Southwest;
District: Forth Worth;
City and state: Denton, TX.
Postal area: Southwest;
District: Dallas;
City and state: Dallas, TX.
Source: GAO.
[End of table]
To assess the Postal Service's progress in overcoming the challenge of
capturing and maintaining accurate facility data, we analyzed all
facility entries (over 36,000) contained in the Facility Database (FDB)
as of October 5, 2006, and assessed the reliability of the data it
contains. To assess the reliability of FDB data, we (1) interviewed
Postal officials to obtain an understanding of the data, the database
structure, the sources of the data, known issues or limitations in the
database, and relevant Postal Service documentation; (2) reviewed
related reports by the Postal Service Office of Inspector General
(Postal OIG); and (3) performed electronic testing of the database for
completeness, obvious errors, and inconsistencies. We also attempted to
verify the data in FDB during our 58 facility visits. Prior to our
visits, we identified potential data reliability problems and, during
our visits, documented information related to the existence and causes
of those problems. In addition, we corroborated our observations on FDB
reliability issues through interviews with and documentation obtained
from postal officials in the Delivery and Retail department. To
determine the reasons for the data reliability issues in FDB, we
interviewed Postal Service personnel in the Delivery and Retail
department responsible for managing the facilities data, local postal
officials, and postal officials from the Postal OIG. We also reviewed
key Postal Service documents related to the facilities data, including
the FDB user's guide, the Postal Service's 2002 and 2006 Transformation
Plans, and reports issued by the Postal OIG and GAO. Our analysis was
based principally on the FDB data as of October 5, 2006, but we also
analyzed FDB data obtained on July 7, 2007, in part, to assess the
impact of the Postal Service's efforts to improve FDB since October 6,
2006. To identify examples of leading federal practices related to our
objectives, we reviewed Executive Order 13327: Federal Real Property
Asset Management, related documentation from the Federal Council, and
previous GAO reports. We also interviewed a Federal Council official
and attended a Federal Real Property Association conference in 2006
that focused on the implementation of the executive order.
To assess the Postal Service's progress in overcoming the challenge of
maintaining its facilities in adequate condition, we analyzed data
drawn from the Postal Service's maintenance tracking system (the
Facility Single Source Provider) as of March 7, 2007. We assessed the
reliability of the data by (1) interviewing knowledgeable Postal
Service officials and (2) validating the accuracy of the data at the
facilities we visited. We also observed conditions at the 58 facilities
we visited and interviewed local postal officials. Additionally, we
analyzed key Postal Service documents related to facility maintenance,
including the Postal Service's Strategic Transformation Plan for 2006
through 2010, presentations related to its facility assessment effort,
and an audit report issued by the Postal OIG.
To assess the Postal Service's progress in overcoming the challenge of
aligning access to retail services with customer needs, we assessed the
variance in access to retail postal facilities among similar counties
using an ordinary-least squares regression model. We designed the model
to predict the number of postal retail facilities (main post offices,
stations, branches, and contract units) in each U.S. county based on
each county's population (in 2000), land area (in square miles), and
degree of urbanization (as defined by the U.S. Census Bureau).[Footnote
36] First, we determined the number of retail facilities in each county
by conducting a unique address analysis, which counted only one retail
facility at each address within FDB to avoid counting the same retail
facilities more than once. The regression coefficients from the
regression model are presented in table 3.
Table 3: Regression Coefficients Used to Establish the Average Number
of Retail Postal Facilities in Counties Based on Each County's
Population, Land Area, and Degree of Urbanization:
County characteristic[A]: Intercept;
Estimate: 1.861[B];
Standard error of the estimate: 0.292.
County characteristic[A]: Population in 2000 (in thousands);
Estimate: 0.318[B];
Standard error of the estimate: 0.016.
County characteristic[A]: Degree of micropolitan urbanization[C];
Estimate: 0.618;
Standard error of the estimate: 0.539.
County characteristic[A]: Population micropolitan;
Estimate: - 0.142[B];
Standard error of the estimate: 0.018.
County characteristic[A]: Degree of metropolitan urbanization[C];
Estimate: 6.581[B];
Standard error of the estimate: 0.358.
County characteristic[A]: Population metropolitan;
Estimate: - 0.276[B];
Standard error of the estimate: 0.016.
County characteristic[A]: Land area in square miles (in thousands);
Estimate: 0.279[B];
Standard error of the estimate: 0.033.
Source: GAO.
Notes: Adjusted R-squared = 0.79 N (counties in the United States and
Puerto Rico) = 3,213:
[A] Because the rural degree of urbanization serves as the baseline of
the model, there is no separate estimate for rural urbanization. To
obtain the predicted value for rural counties, we used the following
regression equation for the number of postal retail facilities in rural
counties: post offices in rural counties = 1.861 + 0.318 (population in
thousands) + 0.279 (land area in thousands of square miles) + model
error.
[B] Indicates statistical significance at the 0.001 level.
[C] Degree of urbanization is specified as a dummy variable in this
model: 1 if micropolitan, 0 otherwise, and 1 if metropolitan, 0
otherwise.
[End of table]
The R-squared statistic, an indicator of model fit or explanatory
power, was 0.79. This means the model explains 79 percent of the
variation in the number of post offices between counties. We performed
various model specification and diagnostic tests to determine the
appropriateness of our model specifications (e.g., interaction effects
and degree of urbanization as dummy variables), as well as to determine
the existence and influence of outliers. We identified two potential
outliers, but did not eliminate them from our analysis because they did
not materially affect our results.[Footnote 37]
To determine the variation in the number of postal retail facilities
between counties, we examined the residuals from the ordinary-least
squares regression model. The residuals consist of the difference
between the actual number of postal retail facilities and the number
predicted by the model. The number predicted by the model can be
considered the average number of facilities offering postal retail
services in counties of similar population, land area, and degree of
urbanization because the model, in deriving the estimates, considers
these factors across all 3,213 counties in the United States and Puerto
Rico. We then rank ordered the counties on the difference between the
actual and the predicted number of postal retail facilities from low to
high (i.e., from fewer than predicted to more than predicted). For the
map in figure 7, we considered the top 10 percent of counties in this
rank order as having more post offices than comparably sized and
populated counties and the bottom 10 percent of counties as having
fewer post offices than comparable counties. We limited this portion of
our analysis to counties with an urban center of at least 10,000
people--defined as metropolitan and micropolitan areas--because the
Postal Service may need to maintain more postal retail facilities in
these areas to fulfill its mission of providing universal access to
postal services. We interviewed postal officials at the facility,
district, area, and headquarters levels about how retail facilities are
aligned with customer needs and obtained documentation relating to
alternative service options and emergency suspensions that resulted in
facility closures. We also reviewed key Postal Service documents,
including the policies and procedures for closing postal facilities,
federal regulations governing postal facility closures, the Postal
Service's 2002 and 2005 Transformation Plans, audit reports issued by
the Postal OIG, and previous GAO reports.
We conducted our work from July 2006 through December 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix III: Comments from the Postal Service:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
United States Postal Service:
475 L'Enfant Plaza SW:
Washington, DC 20260:
[hyperlink, http://www.usps.com]:
November 19, 2007:
Katherine A. Siggerud:
Director, Physical Infrastructure Issues:
United States Government Accountability Office:
Washington, DC 20548-0001:
Dear Ms. Siggerud:
Thank you for providing the U.S. Postal Service with the opportunity to
review and comment on the draft report titled U.S. Postal Service
Facilities: Improvements in Data Would Strengthen Maintenance and
Alignment of Access to Retail Services, (GAO-08-41).
Data Integrity and Reliability:
The report accurately reflects that our expansive facility network
poses significant real property management challenges. To meet this
challenge, the Postal Service relies on a number of systems to capture,
monitor, and track information about each of our facilities. However,
this report focuses almost exclusively on the data and reliability of
our Facilities Database (FDB). The following provides information on
each of the systems identified in the report and clarification as to
its purpose:
* Address Management System”maintains the master postal addressing
database.
* Electronic Facilities Maintenance System (eFMS)-manages and tracks
construction, repair and alteration projects, and all leasing
activities.
* Facilities Database”serves as a repository/information database of
facility information.
The theme throughout the report is that FDB has not met the Postal
Service's goal for a single, consolidated source of accurate facility
data; the report also seems to target FDB's demise. We want to make it
very clear that FDB was never intended to be what the report claims. As
stated above, FDB is a repository of facility information. However, the
report dismisses FDB without any exploration of how the information it
contains is actually used throughout the Postal Service, and states
that several internal organizations "do not use FDB for aggregate
facility information, partly because of concerns about its
reliability." Did the GAO base this conclusion, in part, on the various
sources used in our annual report to account for facility information?
If so, please be aware the data for our annual report properly extracts
this information from the appropriate source, not FDB alone. [See
comment 1]
Recommendations 1 and 2 state:
To strengthen the reliability and usefulness of the Postal Service's
facility data, the Postmaster General should direct the Vice President
of Delivery and Retail to (1) determine, in consultation with the Vice
Presidents of Facilities and Intelligent Mail and Address Quality,
whether it is more cost-effective to make FDB a reliable source for
consolidated data on its facilities or to replace it with a new, more
reliable database. If the Postal Service decides to retain FDB, take
steps to improve its reliability and usefulness by (2) establishing
internal controls, such as edit checks, to preclude obvious mistakes.
[See comment 2]
We agree with recommendation 1 and, as such, determined it is in our
best interest and more cost-effective to retain FDB. We believe the
report's recommendation to consider replacement of FDB is based on an
overly ambitious goal for this repository of facility information, and
to replace it would be fiscally irresponsible. We also recognize there
are issues with any database; therefore, we agree with recommendation
2, even though we believe FDB is, as a whole, very reliable. We are
already working to improve the reliability of FDB by putting additional
controls in place to minimize errors whenever data is captured from
feeder systems and during any data-entry process performed by local
management.
On several occasions, when confronted with the report's findings, our
staffs were able to explain most of the data reliability issues brought
to their attention with the use of the aforementioned systems. The
Postal Service uses these systems in concert to achieve its mission.
Errors which were brought to our attention during these discussions
with GAO personnel were corrected, and we would benefit tremendously if
all the identified issues cited in the report were shared with us, as
requested previously. In addition, while the report specifically states
that it could not determine the overall magnitude of FDB's data
reliability, it then speculates that errors in FDB could cause the
Postal Service's rent obligation to vary by as much as $82M. GAO has
not provided data to allow us to evaluate this conclusion, and in any
event, the Lease Payment System within eFMS is used to determine all
USPS rent payments, not FDB. [See comment 3 and 4]
Leading Federal Practices:
Recommendations 3 and 4 state:
To better conform to leading federal practices, the Postmaster General
should direct the Vice President of Delivery and Retail to (3) adopt
federal leading practices [sic] for measuring facility management
performance, including a facility's importance to achieving the Postal
Service's mission and the facility's utilization rate, condition, and
annual operating costs, and (4) begin tracking facility performance
management over time.
We do not agree with recommendations 3 and 4. As duly noted in the
report, the Postal Service is not covered by the executive order which
established the Federal Real Property Council. While we voluntarily
participate in meetings whenever topics are germane to the Postal
Service, considerations on meeting real property management challenges
for the Postal Service are very different than those for the rest of
the federal government. We are mandated to provide universal mail
service on an almost daily basis, but we also provide services and
products that have direct competition with the private sector. The
report repeatedly cites that the Postal Service does not follow leading
federal practices the Council requires of covered agencies. These
practices are to establish current and reliable inventory of facilities
and to capture, track, and report facility management performance-
related data on 1) the importance to achieving the agency's mission, 2)
utilization rate, 3) physical condition, and 4) annual operating costs.
While we do consider leading federal practices, we have real concerns
about applying these leading federal practices, in their entirety, to
Postal Service activities across the board due to the uniqueness of our
mission and business. [See comment 5]
Today, we consider the majority of our facilities to be important to
achieving the agency's mission - from a one-person, part-time office in
rural America providing a sense of community, to a facility which
processes millions of pieces of mail each week. However, as noted in
the report, we do close and consolidate facilities, which is an
admittedly difficult process due to specific legal requirements and
political realities. To determine utilization rate, we seek input from
local installation heads on the availability of vacant space in their
facility. Facilities Service Offices, in cooperation with our
Operations personnel, determine the potential leasibility or
saleability of excess space. In addition, the Postal Service now has a
national revenue generation program that has identified potential
disposal and developmental opportunities for excess space. We do not
rely solely upon local managers to identify excess space, and FDB was
never intended to be the only source to identify such space.
Facility Management and Costs:
Recommendations 5 and 6 state:
To improve facility management and reduce long-term facility costs, the
Postmaster General should, consistent with leading federal practices,
(5) direct the Vice President for Facilities to prioritize maintenance
projects based on a facility's overall performance, including the
facility's importance, utilization rate, and costs, and not just on a
project's urgency; and (6) direct the Vice President for Delivery and
Retail to institute a proactive, criteria-based approach to identify
and close unneeded retail facilities as part of the June 2008 facility
plan required by the Postal Accountability and Enhancement Act.
With regard to recommendation 5, we agree in principle with the idea of
prioritizing maintenance projects and believe that we already
prioritize them adequately. The report states the Postal Service
focuses "solely on urgent repairs at the expense of routine, preventive
maintenance;" this is simply not true. Certainly in the absence of
unlimited funding, the Postal Service must balance the number of
maintenance requests with available funds by prioritizing projects
which range from discretionary (e.g., repainting office space) to
emergency (e.g., safety of employees and customers). The report did
acknowledge that for the first time on a national level, the Postal
Service received deficiency information based on surveys of
installation heads. And in conjunction with the Facilities Condition
Assessment program of all larger facilities, data will be available to
better identify and prioritize workload and budget. All facilities will
be surveyed or inspected every three years to determine maintenance
needs. [See comment 6]
We disagree with recommendation 6, as we do not see this approach as
part of the 2008 Facility Plan. The focus of the Facility Plan
developed pursuant to the Postal Accountability and Enhancement Act of
2006 is our mail processing network, not retail facilities. As
information, the Transformation Plan, updated in 2005 for fiscal years
2006 to 2010, purposely removed mention of retail facility closures, as
it is difficult to agree and establish criteria that could be applied
to all locations. As GAO noted, looking at retail facility distribution
on a county-by-county basis is one evaluation option, but there are
other approaches that could be considered (e.g., universal service,
local infrastructure and economy, demographics, growth, competitive
presence, etc.). As discussed when we met, we have learned that each
facility must be assessed on a case-by-case basis, and we intend to
continue to use this method. [See comment 7]
The report appears to reach the conclusion that for a facility to be
viable, it must meet the minimum revenue threshold that is required of
an Automated Postal Center (APC). The APCs are intended for use in high
growth areas where there is significant customer traffic; APCs also
enable us to shift less complex transactions away from the retail
counter. It is not appropriate to apply the APC's revenue criteria to
our brick and mortar retail facilities. We would be glad to further
discuss the GAO's criteria for identifying unneeded facilities. [See
comment 8]
We again request detailed information from GAO on its site visits to
enable us to correct the facility-specific issues that were identified
and highlighted in the report. We would also appreciate receiving all
specific information on any data reliability issues found.
If you or your staff wishes to discuss any of these comments further,
we are available at your convenience.
Sincerely,
Singed by:
Kathy Ainsworth:
Vice President Delivery and Retail:
The following are GAO's comments on the Postal Service's letter dated
November 19, 2007.
GAO Comments:
1. The Postal Service stated that FDB is a repository of facility
information and that it was never intended to be a single, consolidated
source for information on facilities. The agency's September 2006 FDB
briefing to us appears to dispute this point. At that time, postal
officials indicated that the agency had intended to create "one source
of information for tracking all aspects of our [its] facilities" to
address, among other matters, the high cost of maintaining inaccurate
and redundant databases. Notwithstanding our prior understanding, we
clarified our report, indicating that FDB was intended to be a
"consolidated" source for accurate facility data--not a "single,"
consolidated data source.
2. The Postal Service questioned a statement in our report which
indicated that several internal (postal) organizations "do not use FDB
for aggregate facility information, partly because of concerns about
its reliability." More specifically, the agency inquired whether we had
drawn this conclusion on the basis of the various data sources used to
compile the Postal Service's 2006 annual report. While the variety of
data sources used in the annual report--none of which were exclusively
FDB--is illustrative of our point, our statement was principally based
on interviews with numerous officials throughout the Postal Service's
major departments.
3. The Postal Service correctly noted that, after researching multiple
data sources, its staff was able to provide explanations for specific
examples of data reliability issues--including reasons for identified
mistakes--that we brought to their attention. Although these
explanations appeared plausible, as discussed in our report, without
additional site visits, we cannot determine whether their explanations
were accurate. Most importantly, however, regardless of whether the
identified mistakes could be explained using other data sources--the
fact remains that FDB contains errors that need to be corrected if it
is to retained and used as a reliable source of agency data.
4. The Postal Service indicated that it would benefit tremendously if
we shared information on all of the specific examples of data
reliability issues we used in this report. We appreciate the Postal
Service's desire to improve the reliability and usefulness of FDB and,
therefore, suggest that the Postal Service replicate our statistical
analyses on current data by, among other standard analytical methods,
sorting its current FDB data according to each facility's name,
address, and type in order to identify duplicate facility entries. If
needed, we could also meet to further discuss our analytical methods
for analyzing the Postal Service's data.
5. As discussed in the body of this report, we continue to believe that
measuring and tracking performance in such areas as a facility's
importance, utilization, condition, and operating costs are critical to
effective facility management. Nevertheless, because we also recognize
that the Postal Service's business and mission are unique, we revised
these recommendations to emphasize that the Postal Service should
develop performance measures that may better meet its needs--as long as
the measures are consistent with the spirit of those developed by the
Federal Council.
6. The Postal Service disagreed with our statement that it focuses
"solely on urgent repairs at the expense of routine, preventive
maintenance." While we removed "solely" from the applicable sentence in
this report, this statement was based on evidence obtained during
interviews with numerous postal employees involved with facility
maintenance at the national, area, and local levels. All of these
individuals stated that resource constraints have forced the Postal
Service to focus on urgent repairs and to defer routine or preventive
maintenance projects. Furthermore, the interviewees' comments were
consistent with findings in a prior Postal OIG review which found that
insufficient budgeting for repairs and maintenance may be hampering the
Postal Service's ability to proactively manage its
maintenance.[Footnote 38]
7. As discussed in the body of this report, we agree that developing
criteria for identifying unneeded retail facilities is difficult and
that such criteria cannot be uniformly applied to the universe of all
postal retail facilities. As a result, we clarified our recommendation
to indicate that the results of a criteria-based approach would
"assist" in identifying candidate retail facilities for closure.
Furthermore, although the Postal Service does not currently envision
developing such a criteria-based approach as part of its
congressionally required facility plan, we continue to believe that
doing so would provide an excellent opportunity for the agency to begin
pursuing its 2002 goal of identifying and closing redundant, low value
retail facilities.
8. We are not intending to imply that in order to be viable, a facility
must meet minimum revenue thresholds established for the Postal
Service's Automated Postal Centers. As discussed in our report, this
threshold was $198,000 in fiscal year 2007. We included information on
this threshold simply as context for the amount of revenue generated by
some of the postal retail facilities we visited-- all of which were in
urban areas. While we agree that the threshold the Postal Service
applied to the deployment of automated postal centers is not
necessarily applicable to its retail facilities, the Postal Service has
not established criteria based on revenue or any other criteria for
analyzing the performance of its retail facilities. The absence of such
action is among the reasons we are recommending that the Postal Service
institute a proactive, criteria-based approach to help identify and
close unneeded retail facilities.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Katherine A. Siggerud, (202) 512-2834 or siggerudk@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Kathleen Turner, Assistant
Director; Michael Armes; Richard Bakewell; Keith Cunningham; Bess
Eisenstadt; Kathy Gilhooly; Brandon Haller; Anne Izod; Dorothy Yee
Leggett; Josh Ormond; and Minette Richardson made key contributions to
this report.
[End of section]
Footnotes:
[1] Pub. L. No. 109-435 (Dec. 20, 2006).
[2] Notwithstanding the annual limitation, rates may be adjusted on an
expedited basis due to either extraordinary or exceptional
circumstances. See Section 201 of Pub.L. No. 109-435 (2006).
[3] The Executive Order applies to the heads of all executive branch
departments and agencies listed in 31 U.S.C. 901(b)(1) and (b)(2). The
Postal Service is not included in that list.
[4] GAO, Federal Real Property: Progress Made Toward Addressing
Problems, but Underlying Obstacles Continue to Hamper Reform, GAO-07-
349 (Washington, D.C.: Apr. 13, 2007).
[5] The Postal Service is required by statute to consider specific
factors in making a determination to close a post office and to give
persons served by a post office the opportunity to present their
concerns regarding a proposal to close the post office. See 39 U.S.C
404(b). Additionally, the Postal Service is precluded from closing a
small post office solely because it operates at a deficit. See 39
U.S.C. 101(b).
[6] The Postal Service closed 795 facilities due to emergency
circumstances from 2002 through April 2007.
[7] The Postal Service has nine geographically based area offices. The
eight Facility Service Offices are aligned with the Postal Service's
areas, but the Eastern and Capital Metro areas are combined into one
Facility Service Office.
[8] GAO, U.S. Postal Service: Transformation Challenges Present
Significant Risks, GAO-01-598T (Washington, D.C.: Apr. 4, 2001).
[9] GAO, U.S. Postal Service: USPS Needs to Clearly Communicate How
Postal Services May Be Affected by Its Retail Optimization Plans, GAO-
04-803 (Washington, D.C.: July 13, 2004).
[10] For more information on our assessment of data reliability, see
appendix II of this report.
[11] According to Postal Service officials, some of this variation
could be caused by the existence of different leases for the same
facility, but we were unable to determine the reasons for the
variations from the FDB data.
[12] According to the Postal Service, some inconsistent ownership data
may be associated with facilities owned by the Postal Service on leased
land or facilities leased by the Postal Service on land that it owns,
but this information could not be determined from the FDB data we
received.
[13] The Postal Service also identified other data errors related to
the Lubbock facilities. Specifically, according to the Postal Service,
the Facility Management System contained an outdated address for the
main post office (entry 1) and an incorrect address for the location of
the postal vending machine (entry 4).
[14] U.S. Postal Service, Office of the Inspector General, Data
Integrity Review of Address Management System Facility Data, IS-AR-07-
005 (Washington, D.C., Dec. 22, 2006).
[15] U.S. Postal Service, Office of the Inspector General, Audit
Report: Data Input Validation for the Facilities Database, IS-AR-06-006
(Washington, D.C., Mar. 30, 2006).
[16] U. S. Postal Service, Office of the Inspector General, Audit
Report: Data Input Validation for the Facilities Database, IS-AR-06-006
(Washington, D.C., Mar. 30, 2006).
[17] The contractor used a long-standing industry measure, called a
facility condition index, which compares the cost of repairing a
facility with the cost of replacing the facility to acceptable levels.
[18] The Postal Service plans to stagger the assessments by assessing
one-third of the facilities with 6,500 to 100,000 square feet each
year.
[19] U.S. Postal Service, Office of the Inspector General, Postal
Service Facilities Maintenance and Repair Costs, CA-AR-07-003
(Arlington, Va., May 14, 2007).
[20] U.S. Postal Service, Office of the Inspector General, Allegations
of Unsafe Working Conditions at the Dallas Downtown Station, LM-AR-00-
002 (Arlington, Va., Mar. 20, 2000).
[21] U.S. Post Office, Strategic Transformation Plan 2006-2010
(Washington, D.C., September 2005).
[22] CA-AR-07-003.
[23] The National Research Council of the National Academies is a
nonprofit institution that provides science, technology and health
policy advice to the federal government.
[24] National Academy of Sciences, Committing to the Cost of Ownership:
Maintenance and Repair of Public Buildings (Washington, D.C., 1990).
[25] National Academy of Sciences, Investments in Federal Facilities:
Asset Management Strategies for the 21st Century (Washington, D.C.,
2004).
[26] Our analysis includes retail facilities that are owned or leased
by the Postal Service, as well as privately operated contract
facilities that provide postal retail services.
[27] We excluded counties without an urban center of at least 10,000
people from the output of our analysis because the Postal Service may
need to maintain more postal retail facilities in these areas in order
to fulfill its mission of providing universal access to postal
services. See appendix II for additional details on our methodology.
[28] In 2006, the Postal Service reported having 3,014 contract postal
units and 937 community post offices.
[29] GAO-04-803.
[30] As of December 2006, the Postal Service had relocated 170
automated postal centers that did not meet revenue targets.
[31] As noted in appendix I of this report, the President signed
Executive Order 13327: Federal Real Property Asset Management in 2004
with the goal of ensuring that agencies maintain facility inventories
appropriate to their needs, cost, and physical condition to support
each agency's mission and objectives. This order applies to 24
executive departments and agencies, but not to the Postal Service.
However, the Postal Service has voluntarily adopted some of the Federal
Council's leading practices.
[32] GAO, High-Risk Series: Federal Real Property, GAO-03-122
(Washington, D.C.: January 2003).
[33] The executive order applies to the Departments of Agriculture,
Commerce, Defense, Education, Energy, Health and Human Services,
Homeland Security, Housing and Urban Development, Interior, Justice,
Labor, State, Transportation, the Treasury, and Veterans
Administration, as well as to the Environmental Protection Agency, the
National Aeronautics and Space Administration, the United States Agency
for International Development, the General Services Administration, the
National Science Foundation, the Nuclear Regulatory Commission, the
Office of Personnel Management, the Small Business Administration, and
the Social Security Administration.
[34] The Executive Order applies to the heads of all executive branch
departments and agencies listed in 31 U.S.C. 901(b)(1) and (b)(2). The
Postal Service is not included in that list.
[35] The condition index is calculated by dividing the cost of a
facility's repair needs by the facility's replacement value. "Repair
needs" is the amount necessary to ensure that a facility is restored to
a condition substantially equivalent to the facility's originally
intended and designed capacity, efficiency, or capability.
[36] Metropolitan (metro) and micropolitan (micro) statistical areas
are geographic entities defined by the U.S. Census Bureau for use by
federal statistical agencies in collecting, tabulating, and publishing
federal statistics. A metro area contains a core urban area with a
population of 50,000 or more, and a micro area contains an urban core
with a population of at least 10,000 (but less than 50,000). Each metro
or micro area consists of one or more counties and includes the
counties containing the core urban area, as well as any adjacent
counties that have a high degree of social and economic integration (as
measured by commuting to work) with the urban core.
[37] There were two potentially influential outliers (counties) as
detected by the Cook's D measure (DFFITS). To test the influence of
outlying counties on our regression model, we ran the model without
these two counties. Although the R-squared of this model was somewhat
lower at 0.75 with these two counties, we retained them in the final
model because their inclusion did not materially affect the results for
all other counties.
[38] U.S. Postal Service, Office of the Inspector General, Postal
Service Facilities Maintenance and Repair Costs, CA-AR-07-003
(Arlington, Va., May 14, 2007).
[End of section]
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