U.S. Postal Service
Mail Processing Realignment Efforts Under Way Need Better Integration and Explanation Gao ID: GAO-07-717 June 21, 2007Major changes in the mailing industry have reinforced the need for the U.S. Postal Service (USPS) to reduce costs and increase efficiency. In its 2002 Transformation Plan, USPS proposed doing so by realigning its mail processing network. The objectives of this requested report are to (1) describe the status of the initiatives USPS has developed for realignment; (2) evaluate how the planning, impacts, and results of these initiatives align with realignment goals; and (3) evaluate USPS's communication practices with stakeholders in making realignment decisions.
USPS has developed several initiatives to achieve its overall goal of reducing costs while maintaining service. GAO supports USPS's goals for realigning its mail processing network and encourages continued progress in this area. Four initiatives, which vary in the degree to which they have been implemented to date, play central roles in the realignment of the processing network. While USPS has made progress in implementing its realignment initiatives, it is not apparent if these initiatives will meet USPS network realignment goals. First, realignment goals do not have measurable targets, making it unclear how USPS initiatives are progressing toward these goals. Second, there is limited clarity in how the costs and benefits of each initiative are integrated or affected by each other. Third, significant issues still need to be resolved with the area mail processing (AMP) consolidation initiative, to which USPS attributes most of its progress in reducing excess machine capacity. In particular, the criteria USPS uses in selecting facilities for potential consolidation and making implementation decisions are unclear, it does not use consistent data calculations in making decisions and, due to data limitations, it cannot consider actual delivery performance in its consolidation decision-making or evaluate results. While USPS is in the process of making changes to its AMP consolidation process, our review of draft procedures indicates that some improvements have been made while other issues continue. USPS has also made some improvements to its communication practices, but these practices continue to have gaps related to engaging stakeholders and the public in the realignment process and effectively communicating decisions. AMP communication processes do not provide adequate notification to stakeholders, lack transparency into how public input is considered when USPS makes AMP consolidation decisions, and provide limited information to the public after decisions are made. Congress has also indicated in the recent postal reform act that it supports USPS's efforts to streamline its networks but required USPS to improve its public notice processes, make more information available to communities, allow affected persons opportunity to provide input to USPS, and to take that input into account in decision making. GAO's review of USPS's revised guidance indicates that proposed improvements would neither substantively change information provided to the public, nor improve the public input process.
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-07-717, U.S. Postal Service: Mail Processing Realignment Efforts Under Way Need Better Integration and Explanation
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2007:
U.S. Postal Service:
Mail Processing Realignment Efforts Under Way Need Better Integration
and Explanation:
This report was modified on September 18, 2007, to remove procurement
sensitive information.
GAO-07-717:
GAO Highlights:
Highlights of GAO-07-717, a report to congressional requesters
Why GAO Did This Study:
Major changes in the mailing industry have reinforced the need for the
U.S. Postal Service (USPS) to reduce costs and increase efficiency. In
its 2002 Transformation Plan, USPS proposed doing so by realigning its
mail processing network. The objectives of this requested report are to
(1) describe the status of the initiatives USPS has developed for
realignment; (2) evaluate how the planning, impacts, and results of
these initiatives align with realignment goals; and (3) evaluate USPS‘s
communication practices with stakeholders in making realignment
decisions.
What GAO Found:
USPS has developed several initiatives to achieve its overall goal of
reducing costs while maintaining service. GAO supports USPS‘s goals for
realigning its mail processing network and encourages continued
progress in this area. Four initiatives, which vary in the degree to
which they have been implemented to date, play central roles in the
realignment of the processing network.
Table: Status and Purpose of Key Postal Initiatives:
Initiative: Area mail processing consolidations;
Status: In progress;
Purpose: Increase efficiency and use of existing automation by
consolidating mail processing operations into facilities with excess
capacity.
Initiative: Regional distribution centers;
Status: Reconsidering;
Purpose: Provide essential infrastructure for more efficient processing
network.
Initiative: Flats Sequencing System;
Status: In progress;
Purpose: Increase efficiency by automating the sorting of flat mail,
such as large envelopes and catalogs.
Initiative: Surface transportation centers;
Status: Near completion;
Purpose: Improve transportation network flexibility and efficiency.
Source: GAO presentation of USPS data.
[End of table]
While USPS has made progress in implementing its realignment
initiatives, it is not apparent if these initiatives will meet USPS
network realignment goals. First, realignment goals do not have
measurable targets, making it unclear how USPS initiatives are
progressing toward these goals. Second, there is limited clarity in how
the costs and benefits of each initiative are integrated or affected by
each other. Third, significant issues still need to be resolved with
the area mail processing (AMP) consolidation initiative, to which USPS
attributes most of its progress in reducing excess machine capacity. In
particular, the criteria USPS uses in selecting facilities for
potential consolidation and making implementation decisions are
unclear, it does not use consistent data calculations in making
decisions and, due to data limitations, it cannot consider actual
delivery performance in its consolidation decision-making or evaluate
results. While USPS is in the process of making changes to its AMP
consolidation process, our review of draft procedures indicates that
some improvements have been made while other issues continue.
USPS has also made some improvements to its communication practices,
but these practices continue to have gaps related to engaging
stakeholders and the public in the realignment process and effectively
communicating decisions. AMP communication processes do not provide
adequate notification to stakeholders, lack transparency into how
public input is considered when USPS makes AMP consolidation decisions,
and provide limited information to the public after decisions are made.
Congress has also indicated in the recent postal reform act that it
supports USPS‘s efforts to streamline its networks but required USPS to
improve its public notice processes, make more information available to
communities, allow affected persons opportunity to provide input to
USPS, and to take that input into account in decision making. GAO‘s
review of USPS‘s revised guidance indicates that proposed improvements
would neither substantively change information provided to the public,
nor improve the public input process.
What GAO Recommends:
To strengthen planning and accountability for USPS‘s realignment
efforts, the Postmaster General should ensure that the Facilities Plan,
required by the Postal Accountability and Enhancement, explains the
integration of realignment initiatives and establishes measurable
targets to track USPS‘s progress in meeting realignment goals. To help
improve communication about realignment with stakeholders, the
Postmaster General should modify USPS‘s communication strategy to
improve the quality of public notices and engagement, and increase
transparency in decision making. In response to GAO‘s draft report,
USPS agreed with GAO‘s findings and recommendations and plans to take
steps to improve its communication and transparency.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-717].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Katherine Siggerud at
(202) 512-2834 or siggerudk@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
USPS Initiatives for Realigning Its Processing Network Are at Different
Stages of Development and Implementation:
It Is Unclear if Network Realignment Initiatives Are Meeting USPS END
Goals, and Problems Exist with USPS's AMP Consolidation Initiative:
USPS AMP Communication Practices Do Not Ensure Appropriate Stakeholder
Engagement in Realignment Decisions:
Conclusion:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Overview of AMP Consolidation Process:
Appendix III: Status of USPS 2005 and 2006 AMP Consolidations and PIRs:
Appendix IV: USPS Notification to Stakeholders as Identified in AMP
Communication Documentation:
Appendix V: Comments from the U.S. Postal Service:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Status and Purpose of Central Realignment Initiatives:
Table 2: Implementation Status of AMP Consolidations Approved in 2005:
Table 3: Status of 46 AMP Consolidations Initiated in 2006:
Table 4: Semiannual Post-Implementation Projected Annualized Savings
Versus Estimated Annualized Savings in AMP Studies Approved in 2005:
Table 5: Semiannual Post-Implementation Projected Annualized Savings
Versus Estimated Annualized Savings in AMP Studies Approved in 2005,
Excluding Fully Consolidated Facility:
Table 6: Summary of Major Changes to AMP Consolidation Process Included
in Draft Revised Guidelines:
Table 7: USPS Area Mail Processing Consolidation Notification and
Public Input Requirements:
Table 8: Implementation and PIR Status of AMP Consolidations Approved
In 2005 (as of May 2007):
Table 9: Status of 46 AMP Proposed Consolidations Initiated in 2006 (as
of May 2007):
Figures:
Figure 1: USPS's Originating and Destinating Mail Processing Network:
Figure 2: USPS's Area Mail Processing Consolidation Process and Time
Line:
Figure 3: USPS Notification Letter to Waterbury Republican Newspaper,
Waterbury, Connecticut:
Abbreviations:
AMP: area mail processing:
APWU: American Postal Workers Union:
END: Evolutionary Network Development:
EXFC: External First-Class Measurement System:
FSS: flat sequencing system:
HASP: Hub and Spoke Program:
MODS: Management Operating Data Systems:
ODIS: Origin-Destination Information System:
PIR: post-implementation review:
PRC: Postal Regulatory Commission:
RDC: regional distribution center:
STC: Surface Transportation Center:
USPS: U.S. Postal Service:
United States Government Accountability Office:
Washington, DC 20548:
June 21, 2007:
Congressional Requesters:
Major changes affecting the U.S. Postal Service (USPS), including
changes in mail volumes, increasing compensation benefits and costs,
and a more competitive marketplace, have reinforced the need for USPS
to increase efficiency and reduce expenses, and one area of focus is in
its mail processing network. The mail processing network includes over
600 processing facilities that are responsible for sorting mail once it
has entered the mail system and preparing it for transportation and
delivery. USPS's processing network historically focused on the
processing of First-Class Mail. First-Class Mail volumes have been
experiencing declines. This trend is expected to continue, which raises
concerns because traditionally this mail has provided USPS with high
revenue-per-piece. It also helps USPS cover its operational costs.
While trends in First-Class Mail volume have been declining, trends in
the use of worksharing by mailers have increased. Worksharing provides
mailers with opportunities to earn discounts in postage rates for
sorting, processing, and transporting their mail to a destination based
on a level of mail preparation. Increases in the use of worksharing
have resulted in a large volume of mail bypassing most of USPS's
processing network, creating excess capacity on the equipment USPS uses
to process mail.
To address these trends and other major changes affecting its
processing network, USPS developed a Transformation Plan in 2002 that
outlined its vision for the future. In USPS's Strategic Transformation
Plan Update 2006-2010, USPS stated its commitment to removing $1
billion from its cost base each year. These plans describe how USPS
intends to reduce costs and increase efficiency by making changes to
its mail processing network. USPS has undertaken initiatives aimed at
developing a processing network suited to current and future processing
needs, reducing inefficiencies and redundancies, and increasing
flexibility in its processing operations without impacting service. One
such initiative focuses on consolidating mail processing among
facilities in order to make the best use of processing equipment and
reducing the excess machine capacity that has been created by volume
and worksharing trends in mail processing, in addition to reducing some
processing costs. As this consolidation effort continues, it assists
USPS in positioning itself to better address these trends in the
future.
Congress, the President's Commission on the United States Postal
Service,[Footnote 1] GAO, and others have supported USPS's need to
realign its processing network, yet concerns still exist about how USPS
intends to achieve results. In April 2005, we issued a report in
response to a request that we evaluate USPS's plan for realigning its
network, concluding that questions remain about how USPS intends to
realign its processing network.[Footnote 2] We found that the strategy
at the time lacked clarity, criteria, and accountability, as well as
excluding mechanisms for stakeholder input (i.e., employees, mailers,
locally elected officials, and affected communities) and performance
measures for results. In December 2006, Congress passed the Postal
Accountability and Enhancement Act and an advisory opinion was issued
by the Postal Regulatory Commission (PRC),[Footnote 3] both of which
expressed concern with the lack of transparency USPS provides on its
realignment efforts, and made recommendations to USPS to better inform
its stakeholders and the public of its plans and how those plans will
affect them.
Several Members of Congress requested that we follow up on our 2005
report regarding the USPS's mail processing realignment efforts. In
response, this report addresses three key objectives. First, it
describes the initiatives USPS has undertaken since 2002 aimed at
realigning its processing network and the status of these initiatives.
Second, it evaluates how the planning, impacts, and results to date of
these initiatives align with the goals of USPS's processing network
realignment. Finally, it evaluates USPS's communications practices with
stakeholders in making network realignment decisions and the challenges
and leading practices associated with public engagement.
To address these objectives, we interviewed postal officials at USPS
headquarters and two USPS Area offices,[Footnote 4] as well as
representatives of national mailing industry associations, and national
employee union representatives to learn about USPS's realignment
initiatives, how the initiatives are impacting the mail processing
network, and to understand how network changes have been communicated
to stakeholders. We conducted site visits in two states, Connecticut
and Washington, which have facilities that have recently consolidated
mail processing operations. In these states, we met with local and
regional USPS officials, local mailers, business community leaders, and
local employee union representatives to learn about how these
consolidations were implemented, the communication practices that took
place during the process, and what the impacts of the consolidations
have been. We reviewed documents filed in a PRC advisory hearing, by
USPS and other industry stakeholders, and the PRC's resulting advisory
opinion, to gain an understanding of what USPS's plans and processes
for its future processing network entailed, and to identify industry
and stakeholder concerns with these plans and processes. We reviewed
USPS documents and data pertaining to its processing operations
consolidations and overall realignment strategy, and discussed this
information with USPS's Senior Vice President, Operations, and Vice
President, Network Operations, as well as other officials involved in
the development and implementation of these activities. We conducted
our review between July 2006 and March 2007 in accordance with
generally accepted government auditing standards. A more detailed
discussion of our objectives, scope, and methodology is included in
appendix I. We requested comments on a draft of this report from USPS,
and its comments are discussed later in this report and reproduced in
appendix V.
Results in Brief:
USPS has developed several initiatives to achieve its overall goal of
reducing costs while maintaining service. Four initiatives, which vary
in the degree to which they have been implemented, play central roles
in the realignment of the processing and distribution network. These
four initiatives are as follows:
* The area mail processing (AMP) consolidation initiative is designed
to better use the network's capacity by consolidating mail processing
operations into facilities with excess machine capacity, thereby
increasing the use of automation in mail processing. Since 2005, USPS
has studied 57 opportunities for potential AMP consolidations and
implemented 10 consolidations. Most of the remainder have not been
approved for implementation. All but 1 of the 10 completed
consolidations involved moving operations, not closing facilities
entirely.
* The regional distribution center initiative, which is still in
development, is designed to create new or remodeled distribution
centers to serve as the foundation of USPS's processing network. USPS
is reconsidering whether to proceed with this initiative in light of
requirements in recent postal reform legislation for the Postal Service
to submit a plan to Congress describing its long-term vision for
realigning its mail processing and other networks, as well as the
deployment of new automation equipment.
* A set of automation initiatives designed to reduce costs, standardize
operations, and raise productivity of the processing network is being
continued with an effort to deploy machines for automated sorting of
mail flats (large envelopes, magazines, or catalogs). USPS expects to
obtain and install these machines from 2008 through 2010.
* The surface transportation network development initiative is designed
to improve distribution network flexibility and efficiency by
increasing the use of less expensive surface transportation vehicles in
place of air transportation, eliminating redundant surface
transportation, and maximizing vehicle capacity. The implementation of
this initiative is nearly complete.
While USPS has made varying progress in the development and
implementation of its network realignment initiatives, it is not
apparent if these initiatives will meet its network realignment goals.
These goals include (1) developing mail processing and transportation
networks suited to current and future operational needs, (2) reducing
inefficiency and redundancy, (3) making operations flexible, and, (4)
reducing costs. USPS stated that it plans on achieving its goals
without degrading service to customers. First, USPS's realignment goals
have evolved over time and do not have targets for measuring USPS's
progress, making it unclear how USPS is progressing in achieving these
goals. Second, it is unclear how USPS's realignment initiatives are
integrated with each other. That is, how the individual and collective
costs and benefits of these initiatives impact the overall goal of
network realignment. Third, significant issues still need to be
resolved with the initiative to which USPS attributes most of its
progress in reducing excess machine capacity, AMP consolidations. In
particular, the AMP consolidation process raises the following three
major concerns:
* Criteria used in identifying consolidation opportunities and deciding
whether to implement an AMP consolidation are unclear and, therefore,
it is uncertain whether USPS is identifying the best possible
opportunities in selecting facilities for AMP consolidation studies.
* USPS does not use consistent data calculations when determining
impacts and costs of AMP consolidations. Without the use of consistent
data calculations in the feasibility studies, USPS's ability to
identify all of the foreseeable impacts of the consolidation may be
limited, and the accuracy of projected and actual savings and impacts
in its post-implementation evaluations remains questionable.
* USPS does not have a comprehensive mechanism for measuring mail
delivery performance so it cannot include actual delivery performance
in its AMP consolidation studies or post-implementation evaluations.
Therefore, USPS does not have data that can accurately capture expected
or actual impacts that the AMP consolidations have had on delivery
performance.
While USPS is in the process of changing its AMP consolidation process,
our review of a draft of its revised consolidation procedures indicates
that issues related to the standardization of data sources are being
addressed, but other issues continue. The revised procedures still do
not clarify the criteria USPS is using in making facility selection
decisions or deciding whether to implement an AMP consolidation,
although USPS officials told us that they will begin to prioritize
implementation of AMP consolidations that are expected to yield $1
million or more in cost savings annually. Without better data and
improved evaluations, USPS does not know whether its AMP consolidations
are resulting in increased efficiency and a reduction in excess
capacity as intended.
USPS also made some improvements to its communication practices, but
these practices continue to have gaps related to engaging its
stakeholders--mailers, employees, elected officials, the business
community, and the media--and the public in the realignment process and
effectively communicating decisions. AMP communication processes, which
have evolved since 1995, do not provide clear and useful notification
to stakeholders, lack transparency into how stakeholder and public
input is considered when USPS makes AMP decisions, and provide limited
information to stakeholders and the public after decisions are made.
For example, notification letters to stakeholders are largely form
letters that do not clearly state the changes USPS is studying or the
possible outcomes that may result. Although AMP guidance requires USPS
to fully consider both service and other impacts on the community,
mailers and others we spoke with expressed concern about the lack of
transparency in consolidation decisions. A town hall meeting is the
only formal requirement for public input during the AMP process.
Stakeholders and others, such as the PRC, have criticized the timing of
these meetings as occurring too late in the process, after USPS has
already made major decisions. To help remedy problems with providing
information and seeking public input, Congress required USPS to improve
its public notice processes, make more information available to
communities, allow affected persons opportunity to provide input to
USPS, and to take that input into account in decision making. USPS's
planned improvements would generally limit changes to internal
processes such as clarifying USPS roles and responsibilities for the
public meeting and making arrangements for the meeting. USPS would
provide notice of its decisions to stakeholders more frequently, but
the content of notification letters would generally remain the same,
and the timing of the town hall meeting would not change. Our review of
USPS's revised guidance indicates that proposed improvements would
neither substantively change information provided to the public, nor
substantially improve the public input process.
To strengthen planning and accountability for USPS's realignment
efforts, we are recommending that the Postmaster General ensure that
the Facilities Plan required by the Postal Accountability and
Enhancement Act explains the integration of realignment initiatives and
establishes measurable targets to track USPS's progress in meeting
realignment goals. To help improve communication about realignment with
stakeholders, we are recommending that the Postmaster General modify
USPS's communication strategy to improve the quality of public notices
and engagement, and increase transparency in decision making. USPS
generally agreed with our findings and recommendations and stated that
its compliance with the Postal Accountability and Enhancement Act will
satisfy our recommendations related to the Facilities Plan, and that it
will take steps to improve communication about its realignment and
increase transparency.
Background:
As part of its 2002 Transformation Plan, USPS announced plans to review
and realign its processing and transportation networks to better align
with trends in the marketplace that include:
* changing customer needs,
* eroding mail volumes, and:
* rising costs.
At this time, USPS began plans for comprehensively realigning its
processing network and outlined a strategy[Footnote 5] to create a
flexible logistics network that would reduce both USPS's and its
customers' costs, increase overall operational effectiveness, and
improve consistency of service. This strategy would employ computer
modeling to provide USPS with the analytical means to evaluate a
variety of future network alternatives that could be used in
redesigning its existing network.
USPS operates a complex processing network for letters, flats, and
parcels. Most mail is sorted by automated equipment in USPS processing
facilities and then dispatched for delivery. The processing network is
interdependent with the transportation network where operations in one
part affect operations throughout.
In summer 2003, a report issued by the President's Commission on the
United States Postal Service reiterated the need for USPS to realign
its processing network. In January 2004, USPS submitted a report to the
House Committee on Government Reform stating that, based on the outputs
of the model, it would realign its network using a hub and spoke
concept. This report proposed focusing its network on two types of
"spoke" facilities--those that would process mail at its origin, when
the sender enters the mail into USPS's network, and those that would
process mail at its destination, preparing it for delivery. Figure 1
depicts a basic overview of these two types of facilities.[Footnote 6]
Figure 1: USPS's Originating and Destinating Mail Processing Network:
[See PDF for image]
Source: GAO.
[End of figure]
According to the report, the hub and spoke system would create a
uniform network unlike the existing system that had been developed over
time and had resulted in wide variations in productivity and capacity
among processing facilities. In fall of 2004 at the National Postal
Forum, the Postmaster General announced that USPS would realign its
network through an evolutionary process. He explained that because
future mail volumes and advances in technology are not predictable,
USPS will need to continuously rationalize and optimize its security,
plants, processing systems, transportation, and workforce in order to
keep its networks efficient and systems affordable. Accordingly, this
evolutionary process would have no definitive completion date and would
continuously examine the processing network for inefficiencies and
redundancies and standardize the best operational practices.
In April 2005 we reported on this evolutionary strategy, U.S. Postal
Service: The Service's Strategy for Realigning Its Mail Processing
Infrastructure Lacks Clarity, Criteria, and Accountability (GAO-05-
261). This report outlined several major changes that have affected
USPS's mail processing and distribution operations over time, including
changes in the marketplace, evolution of infrastructure, developments
in automation and worksharing, and shifts in national demographics. In
evaluating USPS's strategy to address these changes, we found that it:
* lacked clarity--since USPS announced its intent to realign, it had
developed several different realignment strategies,
* lacked criteria and processes for eliminating excess capacity in its
network,
* excluded stakeholder input in its decision-making processes,
* was not sufficiently transparent and accountable, and:
* lacked performance measures for results.
To address these findings, we recommended that USPS establish a set of
criteria for evaluating realignment decisions, develop a mechanism for
informing stakeholders as decisions are made, and develop a process for
implementing these decisions that includes evaluating and measuring the
results, as well as the actual costs and savings resulting from the
decisions. In response to our report, USPS concurred with our
description of its mail processing and distribution infrastructure and
the major business and demographic changes that have affected its
operations but did not respond directly to our conclusions or
recommendations.
In 2006, USPS reiterated its commitment to the evolutionary strategy,
and in February 2006 USPS sought out an advisory opinion from the PRC
on anticipated changes in the application of current service standards
that may result from a systemwide review and realignment of its mail
processing and transportation networks.[Footnote 7] In its filing, USPS
stated that the goals of its evolutionary network realignment strategy
are to:
* develop mail processing and transportation networks suited to current
and future operational needs,
* reduce inefficiency and redundancy,
* make operations flexible, and:
* reduce postal costs.
USPS also reiterated that the evolutionary strategy would be
implemented incrementally and that it would likely take several years
to review all major components of the mail processing network and to
implement any resulting operational changes. Progress in implementing
these changes, primarily with respect to USPS's initiative to
consolidate mail processing operations among facilities, has been slow
going due to several factors. In some cases, USPS was not ready to
proceed with the consolidation. For example, some locations had
preexisting service issues that needed to be resolved before the
consolidation was implemented. Additionally, external factors have
slowed the process. Consolidations have been met with union and
community resistance. Also, language in the Senate Committee on
Appropriations report on fiscal year 2007 appropriations directed USPS
to suspend its consolidation efforts in three locations until this GAO
report is released.[Footnote 8]
In December 2006, the PRC issued its advisory opinion and found that
the goals USPS established for its network realignment were fully
consistent with the policies and criteria of the Postal Reorganization
Act and endorsed them. While the PRC found the goals of USPS's
realignment strategy laudable, it found no assurance that the proposed
realignment program, as currently envisaged, would meet these declared
goals. In particular, it found that it contained flawed or incomplete
information on certain crucial aspects of USPS's plan for network
realignment, specifically:
* questionable or incomplete cost and service estimates,
* inadequate review of local impacts, and:
* insufficient provisions for public participation.
Also in December 2006, the Postal Accountability and Enhancement
Act[Footnote 9] was signed into law in order to address long-standing
issues with USPS's business model. In addition to addressing issues
related to USPS's financial challenges, this act also included
provisions related to the realignment of USPS's processing and
distribution network. Specifically the act requires USPS to:
* establish a set of modern service standards for market dominant
products, one objective of the standards is to provide a system of
objective external performance measurements for each market-dominant
product as a basis for measuring USPS's performance, and some factors
USPS must take into account include the actual level of service that
its customers receive under any service guidelines previously
established by USPS and the degree of customer satisfaction with USPS's
performance in the acceptance, processing, and delivery of mail.
* develop a Facilities Plan that includes:
- a strategy for how USPS intends to rationalize the postal facilities
network and remove excess processing capacity and space from the
network, including estimated time frames, criteria, and processes to be
used for making changes to the facilities network, and the process for
engaging policymakers and the public in related decisions;
- a discussion of what impact any facility changes will have on the
workforce and whether USPS has sufficient flexibility to make needed
workforce changes;
- an identification of anticipated costs, costs savings, and other
benefits associated with the infrastructure rationalization
alternatives discussed in the plan; and:
- procedures USPS will use to provide adequate public notice to
communities potentially affected by a proposed rationalization
decision; make available information regarding any service changes in
the affected communities, any other effects on customers, any effects
on postal employees, and any cost savings; afford affected persons
ample opportunity to provide input on the proposed decision; and take
such comments into account in making a final decision.
Congress strongly encouraged USPS to expeditiously move forward in its
streamlining efforts and keep unions, management associations, and
local elected officials informed as an essential part of this effort
and abide by any procedural requirements contained in the national
bargaining agreements. With respect to existing efforts, USPS was
directed that effective on the date of enactment of the act (December
20, 2006), it may not close or consolidate any processing or logistics
facilities without using procedures for public notice and input
consistent with those required to be included in the Facilities Plan.
USPS Initiatives for Realigning Its Processing Network Are at Different
Stages of Development and Implementation:
USPS is using an approach called Evolutionary Network Development (END)
to realign its processing and transportation networks. According to
USPS, END is evolutionary, meaning the approach will continually
examine processing and transportation networks for opportunities to
increase their efficiency. END involves several initiatives that are at
varying stages of development and implementation. Four of these
initiatives play central roles in network realignment: AMP
consolidations, regional distribution center (RDC) development, flats
sequencing system, and surface and air network development, as
summarized in table 1.
Table 1: Status and Purpose of Central Realignment Initiatives:
Initiative: Area mail processing consolidations;
Status: In progress;
Purpose: Increase efficiency and use of existing automation by
consolidating mail processing operations into facilities with excess
capacity.
Initiative: Regional distribution center development;
Status: Reconsidering;
Purpose: Provide essential infrastructure for more efficient processing
network.
Initiative: Flats Sequencing System;
Status: Under development;
Purpose: Increase processing efficiency by automating flat mail sorting
to carrier delivery sequence.
Initiative: Surface and air network development;
Status: Near completion;
Purpose: Improve transportation network flexibility and efficiency.
Source: GAO presentation of USPS data.
[End of table]
USPS is facilitating the development of the four central network
realignment initiatives with a computer model that simulates its
processing and transportation facility networks to identify
opportunities for reducing costs, increasing transportation efficiency,
and allowing the network to better adapt to changing conditions and
workloads. While the model supplies the basis for general planning
related to these initiatives, it is not designed to incorporate all
possible variables necessary for future network planning. As a result,
USPS managers conduct additional analysis to make USPS realignment
decisions.
AMP Consolidations Are Under Way but Taking Longer Than Anticipated to
Complete:
In 2005 and 2006, USPS initiated 57 studies of opportunities for AMP
consolidations, but has decided not to implement 34 of these. While
USPS has carried out AMP consolidations for more than 30 years, in 2002
it recognized them as a tool to rightsize the network and has since
focused on expanding their implementation and updating their
implementation guidelines.
Status of AMP Consolidations Initiated in 2005 and 2006:
In 2005 and 2006, most USPS decisions about whether to implement AMP
consolidation opportunities lagged behind the decision-making time
frames set forth by its guidelines. According to USPS's 1995 AMP
guidelines, local offices should not take more than 6 months to
complete a formal study of the feasibility of a consolidation
opportunity, after which Area offices and headquarters have 2 months to
review the study and make a final decision about implementation of the
consolidation (see fig. 2).[Footnote 10] The majority of the
consolidation studies and implementation decisions made by USPS in 2005
and 2006 exceeded these time frames. For further description of the
consolidation process stipulated by USPS AMP guidelines, see appendix
II.
Figure 2: USPS's Area Mail Processing Consolidation Process and Time
Line:
[See PDF for image]
Source: USPS.
[End of figure]
The majority of the AMP consolidations that have been implemented since
END was initiated in 2002 were approved in 2005. As summarized in table
2, USPS officials told us that in 2005 USPS approved 11 consolidations,
9 of which it has implemented. USPS area and headquarters officials
took an average of 4 months to decide to implement these 11
consolidations, 2 months longer than prescribed by AMP guidelines. USPS
later decided not to implement one consolidation because, following a
modification in USPS area boundaries that changed the Area office
responsible for oversight of the facilities involved, the new Area Vice
President requested that the AMP not be implemented due to concerns
about service issues. The final consolidation has not yet occurred due
to delay in the acquisition and installation of equipment needed in the
facility that will process the increased mail volumes. It is now
expected to be fully implemented by the summer of 2007.
Table 2: Implementation Status of AMP Consolidations Approved in 2005:
Status of AMP consolidation: Approved for implementation;
Number: 11.
Status of AMP consolidation: Implemented;
Number: 9.
Status of AMP consolidation: Implementation postponed;
Number: 1.
Status of AMP consolidation: Subsequent decision not to implement;
Number: 1.
Source: GAO presentation of USPS data.
Note: Status numbers are from AMPs approved in calendar year 2005.
[End of table]
Studies of consolidation opportunities undertaken in 2006 took longer
than prescribed by USPS guidelines and so far have produced fewer
decisions to consolidate than in 2005. As summarized in table 3, in
2006 USPS initiated 46 AMP consolidation studies. As of May 2007, it
had implemented 1 consolidation, approved but not yet implemented 1
consolidation, decided not to implement 33 studies (5 placed on
indefinite "hold"), continued to consider 10 consolidations, and was
still completing the study of 1 consolidation. The majority of USPS
decisions about whether to implement the studies lagged behind the 8
month time frame prescribed by its AMP guidelines. USPS officials
explained that decisions to place 5 AMP consolidation studies on
indefinite hold were made by Area offices in light of their observation
of existing service issues in these facilities, which they wished to
resolve before considering implementation. USPS officials said that the
remaining 28 of the 33 decisions not to implement the consolidations
were made for reasons that included study findings that implementation
would result in negligible savings or degrade existing service. For
further detail about the specific facilities involved in 2006
consolidations, see appendix III. USPS anticipates making final
decisions for all 10 feasibility studies still under consideration by
summer of 2007.
Table 3: Status of 46 AMP Consolidations Initiated in 2006:
Status of AMP consolidation: AMP approved and implemented;
Number: 1.
Status of AMP consolidation: AMP approved, not yet implemented;
Number: 1.
Status of AMP consolidation: Decision not to implement proposed AMP[A];
Number: 33.
Status of AMP consolidation: AMP package under review by Area or
Headquarters;
Number: 10.
Status of AMP consolidation: AMP study under development by local
office; Number: 1.
Status of AMP consolidation: Total;
Number: 46.
Source: GAO presentation of USPS data.
Note: Status numbers are from AMPs initiated in calendar year 2006.
[A] Decisions not to implement proposed AMP consolidations include five
consolidations USPS has placed on indefinite "hold."
[End of table]
AMP Consolidations Are Intended to Reduce Excess Capacity:
AMP consolidations are intended to reduce costs and increase efficiency
through reducing excess capacity. According to USPS officials,
declining mail volumes have resulted in excess capacity, including
excess machine and workhours. Excess machine hours occur when machines
sit idle because declining amounts of mail are being processed on the
same amount of equipment, and excess workhours occur when more
workhours are used than necessary for mail processing. One way to
reduce excess capacity is to consolidate mail-processing operations
from one or more facilities into one or more plants. This increases the
amount of mail processed on machines and decreases workhours used in
mail processing by reducing the number of staffed machines. AMP
consolidations are designed to provide machine and workhour efficiency
and/or improve service for all originating and/or destinating
operations through transferring the responsibility for processing
mostly single-piece First-Class Mail from one or more facilities into a
facility with excess machine capacity.[Footnote 11] Single-piece First-
Class Mail is mailable matter, 13 ounces or less, including personal
correspondence, bills, statements of accounts, or handwritten matter
and comprises a small and decreasing portion of USPS mail volumes--21
percent in fiscal year 2006 compared with 26 percent in fiscal year
2000. Meanwhile, postal worksharing, in which mailers prepare, barcode,
sort, and/or transport mail closer to its destination location to
qualify for reduced postage rates, is increasing. As mailers enter mail
into the mailstream closer to its destination location, USPS receives
less mail to process at the locations where mail originates. By
decreasing the number of machines used to process remaining single-
piece First-Class Mail, and thereby the workhours required for its
processing, AMP consolidations can reduce postal costs.
Most AMP consolidations have been of processing operations for
originating mail. Originating mail is mail that was collected in the
local area and brought to the local USPS facility for processing. By
definition, AMP consolidations can also consolidate processing
operations for destinating mail (mail that is prepared for delivery at
its final destination). Since 2005, however, consolidations of
processing operations for originating mail have been more common than
those of destinating processing operations. Only 6 out of 57
feasibility studies initiated from 2005-2006 were of destinating mail
processing operations. This may be due to the continued growth in
delivery points (approximately 1.8 million per year) serviced by USPS.
Another factor is that more mail is entering the system at its
destination, resulting in less excess capacity in processing operations
for destinating mail than for originating mail.
Although AMP consolidations transfer specific processing operations out
of facilities and relocate associated mail processing employees, they
do not generally lead to facility closures. The facilities from which
operations were transferred still need to process mail in the remaining
operations and conduct retail operations for which they are
responsible. Officials told us that USPS generally only considers
closing a facility if an AMP consolidation transfers out all
operations, and USPS determines that there is no need for the facility.
To date, only one AMP consolidation implemented in 2005 has led to a
facility closure.
Implementation of the Regional Distribution Center Initiative Has Not
Begun and Is Being Reconsidered:
USPS testified to the PRC in February 2006 that it would be undertaking
an initiative to develop a network of distribution centers to serve as
the foundation of its processing network, but to date progress in
developing the RDC initiative has been limited, and USPS has not
determined if it will proceed with this initiative. USPS's mail
processing and distribution network, whereby mail is prepared for
sorting on automation equipment and transported between plants, has
evolved over time and presently consists of overlapping networks, each
of which functions to process and distribute a specific class of
mail.[Footnote 12] Some facilities in these networks are responsible
for processing a particular type of mail (for example flats, parcels,
or automated letters), each of which is transported on a separate
transportation network. USPS explained that the RDC initiative would
allow USPS to merge these multiple, "single-class" networks into a
network capable of handling multiple classes of mail. RDCs would serve
as consolidation centers for mail of the same shape (for example,
letters, flats, or parcels), which would allow mailers to bring various
classes of mail to one facility and facilitate the transportation of
multiple mail classes on a single transportation network. When USPS
first introduced the concept of RDCs to serve as the foundation of its
processing network, it projected it would need between 28 and 100 RDCs
nationally.
Various developments have caused USPS to reexamine whether it will
proceed with the RDC initiative. In February 2007, officials told us
they would be reevaluating processing and transportation network plans
in light of the December 2006 Postal Accountability and Enhancement
Act, the PRC opinion, and the deployment of new flat automation
equipment. In March 2007, USPS's Senior Vice President, Operations,
told us that USPS is still determining the structure of its processing
network foundation. He said that similar to the current network, the
future network would still be designed around USPS's processing and
distribution centers, but how USPS will make determinations about these
facilities appears largely uncertain.
USPS Plans to Begin Deploying Machines to Enhance Automation of Flat
Sorting in 2008:
As part of ongoing efforts to automate mail processing, one current
initiative calls for new equipment to further automate sorting of flat
mail (larger envelopes, catalogs, circulars, newspapers, and
magazines). In 2002, USPS introduced high-speed equipment that
automated the sorting of many--but not all--kinds of flat mail. Mail
that cannot be handled by these machines must be manually sorted, which
increases USPS expenses considerably as it costs approximately three
times as much in labor to process flats manually. A new machine called
the flat sequencing system (FSS) has the potential to greatly reduce
the need for manual flat sorting. USPS estimates that this equipment
will handle approximately 8.5 billion pieces of flat mail per year (16
percent of total current flat volumes).
In October of 2006, the Board of Governors[Footnote 13], which USPS
plans to deploy between October of 2008 and October of 2010. USPS plans
to place the 100 FSS in 33 facilities, each of which will house at
least two systems. Although 13 existing facilities will house systems,
due to their large size (each FSS has a footprint of approximately
30,000 square feet), USPS plans to expand 15 facilities and construct 5
new facilities to house the systems.
The Surface and Air Network Development Initiative Is Nearly Complete:
USPS also has taken steps to develop a more flexible transportation
network that is intended to allow it to move greater mail volumes more
efficiently and at a lower cost. To this end, it has nearly completed a
surface transportation network designed to maximize its geographic
coverage, optimize its use of vehicle space, and to dispatch the ideal
number of vehicles on transportation routes.
Surface Transportation Centers (STC)[Footnote 14] provide the
foundation for the new surface and air network by serving as
concentration points where mail containers from multiple facilities are
consolidated and transferred to other postal facilities in the same
vehicles. By enabling USPS to dispatch full vehicles on expanded
routes, STCs permit mail formerly transported by air to be carried at
less cost on ground transportation. The revised network will have a
total of 23 STCs. There are currently 20 STCs in the network, and 3
additional ones are expected to be opened in 2007.
USPS reported that it has increased its air transportation reliability
and flexibility by making air transport contract decisions based on
performance assessments of its carriers. In 2006, USPS awarded United
Parcel Service a 3-year contract to provide domestic transport for
primarily Priority Mail and First-Class Mail, and FedEx a 7-year
contract that replaced its existing contract to transport Express Mail,
Priority Mail, and First-Class Mail.[Footnote 15] In efforts to
increase the efficiency and dependability of its air transportation,
USPS awarded 5-year contract extensions to seven commercial air
carriers that met on-time provisions of previous contracts and
eliminated nonperforming commercial air carriers from transporting
mail.
USPS is also developing a tool called the Transportation Optimization
Planning and Scheduling System to help improve efficiency through
identifying optimal mail routes and mail volumes for different
transportation networks. The system will help analyze alternative
scenarios to determine the lowest cost transportation network given
USPS mail delivery obligations.
It Is Unclear if Network Realignment Initiatives Are Meeting USPS END
Goals, and Problems Exist with USPS's AMP Consolidation Initiative:
While USPS has made varying degrees of progress in the development and
implementation of its realignment initiatives, it is unclear if the
results of these initiatives are meeting its network realignment goals.
Because the goals lack measurable targets and there is little
transparency in how USPS's network realignment initiatives are
integrated with each other, it is not apparent to what extent these
initiatives are achieving USPS's END goals. Additionally, concerns with
the AMP consolidation process further illustrate the lack of clarity in
determining whether this initiative is meeting USPS's realignment
goals. USPS is taking actions to address the AMP consolidation process,
but concerns with criteria and USPS's limited ability to measure
delivery performance still exist.
USPS's Network Realignment Goals Lack Measurable Targets, and It Is
Unclear How Initiatives Are Integrated with Each Other:
USPS has continuously developed initiatives to facilitate realignment
of its processing network, but it is not clear based on the plans that
USPS has developed if these initiatives are meeting its END goals. USPS
has established goals for its END infrastructure realignment initiative
and is making changes to its processing network with the aim of meeting
these goals while still maintaining current levels of service. Goals
are as follows:
* developing mail processing and transportation networks suited to
current and future operational needs,
* reducing inefficiency and redundancy,
* making operations flexible, and:
* reducing postal costs.
While these goals have been supported by GAO, the PRC, and the
President's Commission, USPS has yet to develop measurable targets for
achieving these goals.[Footnote 16] With no measurable targets, there
is no way to determine how much of an impact USPS's network realignment
initiatives are making on achieving these goals. For example, USPS's
Senior Vice President, Operations, told us that there are no actual
targets for cost savings in network realignment, but an indicator of
success will be the implementation of more AMP consolidations.
USPS's inability to measure its success in meeting END goals is
accompanied by the lack of clear information available to stakeholders
about how USPS is integrating its initiatives. For example, when USPS
testified in the PRC proceedings in 2006 that it planned to develop
RDCs as the backbone of its processing network, it had not yet taken
into consideration the deployment of new processing equipment, the FSS,
that is expected to result in major changes to how and where flat mail
is processed even though plans for making a major change to USPS's
Corporate Flats Strategy was published in May 2003.[Footnote 17]
Consequently, USPS has put its plans for the RDCs on hold as it
reconsiders their feasibility as the backbone for the processing
network. In its Advisory Opinion, the PRC reinforced that it is not
clear how the network plan USPS proposed would meet END goals. After
the decision to approve the FSS was made, PRC advised USPS to take
precautions to ensure that changes it makes to its network will be able
to accommodate deployment of the FSS without incurring unnecessary
expense. The PRC has also stated that this piece of equipment is an
important aspect of USPS's future network and should be given careful
consideration. At this point, it is unclear how USPS is integrating the
new equipment into its future network realignment planning. To address
these concerns, USPS is incorporating the FSS into its network modeling
and is reevaluating its plans but has not said when it expects to
complete its updated plans for establishing a backbone for its network.
In addition to the PRC Advisory Opinion, the Postal Accountability and
Enhancement Act, passed in December 2006, addressed the lack of clarity
in understanding how network realignment initiatives are integrated
with each other. The legislation requires USPS to develop a
comprehensive Facilities Plan that includes a strategy for how USPS
intends to rationalize its network and an identification of anticipated
costs, costs savings, and other benefits associated with the
infrastructure rationalization alternatives discussed in the plan.
In light of the recent changes in legislation and the deployment of FSS
machines, USPS will be reevaluating its processing and transportation
network plans. USPS is still determining what its backbone
infrastructure will look like, but it will still be designed around
USPS's processing and distribution centers and will be composed of
processing and operations facilities and a surface and air network.
While USPS officials have repeatedly stated that the design of its
future processing network is evolutionary in nature, it is unclear--5
years after its initial announcement--what USPS intends its processing
network to evolve into.
Concerns with the AMP Consolidation Process Make it Unclear How This
Initiative Is Meeting Network Realignment Goals:
AMP consolidations are the initiative that most clearly address USPS's
reduction of excess machine capacity due to increased worksharing and
declining First-Class Mail volumes, yet the limited transparency in the
AMP consolidation process makes it unclear to what extent this
initiative is meeting END goals. Many of the concerns about this lack
of transparency in the planning and evaluation processes are primarily
related to what criteria USPS used in selecting facilities as
opportunities for AMP consolidations, the lack of consistent data
calculations used in the decision making and evaluation processes, and
the lack of the AMP consolidation's evaluation of impact on service
performance. USPS is taking steps to address these areas by revising
its AMP consolidation guidelines, but concerns still exist.
Criteria USPS Uses in Selecting Facilities as Opportunities for AMP
Consolidations and Deciding to Implement an AMP Consolidation Are
Unclear:
It is neither clear what criteria USPS uses in selecting facilities
that may serve as potential opportunities for AMP consolidations, nor
is it clear what criteria USPS uses in deciding whether or not to
implement a consolidation. Therefore, it is not clear if USPS is
targeting the best opportunities for consolidation. Before 2005, USPS
conducted AMP consolidations at the suggestion of local officials who
identified opportunities for consolidation and were then responsible
for presenting these opportunities to district and area management.
USPS supplemented this bottom-up approach in identifying AMP
consolidation opportunities. With the development of its END model,
USPS also began using a top-down approach. While USPS officials have
acknowledged that the opportunities identified by the model may not
always be feasible in reality, they are now going to use modeling and
analysis at the national level to identify opportunities in which
operations could be consolidated. A USPS headquarters official we met
with said one reason for this is because plant managers should not be
held responsible for identifying their own plant as an opportunity for
reduction or potential closure.
In 2005, USPS reported that the END model identified 139 sets of
facilities that could potentially be consolidated. Of these, 46 sets of
facilities were deemed feasible for initiating AMP consolidation
studies and, of these studies, so far 2 AMP consolidations have been
approved, and 33 of these 46 sets have been either rejected or put on
hold. The effectiveness of the use of the END model in identifying
opportunities for AMP consolidations was called into question in the
PRC's Advisory Opinion, and the USPS Inspector General is current
reviewing the AMP consolidation facility selection process. The PRC's
concerns are related to the fact that the END model does not entirely
use facility-specific data in identifying opportunities for
consolidation. Instead the model uses some facility specific data and
some national productivity averages, which may not adequately target
facilities that provide the best opportunities for consolidations.
In addition to unclear criteria in selecting facilities with potential
for consolidation, USPS does not have specific criteria for deciding
whether or not to implement an AMP consolidation after the study has
been completed. USPS's Senior Vice President, Operations, told us they
are currently prioritizing consolidations of facilities that are
expected to achieve $1 million or more in cost savings annually.
Currently, no such threshold exists, and neither do any other
definitive thresholds or principles in deciding whether or not to
implement an AMP consolidation. In its Advisory Opinion, the PRC found
that the AMP consolidation process lacks criteria for approval and
stated that "without set criteria or guidelines, the decision-making
process can lose objectivity [and that] both the Office of the Consumer
Advocate[Footnote 18] and the American Postal Workers Union found the
lack of criteria to be troublesome. The Office of the Consumer Advocate
suggested that the PRC should recommend USPS implement decision rules
and guidelines, and the PRC concurred stating that USPS should
"establish a set of criteria, or at a minimum, guiding principles for
making realignment decisions."
USPS Does Not Use Consistent Data Calculations in Making AMP
Consolidation Decisions and Evaluating Results:
In addition to the lack of clarity in the facility selection process,
USPS does not use consistent data calculations in determining impacts
and savings of these consolidations, resulting in the potential for
foreseeable impacts to go unnoticed and inconsistency in anticipated
savings. USPS bases AMP consolidation impacts on projections determined
through these calculations. As a result, some facilities may have
difficulty in handling and processing the additional mail they receive
through the consolidation. For example, in one of our site visits,
local and district USPS officials told us that they were concerned that
the gaining facility would not be able to process the additional mail
volume that it would be receiving because it was already having
problems processing its existing volume on time. The projections
calculated by district managers supported this concern, yet the
projections calculated by Area managers showed that the AMP
consolidation was feasible, and it was approved and implemented.
Several months later, the consolidation was suspended because
additional equipment was needed at the receiving facility in order to
accommodate the additional mail volume. A USPS official told us that
this was primarily due to lack of standardized data calculations used
in the study and lack of understanding of the study guidelines by
officials that completed the study. Examples such as these, in which
foreseeable impacts could have been avoided, may be mitigated through
the use of consistent data calculations in the AMP consolidation study.
Inconsistent Data Calculations Result in Differences in Projected Cost
Savings:
Inconsistency in data calculations also impacts the ability of USPS to
accurately determine the expected cost savings of the AMP
consolidations. The current AMP guidelines neither prescribe
standardized sources for the data used in completing the worksheets,
nor is there a standardized methodology for calculating some of the
data in the worksheets. For example, in its Advisory Opinion, the PRC
found that work-hour savings in the AMP consolidation studies were
calculated differently in various studies and that, in some cases, the
PRC could not determine how the savings were calculated. In our review
of the pre-and post-implementation data for nine consolidations
implemented in 2005, we also found that the calculations used in
determining the projected savings were inconsistent, making it unclear
what the baseline should be for evaluating actual cost savings.
Concerns with data calculations used in USPS's AMP consolidation
process have also been addressed by USPS's Inspector General. For
example, during a review of one AMP consolidation, the Inspector
General found discrepancies in the projected cost savings in the AMP
consolidation study, resulting in savings that may have been
significantly overstated.
AMP consolidation guidelines require semiannual and annual post-
implementation reviews (PIR) of AMP consolidations, which ensure
management's accountability for implementing an AMP plan. USPS's post-
implementation review process essentially replicates the AMP
consolidation study process and compares the estimated annual savings
submitted in the approved AMP consolidation study against the actual
savings after 6 months, which is then projected to annualized savings.
PIRs are completed by local managers, approved by Area Offices and
subject to final review by headquarters. As of January 30, 2007, PIRs
for the nine fully implemented consolidations were due to USPS
headquarters and, as of March 2007, USPS headquarters officials had
received all of them, and in May 2007 had completed its review of
three.
In some cases, reviewing officials in USPS headquarters have made
significant corrections and changes to the draft PIRs that were
submitted for their review, resulting in revised projected annualized
savings that were closer to the original estimates prepared for the AMP
consolidation studies. As shown in table 4, the sum of estimated annual
savings in the nine AMP consolidations approved in 2005, as provided in
the AMP study documents, was about $28 million.[Footnote 19] According
to the initial draft PIRs for these nine consolidations prepared by
USPS officials at the local level 6 months after implementation, they
projected about $19 million in annualized savings. During the review of
these PIRs by USPS headquarters, this sum was revised to about $28
million. The headquarters review of the PIRs has been completed for
only three of the nine PIRs, and additional revisions to the projected
annualized savings may be made, but USPS officials provided us with the
most recent data available from their ongoing reviews.
Table 4: Semiannual Post-Implementation Projected Annualized Savings
Versus Estimated Annualized Savings in AMP Studies Approved in 2005:
Number of PIRs: 9;
Estimated annualized savings in AMP studies: $28,142,829;
Initial post-implementation projected annualized savings (prepared by
local officials): $19,017,453;
Revised post- implementation projected annualized savings (based on
headquarters review): $28,112,909.
Source: GAO presentation of USPS data.
Note: The headquarters review of the PIRs has been completed for only
three of the nine PIRs, and additional revisions to the projected
annualized savings may be made, but USPS officials provided us with the
most recent data available from their ongoing reviews.
[End of table]
Of these projected annual savings reported in the headquarters' revised
PIRs, 60 percent are anticipated to come from a single consolidation in
which all mail processing operations were consolidated (both
originating and destinating). As shown in table 5, if anticipated and
realized savings from this consolidation are excluded, the estimated
annual savings from the AMP studies of the remaining eight
consolidations was about $10.7 million, and the initial PIRs projected
about $2.15 million would actually be realized. However, based on the
most recently available data from the ongoing headquarters review of
these PIRs, the revised projected annualized savings was about $11.25
million.
Table 5: Semiannual Post-Implementation Projected Annualized Savings
Versus Estimated Annualized Savings in AMP Studies Approved in 2005,
Excluding Fully Consolidated Facility:
Number of PIRs: 8;
Estimated annualized savings in AMP studies: $10,722,363;
Initial post-implementation projected annualized savings (prepared by
local officials): $2,152,827;
Revised post-implementation projected annualized savings (based on
headquarters review): $11,248,283.
Source: GAO presentation of USPS data.
Note: The headquarters review of the PIRs has been completed for only
three of the nine PIRs, and additional revisions to the projected
annualized savings may be made, but USPS officials provided us with the
most recent data available from their ongoing reviews.
[End of table]
While the differences in the savings from the AMP studies' estimated
annualized savings and the revised PIR projected annualized savings are
generally small, in the interim, drafts of the PIRs showed different
projections before USPS headquarters officials made revisions based on
their review. For example, one of the draft PIRs submitted to USPS
headquarters stated that the AMP consolidation would result in a loss
of approximately $2.6 million. Based on the ongoing PIR by USPS
headquarters officials, the annualized projected savings for this AMP
consolidation has been revised to just over $1 million--a difference of
about $3.7 million. In another case, the draft PIR submitted to USPS
headquarters estimated savings of about $820,000 and was revised during
the headquarters review to an estimated savings of $2.3 million. USPS's
Senior Vice President, Operations, told us that the headquarters review
has shown that when PIRs have not been finalized, they do not always
account for all of the actual savings achieved by the AMP
consolidation. Another USPS official stated that the difference in the
amounts reported in some PIRs and the revised projected annualized
savings was due to the fact that unexpected events (e.g., changes in
cost elements, such as work-hour rates) and differences in the
methodologies used by the individuals calculating the data impact the
results. He also stated that revised AMP consolidation guidelines,
which will require the use of specific data and formulas for
determining savings, should prevent such inconsistencies from happening
in the future.
USPS Does Not Have a Mechanism for Determining AMP Consolidation
Impacts on Delivery Performance:
Another concern with the AMP consolidation process is that it does not
evaluate potential impacts to delivery performance; therefore, there is
no way to determine the actual impact that AMP consolidations are
having on delivery service. Despite this, USPS has stated that it
intends on maintaining or improving service performance while it
implements consolidations, making it unclear how it intends on
achieving this. This is often a concern from stakeholders in areas
where consolidations are being considered and has also been identified
as an area of concern in a recent report from the USPS Inspector
General's Office.[Footnote 20]
As we reported in 2006, USPS does not measure and report its delivery
performance for most types of mail, and less than one-fifth of total
mail volume is measured.[Footnote 21] No representative measures of
delivery performance exist for Standard Mail (48 percent of volume),
bulk First-Class Mail (25 percent of volume), Periodicals (4 percent of
volume), and most Package Services (less than 1 percent of volume).
While USPS is taking steps toward developing increased delivery
performance measurements, currently there are limited mechanisms in
place to determine how AMP consolidations may potentially impact
delivery performance or to evaluate the actual impacts after
implementation. For example, during one of our site visits, mailers we
met with indicated that they had experienced extensive delays in mail
delivery since the implementation of the AMP consolidations in their
area and, in one case, a mailer told us these delays impacted his
business. This mailer projected that his retail store lost revenue
because advertising for an annual sale did not reach customers until
after the sale was complete. (Due to limited performance measurement
mechanisms, we cannot validate whether these complaints are related to
AMP consolidations.) USPS has a system in place to measure the delivery
performance of some of its First-Class Mail and Priority Mail, and if
the evaluation of the AMP consolidation shows declines in this
performance after implementation, the facility manager is required to
create and submit a Service Performance Action Plan to USPS
headquarters outlining how the facility intends on resolving the
delivery performance declines.[Footnote 22]
While the AMP consolidation study does not take delivery performance
into account, it does review impacts on service standards, which are
USPS's official standards on the amount of time it should take for
different classes of mail to be processed between the location where
USPS receives the mail (originating ZIP codes) and its final
destination (destinating ZIP codes). The AMP consolidation study
considers whether standards for different classes of mail will be
upgraded (a decrease in the amount of time it takes mail to travel
between certain ZIP codes) or downgraded (an increase in the amount of
time it takes mail to travel between certain ZIP codes) through
implementation of the consolidation. While consideration of these
service standards provides some insight into potential impacts of the
AMP consolidation on USPS's ability to meet its internal standards,
without service performance data or the ability to measure the AMP
consolidation's impacts on delivery performance, it is unclear how USPS
can accurately determine the cost and service impacts of its AMP
consolidations.
USPS recently implemented a "24-hour clock" program in its processing
facilities, which will standardize the time it takes to process mail by
holding managers at all postal facilities accountable for meeting
nationwide targets for and indicators in managing daily mail. Some of
the activities USPS is standardizing involve the same operations that
USPS is consolidating. For example, managers must ensure that 80
percent of single-piece First-Class collection mail is
cancelled[Footnote 23] by 8:00 p.m. and that the first sort of all
outgoing mail is conducted by 11:00 p.m. Currently, the AMP
consolidation study guidelines do not require managers to take into
account how well the facility that will be gaining mail volume is
meeting these targets. While meeting these targets is not an indicator
of delivery performance, they are a useful proxy because the inability
to meet them can create delays in processing operations. It may be
valuable for USPS to review how well these targets are currently being
met in facilities expected to receive additional mail volume through
consolidations as an indicator of that facility's ability to process
additional mail volume expediently, potentially reducing delays later
in the processing and delivery process.
USPS Is Addressing Several of these Issues through Revised AMP
Consolidation Guidelines, but Concerns Still Exist:
USPS is currently in the process of revising its AMP consolidation
procedural guidelines[Footnote 24] to address the issues that have been
raised. Drafts of these revised guidelines indicate that the new
process will provide several changes aimed at standardizing the AMP
consolidation process and data calculations used in studying potential
consolidations. USPS officials stated that the revised guidelines are
currently scheduled to be released in summer 2007.[Footnote 25] Table 6
shows some of the changes to the AMP consolidation guidelines.
Table 6: Summary of Major Changes to AMP Consolidation Process Included
in Draft Revised Guidelines:
Selection of facilities;
Current AMP guidelines: Bottom-up approach initiated at local level;
Draft revised AMP guidelines: Top-down approach added with headquarters
using computer modeling to identify opportunities.
Data calculations and sources for use in study;
Current AMP guidelines: Data collection must be consistent and must
utilize recognized data sources, such as Management Operating Data
Systems (MODS), Origin- Destination Information System (ODIS), and
locally developed statistics; The individual completing the study has
discretion to determine what data sources to use and what methodology
to use when making data calculations to complete the study;
Draft revised AMP guidelines: Formulas used in analysis will also be
standardized and "hard-coded" in electronic worksheets; Specific
instructions provided for which data sources to use in completing
analysis.
Data time frames for use in study;
Current AMP guidelines: Guidelines provide annual data periods for AMPs
and quarterly data requirements for PIRs; While annual requirements
exist, they do not specify if this information should come from the
preceding 12 months, the most recent fiscal year, or the most recent
calendar year;
Draft revised AMP guidelines: Specific instructions provided for which
data time frames to use in completing analysis.
Document retention;
Current AMP guidelines: Guidelines require documents to be kept on file
until completion of PIR; There are no instructions for where documents
should be retained;
Draft revised AMP guidelines: Specific instructions for keeping all
supporting documentation on file at the Area office for at least 3
years.
Facility evaluation/disposition;
Current AMP guidelines: None;
Draft revised AMP guidelines: Worksheet added to AMP consolidation
study to document potential uses for excess floor space/equipment
directly related to consolidation.
Service standard impacts;
Current AMP guidelines: Review of AMP impact on service standards
related to First-Class Mail and other categories of mail as applicable
(i.e., Express Mail, Priority Mail);
Draft revised AMP guidelines: Review of upgrades and downgrades of AMP
consolidation impact on service standards related to First-Class Mail,
Priority Mail, and other mail categories as applicable (i.e.,
Periodicals, Standard Mail, and Package Services).
Public communication process;
Current AMP guidelines: Identifies stakeholders to be notified at onset
of AMP study;
Draft revised AMP guidelines: Incorporates the use of AMP Consolidation
Communication Plan and Toolkit, outlining specific stakeholders to be
notified during different decision points in the AMP consolidation
process, as well as inclusion of public meetings as part of AMP
consolidation process; (discussed further in next section of this
report).
Delivery service performance;
Current AMP guidelines: None;
Draft revised AMP guidelines: External First-Class Measurement System
(EXFC) summary and analysis.
Savings threshold for implementation;
Current AMP guidelines: None;
Draft revised AMP guidelines: None, although USPS officials stated that
those AMP consolidations yielding $1 million or more in savings will be
made a priority.
Source: GAO presentation of USPS data.
[End of table]
Changes included in the draft revisions to the AMP consolidation
guidelines indicate that data-related issues are being addressed,
specifically those related to the standardization of data sources, but
concerns still remain with the fact that USPS is not using facility-
specific data in identifying facilities to consider for consolidation.
Therefore, USPS is unable to take into account specific facility
processing circumstances in initial selection of potential facilities.
The use of consistent data sources should alleviate some of the delays
that are currently experienced in the AMP consolidation process. The
new guidelines also neither include information on what criteria USPS
uses when deciding to approve an AMP consolidation, nor do they address
USPS's limited ability to measure delivery performance.
Although it may be hard to determine what cost savings and subsequent
impacts USPS has made through AMP consolidations and, while the savings
that have been reported may appear small, the AMP consolidation
initiative could be an important effort on USPS's part in meeting its
future network needs. By eliminating the excess capacity on its
equipment that processes single-piece First-Class Mail, USPS would be
addressing its goal of meeting the future needs of its processing
network. As the volume of this mail declines, there would likely be
less of a need for infrastructure to support the processing of single-
piece First-Class Mail and, while flaws in the AMP consolidation
process exist, the intent of the consolidations addresses this trend.
USPS AMP Communication Practices Do Not Ensure Appropriate Stakeholder
Engagement in Realignment Decisions:
USPS has made improvements to its communication practices, but these
practices continue to have gaps. Namely, AMP consolidation
communication processes (1) do not provide clear and useful
notification to stakeholders, (2) do not provide for meaningful public
input and lack transparency into the AMP decision-making process, and
(3) provide limited information to the public after USPS makes AMP
consolidation decisions. A town hall meeting is the only formal
requirement for public input during the AMP consolidation process.
Stakeholders and others have criticized the timing of the meeting as
occurring too late in the process, after USPS has already made major
decisions. To help remedy this and other problems, Congress required
USPS to make improvements to its public communication processes. USPS's
planned improvements in response to Congress would generally limit
changes to internal processes, while notice to stakeholders would
generally remain the same, and the timing of the public input meeting
would not change. Our review of USPS's revised guidance indicates that
planned improvements would neither substantively change information
provided to the public, nor improve the public input process.
Communication Requirements Have Focused on Post Offices and Employee
Notification:
USPS is required to follow certain steps with regard to communicating
changes and engaging the public as it makes realignment decisions. A
statutory requirement for public notice for closings and consolidations
of post offices has been in existence since 1976,[Footnote 26] but it
did not speak to the consolidation of mail processing operations--the
result for most approved AMP consolidations. If USPS is considering
closing a post office, USPS must provide adequate notice and
regulations prescribe a formal comment period.[Footnote 27] Any
decision to close or consolidate a post office must include the effect
on the community served and the effect on the office's postal
employees. In addition, the following mandatory procedures apply:
* The public must be given 60 days notice of a proposed action to
enable the persons served by a post office to evaluate the proposal and
provide comments.
* USPS must take any other steps necessary to ensure that the persons
served by the affected post office understand the nature and
implications of the proposed action, e.g., meeting with community
groups and following up on comments received that seem to be based on
incorrect assumptions or information.
* After public comments are received and taken into account, any final
determination to close or consolidate a post office must be made in
writing and must include findings covering all the required
considerations.
* The written determination must be made available to persons served by
the post office at least 60 days before the discontinuance takes
effect.
* Within the first 30 days after the written determination is made
available, any person regularly served by the affected post office may
appeal the decision to the PRC.
In addition to these requirements for closing or consolidating post
offices, USPS has a collective bargaining agreement--a contract--with
its employees that requires a certain level of communication when USPS
is contemplating changes in employee wages, hours, or working
conditions at any facilities.[Footnote 28] USPS has placed
consolidations in this category because they can result in employees
working in different locations, i.e., they can affect employees'
working conditions. USPS is required to seek employee union input on
handbooks or guidelines it publishes, including AMP consolidation
guidelines. According to national union officials, employees may
request meetings with USPS when proposed changes relate to wages,
hours, or working conditions. Thus, USPS has generally provided
employees more information about consolidations than USPS has provided
to other stakeholders.
While AMP consolidations have been taking place since the late 1960s,
and USPS established AMP consolidation guidelines in 1979, until 2006,
USPS has had no statutory requirement to contact the public (other than
USPS employees) concerning the consolidation of its operations, unless
the consolidation would result in a retail facility closure. In the
Postal Accountability and Enhancement Act, enacted in December 2006,
Congress strongly encourages USPS to move forward in its streamlining
efforts and keep unions, management associations, and local elected
officials informed. Specifically, the law requires USPS, in its
Facilities Plan, to include procedures that USPS will use to:
* provide adequate public notice to communities potentially affected by
a proposed rationalization decision;
* make available information regarding any service changes in the
affected communities, any other effects on communities, any other
effects on customers, any effects on postal employees, and any cost
savings;
* afford affected persons ample opportunity to provide input on the
proposed decision; and:
* take such comments into account in making a final decision.
Congress also directed USPS not to close or consolidate any processing
or logistics facilities without using procedures consistent with those
described above.[Footnote 29]
AMP Consolidation Communication Processes Lack Transparency:
USPS's AMP consolidation communication processes do not provide clear
and useful notification to stakeholders--mailers, employees, elected
officials, the business community, and the media--and lack transparency
into AMP consolidation decision making. Congress encouraged USPS to
keep employees, local elected officials, and the affected public
informed. The PRC and others have advised or recommended USPS more
fully communicate with and engage stakeholders and the public earlier
in the decision-making process and, once USPS makes decisions, keep
stakeholders and the public informed. While USPS is updating its
communication guidance--the AMP Consolidation Communication Plan and
Toolkit--its proposed improvements would neither substantively improve
information provided to stakeholders and the public, nor improve the
public input process. Proposed improvements would help clarify which
stakeholders USPS notifies but would not improve the content of the
notifications. Further, the draft AMP consolidation guidelines would
not provide for transparency into the AMP consolidation decision-making
process to the extent that Congress has encouraged, and others have
recommended or advised, for example, by holding the public meeting
earlier or explaining how USPS uses public input.
Inconsistent Identification of Stakeholders:
USPS's AMP consolidation guidelines were updated in 1995--with new
worksheets and instructions issued in 2004--and established, among
other things, USPS's communication guidance. They required USPS to
notify stakeholders only when USPS implemented an AMP consolidation.
The guidelines did not provide a public input process, such as a public
meeting. USPS enhanced its communications in 2005 by creating a
communication plan that required notice to additional stakeholders at
the point when USPS initiated the AMP consolidation study and
identified responsibility for notifications by clarifying which USPS
office had responsibility for providing the notifications. In 2006,
USPS created additional guidance, its notifications toolkit, which
complements the AMP guidelines and communication plan and has a public
meeting requirement. Since the notifications toolkit did not go into
effect until 2006, none of the AMP consolidations initiated in 2005 was
subject to these additional requirements. USPS officials told us,
however, that all 46 AMP studies initiated in 2006 are subject to the
requirements as stated in the notifications toolkit.
Among the AMP consolidation packages we reviewed, USPS inconsistently
identified individual stakeholders in the impacted communities. USPS
stakeholder categories included employee groups, elected officials,
media, community organizations, and mailers. USPS guidance regarding
notifications to stakeholders was unclear and, in some cases, mayors
and governors were notified of an AMP consolidation study, while in
others, no local elected officials were contacted. As shown in appendix
IV, in one AMP consolidation study, USPS identified 158 mailers as
stakeholders, while in others, no mailers were identified. In one case,
mailers whom USPS did not identify as affected by the consolidation
told us their service had been negatively impacted as a result of that
consolidation. In another case, we spoke with officials from a bank in
Connecticut that USPS identified as a major mailer and listed as a
stakeholder, while the company that prepared most of the bank's mail
and processed more mail volume than the bank was not considered a
stakeholder.[Footnote 30]
USPS has made improvements to its draft guidance by clarifying certain
stakeholder categories and providing examples of "appropriate
government officials," as well as establishing criteria for local
mailers.[Footnote 31] The proposed changes would likely help clarify
stakeholder groups and would allow more consistent identification of
stakeholders.
Unclear Content in Notification Letters:
AMP consolidation notification letters sent to stakeholders were not
meaningful and provided little detail. Notification letters we reviewed
were largely form letters and did not simply and clearly state the type
of change or changes being studied and provided no range of possible
outcomes for the public to understand. Letters contained jargon, for
example, they stated that USPS was studying the facility's "total mail
processing," "originating/destinating mail processing," or "originating
mail processing" and did not provide the name of the gaining facility.
Such terms may not be familiar to the public. Further, USPS did not
explain to stakeholders that "consolidating both originating and
destinating mail" meant USPS was considering closing the facility,
whereas consolidation of "either destinating or originating mail" meant
potential changes only to internal mail processing. Stakeholders we met
with told us they did not understand what USPS was planning or
studying. For example, USPS-identified stakeholders in Waterbury,
Connecticut, said they did not understand the context of the
notification letter they received or the potential impact of the
consolidation. Another stakeholder said USPS simply notifies
stakeholders that changes will be made, without presenting the context
for the changes or providing any alternatives. See figure 3 for an
example of a notification letter sent to one of the stakeholders USPS
identified in Waterbury, Connecticut.
Figure 3: USPS Notification Letter to Waterbury Republican Newspaper,
Waterbury, Connecticut:
[See PDF for image]
Source: USPS.
[End of figure]
With limited information made available to the public throughout the
process, other stakeholders have filled an information void with
information to the public that was often not accurate. For example, in
some cases, unions have expressed concern that employees would lose
jobs or that postal facilities would be shut down. In fact, according
to USPS, no layoffs have occurred, and USPS has stated that it does not
intend to lay off any career employees due to consolidations. Also,
USPS officials told us only one facility has been closed as a result of
AMP consolidation studies initiated in 2005 or 2006. Mailers we spoke
with identified an employee union Web site as their primary source of
information about the consolidations because USPS does not provide
adequate AMP consolidation-related information on its Web site. In some
cases, citizens are concerned that their town's postmark will be taken
away and jobs lost because USPS has not communicated effectively, and
others have provided inaccurate information. In the case of the AMP
consolidation process, the public has been frustrated, and there has
been a lack of buy-in for some USPS decisions. When USPS has made
decisions regarding AMP consolidations, it has not clearly communicated
the progress to the public. For example, the USPS Office of Inspector
General found that, in one case, USPS notified stakeholders it was
beginning a review when the USPS local office had already approved the
AMP consolidation, which the Inspector General said "negatively
impact[ed] stakeholder relations.[Footnote 32] The Inspector General
reported that notification letters should have been modified from the
guidance available to more accurately reflect the progress of the AMP
consolidation.
Under the new postal reform legislation, USPS is to provide "adequate
public notice." USPS is revising its AMP consolidation guidelines and
communication plan. However, the draft guidance we reviewed, complete
with notification templates, would provide largely the same
notification content and lacks basic information, such as the next
decision points, a date for a public meeting, and how public input
would be considered. Stakeholders would remain unclear as to what USPS
is planning. USPS's notifications to the public about AMP
consolidations would remain unclear and would not simply and clearly
state the type of change or changes being studied. In terms of
communicating the status of the AMP consolidation study, the guidance
is unclear as to the requirement for notifying stakeholders in the
event of no action taken, the study is placed on hold or resumed, or
USPS does not approve the AMP consolidation study.
With limited information made available to the public throughout the
process, other entities might continue to fill the information void
with data that may not be accurate. Public participation experts
recognize that an uninformed public is likely to make up its own facts,
and misunderstandings become new, separate conflicts that make the
original problem more difficult to solve, which may slow down the
consolidation process.[Footnote 33]
Limited Public Input Process:
AMP guidance requires USPS to "fully consider" both service and "other
impacts on the community." Since 2006, there has been a requirement for
a town hall meeting to provide a forum to collect public input, but
there are many flaws with that requirement. Other than a town hall
meeting, there is no formal AMP public input requirement. To date,
there have only been five town hall meetings open to the public, and
none have been scheduled for 2007. USPS provided little information
about the study prior to the meetings--a series of bullets was posted
on a USPS Web site several days prior to the meetings, and USPS neither
publicized an agenda for the meetings nor employed a neutral party to
facilitate them. According to the guidance, it is not until a meeting
occurs that more information, in the form of briefing slides and a
video screening, is made available to attendees. Then, a USPS official
prepares a summary document after a meeting that is to be forwarded to
USPS headquarters. After a meeting, the stakeholders and the public are
provided with the opportunity to draft and submit comments to
USPS.[Footnote 34]
Public meetings have been held after the AMP consolidation studies are
forwarded to USPS headquarters, after USPS has gathered and analyzed
most of its data, including those concerning customer service impacts.
Stakeholders we spoke with were not satisfied with the public input
process and told us that their input was only solicited when USPS
considered the AMP consolidation a "done deal." The PRC has also
criticized the timing of the public meeting.
Some of the flaws stakeholders and the PRC identified with the town
hall meetings held to date include the following:
* meeting held too late in process, after data gathered;
* not enough notice to public about meeting;
* USPS presents limited data at meeting;
* local USPS official runs meeting and may not be skilled in
facilitating public meetings; and:
* unclear how input from meeting is used in AMP consolidation decision.
USPS officials could not specifically explain how stakeholder and
public input is used in reaching AMP consolidation decisions. Further,
USPS has no requirement to notify or seek input from stakeholders or
the public when evaluating completed AMP consolidations. However, USPS
officials told us, as a matter of practice, USPS provides employee
organizations with copies of approved AMP studies and completed AMP
evaluations. It is unclear how the information collected at the
meetings, or subsequent to them, factors into the consolidation
decision. Stakeholders and the public wanted to know how their input to
USPS--letter, phone calls, public meeting results--is taken into
consideration when USPS makes its decisions. Mailers said they do not
need to be involved in all USPS decisions; rather, they want to provide
input when decisions may impact them, such as changing locations or
timing for dropping off the mail.
The Postal Accountability and Enhancement Act requires USPS to use
procedures that afford affected persons "ample opportunity to provide
input on the proposed decision" and to "take such comments into account
in making a final [AMP consolidation] decision." In its draft
communication guidance, USPS has not substantively revised its public
meeting requirements. Proposed changes would generally be limited to
USPS internal processes, such as clarifying USPS roles and
responsibilities for a public meeting and making arrangements for a
meeting. USPS has not altered the timing of a public meeting but has
provided for earlier notice to the public regarding a meeting and more
time for the public to submit comments after a meeting. Table 7
provides an overview of USPS AMP communication practices.
The PRC and others have made several suggestions to improve the AMP
consolidation public input process. Rather than holding the AMP
consolidation public meeting after data is collected, USPS could
consider moving the meeting to the data-gathering phase of the study.
USPS could share its public meeting agenda so these meetings are
focused and productive, and the public has opportunity to adequately
prepare for them. USPS could use a skilled independent, neutral
facilitator to lead the meetings, draft the summary of public input,
and explain how it will be used. USPS officials said that holding the
meeting earlier might be the best thing to do.
Public participation experts recognize that actively engaging the
public in decision making can serve not only to educate the public
about a policy process but can also lead to more informed
decisions.[Footnote 35] By ensuring public concerns have been heard,
considered, and addressed, the agency can also establish a level of
trust and accountability with the public. When making realignment
decisions, USPS could proactively and consistently engage appropriate
stakeholders when changes under consideration will affect them. In the
case of the flats automation strategy, mailers noted that USPS
solicited input regarding new equipment. Additionally, USPS recently
provided an update to the mailing industry on its flats automation
plans. A study on citizen engagement by the IBM Center for the Business
of Government states that citizens are more satisfied with the decision-
making process when agencies ensure that citizen input is accounted for
and reflected in final decisions.[Footnote 36] Reflecting public input
in decisions does not necessarily translate to agreeing with the public
but to considering citizens' concerns and including them in the
process.
Table 7: USPS Area Mail Processing Consolidation Notification and
Public Input Requirements:
1995 AMP guidelines;
Notification requirements: USPS is required to send notification
letters only at approval or implementation of consolidation;
GAO assessment: Notification letters sent to select stakeholders and
number of stakeholders identified varied across AMP consolidations;
USPS excluded some impacted parties from its stakeholder groups.
2005 communication plan;
Notification requirements: USPS required additional notification
letters at initiation of study;
GAO assessment: Notification letters sent to select stakeholders and
number of stakeholders identified varied across AMP consolidations;
Letters lacked detail of consolidation plan, e.g., very brief and
provided little context or information; Incomplete information added to
distrust of USPS decisions and contributed to lack of public buy-in.
2006 notification toolkit;
Notification requirements: USPS added notification requirement for
public input process; USPS provided notification templates for no
action taken, study placed on hold, and study resumed;
GAO assessment: USPS clarified roles and responsibilities and USPS
messaging to stakeholders and public; Additional notifications helped
inform stakeholders of decisions, but content of letters was not clear
or useful to stakeholders.
2007 draft communication guidance[A];
Notification requirements: No additional notification required; USPS
further clarified roles and responsibilities concerning notifications
and USPS messaging to stakeholders and public;
GAO assessment: USPS clarified its guidance for identifying certain
stakeholders that may help ensure more consistent communication across
AMP consolidations; Content of notification letters remains unclear and
not useful. Letters provide little detail and contain jargon. Public
and stakeholders may remain unclear as to whether facility is closing
or USPS internal mail processing is being consolidated with another
facility. The guidance is unclear as to the requirement for notifying
stakeholders in the event of no action taken, study placed on hold or
resumed, or USPS does not approve the study.
1995 AMP guidelines and 2005 communication plan;
USPS public input requirements: USPS had no public input process
requirement;
GAO assessment: USPS did not engage stakeholders and the public in two-
way communication regarding AMP decisions. Communication practices were
generally one-way from USPS or one-way to USPS, without meaningful
stakeholder or public participation; USPS provided limited transparency
into how USPS weighed stakeholder and public concerns; Keeping
stakeholders and the public engaged and informed in decision making (1)
may lead to better decisions and (2) allows stakeholders and the public
time to prepare for changes associated with decisions.
2006 Notification toolkit;
USPS public input requirements: 2006 notifications toolkit created
public meeting requirement; Public or town hall meetings are only
standard forum to capture public input;
GAO assessment: Meetings generally did not provide for meaningful
stakeholder or public participation. USPS did not engage stakeholders
and the public in two-way communication regarding AMP decisions; USPS
provided limited transparency into how USPS weighed stakeholder and
public concerns; Keeping stakeholders and the public engaged and
informed in decision making (1) may lead to better decisions and (2)
allows stakeholders and the public time to prepare for changes
associated with decisions.
2007 draft communication guidance;
USPS public input requirements: USPS has allowed for earlier notice to
public about public meeting and additional time for public to submit
comments after public meeting;
GAO assessment: Timing of meeting is unchanged. USPS does not engage
stakeholders and the public in two-way communication regarding AMP
decisions. Communication practices are generally one-way from USPS or
one-way to USPS, without meaningful stakeholder or public
participation; USPS provides limited transparency into how USPS weighs
stakeholder and public concerns; Keeping stakeholders and the public
engaged and informed in decision making (1) may lead to better
decisions and (2) allows stakeholders and the public time to prepare
for changes associated with decisions.
Source: GAO analysis of USPS and stakeholder data.
[A] Includes both 2007 draft AMP guidelines and 2007 draft
communication plan.
[End of table]
Lack of Information to Public:
USPS does not keep the public adequately informed of its decisions,
although several mechanisms exist that USPS could employ, such as
Postal Customer Councils,[Footnote 37] USPS's Web site, and local
business community newsletters. Stakeholders we spoke with acknowledged
that USPS goals of efficiency and cost savings are legitimate, but they
were concerned about the lack of transparency of the consolidation
decisions. In a case where USPS is considering closing a facility, USPS
could make that information available in advance and, if necessary,
reveal its plans for carrying out a closure so that impacted parties
could prepare for the change. Once decisions are made, stakeholders
said they wanted timely information so they could plan accordingly, for
example, to reroute their mail, advise their customers of any changes
in service, etc. When we spoke with USPS officials, they told us they
were in the process of developing communication requirements in the
event of a facility closure not related to AMP consolidations.[Footnote
38]
Stakeholders described USPS as unconcerned with the effect the
consolidations could be having on its customers. One stakeholder noted
that informing affected parties of significant changes and seeking
their input is a good business practice. In terms of follow-up and
communicating its decisions, USPS could improve transparency and
provide information to stakeholders and the public by using existing
mechanisms to communicate the status of realignment efforts, especially
the status of AMP consolidations. In its 2006 Annual Progress Report,
USPS provided only general information about the AMP consolidation
initiative. Instead, USPS could use its annual reports to report on the
status of individual AMP consolidations. USPS can employ established
entities like its local Postal Customer Councils or local business
organizations to inform the affected public. Both the national Postal
Customer Council and local business organization officials we spoke
with were willing to include USPS realignment status updates and plans
in their regular communications to members.
Conclusion:
In our report 2 years ago, we concluded that USPS did not have answers
to important questions about how it intended to realign its mail
processing networks. This conclusion still holds today. USPS has made
progress on several of its individual initiatives, but it remains
unclear how these various initiatives are individually and collectively
contributing to achieving realignment goals. Also, without measurable
performance targets for these goals, USPS remains unable to demonstrate
to Congress and other stakeholders the costs and benefits of these
initiatives. Further, data inconsistencies related to the AMP
initiative have limited USPS's ability to identify potential impacts in
its feasibility studies of proposed AMP consolidations and to
accurately evaluate the results of consolidations after they are
implemented. In the communication area, despite recent improvements to
its communication practices, USPS continues to have gaps related to
engaging stakeholders and the public in its AMP consolidation process
and effectively communicating decisions. Stakeholder concerns related
to the lack of clear and useful notification to stakeholders, coupled
with a lack of public input and transparency into USPS's AMP
consolidation decision making, have contributed to public frustration
with USPS's communication regarding its AMP consolidation decisions.
USPS is currently developing a Facilities Plan, mandated in legislation
passed in December 2006, explaining how the network will be realigned
and outlining how USPS will interact with stakeholders in making any
changes. It is also responding to PRC and USPS Inspector General
recommendations on a variety of realignment issues, including
communications with stakeholders. The quality and thoroughness of these
efforts will be key in overcoming the concerns that stakeholders have
raised. Matters that will require careful attention include
establishing a clear relationship between individual initiatives and
realignment goals, developing ways to measure progress and monitor
results, and establishing effective communications with stakeholders in
initiatives such as the AMP consolidation.
Recommendations for Executive Action:
To strengthen planning and accountability efforts for USPS's
realignment efforts, we are making two recommendations to the
Postmaster General to ensure that the Facilities Plan required by the
Postal Accountability and Enhancement Act includes the following:
* A discussion of how the various initiatives that will be used in
rationalizing the postal facilities network will be integrated with
each other.
* The establishment of measurable targets USPS plans on meeting for the
anticipated cost savings and benefits associated with network
rationalization, in conjunction with the time line for implementation.
To help improve the way in which USPS communicates its realignment
plans and proposals with stakeholders, particularly with regard to
proposals for consolidations under the AMP consolidation initiative, we
are making three additional recommendations to the Postmaster General
to ensure that the following steps are included in USPS's
communications strategy:
* Improve public notice. Clarify notification letters by explaining
whether USPS is considering closing the facility under study or
consolidating operations with another facility, explaining the next
decision point, and providing a date for the required public meeting.
* Improve public engagement. Hold the public meeting during the data-
gathering phase of the study and make an agenda and background
information, such as briefing slides, available to the public in
advance.
* Increase transparency. Update AMP guidelines to explain how public
input is considered in the decision-making process.
Agency Comments and Our Evaluation:
The U.S. Postal Service provided comments on a draft of this report in
a letter dated June 1, 2007. These comments are summarized below and
included as appendix V. USPS concurred with our characterization of its
network realignment goals and indicated that its mail processing
realignment efforts have not wavered from the achievement of these
goals. USPS noted that it has made progress on additional realignment
initiatives that were not outlined in our report.
USPS stated that its compliance with the Postal Accountability and
Enhancement Act will satisfy our recommendations for the Postmaster
General to ensure that the required Facilities Plan includes (1) a
discussion of how the various initiatives that will be used in
rationalizing the postal facilities network will be integrated with
each other and (2) the establishment of measurable targets USPS plans
on meeting for the anticipated cost savings and benefits associated
with network rationalization, in conjunction with the time line for
implementation. We agree that the required Facilities Plan provides an
opportunity for USPS to more fully discuss the integration of its
realignment initiatives and establish measurable targets for meeting
the anticipated cost savings and benefits of network rationalization.
In its comments, USPS generally agreed with our recommendations related
to improving the way in which it communicates its realignment plans and
proposals with stakeholders, particularly proposals for consolidations
under the AMP consolidation initiative. However, USPS felt that it
would be premature to hold a public meeting during the data-gathering
phase of a feasibility study as we recommended but agreed instead to
improve public engagement by moving the public meeting earlier in the
AMP process. We agree that this timing will improve USPS's public
engagement process, as well as the usefulness of public input in making
AMP consolidation decisions. Under the updated process, the meeting
will occur after the District Manager has approved a consolidation and
before the Area Vice President has made a decision. USPS commented that
the agenda and briefing slides will be posted on www.usps.com in
advance of the public meeting.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to the Ranking Member of the House Subcommittee on the Federal
Workforce, Postal Service, and the District of Columbia; Committee on
Oversight and Government Reform; and the Ranking Member of the Senate
Subcommittee on Federal Financial Management, Government Information,
Federal Services and International Security; Committee on Homeland
Security and Governmental Affairs; the Postmaster General; and other
interested parties. We also will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at http://www.gao.gov.
If you or your staff has any questions regarding this report, please
contact me at siggerudk@gao.gov or by telephone at (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 VI.
Signed by:
Katherine Siggerud:
Director, Physical Infrastructure Issues:
Congressional Requesters:
The Honorable Joseph I. Lieberman:
Chairman:
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:
The Honorable Henry A. Waxman:
Chairman:
The Honorable Tom Davis:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Danny K. Davis,
Chairman,
Subcommittee on Federal Workforce, Postal Service, and the District of
Columbia:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Tom Harkin:
United States Senate:
The Honorable Bernard Sanders:
United States Senate:
The Honorable John Thune:
United States Senate:
The Honorable Brian Baird:
House of Representatives:
The Honorable Xavier Becerra:
House of Representatives:
The Honorable Marion Berry:
House of Representatives:
The Honorable Jerry Costello:
House of Representatives:
The Honorable Susan Davis:
House of Representatives:
The Honorable Lloyd Doggett:
House of Representatives:
The Honorable Chet Edwards:
House of Representatives:
The Honorable Barney Frank:
House of Representatives:
The Honorable Stephanie Herseth:
House of Representatives:
The Honorable Rush Holt:
House of Representatives:
The Honorable Ron Kind:
House of Representatives:
The Honorable John M. McHugh:
House of Representatives:
The Honorable Dennis Moore:
House of Representatives:
The Honorable Ted Poe:
House of Representatives:
The Honorable Adam Schiff:
House of Representatives:
The Honorable Christopher Shays:
House of Representatives:
The Honorable John Shimkus:
House of Representatives:
The Honorable Adam Smith:
House of Representatives:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our objectives for this report were to (1) describe the initiatives the
U.S. Postal Service (USPS) has undertaken since 2002 aimed at
realigning its processing network and the status of these initiatives;
(2) evaluate how the planning, impacts, and results to date of these
initiatives align with the goals of USPS's processing network
realignment; and (3) evaluate USPS's communications practices with
stakeholders in making network realignment decisions, and the
challenges and leading practices associated with public engagement.
To describe the initiatives USPS is undertaking to realign its mail
processing network, how these initiatives are integrated, and the
status of these initiatives we interviewed postal officials at USPS
headquarters, including USPS's Senior Vice President, Operations, and
Vice President, Network Operations. We interviewed USPS officials in
the Northeastern and Western Areas. We interviewed American Postal
Workers Union headquarters officials to gain their perspective about
the various initiatives, as well as representatives from several
national mailing industry associations representing different facets of
the industry. To provide descriptions and status information about
these initiatives, we reviewed documents filed by USPS, union
representatives, and other mailing industry representatives in the PRC
2006 advisory hearing, as well as the PRC's resulting "Advisory Opinion
Concerning a Proposed Change in the Nature of Postal Services" issued
December 19, 2006.
To describe the area mail processing (AMP) consolidation's process,
status, impacts, and results, we reviewed AMP consolidation guidelines
published in 1995 (Handbook PO-408) and a revised draft version of
these guidelines that USPS is planning to release in the summer of
2007. We reviewed the studies conducted for all 57 AMP consolidations
in calendar year 2005 and 2006 and reviewed drafts of post-
implementation reviews for 9 of the 10 AMP consolidations that were
implemented. We reviewed USPS Inspector General reports about the AMP
consolidations, the PRC's advisory opinion, as well as the Postal
Accountability and Enhancement Act.
To learn about how AMP consolidations are implemented and the
communication practices USPS employs while implementing AMP
consolidations and providing network realignment information to
stakeholders, we reviewed AMP consolidation guidelines, the AMP
Communication Plan, the AMP Notification Toolkit, and revised drafts of
these documents. We reviewed documentation of USPS contact with
stakeholders as recorded on AMP Worksheet 3 for AMP consolidation
packages submitted during the Postal Regulatory Commission (PRC) case
N2006-1. We reviewed notification letters produced by USPS for the AMP
consolidation studies that took place in 2005 and 2006. We reviewed the
procedures USPS must follow under 39 U.S.C. 404(b), legislation that
provides rules that must be applied when closing a USPS retail
facility, as well as the Postal Accountability and Enhancement Act,
which directs USPS to make changes to its public input process when
making realignment decisions, and to provide a facilities plan to
Congress outlining its infrastructure realignment strategy. We
conducted site visits in two states, Connecticut and Washington, where
AMP consolidations were implemented in 2005 and 2006 to learn about the
AMP consolidation process. During these site visits, we interviewed
USPS district and facility officials, as well as local union
representatives to learn about the AMP consolidation process and its
subsequent impacts and results. To learn how USPS communicated with
stakeholders, we interviewed USPS officials, employees, mailers, and
business community members.
We conducted our review between July 2006 and May 2007 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Overview of AMP Consolidation Process:
USPS's 1995 AMP Guidelines outline its procedures for AMP
consolidations. The consolidation process prescribed by the guidelines
can be broken into four stages: (1) study and proposal, (2) evaluation,
(3) implementation, and (4) review of consolidation.
Study and Proposal:
AMP proposals are initiated at the local level by district managers,
customer sales and service, and/or plant managers. Initiating plant
managers are responsible for studying the feasibility of the
consolidation and assembling an AMP consolidation package containing
data to support the proposal. Area offices then review the feasibility
of these consolidations. AMP guidelines specify that the local office
is responsible for considering the foreseen impacts the consolidation
will have on service, the community, and employees. If upon these
considerations the local office makes the preliminary determination
that service and efficiency can be improved through an AMP
consolidation, it notifies the Area office of its intention to conduct
an AMP study. The Area office then notifies headquarters of this
intention, and managers at the facilities under consideration have 6
months to undertake a study to analyze the feasibility of relocating
origination and/or destination operations between locations.
The study includes 10 worksheets that collectively determine the
expected impact the consolidation will have on USPS costs, workforce,
and service. The worksheets calculate anticipated cost changes to
annual workhours, transportation, and associated costs, as well as one-
time indemnity and associated costs.[Footnote 39] The worksheets also
evaluate personnel impacts in terms of positions and workhours that
will be gained or lost at the facilities involved. In regard to
service, the AMP consolidation worksheets consider whether standards
for different classes of mail will be upgraded (a decrease in the
amount of time it takes mail to travel between certain ZIP codes) or
downgraded (an increase in the amount of time it takes mail to travel
between certain ZIP codes) through implementation of the consolidation.
They also identify stakeholders of the consolidation with whom USPS
communicates about its proposal. In addition to the completed
worksheets, local managers complete the AMP consolidation proposal by
providing a narrative justifying implementation of the consolidation.
If the consolidation is cancelled for any reason, local managers cancel
the study and notify Area managers of the decision. Local offices have
6 months to complete and submit a proposal to the Area office.
Evaluation of Proposal:
Upon receipt of the AMP consolidation proposal by the Area office, the
Vice President of Area Operations evaluates the package and decides
whether or not to approve the consolidation. First the Vice President
reviews all aspects of the proposal, ensuring that it is accurate and
complete. If he/she has concerns, consultations between the local and
area offices may lead to modifications of the original proposal. The
Area office must complete evaluation of the proposal within 30 days and
either disapproves and returns the package to the local originator or
recommends approval and forwards it to headquarters.
USPS headquarters is responsible for making the final decision as to
whether an AMP consolidation will be implemented. Upon receipt of a
package from the Area office, the Headquarters Cross-Functional Review
Team reviews the package and has 30 days to evaluate the
study.[Footnote 40] At this stage, consultations between the Area
office and headquarters may lead to modifications to the proposal. A
critical element of the headquarters review is the evaluation of
potential service standard upgrades and/or downgrades that would result
if the operational changes proposed by an AMP consolidation were
implemented.[Footnote 41] Once headquarters completes its review, it
makes a final decision as to whether the AMP consolidation will be
implemented.
Implementation of Consolidation:
As soon as practicable following approval of an AMP consolidation
proposal by headquarters, the area, district, and local managers
affected by the AMP decision determine the schedule for implementing
the consolidation. Depending on the complexity of a particular AMP
consolidation, implementation may take up to 6 months to complete.
Review of Consolidation:
During the first year after implementation, the AMP Guidelines require
that semiannual and annual post-implementation reviews (PIR) are
conducted to determine if the projected savings, improved operational
efficiency, and management accountability for making decisions
regarding AMPs have been accomplished. The area management where an AMP
consolidation takes place is responsible for ensuring completion of
PIRs, which entails completing a new set of AMP worksheets and
comparing them with the original worksheets contained in the proposal
in order to document the observed results relative to the expected
outcome of the consolidation. Observations from this comparative
analysis are synthesized in a narrative executive summary, which is
submitted along with the new set of worksheets to headquarters
following review for accuracy by the Vice President, Area Operations.
Upon receipt by headquarters, the PIR analysis is circulated for
assessment among the functional units that participated in the approval
process, and headquarters notifies the Area within 30 days after
receiving the package of the final disposition of the PIR. The
semiannual PIR, which must be completed within 30 days after the second
full quarter following implementation, determines whether the
implementation of an AMP is accomplishing necessary training,
relocation, transportation, operational changes, and workhour
adjustments. If these are not being accomplished, the review alerts the
responsible parties of the necessity to change or correct any
deficiencies. The annual PIR serves to determine the viability of the
consolidation and allows management the opportunity for decision
analysis concerning the AMP plan.
If a local office deems it necessary to reverse implementation of an
AMP, it must appeal to headquarters to do so. The local office
completes a detailed narrative statement, action plan for reversal, and
time line for intended actions and forwards it to the Area office. Upon
concurrence, the Area office forwards the proposal for reversal to the
Senior Vice President, Operations. USPS officials told us that
reversals of AMP implementation are very rare; in the last 30 years
only one consolidation implementation has been reversed.
[End of section]
Appendix III: Status of USPS 2005 and 2006 AMP Consolidations and PIRs:
Table 8: Implementation and PIR Status of AMP Consolidations Approved
In 2005 (as of May 2007):
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Bridgeport, CT/Stamford, CT;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Greensburg, PA/ Pittsburg, PA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: [Empty];
Semiannual PIR complete: Check.
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Kinston, NC/ Fayetteville, NC;
Implemented: [Empty];
Implementation postponed: [Empty];
Subsequent decision not to implement: Check;
Semiannual PIR under review by headquarters: [Empty];
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Marina, CA/Los Angeles, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: [Empty];
Semiannual PIR complete: Check.
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Marysville, CA/ Sacramento, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: [Empty];
Semiannual PIR complete: Check.
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Mojave, CA/Bakersfield, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Monmouth, NJ/ Trenton, NJ & Kilmer, NJ;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Northwest Boston, MA/ Boston, MA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Olympia, WA/Tacoma, WA;
Implemented: [Empty];
Implementation postponed: Check;
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: [Empty];
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Pasadena, CA/Santa Clarita, CA &
Industry, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Waterbury, CT/ Southern Connecticut, CT;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty];
Semiannual PIR under review by headquarters: Check;
Semiannual PIR complete: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Total;
Implemented: 9;
Implementation postponed: 1;
Subsequent decision not to implement: 1;
Semiannual PIR under review by headquarters: 6;
Semiannual PIR complete: 3.
Source: GAO presentation of USPS data.
[End of table]
Table 9: Status of 46 AMP Proposed Consolidations Initiated in 2006 (as
of May 2007):
AMP package under review at district or area management: 1; A
MP package under review by headquarters: 10;
Proposed AMP review on hold: 5;
Decision not to implement proposed AMP: 28; AMP approved: 2.
AMP package under review at district or area management: Daytona Beach,
FL/ Mid-FL, FL;
AMP package under review by headquarters: Aberdeen, SD/ Dakotas
Central,SD;
Proposed AMP review on hold: Alamogordo, NM/ El Paso, TX;
Decision not to implement proposed AMP: Beaumont, TX/ Houston, TX;
AMP approved: Newark, NJ/ Kearny, NJ.
AMP package under review by headquarters: Bronx, NY/ Morgan, NY;
Proposed AMP review on hold: Batesville, AR/ Little Rock, AR;
Decision not to implement proposed AMP: Binghamton, NY/ Syracuse, NY;
AMP approved: Saint Petersburg, FL/ Tampa, FL.
AMP package under review by headquarters: Canton, OH/ Akron, OH;
Proposed AMP review on hold: Carbondale, IL/ Saint Louis, MO;
Decision not to implement proposed AMP: Bloomington, IN/ Indianapolis,
IN;
AMP approved: [Empty].
AMP package under review by headquarters: Dallas, TX/ North Texas, TX;
Proposed AMP review on hold: Centralia, IL/ Saint Louis, MO;
Decision not to implement proposed AMP: Bryan, TX/ Houston, TX;
AMP approved: [Empty].
AMP package under review by headquarters: Flint, MI/ NE Metro, MI;
Proposed AMP review on hold: Las Cruces, NM/ El Paso, TX;
Decision not to implement proposed AMP: Burlington, VT/ White River
Jnt, VT;
AMP approved: [Empty].
AMP package under review by headquarters: Jackson, TN/ Memphis, TN;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Cape Cod, MA/ Brockton, MA;
AMP approved: [Empty].
AMP package under review by headquarters: Kansas City, KS/ Kansas City,
MO;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Carroll, IA/ Des Moines, IA;
AMP approved: [Empty].
AMP package under review by headquarters: Oshkosh, WI/ Green Bay, WI;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Cumberland, MD/ Frederick, MD;
AMP approved: [Empty].
AMP package under review by headquarters: Sioux City, IA/ Sioux Falls,
SD;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Fox Valley, IL/ South Suburban,
IL;
AMP approved: [Empty].
AMP package under review by headquarters: Waco, TX/ Fort Worth/Austin,
TX;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Gaylord, MI/ Traverse City, MI;
AMP approved: [Empty].
Decision not to implement proposed AMP: Glenwood Springs, CO/ Grand
Junction, CO.
Decision not to implement proposed AMP:Helena, MT/ Great Falls, MT.
Decision not to implement proposed AMP: Hutchinson, KS/ Wichita, KS.
Decision not to implement proposed AMP: LA Crosse, WI/ Rochester, MN.
Decision not to implement proposed AMP: McAllen PO TX/ Corpus Christi,
TX.
Decision not to implement proposed AMP: McCook & N. Platte, NE/ Casper,
WY.
Decision not to implement proposed AMP: Plattsburg, NY/ Albany, NY.
Decision not to implement proposed AMP: Portsmouth, NH/ Manchester, NH.
Decision not to implement proposed AMP: Rockford, IL/ Palatine, IL.
Decision not to implement proposed AMP: Sheridan, WY/ Casper, WY.
Decision not to implement proposed AMP: Springfield, MA/ Hartford, CT.
Decision not to implement proposed AMP: Staten Island, NY/ Brooklyn,
NY.
Decision not to implement proposed AMP: Twin Falls, ID/ Boise, ID.
Decision not to implement proposed AMP: Utica, NY/ Syracuse or Albany,
NY.
Decision not to implement proposed AMP: Watertown, NY/ Syracuse, NY.
Decision not to implement proposed AMP: Wheatland, WY/ Cheyenne, WY.
Decision not to implement proposed AMP: Yakima, WA/ Pasco, WA.
Decision not to implement proposed AMP: Zanesville, OH/ Columbus, OH.
Source: GAO presentation of USPS data.
Note: This table includes the facilities involved in proposed
consolidations, both the facility losing operations and the facility
gaining operations.
[End of table]
[End of section]
Appendix IV: USPS Notification to Stakeholders as Identified in AMP
Communication Documentation:
Table 10: :
AMP consolidations approved in 2005.
Bridgeport, CT/Stamford, CT;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 1;
Major mailers: 1.
Greensburg, PA/Pittsburgh, PA;
Employee groups: 3;
Local and state elected officials[A]: 2;
Media: 4;
Community organizations: 2;
Major mailers: 6.
Kinston, NC/Fayetteville, NC;
Employee groups: 2;
Local and state elected officials[A]: 2;
Media: 3;
Community organizations: 1;
Major mailers: 2.
Marina, CA/ Los Angeles, CA;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 4;
Community organizations: 2;
Major mailers: 3.
Marysville, CA/Sacramento, CA;
Employee groups: 3;
Local and state elected officials[A]: 4;
Media: 8;
Community organizations: 2;
Major mailers: 2.
Mojave, CA/Bakersfield, CA;
Employee groups: 2;
Local and state elected officials[A]: 0;
Media: 2;
Community organizations: 2;
Major mailers: 0.
Monmouth, NJ/Trenton, NJ;
Employee groups: 2;
Local and state elected officials[A]: 0;
Media: 2;
Community organizations: 2;
Major mailers: 14.
NW Boston, MA/Boston, MA;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 3;
Major mailers: 9.
Olympia, WA/Tacoma, WA;
Employee groups: 2;
Local and state elected officials[A]: 1;
Media: 5;
Community organizations: 10;
Major mailers: 2.
Pasadena, CA/Santa Clarita, CA;
Employee groups: 5;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 1;
Major mailers: 18.
Waterbury, CT/So. CT, CT;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 1;
Major mailers: 0.
AMP consolidations initiated in 2006.
Aberdeen, SD/Dakotas Central, SD;
Employee groups: 6;
Local and state elected officials[A]: 1;
Media: 2;
Community organizations: 1;
Major mailers: 7.
Alamogordo, NM/El Paso, TX;
Employee groups: 2;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 2;
Major mailers: 0.
Batesville, AR/Little Rock, AR;
Employee groups: 3;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 0;
Major mailers: 1.
Beaumont, TX/Houston, TX;
Employee groups: 4;
Local and state elected officials[A]: 0;
Media: 4;
Community organizations: 1;
Major mailers: 2.
Binghamton, NY/Syracuse, NY;
Employee groups: 12;
Local and state elected officials[A]: 5;
Media: 1;
Community organizations: 11;
Major mailers: 2.
Bloomington, IN /Indianapolis, IN;
Employee groups: 5;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 3;
Major mailers: 2.
Bronx, NY/Morgan, NY;
Employee groups: 3;
Local and state elected officials[A]: 3;
Media: 4;
Community organizations: 3;
Major mailers: 2.
Bryan, TX/Houston, TX;
Employee groups: 4;
Local and state elected officials[A]: 3;
Media: 0;
Community organizations: 2;
Major mailers: 13.
Burlington, VT/White River Jct ., VT;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 0;
Community organizations: 2;
Major mailers: 3.
Canton, OH/Akron, OH;
Employee groups: 5;
Local and state elected officials[A]: 0;
Media: 2;
Community organizations: 1;
Major mailers: 1.
Cape Cod, MA/Brockton, MA;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 1;
Community organizations: 4;
Major mailers: 4.
Carbondale, IL/Saint Louis, MO;
Employee groups: 4;
Local and state elected officials[A]: 2;
Media: 1;
Community organizations: 1;
Major mailers: 0.
Carroll, IA/Des Moines, IA;
Employee groups: 8;
Local and state elected officials[A]: 2;
Media: 2;
Community organizations: 1;
Major mailers: 0.
Centralia, IL/Saint Louis, MO;
Employee groups: 4;
Local and state elected officials[A]: 2;
Media: 1;
Community organizations: 1;
Major mailers: 0.
Cumberland, MD/Frederick, MD;
Employee groups: 10;
Local and state elected officials[A]: 1;
Media: 8;
Community organizations: 3;
Major mailers: 10.
Dallas, TX/North Texas, TX;
Employee groups: 6;
Local and state elected officials[A]: 1;
Media: 2;
Community organizations: 10;
Major mailers: 0.
Daytona Beach, FL/Mid-Florida, FL;
Employee groups: 3;
Local and state elected officials[A]: 1;
Media: 6;
Community organizations: 0;
Major mailers: 4.
Flint, MI/NE Metro, MI;
Employee groups: 33;
Local and state elected officials[A]: 2;
Media: 4;
Community organizations: 0;
Major mailers: 129.
Fox Valley, IN/South Suburban, IL;
Employee groups: 6;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 1;
Major mailers: 0.
Gaylord, MI/Traverse City, MI;
Employee groups: 8;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 0;
Major mailers: 0.
Glenwood Springs, CO/Grand Junction, CO;
Employee groups: 4;
Local and state elected officials[A]: 3;
Media: 1;
Community organizations: 2;
Major mailers: 0.
Helena, MT/Great Falls, MT;
Employee groups: 15;
Local and state elected officials[A]: 4;
Media: 1;
Community organizations: 1;
Major mailers: 7.
Hutchinson, KS/Wichita, KS;
Employee groups: 12;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 4;
Major mailers: 2.
Jackson, TN /Memphis, TN;
Employee groups: 1;
Local and state elected officials[A]: 0;
Media: 3;
Community organizations: 2;
Major mailers: 4.
Kansas City, KS /Kansas City, MO;
Employee groups: 4;
Local and state elected officials[A]: 2;
Media: 2;
Community organizations: 2;
Major mailers: 158.
La Crosse, WI/Rochester, MN;
Employee groups: 5;
Local and state elected officials[A]: 1;
Media: 4;
Community organizations: 1;
Major mailers: 4.
Las Cruces, NM/El Paso, TX;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 3;
Community organizations: 2;
Major mailers: 2.
McAllen, TX/Corpus Christi, TX;
Employee groups: 4;
Local and state elected officials[A]: 1;
Media: 2;
Community organizations: 1;
Major mailers: 1.
McCook /N. Platte, NE & Casper, WY;
Employee groups: 6;
Local and state elected officials[A]: 1;
Media: 1;
Community organizations: 1;
Major mailers: 0.
Newark, NJ/Dominick V. Daniels & No. NJ Metro, NJ;
Employee groups: 7;
Local and state elected officials[A]: 1;
Media: 2;
Community organizations: 0;
Major mailers: 15.
Oshkosh, WI/Green Bay, WI;
Employee groups: 2;
Local and state elected officials[A]: 2;
Media: 1;
Community organizations: 1;
Major mailers: 2.
Plattsburg, NY/Albany, NY;
Employee groups: 15;
Local and state elected officials[A]: 4;
Media: 1;
Community organizations: 5;
Major mailers: 6.
Portsmouth, NH/Manchester, NH;
Employee groups: 2;
Local and state elected officials[A]: 1;
Media: 3;
Community organizations: 1;
Major mailers: 2.
Rockford, IL/Palatine, IL;
Employee groups: 6;
Local and state elected officials[A]: 16;
Media: 1;
Community organizations: 5;
Major mailers: 9.
Saint Petersburg, FL /Tampa, FL;
Employee groups: 3;
Local and state elected officials[A]: 2;
Media: 7;
Community organizations: 2;
Major mailers: 17.
Sheridan, WY/Casper, WY;
Employee groups: 3;
Local and state elected officials[A]: 2;
Media: 0;
Community organizations: 2;
Major mailers: 0.
Sioux City, IA /Sioux Falls, SD;
Employee groups: 14;
Local and state elected officials[A]: 3;
Media: 1;
Community organizations: 3;
Major mailers: 13.
Springfield, MA/Hartford, CT;
Employee groups: 19;
Local and state elected officials[A]: 0;
Media: 4;
Community organizations: 6;
Major mailers: 32.
Twin Falls, ID/Boise, ID;
Employee groups: 7;
Local and state elected officials[A]: 5;
Media: 2;
Community organizations: 1;
Major mailers: 0.
Utica, NY/Syracuse or Albany, NY;
Employee groups: 12;
Local and state elected officials[A]: 6;
Media: 2;
Community organizations: 8;
Major mailers: 9.
Waco, TX/Fort Worth & Austin TX;
Employee groups: 3;
Local and state elected officials[A]: 0;
Media: 4;
Community organizations: 1;
Major mailers: 1.
Watertown, NY/Syracuse, NY;
Employee groups: 12;
Local and state elected officials[A]: 4;
Media: 1;
Community organizations: 5;
Major mailers: 2.
Wheatland, WY/Cheyenne, WY;
Employee groups: 6;
Local and state elected officials[A]: 3;
Media: 1;
Community organizations: 1;
Major mailers: 0.
Yakima, WA/Pasco, WA;
Employee groups: 4;
Local and state elected officials[A]: 2;
Media: 1;
Community organizations: 1;
Major mailers: 1.
Zanesville, OH/Columbus, OH;
Employee groups: 5;
Local and state elected officials[A]: 0;
Media: 2;
Community organizations: 1;
Major mailers: 4.
Source: GAO presentation of USPS data.
[A] For all 2005-2006 AMP consolidations, members of Congress are
identified. Note: This table includes the facilities involved in
proposed consolidations, both the facility losing operations and the
facility gaining operations.
[End of table]
[End of section]
Appendix V: Comments from the U.S. Postal Service:
William P. Galligan:
Senior Vice President Operations:
United States Postal Service:
June 1, 2007:
Ms. Katherine A. Siggerud:
Director, Physical Infrastructure:
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 Mail Processing
Realignment Efforts Underway Need Better Integration and Explanation
(GAO-07-717).
As noted in the report, postal network realignment has four goals:
develop mail processing and transportation networks suited to current
and future operational needs, reduce costs, create flexible operations,
and reduce inefficiency and redundancy. Our mail processing realignment
efforts have not wavered from the achievement of these goals.
In addition to area mail processing consolidations, we have also made
progress on numerous other fronts. For instance, 45 of 55 remote
encoding centers have been closed since 1999, resulting in significant
savings. Other network optimization efforts involved the establishment
of surface transfer centers, elimination of operations at 26 air mail
centers, and savings negotiated among contracts with cargo and
commercial air suppliers.
The Postal Accountability and Enhancement Act requires submission of a
Facilities Plan that will include a strategy for how the Postal Service
intends to rationalize its facilities network and remove excess
processing capacity and space from the network. Additionally, we must
also identify anticipated costs, cost savings, and other benefits
associated with the infrastructure rationalization alternatives
discussed in the plan. Our compliance with the law will satisfy the two
Government Accountability Office's recommendations regarding the
Facilities Plan.
The report also recommends three steps to improve our communication
strategy for stakeholders affected by area mail processing (AMP):
1. Drove Public Notice:
We agree to improve public notice by providing clear and simple
language detailing the type of change being considered and forecasting
changes to customer services. We will solicit public input at the
initiation of a feasibility study. The public notice will outline a
formal comment period and inform stakeholders that comments will be
addressed later at a public meeting.
2. Improve Public Engagement:
We believe that it would be premature to hold a public meeting during
the data-gathering phase of a feasibility study. A public meeting held
at this juncture of the study would raise concerns and promote the
perception of decreased transparency as there would be no data from
which to accurately report the possible outcomes of the study. However,
to improve public engagement, we will move the public meeting earlier
in the AMP process. Under the updated process, this meeting will occur
after the approval of the District Manager and prior to a decision made
by the Area Vice President. The agenda and briefing slides will be
posted on www.usps.com in advance of the public meeting.
3. Increase Transparency:
We agree to increase transparency by adding information to the AMP
guidelines on how public input is used in the decision-making process.
Public input information will be appended to the AMP proposal provided
to the Area Vice President for a decision. This input will be weighed
against the overall impact to cost savings and service. If the AMP
proposal is approved, the Area Vice President will forward it along
with public input information to the Senior Vice President, Operations.
The final report will be posted on www.usps.com summarizing the savings
impacts, service impacts, and other stakeholder concerns.
Our ongoing optimization efforts continue to evolve and will provide a
more service responsive and cost effective network infrastructure that
is required by the Postal Accountability and Enhancement Act. Likewise
the Consumer Price Index price cap imposed on our "market dominant"
products, which provide 90 percent of our revenue, will require the
Postal Service to continually scrutinize every dollar spent to ensure
that we will be able to operate within that cap. Only through these
efforts will we be able to consistently fulfill our enormous
responsibility to preserve universal service at affordable rates.
If you or your staff wish to discuss any of these comments, I am
available at your convenience.
Sincerely,
Signed by:
William P. Galligan:
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Katherine Siggerud, (202) 512-2834, or siggerudk@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Teresa Anderson, Assistant
Director; Tida E. Barakat; Kathy Gilhooly; Brandon Haller; Taylor M.
Matheson; Margaret B. McDavid; Josh Ormond; and Stan Stenerson made key
contributions to this report.
FOOTNOTES
[1] President's Commission on the United States Postal Service,
Embracing the Future: Making the Tough Choices to Preserve Universal
Mail Service (Washington, D.C.: July 31, 2003).
[2] GAO, U.S. Postal Service: The Service's Strategy for Realigning Its
Mail Processing Infrastructure Lacks Clarity, Criteria, and
Accountability, GAO-05-261 (Washington, D.C.: Apr. 8, 2005).
[3] The Postal Regulatory Commission was previously named the Postal
Rate Commission. Section 604 of the Postal Accountability and
Enhancement Act (Pub. L. No. 109-435), enacted on December 20, 2006,
redesignated the Postal Rate Commission as the Postal Regulatory
Commission.
[4] USPS has nine Area offices each responsible for different
geographic regions of the country.
[5] As outlined in the Transformation Plan, this strategy was called
Network Integration and Alignment.
[6] Some mail bypasses the originating USPS processing facility that
otherwise would initially receive and sort mail and instead be
transported by the mailers to a USPS facility that generally is closer
to the final destination of the mail.
[7] PRC Docket No. N2006-1, Evolutionary Network Development Service
Changes, 2006. USPS requested the Postal Regulatory Commission issue an
advisory opinion to determine whether or not changes resulting from
network realignment would be in violation of the law.
[8] S. Rept. No. 109-293, at 228 (2006).The three consolidations put on
hold were: Sioux City, IA; Aberdeen, SD; and Yakima, WA.
[9] Pub. L. No. 109-435.
[10] USPS has divided its national network into nine geographic areas,
each of which is overseen by an Area Vice President. Areas are composed
of several districts that oversee local offices.
[11] AMP consolidations handle more than just First-Class Mail.
[12] Different classes of mail dictate the rate the customer is charged
to send the mail and the amount of time it should take for the mail to
be delivered from the time it is sent.
[13] The USPS Board of Governors is comparable to a board of directors
of a private corporation and includes nine Governors who are appointed
by the President. The board directs the exercise of the powers and
expenditures of USPS, conducts long-range planning, and sets policies
on all postal matters.
[14] STCs are virtually identical to what were formerly referred to as
Hub and Spoke Program (HASP) facilities.
[15] Express Mail is mail sent by the fastest mail service offered by
USPS. Priority Mail is First-Class Mail that weighs over 13 ounces.
[16] In July 2003, the President's Commission provided recommendations
on ensuring efficient operation of USPS, while minimizing financial
exposure to the American taxpayers. These recommendations supported
USPS's realignment of it processing network.
[17] While plans have been in development since 2002, the USPS Board of
Governors did not approve plans to move forward with the FSS equipment
until February 2006.
[18] The Office of the Consumer Advocate is an office within the PRC
whose mission is to be a vigorous, responsive, and effective advocate
for reasonable and equitable treatment of the general public in
proceedings before the PRC.
[19] USPS headquarters officials also revised the AMP study estimated
annual savings for two consolidations, after the consolidations were
approved, to eliminate duplicated savings, which reduced the total AMP
study estimated annual savings by $2.8 million. We did not include this
revised AMP estimate in the table, so that all the data in the table
would be from consistent sources.
[20] U.S. Postal Service Office of Inspector General, Service
Implications of Area Mail Processing Consolidations, EN-AR-07-002
(Washington, D.C.: Dec. 5, 2006).
[21] In July 2006, we addressed several limitations in USPS's delivery
performance measurement. We recommended that USPS take actions to
facilitate greater progress in developing complete delivery performance
information. GAO, U.S. Postal Service: Delivery Performance Standards,
Measurement, and Reporting Need Improvement, GAO-06-733 (Washington,
D.C.: July 27, 2006).
[22] This measurement system is limited in its geographic coverage;
therefore, AMP consolidations may not always be subject to this system.
[23] Cancellation is when USPS applies a postmark to the mail piece.
[24] U.S. Postal Service, Area Mail Processing (AMP) Guidelines, PO-408
(Washington, D.C.: April 1995).
[25] USPS plans on providing a draft of the guidelines to employee
unions for their review in May 2007. Unions are allowed 60 to 90 days
for review and comment.
[26] 39 U.S.C. 404(b).
[27] 39 C.F.R. 241.3 (1998).
[28] 2006-2010 Tentative Collective Bargaining Agreement between
American Postal Workers Union, AFL-CIO and U.S. Postal Service.
According to American Postal Workers Union (APWU), the agreement has
been approved by APWU membership and the text will be official after
joint review and agreement between USPS and APWU.
[29] In February 2007, USPS officials told us USPS was developing a set
of communication requirements that would be used when consolidating or
closing other processing or "logistics" facilities that were being
modeled after those procedures established under the Worker Adjustment
and Retraining Notification Act, Pub. L. No. 100-379 (29 U.S.C. 210l,
et seq.) The Worker Adjustment and Retraining Notification Act provides
guidelines for communication requirements that are applicable to the
private sector when a company meeting certain criteria closes a
facility or moves out of a community.
[30] USPS officials told us stakeholders are determined by local and
district management. The mailers USPS notified are generally managed
accounts and are identified by Business Mail Entry unit personnel.
[31] USPS's draft AMP guidelines establish criteria for local mailers
as being those providing annual postage revenue averaging $5,000-
$156,000. Often large mailers use consolidators to deliver their mail.
USPS guidance may preclude consolidators from obtaining notification
about the status of a potential consolidation.
[32] U.S. Postal Service Office of Inspector General, Pasadena,
California Processing and Distribution Center Consolidation, EN-AR-07-
002 (Washington, D.C.: Sept. 26, 2006).
[33] Susan Carpenter and W.J.D. Kennedy, Managing Public Disputes: A
Practical Guide to Handling Conflict and Reaching Agreements, Jossey-
Bass, San Francisco (1988).
[34] At the time of the five meetings which have been held, USPS
afforded stakeholders and the public 5 days to provide comments. USPS
communication guidance has since been revised to increase the comment
period to 15 days.
[35] Susan L. Carpenter and W.J.D. Kennedy, Managing Public Disputes: A
Practical Guide to Handling Conflict and Reaching Agreements, Jossey-
Bass, San Francisco (1988).
[36] IBM Center for the Business of Government, Public Deliberation: A
Manager's Guide to Citizen's Engagement, Washington, D.C. (2006).
[37] USPS has a national Postal Customer Council and about 200 local
Postal Customer Councils. The councils are chapters of mailers and USPS
representatives. According to USPS, Postal Customer Councils work to
improve communications between USPS and its customers.
[38] According to USPS officials, communication requirements would be
modeled after the Worker Adjustment and Retraining Notification Act,
Pub. L. No. 100-379 (29 U.S.C. 210l, et seq.)
[39] Examples of associated costs include training, energy, and
maintenance.
[40] In testimony before the PRC, a USPS official defined the "cross-
functional team" as a team coordinated by the Manager, Processing
Operations, and includes managers from several functional offices at
headquarters including: Contract Administration, Maintenance Policies
and Programs, Integrated Network Development, Field Communications,
Operations Requirements, Processing Center Operations, Logistics,
Operations Budget and Performance Management, and Network Modeling and
Development. An Organizational Design and Management Analyst and a
Government Liaison are also members of the team.
[41] The guidelines state that generally a consolidation should not
result in service degradation. However, if it is not economically wise
to maintain service standards involving a small amount of mail, in
order for any trade-off between service standards commitments to be
approved, the study must clearly established that the overall service
to cost relationship for the combined service area improves.
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