U.S. Postal Service
Progress Made Toward Implementing GAO's Recommendations to Strengthen Network Realignment Planning and Accountability and Improve Communication
Gao ID: GAO-08-1134R September 25, 2008
Major changes affecting the U.S. Postal Service (USPS)--including declining mail volumes, increasing operating expenses such as rising fuel costs, and a more competitive marketplace--have reinforced the need for USPS to increase efficiency and reduce expenses in its mail processing network. This network includes over 600 facilities that sort mail and prepare it for transportation and delivery. First-Class Mail provides USPS with high revenue per piece and has traditionally helped USPS cover its overhead costs. However, First-Class Mail volumes have been declining since 2001 and this downward trend is expected to continue. Furthermore, while First-Class Mail volumes have been declining, worksharing by mailers has increased. Worksharing allows mailers to earn discounts on postage rates by presorting, preparing, and transporting their mail to a postal facility near the mail's destination. As worksharing has increased, ever-larger volumes of mail have bypassed most of USPS's processing activities, creating excess network capacity. To address these trends affecting its mail processing network, USPS has developed several initiatives to reduce costs and increase efficiency. One such initiative, area mail processing, is designed to consolidate operations at facilities with excess machine capacity, and thereby increase the use of automation in mail processing. In 2005 and 2007, we issued reports that evaluated USPS's network realignment plans and included recommendations for improvement. This report responds to a directive from the House and Senate Committees on Appropriations and assesses the progress USPS has made toward implementing our recommendations to (1) improve realignment planning and accountability by establishing criteria for decision making and a process for evaluating savings and benefits; addressing how the various realignment initiatives are integrated; and establishing measurable performance targets; and (2) improve communication related to realignment plans and proposals by ensuring that its revised Area Mail Processing (AMP) Communication Plan includes steps to improve public notice and engagement and increase transparency.
USPS has taken steps to address our prior recommendations to strengthen planning and accountability for its network realignment efforts, which are important as USPS moves from planning to implementing its network realignment initiatives. Its 2008 Network Plan identifies three major realignment efforts: (1) closures of Airport Mail Centers (AMC), (2) consolidations of AMP operations, and (3) the transformation of the Bulk Mail Center (BMC) network. USPS's Network Plan includes criteria for evaluating realignment decisions, the three most important of which, according to postal officials, are cost, service, and capacity. USPS has established a process for evaluating and measuring the results of its AMP consolidations, is developing an analogous process for AMC closures, and has yet to implement the BMC initiative as this strategy is still under consideration. USPS's AMP guidelines require semiannual and annual postimplementation reviews of AMP consolidations. These reviews assess whether planned savings, work hours, and levels of service have been met and ensure that management is held accountable for implementing an approved AMP proposal. Additionally, we found that USPS's Network Plan generally describes how USPS's key realignment efforts are integrated and provides a few examples. Regarding performance targets, we found that the Network Plan contains limited specific information on performance targets or on the costs and savings attributable to USPS's various realignment initiatives. The only specific reference in the Plan was the statement that USPS would establish fiscal year 2009 service standards targets before the conclusion of fiscal year 2008. The Deputy Postmaster General explained that USPS's performance targets are captured in more detail in its budget. However, limited information on performance targets, particularity related to its realignment initiatives, is available to Congress and the public. USPS provides Congress with highlights of its budget as part of its annual appropriation request, but not its detailed internal budget. Since USPS is self-sustaining, its appropriations requests to Congress are limited. We recognize USPS's need to increase efficiency and decrease costs across all its operations in light of declining mail volumes. In addition, USPS's financial report for the third quarter of this fiscal year states that slow economic growth will continue to negatively affect revenue and volume, especially if fuel prices remain at their current high levels and inflation in other sectors of the economy begins to increase. As USPS pursues its network realignment under these challenging financial conditions, it will have an opportunity, in its annual reports to Congress, to provide ongoing information about its realignment targets and the costs and benefits of its realignment initiatives. USPS has taken steps to address our recommendations to improve communication with its stakeholders as it consolidates its AMP operations. USPS has modified its AMP Communication Plan to improve public notification, engagement, and transparency. Notably, USPS has improved the content of its notification letters and notifies stakeholders earlier of the public meeting during which AMP consolidations are discussed. USPS also has moved the meeting to an earlier point in the AMP process and plans to post a meeting agenda, summary brief, and presentation slides on its Web site 1 week before the public meeting. To increase transparency, USPS has clarified its processes for addressing public comments and plans to make additional information about AMP consolidations available on its Web site. As USPS implements AMP consolidations, it will have the opportunity to gather stakeholders' feedback on the updated Communication Plan and assess the effectiveness of these modifications.
GAO-08-1134R, U.S. Postal Service: Progress Made Toward Implementing GAO's Recommendations to Strengthen Network Realignment Planning and Accountability and Improve Communication
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GAO-08-1134R:
United States Government Accountability Office:
Washington, DC 20548:
September 25, 2008:
The Honorable Richard J. Durbin:
Chairman:
The Honorable Sam Brownback:
Ranking Member:
Subcommittee on Financial Services and General Government:
Committee on Appropriations:
United States Senate:
The Honorable José E. Serrano:
Chairman:
The Honorable Ralph S. Regula:
Ranking Member:
Subcommittee on Financial Services and General Government:
Committee on Appropriations:
House of Representatives:
Subject: U.S. Postal Service: Progress Made Toward Implementing GAO's
Recommendations to Strengthen Network Realignment Planning and
Accountability and Improve Communication:
Major changes affecting the U.S. Postal Service (USPS)--including
declining mail volumes, increasing operating expenses such as rising
fuel costs, and a more competitive marketplace--have reinforced the
need for USPS to increase efficiency and reduce expenses in its mail
processing network. This network includes over 600 facilities that sort
mail and prepare it for transportation and delivery. First-Class Mail
provides USPS with high revenue per piece and has traditionally helped
USPS cover its overhead costs. However, First-Class Mail volumes have
been declining since 2001 and this downward trend is expected to
continue. Furthermore, while First-Class Mail volumes have been
declining, worksharing by mailers has increased. Worksharing allows
mailers to earn discounts on postage rates by presorting, preparing,
and transporting their mail to a postal facility near the mail's
destination. As worksharing has increased, ever-larger volumes of mail
have bypassed most of USPS's processing activities, creating excess
network capacity.
To address these trends affecting its mail processing network, USPS has
developed several initiatives to reduce costs and increase efficiency.
One such initiative, area mail processing, is designed to consolidate
operations at facilities with excess machine capacity, and thereby
increase the use of automation in mail processing. In 2005 and 2007, we
issued reports that evaluated USPS's network realignment plans and
included recommendations for improvement.[Footnote 1] This report
responds to a directive from the House and Senate Committees on
Appropriations and assesses the progress USPS has made toward
implementing our recommendations to (1) improve realignment planning
and accountability by establishing criteria for decision making and a
process for evaluating savings and benefits; addressing how the various
realignment initiatives are integrated; and establishing measurable
performance targets; and (2) improve communication related to
realignment plans and proposals by ensuring that its revised Area Mail
Processing (AMP) Communication Plan includes steps to improve public
notice and engagement and increase transparency.
Our April 2005 report found that USPS did not establish criteria to
select facilities for potential AMP consolidations or to make decisions
about implementing consolidations. As a result, it was unclear whether
USPS was making decisions fairly and efficiently or whether USPS was
targeting the best consolidation opportunities. In 2005, we also found
that it was unclear how USPS's strategy would provide accountability
for realignment decisions because there was no process for evaluating
the results of these decisions and no stated policy for making managers
accountable. Accordingly, we recommended that USPS establish criteria
for evaluating realignment decisions and develop a process to evaluate
and measure the results.
In June 2007, we issued a follow-up report on USPS's realignment
efforts. We found little transparency in USPS's process for integrating
its realignment efforts and determined that USPS could not demonstrate
the costs and benefits associated with its network realignment
initiatives because it lacked measurable performance targets to track
its realignment goals. We also found that the AMP consolidation
communication processes did not provide clear and useful notification
to stakeholders, did not provide for meaningful public input or
engagement, and lacked transparency regarding how USPS makes AMP
consolidation decisions. Table 1 describes the recommendations we made
to the Postmaster General in our 2007 report.
Table 1: Recommendations to the Postmaster General in GAO-07-717:
Planning and Accountability:
Strengthen planning and accountability by ensuring that USPS's network
realignment plans include;
* a discussion of how the various network realignment initiatives will
be integrated with each other to achieve network realignment goals,
and;
* measurable targets for the anticipated cost savings and benefits
associated with network rationalization;
Communication:
Improve the way USPS communicates with stakeholders about its
realignment plans and proposals, particularly its proposals for
consolidating AMP operations, by ensuring that its revised
communication plan includes steps to;
* improve public notice;
* improve public engagement, and;
* increase transparency.
Source: GAO:
[End of table]
To strengthen its planning and communication, in June 2008, USPS issued
its Network Plan.[Footnote 2] This plan, mandated by the Postal
Accountability and Enhancement Act of 2006 (PAEA),[Footnote 3] was to
include USPS's long-term vision and strategy for realigning its
network; a description of the anticipated costs, cost savings, and
other benefits associated with the infrastructure realignment
alternatives; and USPS's communication procedures for AMP
consolidations. USPS has additional legislative requirements to meet
before moving forward with AMP consolidations. Moreover, the previously
mentioned congressional directive that called for this report, which
appeared in the joint explanatory statement accompanying the
Consolidated Appropriations Act for fiscal year 2008, restricts USPS
from implementing additional AMP consolidations until we have issued
this report to the Committees on Appropriations.[Footnote 4]
To describe USPS's progress in implementing our recommendations on
improving network realignment planning and accountability, we reviewed
the Network Plan USPS issued in June 2008 and our work on USPS's
realignment initiatives.[Footnote 5] We also met with the Deputy
Postmaster General and Acting Senior Vice President for Operations to
discuss USPS's Network Plan and decision-making process for realignment
initiatives. To describe USPS's progress in implementing our
recommendations on better communicating its realignment plans and
proposals to stakeholders, we reviewed USPS's revised AMP guidelines
and revised Communication Plan, both issued in March 2008, along with
our related realignment products and USPS's June 2008 Network Plan. We
also met with USPS's Manager of Processing Operations and the Manager
of Network Alignment Implementation to discuss the changes USPS has
made to improve its AMP process. We conducted this performance audit
from June 2008 through September 2008 in accordance with generally
accepted government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence
to provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
Results in Brief:
USPS has taken steps to address our prior recommendations to strengthen
planning and accountability for its network realignment efforts, which
are important as USPS moves from planning to implementing its network
realignment initiatives. Its 2008 Network Plan identifies three major
realignment efforts: (1) closures of Airport Mail Centers (AMC), (2)
consolidations of AMP operations, and (3) the transformation of the
Bulk Mail Center (BMC) network. USPS's Network Plan includes criteria
for evaluating realignment decisions, the three most important of
which, according to postal officials, are cost, service, and capacity.
USPS has established a process for evaluating and measuring the results
of its AMP consolidations, is developing an analogous process for AMC
closures, and has yet to implement the BMC initiative as this strategy
is still under consideration. USPS's AMP guidelines require semiannual
and annual postimplementation reviews of AMP consolidations. These
reviews assess whether planned savings, work hours, and levels of
service have been met and ensure that management is held accountable
for implementing an approved AMP proposal. Additionally, we found that
USPS's Network Plan generally describes how USPS's key realignment
efforts are integrated and provides a few examples. Regarding
performance targets, we found that the Network Plan contains limited
specific information on performance targets or on the costs and savings
attributable to USPS's various realignment initiatives. The only
specific reference in the Plan was the statement that USPS would
establish fiscal year 2009 service standards targets before the
conclusion of fiscal year 2008. The Deputy Postmaster General explained
that USPS's performance targets are captured in more detail in its
budget. However, limited information on performance targets,
particularity related to its realignment initiatives, is available to
Congress and the public. USPS provides Congress with highlights of its
budget as part of its annual appropriation request, but not its
detailed internal budget. Since USPS is self-sustaining, its
appropriations requests to Congress are limited.[Footnote 6] We
recognize USPS's need to increase efficiency and decrease costs across
all its operations in light of declining mail volumes. In addition,
USPS's financial report for the third quarter of this fiscal year
states that slow economic growth will continue to negatively affect
revenue and volume, especially if fuel prices remain at their current
high levels and inflation in other sectors of the economy begins to
increase. As USPS pursues its network realignment under these
challenging financial conditions, it will have an opportunity, in its
annual reports to Congress, to provide ongoing information about its
realignment targets and the costs and benefits of its realignment
initiatives.[Footnote 7]
USPS has taken steps to address our recommendations to improve
communication with its stakeholders as it consolidates its AMP
operations. USPS has modified its AMP Communication Plan to improve
public notification, engagement, and transparency. Notably, USPS has
improved the content of its notification letters and notifies
stakeholders earlier of the public meeting during which AMP
consolidations are discussed. USPS also has moved the meeting to an
earlier point in the AMP process and plans to post a meeting agenda,
summary brief, and presentation slides on its Web site 1 week before
the public meeting. To increase transparency, USPS has clarified its
processes for addressing public comments and plans to make additional
information about AMP consolidations available on its Web site. As USPS
implements AMP consolidations, it will have the opportunity to gather
stakeholders' feedback on the updated Communication Plan and assess the
effectiveness of these modifications.
We provided USPS with a draft of this report, and we have incorporated
its technical comments, as appropriate.
USPS Has Made Progress toward Implementing GAO's Recommendations to the
Postal Service to Improve Realignment Planning and Accountability:
In its 2008 Network Plan, USPS has clarified how it makes realignment
decisions and evaluates results and generally addressed how it
integrates its realignment initiatives, but it has not established
measurable performance targets for these initiatives. USPS believes
that its budgeting process accounts for the cost reductions achieved
through these initiatives.
USPS Has Clarified Its Criteria for Making Realignment Decisions and
Its Process for Evaluating AMP Proposals:
According to postal officials, USPS uses three primary criteria for
evaluating realignment decisions--cost, service, and capacity. Its 2008
Network Plan states that opportunities for consolidation are judged
against the same criteria, regardless of whether proposals to conduct
AMP feasibility studies are initiated from the "top down" or from the
"bottom up."[Footnote 8] The Plan lists these criteria as:
* changes in service quality, as measured by service performance
indicators;
* upgrades or downgrades in service standards for First-Class Mail and
other mail classes;
* changes in collection box pick-up times and retail service
availability;
* changes in location and hours for business mail acceptance at mail
entry units and for drop shipments;
* operating plans at the gaining and consolidated mail processing
facilities;
* future needs for deploying mail processing equipment and for floor
space; and:
* potential savings and efficiencies, including reductions in utility
costs.
In 2007, USPS officials told us they were prioritizing AMP
consolidations that were expected to achieve $1 million or more in cost
savings annually. In June 2008, they told us that USPS plans on
considering consolidations that are expected to achieve less than $1
million in annual cost savings. Furthermore, they explained that USPS
plans to focus on those consolidations that will result in minimal, if
any, degradation of First-Class service standards.
In addition, USPS has established a process for evaluating the savings
and benefits resulting from AMP consolidations, is developing a process
to evaluate the results of its AMC closures, and has not yet
implemented its BMC transformation. USPS's AMP guidelines require that
approved AMP consolidations be reviewed twice after a consolidation has
been implemented to assess whether planned savings, work hours, and
levels of service have been met and to ensure management's
accountability for implementing an approved AMP proposal. The first
review, which covers the first and second full quarters following
implementation, indicates whether the AMP consolidation is on track for
achieving the expected savings and determines whether the AMP
consolidation achieved the necessary training, relocations,
transportation, operational changes, and work hour adjustments. The
second review compares the initial estimates against actual data to
determine the viability of the consolidation and allows management the
opportunity to analyze the decisions it made in implementing the
approved AMP proposal. In 2007 we reported that the guidance for this
process did not prescribe standardized sources for the data used or
standardized methodologies for analyzing some of the data. USPS updated
its AMP guidance in 2008 and has standardized its AMP data sources and
analytical methodologies to achieve more consistent results, for
example, by locking in formulas to be used in postimplementation
reviews.
USPS Has Generally Addressed the Integration of Its Various Network
Realignment Initiatives:
In its 2008 Network Plan, USPS identifies three major realignment
efforts--(1) AMC closures, (2) consolidations of AMP operations, and
(3) the transformation of the BMC network--and briefly addresses the
integration of these network initiatives. The Network Plan states that
the overall impact and execution are tightly integrated, and provides a
few examples, but gives little contextual information about what USPS's
future network will look like or how its realignment goals are being
met. However, senior USPS officials recently provided information that
helps to put the integration of USPS's three network realignment
initiatives in context. They said this integration is expected to
reduce USPS's network and shrink its mail processing operations. After
integrating these three efforts, they said, USPS will continue to be
the "first and last mile"--the "first mile" being the point of entry
for mail into the system and the "last mile" being the delivery of mail
to customers nationwide--as required to meet USPS's universal service
mission. They expect to lower costs and achieve savings by reducing
excess processing capacity and fuel consumption, as well as by working
with the mailing industry to implement new technologies such as
delivery point sequencing for flats, and Intelligent Mail®.[Footnote 9]
Measurable Performance Targets for Realignment Initiatives Are Limited
to USPS's Budget:
PAEA calls for USPS to, among other matters, establish performance
goals and identify anticipated costs, cost savings, and other benefits
associated with the infrastructure realignment alternatives in its
Network Plan. The Network Plan describes an overall goal to create an
efficient and flexible network that results in lower costs for both
USPS and its customers, improves the consistency of mail service, and
reduces USPS's overall environmental footprint. In addition, the Plan
states that USPS's goals are continuous improvement and savings of $1
billion per year through realignment and other efforts. According to
the plan, USPS will achieve these savings, in part, through its three
core realignment initiatives. The specificity of the expected savings
related to the core initiatives varies in the plan's discussion of
measurable goals and targets. With respect to overall program targets,
USPS estimated a total savings of $117 million for AMC closures--
including $57 million in 2008 and $21 million in 2009--but provided no
such figures for the AMP consolidations. Postal officials told us USPS
is developing an overall program target for the BMC transformations.
Although USPS has estimated total savings for AMC closures, it has not
established measurable performance goals and targets for any of the
three individual realignment initiatives. The only specific reference
in the Plan to targets was the statement that USPS would establish
fiscal year 2009 service standards targets before the conclusion of
fiscal year 2008. According to the Deputy Postmaster General, the
realignment targets are captured in USPS's goal of saving $1 billion
per year. Specifically, he explained that USPS includes its overall
goals and targets in more detail as part of its internal budget.
USPS's Network Plan notes that to address declining mail volumes, USPS
must increase efficiency and decrease costs across all its operations.
Furthermore, USPS's financial report for the third quarter of this
fiscal year stated that slow economic growth will continue to
negatively affect revenue and volume, especially if fuel prices remain
at their current high levels and inflation in other sectors of the
economy begins to increase. Given USPS's challenging financial
situation, we recognize that effective implementation of network
realignment is needed. However, limited information on USPS's
performance targets, particularly related to its realignment
initiatives, is available to Congress and the public. USPS provides
Congress with highlights of its budget as part of its annual
appropriation request, but not its detailed internal budget. Since USPS
is self-sustaining, its appropriations requests to Congress are
limited. USPS's annual reports to Congress, due 90 days after the end
of the fiscal year, provide an opportunity for USPS to make its goals
and results more transparent and provide information about the
effectiveness of its realignment efforts. Going forward, USPS will have
opportunities to provide information about its estimated costs and cost
savings related to its realignment efforts in its annual report to
Congress. Developing and implementing more transparent performance
targets and results can help inform Congress and other stakeholders
about the effectiveness of USPS's realignment efforts.[Footnote 10]
USPS Has Made Progress toward Implementing GAO's Recommendations to
Improve Communication Related to AMP Consolidation Plans and Proposals:
USPS has taken steps to respond to our recommendations related to
communication with stakeholders about its realignment plans and
proposals, particularly its proposals for consolidating AMP operations.
These steps include improving public notice, improving public
engagement, and increasing transparency by clarifying how it considers
public input in making its decisions.
USPS Has Improved Public Notice by Clarifying Notification Letters:
In its 2008 AMP Communication Plan, USPS has largely eliminated jargon
from its notification letters and generally provided more contextual
information on its reasons for conducting AMP feasibility studies. For
example, the initial notification letters[Footnote 11] no longer
contain jargon such as "originating mail processing" and "destinating
mail processing" and now name both facilities that would be affected by
a proposed consolidation, whereas previously, only one facility was
named. Previous letters also contained little contextual information on
the economic trends affecting USPS and on why it believes it needs AMP
feasibility studies and consolidations. Now, the initial notification
letters provide stakeholders with more information for understanding
USPS's AMP process. Presenting such information to stakeholders before
rather than during public meetings may help address the resistance that
has often built up as stakeholders have speculated on USPS's plans in
the absence of accurate information. Further, USPS has added a
requirement in its 2008 Communications Plan that the public be notified
at least 15 days in advance of a public meeting.
USPS Has Improved Engagement by Holding the Public Meeting Earlier in
the AMP Process and Making Informational Materials Available in Advance
of the Meeting:
Although USPS still holds a public meeting after completing the data-
gathering phase of the feasibility study, the meeting now occurs
earlier in the AMP review process. Currently, before the meeting, the
study has been approved only at the district level--the area office and
headquarters have not yet completed their reviews or validated the data
by the time of the meeting. According to USPS officials, they did not
move the meeting up even more, to the data-gathering phase of the
study, because at that point, USPS does not know what operations could
potentially be consolidated. However, to ensure that the public meeting
is held within a reasonable amount of time after the study's
completion, USPS's 2008 AMP Communication Plan requires that the public
meeting take place within 45 days after the District Manager forwards
the study to the area office and headquarters. In addition, the initial
notification letter now includes contact information for the local
Consumer Affairs Manager, to whom the public can submit written
comments up to 15 days after the public meeting. Previously, this
contact information appeared in the second notification letter.
To help stakeholders better prepare for the public meeting, USPS plans
to post a meeting agenda, presentation slides, and a summary brief of
the AMP consolidation proposal on its Web site 1 week before the
meeting. USPS also plans to inform stakeholders in the public meeting
notification letter that these materials will be posted on its Web site
1 week before the meeting.
USPS Has Increased Transparency by Clarifying How It Considers Public
Input in the Decision-Making Process:
In a recent interview, senior USPS officials identified two additions
to the 2008 AMP Communication Plan that address stakeholders' concerns
about how USPS considers public input. First, USPS will now consider
written comments from stakeholders before the public input meetings and
address these comments at the public input meetings. Second, USPS has
modified its public input review process so that officials at the
district, area, and headquarters levels can consider, and be responsive
to, public concerns. The Vice President, Consumer Advocate, at
headquarters is responsible for ensuring that due consideration has
been given to issues raised throughout the public input process before
the proposal and summaries are sent to the SVP Operations, for final
consideration. Senior USPS officials told us that officials weigh
public input primarily by considering the impact of any consolidations
on customer service and service standards. Additionally, USPS officials
told us that as AMP consolidations go forward, USPS will post standard
information about each consolidation on its Web site and update this
information regularly. Specifically, USPS plans to post initial
notifications, a brief summary of the proposed AMP consolidation,
details about the scheduled public meeting, a summary of written and
verbal public input, and the final decision and implementation plans if
an AMP consolidation is approved.
We have previously discussed the difficulties that stakeholder
resistance poses for USPS when it tries to close facilities and how
delays may affect USPS's ability to achieve its critical cost-reduction
and efficiency goals. Part of the problem has stemmed from USPS's
limited communication with the public. We believe that USPS has made
significant progress toward improving its AMP communication processes
since 2005. Going forward, it will be crucial for USPS to establish and
maintain an ongoing and open dialogue with its various stakeholders,
including congressional oversight committees and Members of Congress,
who have questions or are concerned about proposed realignment changes.
We are sending copies of this report to the Postmaster General,
appropriate congressional committees, 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
[hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 512-2834 or herrp@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Key contributors to this report were
Teresa Anderson, Margaret McDavid, and Jaclyn Nidoh.
Signed by:
Phillip R. Herr:
Director, Physical Infrastructure Issues:
[End of section]
Footnotes:
[1] GAO, U.S. Postal Service: The Service's Strategy for Realigning Its
Mail Processing Infrastructure Lacks Clarity, Criteria, and
Accountability, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-
261] (Washington, D.C.: Apr. 8, 2005); and U.S. Postal Service: Mail
Processing Realignment Efforts Under Way Need Better Integration and
Explanation, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-717]
(Washington, D.C.: June 21, 2007).
[2] Postal Accountability and Enhancement Act § 302 Network Plan.
[3] Section 302 of the Postal Accountability and Enhancement Act (Pub.
L. No. 109-435) was enacted on Dec. 20, 2006. Whereas the act refers to
network "rationalization," we have previously used the term
"realignment" for analogous purposes and continue to do so in this
report.
[4] See Division D, Financial Services and General Government
Appropriations Act, 2008, of the Explanatory Statement accompanying the
Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, Dec. 26,
2007. The Explanatory Statement is included in the Committee Print on
H.R. 2764/Public Law 110-161, Committee on Appropriations, U.S. House
of Representatives, January 2008.
[5] See [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-261];
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-717]; and U.S.
Postal Service: USPS Has Taken Steps to Strengthen Network Realignment
Planning and Accountability and Improve Communication, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1022T] (Washington, D.C.: July
24, 2008).
[6] For example, in fiscal year 2008, Congress appropriated an
estimated $89 million of USPS's total budget of an estimated $78
billion. Congress put USPS on a self-sustaining basis in 1971, and has
subsidized the mailing costs of certain groups, e.g., the blind and
overseas voters, by providing an appropriation to USPS to cover the
revenues that were given up, or "forgone," in charging below-cost rates
to these groups. See Congressional Research Service, The Postal Revenue
Forgone Appropriation: Overview and Current Issues (Washington, D.C.,
2006).
[7] Section 302 of PAEA requires USPS to submit a report to Congress
within 90 days after the end of each fiscal year on the impact postal
decisions have had or will have on realignment plans.
[8] With the "bottom-up" AMP approach, the process begins when the
postal District Manager or Senior Plant Manager notifies the Area Vice
President (AVP) of the intent to conduct an AMP feasibility study. The
AVP then informs the Senior Vice President (SVP) Operations at
headquarters. With the "top-down" AMP approach, the SVP Operations
contacts the AVP to initiate a feasibility study.
[9] Delivery point sequencing is the automated rather than the manual
sorting of letters in the exact order in which carriers deliver them.
Flats sequencing is a system that fully automates the processing and
delivery sequencing of flat-size mail, which generally consists of
catalogs, envelopes, large cards, magazines, and newspapers.
Intelligent Mail® uses barcodes which are read by scanning devices to
allow postal managers and customers to track mail as it moves through
the postal network.
[10] For additional GAO work on the benefits of establishing
performance standards and targets, see Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational
Transformations, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-
669] (Washington, D.C.: July 2, 2003).
[11] USPS provides for notification letters at multiple points during
the AMP process, e.g., initial notification of intent to perform a
study, notification of a public meeting, and notification to
consolidate facilities.
[End of section]
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