U.S. Postal Service:

Mail Processing Realignment Efforts Under Way Need Better Integration and Explanation

GAO-07-717: Published: Jun 21, 2007. Publicly Released: Jul 26, 2007.

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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.

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.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: 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, the Postmaster General should improve public engagement by holding 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.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: In our 2007 review of the U.S. Postal Service's communication practices with stakeholders in making network realignment decisions, we reported that public meetings required for Area Mail Processing (AMP) consolidations were occurring too late in the decision-making process for the public to become engaged in this process in any meaningful way. We also found that the Service did not publish agendas in advance of public meetings or provide the public with much information about the proposed studies. Accordingly, we recommended that the Service hold the public meeting during the data gathering phase of the study and make an agenda and background information available to the public in advance of the public meetings. In response, the Service has moved the public meeting to a much earlier point in the AMP review process and plans to post a meeting agenda, presentation slides, and a summary brief of the AMP proposal on its Web site 1 week before the meeting.

    Recommendation: 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, the Postmaster General should improve public notice by clarifying 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.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: We assessed the U.S. Postal Service's communication practices with stakeholders in making network realignment decisions and the challenges associated with public engagement. Our report found that stakeholders potentially affected by Area Mail Processing (AMP) consolidations could not discern from the Service's initial notification letters what the Service was planning to study and what the outcomes of the study might be; this lack of clarification led to speculation on the part of stakeholders, which in turn increased public resistance to the Service's realignment efforts. Furthermore in 2007, we reported that stakeholders were not given enough notice about the required public input meeting. Accordingly, we recommended that the Service improve public notice by (1) clarifying notification letters, (2) explaining the next decision point, and (3) providing a date for the public meeting earlier. In its 2008 AMP Communications Plan, the Service has eliminated most of the jargon from its notification letters and has generally provided more context as to why it is necessary to conduct the feasibility studies. The Service also added a requirement that the public be notified at least 15 days in advance of a public meeting.

    Recommendation: To strengthen planning and accountability efforts for USPS's realignment efforts, the Postmaster General should ensure that the Facilities Plan required by the Postal Accountability and Enhancement Act includes 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.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: The Postal Service has taken action to strengthen accountability by establishing measurable targets for expected cost savings associated with its network consolidation activities. In FY 2009 the Service plans to save about $35 million from consolidation of its air mail centers, area mail processing operations, and other facility consolidations. In FY 2010, savings in this area are expected to increase to over $220 million. These savings are not related to appropriated funds since the Postal Service generates its revenues from postal ratepayers.

    Recommendation: To strengthen planning and accountability efforts for USPS's realignment efforts, the Postmaster General should ensure that the Facilities Plan required by the Postal Accountability and Enhancement Act includes a discussion of how the various initiatives that will be used in rationalizing the postal facilities network will be integrated with each other.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: USPS responded in its 9-24-07 letter that it agreed with our recommendations and agreed to incorporate an explanation of how its realignment initiatives are integrated in the Facilities Plan that it will submit to Congress by June 2008. In its 2008 Network Plan the Service addressed the integration of its network initiatives stating that their overall impact and execution are tightly integrated and provided a few examples. In addition, during a recent interview senior postal officials provided us with more information that helps put the integration of the Service's three network initiatives in context.

    Recommendation: 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, the Postmaster General should increase transparency by updating AMP guidelines to explain how public input is considered in the decision-making process.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: Our report about the U.S. Postal Service's network realignment decisions found that stakeholders and the public were unclear as to how public input factored into the Service's decisions to consolidate mail processing operations. Accordingly, we recommended that the Service increase the transparency of its decision-making process by explaining how it considers public input in the decision-making process. In response, the Service has modified its public input review process so that officials at the district, area, and headquarters levels consider, and are responsive to, public concerns. Senior Postal officials told us that they weigh public input primarily by considering the impact of any consolidations on customer services and service standards. Additionally, the Service plans to post standard information about each consolidation,such as specifics about the scheduled public meeting and a summary of written and verbal public input,on its Web site and update this information regularly.

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