U.S. Postal Service: Data Needed to Assess the Effectiveness of Outsourcing

Postal officials told us in June 2009 that the Postal Service has taken the initial steps to establish a process to compare the cost assumptions underlying the decision to outsource contained in the final financial comparative analysis with the actual contract award one year after implementation, with an adjustment for any ramp-up period. This data will be sourced through the appropriate contracting officer, a headquarters finance team, and the pertinent sponsoring organization. Such analysis will be completed for national Article 32.1.B. considerations approved after July 2008. The process will be monitored by the Strategic Initiatives Action Group, the cross-functional committee responsible for coordinating the processes involved in reviewing, approving, and monitoring proposed outsourcing initiatives. Findings will be presented to senior management on the outsourcing approval board. The Program Performance Office, Finance and Planning Department, USPS,has initiated the process and conducted preliminary meetings with the responsible contacts from purchasing and the sponsoring organizations so as to be ready to conduct the one-year evaluation described above. The first such analyses will be required in 2010. We will leave this recommendation open until actual results are provided. In August 2010, postal officials told us that the Postal Service has taken steps to establish a process to compare the cost assumptions underlying the decision to outsource contained in the final financial comparative analysis with the actual contract award one year after implementation, with an adjustment for any ramp-up period and that they had completed the one-year analysis of their first project. This response indicates implementation of our recommendation and we will close this recommendation. We will also create an accomplishment report for this recommendation.