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U.S. Postal Service: Intelligent Mail Benefits May Not Be Achieved if Key Risks Are Not Addressed

GAO-09-599 Published: May 06, 2009. Publicly Released: May 06, 2009.
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Highlights

Over 80 percent of the approximately 200 billion mail pieces processed and delivered by the U.S. Postal Service (USPS) last year was sent by commercial mailers that barcode, sort, or transport mail to get lower postage rates. Starting in May 2009, USPS will encourage these mailers to use new barcodes that have increased capabilities as part of Intelligent Mail, a new program. According to USPS, Intelligent Mail is the most complex change it has ever undertaken. GAO was asked to describe (1) the Intelligent Mail program and the status of implementation efforts and (2) the key risks to implementing Intelligent Mail and how USPS is addressing these risks. GAO reviewed USPS and regulatory documents, public comments, and interviewed USPS officials, mailers, and mailer representatives involved in developing this program.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Postal Service To help ensure that USPS addresses these risks to the successful implementation of Intelligent Mail, the Postmaster General should develop a comprehensive Intelligent Mail strategic plan that defines all planned phases and their associated functions and systems and includes program goals and measures of success.
Closed – Implemented
USPS is implementing its Intelligent Mail program to provide much greater insight into the mail. However, GAO found that USPS faces two key risks to successful implementation of the program--(1) USPS's management approach and (2) mailers may not choose to participate in the program--which, if not addressed, could limit achieving Intelligent Mail. Although USPS was aware of these risks, it had no plan for dealing with them should these potential problems materialize. As a result, GAO recommended that the Postmaster General develop a comprehensive Intelligent Mail strategic plan that defines all planned phases and their associated functions and systems and includes program goals and measures of success. In November 2010, USPS released its Intelligent Mail Vision, which lays out seven strategies to guide its Intelligent Mail efforts. We assessed USPS's plan against the recommendation and determined that the plan addresses most of the elements in the recommendation. Overall, the plan better equips USPS to minimize risk and maximize the chances of successful implementation of a large and complex effort, such as the Intelligent Mail program.
United States Postal Service To help ensure that USPS addresses these risks to the successful implementation of Intelligent Mail, the Postmaster General should develop cost and savings information for the activities that can be attributed to the Intelligent Mail program, including the baseline and metrics to be used to track cost savings achieved.
Closed – Not Implemented
USPS said it established both the baseline and cost reduction metrics for the savings associated with acceptance and verification activities. In addition, it said it has a tracking system in place and is tracking savings for these specific activities on a monthly basis. We requested additional information in September 2010; however, USPS has not provided documentation of these actions. In November 2010, USPS provided us documentation that provided work hours for 2009 and 2010 for the mail acceptance function. GAO is assessing the documentation to determine the extent that it satisfies our recommendation.
United States Postal Service To help ensure that USPS addresses these risks to the successful implementation of Intelligent Mail, the Postmaster General should develop a plan that addresses how USPS will mitigate program-level risks, including the implications of lower-than-anticipated customer adoption of the Full Service Intelligent Mail option, resource limitations, and schedule delays.
Closed – Implemented
USPS is implementing its Intelligent Mail program to provide much greater insight into the mail. However, GAO found that USPS faces risk to successful implementation because it lacks a program-level risk mitigation plan that identifies and addresses potential weaknesses before they adversely affect the program. GAO recommended that the Postmaster General develop a plan that addresses how USPS will mitigate program-level risks. In August 2009, USPS released its Intelligent Mail Corporate Plan, which identified a single risk (mailer adoption). In an update to that plan in November 2010, USPS identified an additional six risks and discussed ways to mitigate them. GAO assessed USPS's plan against the recommendation and determined that the plan satisfies the recommendation. By producing this risk-mitigation plan, USPS has enhanced its ability to address these risks should they materialize and thereby maximize the chances of successful implementation of the Intelligent Mail program, which is the most complex program USPS has ever undertaken.

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Cost controlCost effectiveness analysisInformation systemsInformation technologyIT acquisitionsMail delivery problemsMail transportation operationsPerformance appraisalPostal facilitiesPostal ratesPostal servicePrices and pricingProgram evaluationProgram managementRisk assessmentRisk factorsRisk managementStandardsStrategic planningBenefit-cost trackingPilot programsProgram coordinationProgram goals or objectivesProgram implementation