	USPS Has Taken Steps to Improve Realignment Planning and Accountability, but Measurement of Most Realignment Efforts Is Limited to the Budget Process

USPS has taken steps to respond to most of our prior recommendations to  strengthen planning and accountability for its network realignment efforts. It has clarified how it makes realignment decisions 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. 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. Evaluation of results: USPS has measured the results of its AMP  consolidations through a post-implementation review. When we met with USPS officials in June 2008, we asked why they did not  have measurable performance goals and targets for the individual  realignment initiatives. The Deputy Postmaster General explained that the  realignment targets are captured in USPS’s goal of saving $1 billion per  year. USPS will have  additional opportunities to provide information about its estimated costs  and cost savings related to its realignment efforts in its annual report to  Congress, which is required by the end of December. Developing and  implementing more transparent performance targets and results can help  inform Congress about the effectiveness of USPS’s realignment efforts. 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, flats sequencing, and Intelligent Mail.® Going forward, USPS  has opportunities, in its annual report to Congress and in other reports and  strategic plans, to further articulate how it plans to integrate these three  initiatives and to what extent they are helping USPS meet its goals. USPS Has Established Delivery Service Standards

USPS has partially responded to our prior recommendations related to  improving delivery performance information by establishing delivery  performance standards and committing to develop performance targets  against these standards and provide them to the PRC in August. However,   full implementation of performance measures and reporting is not yet  completed. Delivery service performance is a critical area that may be  affected by the implementation of the realignment initiatives. Our July 2006 report found that USPS’s delivery performance standards,  measurement, and reporting needed improvement. Furthermore, we recommended that USPS improve the transparency of its  delivery standards, measurement, and reporting. Moreover, USPS  provided a specific proposal for measuring and reporting its delivery  performance to the PRC, which has requested public comment on USPS’s  proposal. USPS Has Improved Its AMP Communication Plan

USPS has taken steps to respond to our recommendations that it improve  its communication of realignment plans and proposals with stakeholders. Improve public engagement. Increase transparency. USPS has incorporated into its 2008 AMP Communication Plan several  modifications aimed at improving public notification and engagement. USPS  has increased transparency, largely by clarifying its processes for  addressing public comments and plans to make additional information  available to the public on its Web site. Congress has also addressed USPS’s communication process. PAEA  required USPS to describe its communication procedures related to AMP  consolidations in its Network Plan. Now, it will be crucial for USPS, in  going forward, 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. USPS’s Network Plan stated  that USPS had terminated  operations at 46 AMCs  during fiscal years 2006 and  2007, and another 8 AMCs  in fiscal year 2008. U.S. GAO. GAO. GAO. GAO. Postal Service: The Service’s Strategy for Realigning Its Mail  Processing Infrastructure Lacks Clarity, Criteria, and Accountability. GAO. GAO.
Why GAO Did This Study

GAO has issued reports on the U.S. Postal Service's (USPS) strategy for realigning its mail processing network and improving delivery performance information. These reports recommended that the Postmaster General (1) strengthen planning and the overall integration of its realignment efforts, and enhance accountability by establishing measurable targets and evaluating results, (2) improve delivery service standards and performance measures, and (3) improve communication with stakeholders by revising its Area Mail Processing (AMP) Communication Plan to improve public notice, engagement, and transparency. The 2006 postal reform act required USPS to develop a network plan by June 2008 that described its vision and strategy for realigning its network; the anticipated costs, cost savings, and other benefits of its realignment initiatives; performance measures for its delivery service standards, and its communication procedures for consolidating AMP operations. This testimony discusses USPS's actions toward addressing GAO recommendations to (1) strengthen network realignment planning and accountability, (2) improve delivery performance information, and (3) improve communication with stakeholders. This testimony is based on prior GAO work, a review of USPS's 2008 Network Plan and revised AMP Communication Plan, and updated information from USPS officials. USPS did not have comments on this testimony.

What GAO Found

USPS has taken steps to respond to most of GAO's prior recommendations to strengthen planning and accountability for its network realignment efforts. In its June 2008 Network Plan, USPS clarified how it makes realignment decisions, and generally addressed how it integrates its realignment initiatives. However, USPS has not established measurable performance targets for its realignment initiatives. USPS believes that its budgeting process accounts for the cost reductions achieved through these initiatives. The Deputy Postmaster General explained that such performance targets are captured in USPS's overall annual goal of achieving $1 billion in savings. While these measures are not as explicit or transparent as GAO had recommended, USPS is required to report annually by the end of December to Congress on, among other matters, its realignment costs and savings. Also, USPS's annual compliance reports to the Postal Regulatory Commission (PRC) will provide opportunities for further transparency of performance targets and results. USPS's Network Plan notes that to respond to declining mail volumes, USPS must increase efficiency and decrease costs across all its operations. Given USPS's challenging financial situation, effective implementation of network realignment is needed; and USPS's annual reports could help inform Congress about the effectiveness of its realignment efforts. USPS has partially responded to GAO's recommendations to improve its delivery performance standards, measurement, and reporting, but full implementation of performance measures and reporting is not yet completed. USPS established delivery performance standards in December 2007. USPS's Network Plan stated that USPS would develop targets and measures to assess performance against these standards by fiscal year 2009. In addition, USPS has recently submitted a proposal for measuring and reporting on delivery service performance to the PRC. The PRC has requested public comment on USPS's proposal, which depends upon USPS and mailers implementing new technology. Delivery service performance is a critical area that may be affected by the implementation of the realignment initiatives. USPS has also taken steps to address GAO's recommendations to improve communication with its stakeholders as it consolidates its AMP operations by modifying its Communication Plan to improve public notification and engagement, increasing transparency by clarifying its processes for addressing public comments, and making additional information available on its Web site. Going forward, it will be crucial that USPS establishes and maintains an ongoing and open dialogue with stakeholders, including congressional oversight committees and Members of Congress who have questions or are concerned about proposed realignment changes