Instead, the accounting functions, along with their complement of 102  employees, are to be relocated into leased space in the Bay Area. The Service Is Following Its Investment Review and Approval Process

The Service is following its Investment Review and Approval Process in  deciding whether or not to close the San Mateo IT Center, because it will  require an investment of $8 million to support the closure. Given this, before the Service  makes its decision about closing the San Mateo IT Center, the IT  Department’s DAR may need to be reviewed and updated, if appropriate,  to better reflect current economic conditions and recent plans to  consolidate accounting functions. Economic and Other Conditions Have Changed Since the DAR Was Prepared in 2000

In 2000, when the Service’s IT Department prepared the DAR to support its  proposal to close the San Mateo IT Center, general economic conditions  were noticeably better than they are currently; and the Service had not yet  made plans to automate and reengineer its field accounting activity, which  involves closing its 85 district accounting offices and consolidating  residual activity into its 3 Accounting Service Centers. San Mateo IT Center Employees Anticipate Mostly Economic Impacts if they Opt to Stay in the Bay Area and Social Impacts if they Opt to Relocate to Another Postal IT Center

San Mateo IT Center employees responding to our survey anticipate more  economic impacts than social impacts if they choose to remain in the Bay  Area and more social impacts if they relocate with the Service to another  postal IT center. Bargaining unit  employees are covered by a collective bargaining agreement with a no- layoff provision and are therefore guaranteed a job at another postal IT  center. According to postal officials, about half of the EAS employees will  be offered jobs at other postal IT centers. Other respondents indicated they wanted to stay in the Bay  Area but did not want to take a non-IT job. These programs  included job placement assistance, employee and family counseling,  relocation assistance, and training. Similar to other  organizations that have helped displaced employees, the Service has  indicated that it plans to provide assistance to San Mateo IT Center  employees to minimize the impact, if it decides to close the center. When the IT Department first proposed closing the San Mateo IT Center in  2000, economic conditions and the employment outlook in the Bay Area  were noticeably better than they are today; so much so that the Service  anticipated that postal positions would be available in the Bay Area for  many displaced employees who did not relocate. Given these changed conditions, bargaining unit employees who  do not relocate might encounter difficulty in finding employment in the  Bay Area.
Why GAO Did This Study

While the U.S. Postal Service (USPS) rationalizes its infrastructure, it is weighing a proposal to close and sell its Information Technology (IT) center located in San Mateo, California. According to USPS, closing the IT center and selling the facility should save USPS about $74 million over the next 10 years and result in increased efficiency. All IT union employees and about half of IT management employees will be offered the opportunity to relocate with their jobs to other postal IT centers. The San Mateo IT Center also houses an Accounting Service Center whose functions and staff are to be moved into leased space in the San Francisco Bay Area. GAO undertook this study to, among other things, identify the process USPS is following in making its decision about closing the IT center and determine the impact such a closure would have on IT employees at the center.

What GAO Found

USPS is following its Investment Review and Approval Process in reaching a decision about closing the San Mateo IT Center. To support the investment needed to close the IT center, the process requires--and USPS prepared--analyses based on prevailing economic and other conditions. However, these conditions have changed since USPS prepared the analyses in 2000. In 2001, USPS announced plans to automate and reengineer its field accounting activity, which will result in USPS closing its 85 district accounting offices and consolidating the residual activities into its 3 Accounting Service Centers. USPS has not updated its analyses to reflect the changed conditions, but said that it planned to do so. San Mateo IT employees anticipate mostly negative social impacts if they relocate and mostly negative economic impacts if they stay in the Bay Area. Of the 213 San Mateo IT employees who responded to our survey, 36 (17 percent) indicated they would likely relocate, although most would be offered jobs at other postal IT centers. In 2000, USPS' economic analyses included an assumption--and San Mateo IT employees believed--that local jobs would be available for those individuals who did not want to relocate. However, local postal jobs are no longer available, and nonpostal IT job opportunities have tightened considerably in the Bay Area. GAO has previously noted that progressive organizations that are restructuring often provide job placement assistance to employees faced with losing their jobs. USPS plans to offer job assistance to management employees seeking nonpostal jobs. However, USPS does not plan to offer job assistance to union employees because such assistance is not covered by their collective bargaining agreement. Because the employment outlook in the Bay Area has changed dramatically, union employees who decide not to relocate may encounter difficulty finding employment in the Bay Area.