The letter automation program suffered initial slippages, which caused DPS implementation to fall behind schedule. In its 1992 Plan, the Service scheduled DPS implementation for completion by fiscal-year-end 1995. The 1992 Plan included DPS goals and benchmarks for (1) deploying all needed barcode sorters, (2) barcoding virtually all letter mail, and (3) implementing DPS for specific delivery zones and carrier routes. Then, in April 1994, the Postmaster General announced that the barcoding goal would have to slip from 1995 to the end of fiscal year 1997. In its 1996 Plan, the Service extended the DPS completion date to the end of fiscal year 1998 and revised associated goals and benchmarks. Service officials said this unanticipated increase in workhours was due to a national level arbitrator finding in favor of NALC in a case regarding the Service’s establishment of city carrier routes that required more than 8 hours to complete, which the arbitrator determined violated the parties’ labor agreement. DPS implementation has been one of the contentious issues between the Service and NALC and its city carriers. The Service also acknowledged that it and NALC have had numerous disagreements regarding DPS implementation, but that the disputes over DPS have either been resolved or are in the process of being resolved, and that the parties are engaged in a number of cooperative ventures that they expect will have a beneficial effect on labor-management relationships. Postal Service’s efforts to implement Delivery Point Sequencing (DPS). Postal Service goals for DPS implementation, its projected letter carrier workhour savings, and the extent to which the Service has achieved these; and (2) identify any remaining issues that the Service and others believe must be addressed for the Service to achieve its 1998 DPS goals and the actions, if any, that the Service has taken to address these issues. Operational Issues Affecting Achievement of Fiscal Year 1998 DPS Goals

The Service was addressing operational issues that it believed impeded its efforts to achieve DPS goals and benchmarks and maximize DPS savings. Decline in City Carrier Street Efficiency Affects DPS Savings

The Service has achieved in-office carrier workhour savings with DPS implementation. Although most grievances were resolved through settlement, three went to national level arbitration. 1992 Joint Agreements Set Stage for DPS

In 1992, the Service and NALC published six Memoranda of Understanding, or joint agreements, which were to resolve past disputes and set a joint course for the future. Many City Carriers Raised Concerns About DPS Work Methods

In addition to their concerns about the Service’s noncompliance with national NALC-Service labor agreements, many city letter carriers said that they believe DPS work methods—particularly not being able to manually sort DPS letters to (1) combine them with the non-DPS bundle and (2) identify DPS sort errors and undeliverable letters—adversely affected their efficiency and, in some cases, service to their customers. Comments From the Postal Service

Comments From the National Association of Letter Carriers

	GAO Comments

1. 4.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the status of the Postal Service's (USPS) efforts to implement Delivery Point Sequencing (DPS), focusing on: (1) USPS goals for DPS implementation, its projected letter carrier workhour savings, and the extent to which the Service has achieved these; and (2) issues that may affect USPS's ability to achieve its 1998 DPS goals, including any actions that USPS has taken to address these issues.

What GAO Found

GAO noted that: (1) in its 1992 Corporate Automation Plan, USPS initially scheduled DPS implementation to be completed by fiscal-year-end 1995; (2) the 1992 Plan included DPS goals and benchmarks for: (a) DPS equipment deployment; (b) barcoded letter volume; and (c) delivery zone and carrier route implementation nationwide through fiscal year (FY) 1995; (3) in addition, USPS based its analyses that supported investments in DPS sorting equipment on achieving: (a) a certain DPS letter volume to carrier routes; and (b) specific carrier workhour savings; (4) however, implementation fell behind schedule, and USPS acknowledged that it had been overly optimistic in its DPS expectations; (5) in April 1994, the Postmaster General announced that the barcoding goal had slipped from 1995 to fiscal-year-end 1997; (6) in its 1996 Plan, USPS extended the DPS completion date to the end of FY 1998 and revised associated goals and benchmarks; (7) USPS has identified and was addressing several issues that have affected its efforts to achieve its DPS implementation goals, benchmarks, and carrier workhour savings; (8) to increase volumes of barcoded letters and letters sorted in delivery sequence, USPS has taken several actions; (9) while USPS has achieved some success in addressing issues affecting DPS implementation and achievement of DPS goals, it has been less successful in resolving its disagreements with the National Association of Letter Carriers (NALC), the labor union representing city carriers, regarding DPS implementation; (10) in 1992, USPS and NALC agreed to work together to implement DPS and signed six memoranda of understanding, which were to resolve past disputes and provided a plan for DPS implementation; (11) not long after the memoranda were signed, disagreements developed between USPS and NALC regarding certain aspects of the memoranda; (12) NALC filed national level grievances regarding DPS implementation instructions, and the parties settled most of their disagreements; (13) however, one disagreement went to national arbitration, and the arbitrator decided in NALC's favor and instructed the parties to work together to resolve their differences; (14) in addition, many city carriers GAO spoke with said that although they generally saw benefits in DPS, they were concerned about its effect on their daily work; and (15) in contrast, USPS officials said that while DPS has changed the way carriers deliver mail, the changes have not adversely affected customer service.