233), and according to the U.S. Postal Service (USPS), contractors have delivered mail to homes and businesses since 1900. The National Rural Letter Carriers Association (NRLCA), which represents rural delivery persons, also reached a collective bargaining agreement with the USPS in 2006. In 2007, representatives of both NALC and NRLCA alleged that the USPS was expanding its use of CDS carriers. John Potter, then-Postmaster General, declared that the USPS had "made a commitment for the life of this agreement [with the NALC] not to contract out any city delivery in big cities" and to work with both unions on the use of contractors in suburban and rural areas. After lengthy negotiations, the NALC and the USPS signed an MOU in October 2008. Recent Developments

In November 2010, the NRLCA-USPS collective bargaining agreement expired. The previous collective bargaining agreement's language regarding the hiring of private contractors to deliver mail was not altered, leaving it unclear whether the USPS and NRLCA have come to a working agreement on this particular issue. To this end, the PRA provides the USPS with considerable discretion over its operations. 39 U.S.C. 1003(a)). Hence, the PRA's provisions regarding the USPS's authority to contract and operate an "efficient" system of mail may be at tension with the statute's provision on USPS employee compensation. However, the law also sets a pay and compensation floor for USPS employees and requires the USPS to collectively bargain with its employees. Congress may continue this practice, reasoning that the USPS has legitimate grounds to pursue cost-savings via the use of contractors. Thus, Congress might either ban the practice of using contractors to deliver mail (or perform other mail-movement activities); or it could limit the amount of mail delivery work performed by contractors—perhaps by capping the percentage of routes served by non-USPS employees.
Recently, the U.S. Postal Service (USPS) has been in negotiations with the National Association of Letter Carriers (NALC) and National Rural Letter Carriers Association (NRLCA). One issue that may or may not be settled is the Postal Service's use of non-USPS employees (i.e., contractors) to deliver mail. If the parties cannot come to a satisfactory arrangement, Congress may be approached to consider the matter.
Contractors have delivered mail to homes and businesses since 1900. Controversy over this practice arose in 2007 when the NALC alleged that the USPS had expanded the use of contractors into city areas at the expense of unionized membership. Congress held hearings on the matter, and legislation was introduced in both houses. The USPS and NALC came to a memorandum of understanding (MOU) in October 2008 to govern the practice, which appeared to quell the controversy.
However, the issue was reopened when USPS's collective bargaining agreements with the NRLCA and the NALC expired in 2010 and 2011, respectively. At present, it is unclear whether the parties have come to mutually agreeable arrangements concerning the use of contactors to deliver mail.
By law, the USPS is obliged to provide for an "efficient" system of mail delivery. Federal statute provides the USPS with considerable freedom to enter into contracts with private parties. Wage-earning contractors cost less to employ than wage- and benefits-earning USPS employees. However, federal law also requires the USPS to collectively bargain its employees' compensation. Thus, a conflict arises between these competing legal imperatives when the USPS employs a contractor to perform work that was or could be performed by a postal employee.
The USPS has increased its use of contractors in recent years, but USPS employees continue to serve 98% of all U.S. homes and businesses.
This report will be updated as developments warrant.