OIG Recommends Outsourcing USPS Custodial and Motor Vehicle Jobs
Congressman Darrell Issa (R-CA) asks the OIG to review savings if USPS did not have to comply with McNamara-O’Hara Service Contract Act (SCA) of 1965.
WHY THE OIG DID THE AUDIT:
The report responds to a request from Representative Darrell E. Issa. Our objective was to review Postal Service’s market research to determine if potential savings could be realized if they did not have to comply with the SCA. In addition, we identified positions for which Postal Service labor rates exceeded the SCA rates and barriers to outsourcing those positions. Read more
USPS Still On GAO’s High Risk List
Filed under: GAO, outsourcing, postal, postal news, postal reform, usps
The Government Accountability Office’s (GAO) today released its biennial “High Risk Series” report. The report identifies those agencies most at risk of waste, fraud, abuse, mismanagement, or in need of reform. The U.S. Postal Service’s long-term outlook remains on the GAO’s high-risk list.
The GAO first placed USPS on the high-risk list in April 2001 because of the growing risk that it would be unable to continue providing universal postal service at reasonable rates while staying self-supporting through postal revenue. In 2007, GAO removed USPS from the High-Risk List in part due to its implementation of Strategic Transformation strategies and passage of the Postal Accountability and Enhancement Act of 2006. However, two years later “In July 2009, GAO added the U.S. Postal Service’s (USPS) financial condition to the list of high-risk areas needing attention by Congress and the executive branch to achieve broad-based restructuring. Amid challenging economic conditions, a changing business environment, and declining mail volumes, USPS is facing a deteriorating financial situation which it does not have sufficient revenues to cover its expenses and financial obligations.”
The report included the usual in its “Strategies and (USPS) Options to Facilitate Progress Toward Financial Viability” by: Reduce wage costs by creating a two-tiered pay system; use more part-time staff; reduce benefit costs by reducing USPS health and life insurance contribution rates for active employees to levels comparable to those paid by other federal agencies. The GAO report also listed “outsourcing” as an option for reducing USPS workforce size. But in July 2008, GAO released a report titled “Data Needed to Assess the Effectiveness of Outsourcing,” GAO noted:
“Without cost-savings data, postal managers, stakeholders and Congress cannot assess the risk and value of outsourcing.. To determine the effectiveness of postal outsourcing, improve management accountability and support congressional oversight in this area, we are recommending that the Postmaster General should establish a mechanism to measure the results, including any savings, of outsourcing initiatives that are subject to its collective bargaining agreements and better inform Congress by including these results in its annual operations report to Congress. The Service generally agreed with our findings and our first recommendation. However, it did not commit to implementing our second recommendation to provide Congress with information about the results of its outsourcing initiatives, which we continue to believe is necessary to support congressional oversight.”
So, GAO was unable to justify the cost-savings of outsourcing but yet its an “option” to “Faciliate Progress Toward (USPS) Financial Viability?”
Other Highlights of the GAO report on USPS:
Mail volume has declined from 213 billion pieces in fiscal year 2006 to 1 billion pieces in fiscal year 2010—a decline of about 20 percent. USPS expects mail volume to decline further to about 150 billion pieces by 2020.This trend exposes weaknesses in USPS’s business model, which has relied on mail volume growth to help cover costs. USPS actions to improve its financial condition have been limited in part by statutory and regulatory requirements, such as those related to closing unneeded facilties.
USPS cannot fund its current level of service and operations from its revenues and urgently needs to restructure to reflect changes in mail volume, revenue, and use of the mail. Although USPS reports $12.5 billion in cost savings since fiscal year 2006, it has not been able to cut costs fast enough to offset the large decline in mail volume and revenue – particularly costs related to its workforce, retail and processing networks, and delivery services the GAO said. Further,its revenue initiatives have had limited results. USPS can borrow up to $3 billion from the Treasury annually but expects to reach its statutory $15 billion borrowing limit in fiscal year 2011. USPS must align its costs with revenues, generate sufficient funding for capital investment, and manage its growing debt.
In March 2010, USPS issued a 10-year Action Plan, as suggested by GAO when it added USPS to its High-Risk List that included actions for Congress and USPS to take to achive financial viability. The plan included:
- restructuring its retiree health benefits payments,
- eliminating Saturday delivery,
- expanding access to retail services,
- establishing a more flexible workforce,
- and expanding products and services.
In April 2010, GAO reported on strategies and options for USPS to generate revenues, reduce costs, and increase efficiency (GAO-10-455). Options included
- reducing compensation and benefit costs—which constitute about 80 percent of expenses—and
- optimizing networks to eliminate excess capacity
Several bills introduced in 2010 included provisions for congressional action to restructure USPS’s benefit payments and address barriers to implementing USPS’s Action Plan. These bills were not enacted.
What Needs to Be Done
Congress needs to approve a comprehensive package of actions that would improve USPS’s financial viability by:
1. modifying its retiree health benefit cost structure in a fiscally responsible manner
2.. facilitating USPS cost reduction, such as by modernizing and optimizing postal networks and its workforce;and
3. requiring any binding arbitration in the negotiation process for USPS labor contracts to take USPS’s financial condition into account.
read the full report Restructuring the U.S. Postal Service To Achieve Sustainable Financial Viability
USPS To Phase-Out Postal Career Custodians?
Filed under: maintenance, outsourcing, postal, postal news, usps
In unconfirmed reports PostalReporter has learn that postal supervisors are telling Union Stewards: “USPS will not re-post assignments of custodians upon their retirement.” It appears USPS plans to subcontract (outsource) duties of custodians to private companies.
Fight Against Subcontracting Takes Center Stage at APWU Motor Vehicle Services Pre-Convention
Filed under: APWU, motor vehicle services, outsourcing, postal, postal news
Motor Vehicle Services Division delegates discussed several urgent topics at their pre-convention conference Aug. 21 and 22.
At the top of the agenda was discussion of the pilot program that established flexible work rules and flexible schedules as part of the union’s efforts to ward off subcontracting. “The Motor Vehicle Division is under attack,” said MVS Director Bob Pritchard, but the pilot program prevented 22 sites from being contracted out.
Early discussions with management about implementation of the program were “contentious, to say the least,” Pritchard remarked; however, once management realized that union input was essential to making the pilot work, progress was made.
MVS employees find some of the changes brought about by the program upsetting, he noted, especially the possibility that work days will extend beyond nine hours, but “in the big picture, the program has been very beneficial.”
Subcontracting will be a topic of discussion when contract negotiations get underway next month, and will affect both drivers and mechanics, Pritchard said. The union’s goal will be to keep work in-house.
“The Postal Service is refusing to hire,” he noted. “We have always maintained that we give them a better product for less.”
MVS delegates also discussed the importance of filing grievances to demand that management count Highway Contract Route drivers as casuals. If they are counted as casuals, the complement would exceed the number permitted under the terms of Collective Bargaining Agreement in most installations and would strengthen the union’s effort to limit subcontracting.
A presentation by Assistant Director Michael O. Foster demonstrated the size of the challenge: A review of the MVS officers’ reports to national conventions shows that subcontracting has been a major subject at every MVS conference since 1972.
more: Delegates Take to the Streets: Save Saturday Service!
APWU Wins Important Maintenance Subcontracting Grievance
APWU News
The union won a major victory against subcontracting Feb. 10, when Arbitrator Shyam Das directed the USPS to assign Maintenance Craft employees to maintain computers at approximately 8,000 of the nation’s largest associate offices. The arbitrator also instructed management and the union to discuss the possibility of assigning additional computer maintenance work at AOs to the Maintenance Craft. Read more
Columbus Ohio Motor Vehicle Services Unit Contracted Out
From Postal Reporter reader:
I was just letting you know that Columbus Ohio was just informed that we are Mode Converted and are all being moved into Mailhandler,Carrier , and custodial jobs. Bob Pritchard and Mike Foster are keeping everything quiet, not passing info out to let everyone know.
Bill to Limit Postal Subcontracting Introduced in House
APWU News
Rep. Stephen Lynch (D-MA) introduced legislation in the House of Representatives on March 24 that would restrict USPS subcontracting. The Mail Protection Act (H.R. 1686), which is backed by the APWU, is modeled on a bill the Congressman introduced in November 2007 (H.R. 4236).
The bill would require the Postal Service to bargain with postal unions before engaging in significant subcontracting, and would require the USPS to submit to arbitration if management and the affected unions were unable to reach agreement. It would apply to any private contract involving mail processing, mail handling, or surface transportation of mail, provided that over a 12-month period the contract involved the equivalent of $5 million or 50 work-years.
“This legislation is vital,” said APWU President William Burrus, “especially in light of the Postal Service’s recent financial difficulties. “There is no justification for continued subcontracting while postal employees and equipment are under-utilized.
“Yet the USPS continues to engaging in subcontracting, and, under the terms of the current Collective Bargaining Agreement, is able to avoid bargaining over the issue.”
“The requirement to bargain will enhance our ability to oppose wasteful, inefficient and detrimental subcontracting,” Burrus said. “Too often, contracting out ends up costing the Postal Service more money than if the work were performed by postal employees, and contractors’ service to the public is poor.”
“I applaud Rep. Lynch for introducing this bill, which will be beneficial for the Postal Service, postal workers, and the American public,” the union president said. “The APWU will work with him to help gain co-sponsors for the legislation, and to win support for a companion bill in the Senate.”
Burrus urged postal workers to contact their representatives and urge them to support it. “It is imperative that members of Congress hear from their constituents that this legislation is important to the future of the Postal Service and to postal workers.”
APWU activists at the state and local level should make plans to win support from lawmakers, Burrus said.
“We have a great deal of hard work before us,” he said. “We must do everything we can to see that H.R. 1686 is passed.”
USPS Looking To ‘Outsource’ Change-of-Address Program?
From Federal Business Opportunities
The United States Postal Service (“USPS”) is seeking information from parties interested in engaging in a long-term relationship as Supplier and/or alliance partner with the USPS to implement innovative solutions to enable USPS to efficiently and effectively manage its change-of-address (COA) program, while capturing the significant commercial opportunities presented when a postal patron submits change of address forms in connection with a move. Although the USPS desires at this time that interested parties be willing to fund all costs associated with the program, your response should address how the operating costs and potential future investments could be financed as well as your interest in taking on this role.
The process requires the submission of information from interested parties followed by an evaluation period in which the USPS will determine whether to move forward with a statement of work and request for proposal.
Background
Over 46 million Americans change their addresses annually and the processing of change-of-address (COA) orders received from postal patrons is a vital and necessary part of the USPS’s core mission to maintain timely service to the public. In service of this mission, the USPS processes approximately 46 million change-of-address orders each year. .
The mobility of the American population presents formidable challenges for the USPS and business mailers to maintain high-quality mailing lists that are up-to-date and accurate. It also offers a significant commercial opportunity for businesses to form relationships with potential customers because moving inspires increased, and predictable, event-driven spending patterns both before and after the move date. The USPS currently offers several services for postal patrons to update their address when they move., however, the USPS will not provide name and address lists to the supplier and/or alliance partner or vendors, pursuant to 39 U.S.C. § 412 and federal privacy policies.
USPS Objectives
The USPS wishes to continue and enhance, where feasible, marketing programs that leverage the COA program to capture the potentially high-growth commercial opportunities generated when a patron files a change of address with the USPS. A strategic relationship between the USPS and a capable and compatible supplier and/or alliance partner would be designed to defray the USPS costs of the COA program and deliver meaningful revenue growth for the USPS and its partner. The USPS is uniquely positioned in its relationship and interaction with movers when processing a change of address order and seeks to create innovative and effective marketing programs designed to capture the value potential inherent in this relationship.
Information Requested
The USPS is seeking information from companies interested in partnering to develop innovative solutions to defray the USPS costs of the COA program and drive revenue growth opportunities through advertising and marketing opportunities. Interested parties should address all of the competencies listed below and are encouraged to identify additional capabilities, enhancements and/or concepts.
source: FedBizOpp
USPS Seeking Vendor to Replace Manual Distribution
Residual Mail Processing Sources Sought
The United States Postal Service (USPS) is seeking to obtain information on potential strategic sources for developing, acquiring, and managing a system to automate the processing of residual letter and flat volumes. These residual letter mail and flat mail volumes manifest themselves as current letter and flat automation rejects or non-automation compatible mailpieces. The new system will replace the current manual distribution processes of sorting letter and flat rejects or non-automation compatible mailpieces. Respondents to this Sources Sought Notice are requested to submit “white papers” on their approach or solution for the automation of residual letter and flat volumes.
Companies must describe their system concept, its technical and functional feasibility and capability of going from prototype to production to deployment. At a minimal your white paper must depict how your company will accomplish the following:
1. Process all letter and flat mail residual volumes, without regard to physical mailpiece shape, height, width, weight and condition. Provide an automated volume input method, that may include an operator assisted input function.
2. Derive finest depth-of-code address data for individual residual mail pieces. As a minimum, the following mail piece data will be determined: finalized ZIP Code data based upon the delivery address. 3. Uniquely identify – via tag info – each mailpiece processed. 4. Accept sort plan data from the National Directory Support System (NDSS). 5. Provide sortation depth to the carrier park point or relay point (as available in the national DPF file. 6. Shall not create reject / subsequent handling residual pieces. 7. Include a Video Encoding workstation. 8. Contain Undeliverable -as-Addressed handling capability
The Respondents to this Sources Sought Notice are reminded that responses to this notice are not considered offers and will not be accepted by the Postal Service to form a binding contract. In addition, the Postal Service will not incur any monetary obligation associated with this Sources Sought Notice or any responses thereto.
source: Federal Business Opportunties
Congressman Asks Boston Postal Managers For Explanation Of Outsourcing Vehicle Maintenance Work
Filed under: APWU, maintenance, motor vehicle services, outsourcing, postal, usps
From the American Postal Workers Union:
Expressing concern about the outsourcing of maintenance and repair work on postal vehicles, U.S. Rep. Stephen Lynch (D-MA) wrote to the USPS Boston District Manager on Sept. 22, [PDF] and asked for an explanation of USPS policy.
“It is my understanding that the vehicle maintenance work is currently being contracted out at an hourly rate which exceeds that of USPS” employees, he said. In addition, Lynch said he had seen documentation indicating that some of the work failed to adhere to maintenance guidelines and risked harm to the environment.
“Also of grave concern is that these contactors have access to universally familiar USPS vehicles” and are authorized to remove them from postal premises. Lynch said he was concerned that contractors may not have been vetted to ensure that they pose no threat to homeland security.
“It is my hope that you can provide a detailed explanation of USPS motor vehicle maintenance policy and the process by which these contractors are selected,” Lynch concluded.
Rep. Lynch wrote the letter in response to complaints from Boston Metro Area Local Motor Vehicle Services Craft President Bill Weaver. In a letter to Postmaster General John E. Potter, [PDF] Weaver outlined concerns about the security of the mail, the lack of training of subcontractors, and the cost of subcontracting, as compared with assigning the maintenance and repair work to postal employees.
APWU national officers praised the activities of the members of the Boston Local and of Rep. Lynch. “We have always gotten a good turnout from Boston,” Assistant MVS Director Michael O. Foster said. “This is exactly the kind of grass-roots effort we need.
“Motor Vehicle Craft employees and local leaders have to get involved,” he said. Foster noted that Rep. Lynch authored the Mail Network Protection Act (H.R. 4236), which would require the Postal Service to bargain with postal unions before it engages in significant contracting-out. The APWU enthusiastically supports the bill and has encouraged union members to urge their congressional representatives to sign on as co-sponsors.