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Processing Realignment Efforts, but Better Integration and performance 
Measurement Still Needed' which was released on July 26, 2007. 

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Testimony: 

Before the Subcommittee on Federal Workforce, Postal Service, and the 
District of Columbia, Committee on Oversight and Government Reform, 
House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:00 p.m. EDT: 

Thursday, July 26, 2007: 

U.S. Postal Service: 

Progress Made in Implementing Mail Processing Realignment Efforts, but 
Better Integration and Performance Measurement Still Needed: 

Statement of Katherine Siggerud, Director: 
Physical Infrastructure Issues: 

GAO-07-1083T: 

GAO Highlights: 

Highlights of GAO-07-1083T, a testimony before the Subcommittee on 
Federal Workforce, Postal Service, and the District of Columbia, 
Committee on Oversight and Government Reform, House of Representatives 

Why GAO Did This Study: 

GAO reported in 2005 on major changes in the mailing industry that have 
reinforced the need for the U.S. Postal Service (USPS) to reduce costs 
and increase efficiency. To address these changes and become more 
efficient, USPS is implementing initiatives aimed at realigning its 
mail processing network. In a follow-up review, GAO recently reported 
that USPS has made progress in implementing these initiatives, yet 
challenges such as maintaining delivery standards and addressing 
stakeholder and community resistance remain. In July 2006, GAO also 
reported on USPSís progress in improving delivery performance 
information. This testimony describes (1) the changes that have 
affected USPSís processing network, (2) GAOís concerns related to 
USPSís strategy for realigning its mail processing network and 
implementing its area mail processing consolidations, and (3) GAOís 
concerns related to USPSís progress in improving delivery performance 
information. This testimony is based on prior GAO reports. 

What GAO Found: 

Several major changes have affected USPSís mail processing operations, 
including marketplace changes, declining First-Class Mail volume, 
increased competition, increased mail processing by mailers, automated 
operations, and population shifts. These changes have led to excess 
capacity in USPSís mail processing network and variations in 
productivity among plants. 

GAOís 2005 report concluded that USPSís strategy for realigning its 
mail processing network lacked clarity, sufficient transparency and 
accountability, excluded stakeholder input, and lacked performance 
measures for results. Since then, USPS has developed several 
initiatives that are at varying stages of development to address these 
issues and major changes with an overall goal of reducing costs while 
maintaining service. In 2007, GAO reported that while USPS has made 
progress in implementing its realignment initiatives, (1) USPS still 
did not have answers to important questions about how it intended to 
realign its network, (2) it remains unclear how various USPS 
initiatives are individually and collectively contributing to achieving 
its goals, and (3) the area mail processing (AMP) consolidation 
initiative, to which USPS attributes most of its progress in reducing 
excess machine capacity, still presents significant issues. These 
issues include unclear criteria used in selecting potential AMP 
consolidations, inconsistent data calculations, limited measures of the 
effects of changes on delivery performance, and a lack of appropriate 
stakeholder and public input. USPS is developing new policies to 
address some of these issues. Nevertheless, questions about USPSís 
selection criteria continue as USPS has decided not to implement 34 of 
the 57 potential AMP consolidations it considered in 2005 and 2006 as 
shown in the table below. With limited data on the effects of changes, 
USPS cannot consider actual delivery performance in making 
consolidation decisions or in evaluating results. 

Table: Status of AMP Consolidation Studies in 2005 and 2006: 

Status of AMP consolidation: Approved for implementation; 
2005: 10; 
2006: 2; 
Total: 12. 

Status of AMP consolidation: Approved for implementation: Implemented; 
2005: 9; 
2006: 1; 
Total: 10. 

Status of AMP consolidation: Implementation pending; 
2005: 1; 
2006: 1; 
Total: 2. 

Status of AMP consolidation: Decision not to be implemented; 
2005: 1; 
2006: 33; 
Total: 34. 

Status of AMP consolidation: Decision still pending; 
2005: NA; 
2006: 11; 
Total: 11. 

Status of AMP consolidation: Total AMPs considered; 
2005: 11; 
2006: 46; 
Total: 57. 

Source: GAO presentation of USPS data. 

[End of table] 

GAO reported in 2006 that USPS does not measure and report its delivery 
performance for most types of mail and that its progress to improve 
delivery performance information has been slow and inadequate despite 
numerous USPS and mailer efforts. Postal reform legislation enacted in 
December 2006 requires USPS to submit a plan to Congress describing its 
strategy, criteria, and processes for realigning its network and 
provide performance measures for most types of mail. USPS is preparing 
its response to these requirements. 

What GAO Recommends: 

GAO made recommendations to USPS to enhance the planning, 
accountability, and public communications related to its realignment 
efforts and to improve its delivery performance measures. USPSís 
response to the statutory requirements enacted in December 2006 is an 
opportunity to address GAOís recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1083T]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Katherine Siggerud at 
(202) 512-2834 or siggerudk@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to participate in this oversight hearing 
for the U.S. Postal Service (USPS). In April 2005, we issued a 
report[Footnote 1] that detailed the major changes that have affected 
USPS's mail processing and transportation operations and evaluated 
USPS's strategy for realigning its network to address these changes. We 
recently issued a follow-up report in June 2007,[Footnote 2] which 
focused on the initiatives USPS has implemented to realign its network. 
We also issued a report[Footnote 3] in July 2006 that discussed our 
concerns with USPS's limited delivery performance information, which is 
needed to evaluate how USPS's network realignment decisions affect the 
quality of delivery service. As requested, my remarks today are based 
on these previous GAO reports and will focus on (1) major changes 
affecting USPS's mail processing operations that have prompted the need 
for network realignment, (2) the concerns we raised in our 2005 and 
2007 reports related to USPS's strategy for realigning its mail 
processing network and implementing its area mail processing 
consolidations, and (3) concerns we raised in our 2006 report on USPS's 
progress in improving delivery performance information. 

Summary: 

As we reported in 2005, several major changes have affected USPS's mail 
processing operations. These changes include the following: 

* A changing marketplace and shifts in how customers use the mail--USPS 
is experiencing a decline in First-Class Mail volume--which declined by 
almost 6 percent from fiscal years 2001 through 2006--and has 
attributed this decline to how customers use the mail. 

* A change in the role of mailers--This is primarily due to the advent 
and evolution of USPS's worksharing discounts, which began in 1976. 
Postal worksharing activities generally involve mailers preparing, 
barcoding, sorting, or transporting mail to qualify for reduced postage 
rates.[Footnote 4] These activities allow mail to bypass USPS mail 
processing and transportation operations. 

* The evolution of USPS's automated equipment and processing and 
transportation networks--USPS's use of manual and automated equipment 
and the related processing and transportation network have also evolved 
over time, resulting in an infrastructure network composed of plants 
that are markedly different from one another, which makes it difficult 
to standardize operations. 

* Shifts in national demographics--USPS facilities may not be optimally 
located due to shifts in demographics and changes in transportation. 
USPS has stated that a key challenge is to locate processing plants and 
employees within efficient reach of most of the population while at the 
same time providing universal service to the rest of the nation at a 
reasonable cost. 

These changes have created excess capacity in USPS's processing network 
(i.e., plants, machines, and transportation capacity) and have 
contributed to variations in productivity across USPS processing plants 
that impede efficiency gains. To address these changes and their 
impact, USPS, GAO, the USPS Inspector General, the President's 
Commission on the U.S. Postal Service, and the Postal Regulatory 
Commission (PRC)[Footnote 5] have all stated that USPS's processing 
network needs to be realigned. 

In our 2005 report, we concluded that USPS did not have answers to 
important questions about how it intended to realign its mail 
processing networks. This conclusion still holds true today. In that 
report, we evaluated USPS's strategy for realigning its processing 
network--Evolutionary Network Development (END), an evolutionary 
strategy developed by USPS to realign its processing operations--and 
found that this strategy: 

* lacked clarity (since USPS announced its intent to realign, it has 
developed several different realignment strategies); 

* lacked criteria and processes for eliminating excess capacity in its 
network; 

* excluded stakeholder input from its decision-making processes; 

* was not sufficiently transparent and accountable; and: 

* lacked performance measures for results. 

We recommended that USPS establish a set of criteria for evaluating 
realignment decisions, develop a mechanism for informing stakeholders 
as decisions are made, and develop a process for implementing these 
decisions that includes evaluating and measuring the results as well as 
the actual costs and savings resulting from the decisions. We followed 
up on the actions USPS has taken related to these recommendations in 
our 2007 report and found that although USPS has taken some steps to 
improve its planning and evaluation processes, it still has not 
clarified the criteria it uses for selecting locations for potential 
area mail processing (AMP) consolidations and making decisions on 
whether or not to proceed with implementation. 

As we stated in our June 2007 report, currently, USPS is implementing 
several key initiatives that play central roles in network realignment-
-AMP consolidations, regional distribution center (RDCs) development, 
the Flats Sequencing System,[Footnote 6] and surface and air network 
development--which are at different stages of implementation. Although 
we support USPS's efforts to facilitate the realignment of its 
processing network, we have some concerns about how USPS is 
implementing these initiatives. First, USPS still does not have answers 
to important questions about how it intends to realign its network. For 
example, in February 2006, USPS said that it was planning to develop a 
network of between 28 and 100 RDCs that would serve as the foundation 
for its processing network. In June 2007, we reported that USPS is 
reconsidering this network and it is not clear what the future 
foundation of the processing network will be. Second, it is not clear 
how these initiatives are individually and collectively integrated or 
to what extent they are meeting USPS's realignment goals, which 
include: 

* developing mail processing and transportation networks suited to 
current and future operational needs, 

* reducing inefficiency and redundancy, 

* making operations flexible, and: 

* reducing postal costs. 

USPS is making changes to its processing network with the aim of 
meeting these goals while maintaining current levels of service, but 
USPS has yet to develop measurable targets for achieving these goals. 
With no measurable targets, it is not apparent how much of an impact 
USPS's network realignment initiatives are making toward achieving 
these goals. Third, during our review of these initiatives, we also 
found several issues with AMP consolidations--the initiative that most 
clearly addresses USPS's goal of reducing excess machine capacity. 
These issues include USPS's unclear criteria for selecting facilities 
and deciding on AMP consolidations, the use of inconsistent data 
calculations, limited measures of the effect of changes on delivery 
performance, and a lack of appropriate stakeholder and public input 
when considering potential AMP consolidations. 

USPS is revising its procedural and communication guidelines for AMP 
consolidations to address some of these issues, but we continue to have 
some concerns, primarily with respect to integrating and measuring 
performance related to USPS's network realignment initiatives, 
communication procedures, and the transparency of its decision-making. 
To address these concerns, in our June 2007 report we recommended that 
the Postmaster General: 

* strengthen the planning and accountability for USPS's realignment 
efforts by ensuring that the Facilities Plan required by the Postal 
Accountability and Enhancement Act explains the integration of 
realignment initiatives and establishes measurable targets to track 
USPS's progress in meeting realignment goals and: 

* improve communication with stakeholders by modifying USPS's 
procedures to improve the quality of public notices and engagement, 
particularly those related to proposed AMP consolidations, and increase 
transparency in decision-making. 

We reported in 2006 on our concerns related to USPS's limited progress 
in improving its delivery performance information, which, as we 
reinforced in our 2007 report, is needed to evaluate the effects of its 
network realignment decisions. A key concern of some stakeholders who 
may be affected by USPS's realignment decisions is whether delivery 
service will be negatively affected. Our 2006 report detailed the 
limited scope of USPS's delivery performance measures, which cover less 
than one-fifth of the mail volume. We also reported on the impediments 
to progress and recommended that USPS take actions to provide clear 
management commitment and more effective collaboration with mailers to 
resolve the impediments to implementing delivery performance 
measurement and reporting for all major types of mail. Since our report 
was issued, Congress passed postal reform legislation that requires 
USPS to submit a plan to Congress describing its strategy, criteria, 
and processes for realigning its network and provide the PRC annual 
performance reporting for the speed and reliability of delivery of most 
types of mail. We believe that USPS's response to these statutory 
requirements is an opportunity to address the recommendations from our 
three reports. 

Several Major Changes Have Affected USPS's Mail Processing Operations 
Prompting the Need for Network Realignment: 

Several major changes have affected USPS's mail processing and 
distribution operations including marketplace changes, such as declines 
in First-Class Mail and increased competition, increased automation and 
mail processing by mailers, and shifts in population demographics. 
Historically, USPS's business model was dependent on revenues from 
increasing mail volumes to help cover the costs of its expanding 
infrastructure. This model has proven more difficult to sustain because 
First-Class Mail volumes--which generate high revenue per piece--are 
declining. USPS has attributed the declining First-Class Mail volume to 
the impact of electronic diversion as businesses, nonprofit 
organizations, governments, and households increasingly automate their 
financial transactions and divert correspondence to the Internet. At 
the same time as declines in First-Class Mail are taking place, 
Standard Mail (primarily advertising mail) volumes are increasing. The 
trends for First-Class Mail and Standard Mail, which currently combine 
for about 95 percent of mail volumes and 80 percent of revenues, 
experienced a historical shift in fiscal year 2005. For the first time, 
the volume of Standard Mail exceeded that of First-Class Mail. This 
shift has financial implications because First-Class Mail generates the 
most revenue and is used to finance most of USPS's institutional 
(overhead) costs, while Standard Mail generates less revenue per piece. 
It takes about two pieces of Standard Mail to make the same 
contribution to institutional costs as one piece of First-Class Mail. 

The role of mailers has also changed in large part due to the advent of 
USPS's worksharing discounts in 1976 and the evolution of additional 
worksharing discounts in subsequent years. Postal worksharing 
activities generally involve mailers preparing, barcoding, sorting, or 
transporting mail to qualify for reduced postage rates. These 
activities allow mailers to bypass some USPS mail processing and 
transportation operations. Thus, for example, an activity called 
dropshipping allows the mailer a discount for bypassing the plant near 
where the sender of the mail is located and transporting the mail 
closer to its destination point. Worksharing contributes to excess 
capacity in USPS's operations because mail volumes bypass operations 
that occur early in USPS's processing network; in some cases, as with 
dropshipping, mail volumes bypass entire plants. Also, some plants have 
exclusively processed certain types of mail, which has driven up the 
cost per piece of those types of mail. In general, by law, each postal 
product must cover the costs attributable to its provision plus a 
reasonable contribution to cover institutional costs. Consequently, 
when a network is dedicated to only one type of mail, that type of mail 
must bear the costs of the dedicated network. 

USPS's use of manual and automated equipment and the related processing 
and distribution network have also evolved over time, resulting in an 
infrastructure network composed of plants that are markedly different 
from one another. As a result, some plants cannot accommodate some 
types of processing equipment because the floor space requirements 
differ for manual and automated processing and the plants were not 
originally designed to house the advanced technology. In 2005, USPS's 
mail processing and distribution infrastructure included plants that 
ranged in age from 2 to 72 years old and ranged in size from just over 
400 square feet to over 1.5 million square feet; have different 
layouts; serve different processing functions; and do not share the 
same amount and type of processing equipment. 

Additionally, USPS facilities may not be optimally located due to 
shifts in demographics and changes in transportation. Most USPS 
processing plants are located in eastern states--in areas that 
historically have had the largest population. During the 1990s, U.S. 
households continued moving West and South, with Nevada and Arizona 
ranking as the two fastest growing states in the nation. In 2005, we 
reported that the majority of USPS processing plants are located in 
states where household growth has not been as rapid as in others. USPS 
stated that the challenge it faces is to locate processing plants and 
employees within efficient reach of most of the population, while at 
the same time providing universal service at a reasonable cost. 
Furthermore, as a result of ongoing changes in transportation, most 
mail is now moved by highway and air, and some processing plants could 
be better located so that major highways and airports would be more 
easily accessible. In particular, changes in transportation occurred 
after the September 11, 2001, terrorist attacks, when new federal 
aviation security restrictions prohibited the transportation of mail 
weighing more than 16 ounces on commercial passenger flights. As a 
result, the majority of the mail previously transported by commercial 
passenger air is now shipped by surface transportation or flown by 
FedEx. 

These major changes have led to variations in productivity and excess 
capacity in USPS's processing network, prompting the need for network 
realignment. Average productivity--total pieces processed per hour-- 
varies among USPS's mail processing and distribution plants, which 
indicates that some plants are not processing mail as efficiently as 
others. USPS officials have attributed this variation to several 
factors, including size of plant as measured by workload, number of 
employees, plant layout, and use of nonstandardized processes. In our 
2005 report, we found that none of these factors, in isolation, can 
explain the variations; rather, it seems that plants with low 
productivity exhibit a number of contributing factors. 

These major changes have also created excess capacity in USPS's 
processing network. According to USPS officials, declining mail volume, 
worksharing, and the evolution of mail-processing operations from 
manual to automated equipment have led to excess capacity. Excess 
capacity created by these trends can be categorized into different 
types, including the following: 

* excess machine hours, which occur when machines sit idle; 

* excess physical infrastructure, which occurs when more square footage 
is available for processing mail than is necessary (this may include 
entire plants); 

* excess transportation capacity, which occurs when trucks are run at 
less than full capacity; and: 

* excess work hours, which occur when more work hours are used than are 
necessary for processing the mail. 

Concerns Related to USPS's Strategy for Realigning Its Mail Processing 
Network and Implementing its Area Mail Processing Consolidations: 

As we reported in 2005, and it continues to be the case today, 
important questions remain about how USPS intends to realign its mail 
processing network to meet its future needs because USPS does not have 
a comprehensive, transparent strategy for realigning its processing 
network. Since our 2005 report, USPS has been working on several key 
initiatives that play central roles in network realignment: AMP 
consolidations, RDC development, the Flats Sequencing System, and 
surface and air network development. In 2007 we reported that USPS has 
made progress in implementing these initiatives, but we have some 
concerns related to the integration and results of these initiatives, 
particularly the AMP consolidations. 

USPS's Strategy for Realigning Its Mail Processing Network is Still 
Unclear: 

Our 2005 report concluded that USPS's strategy for realigning has not 
been clear because USPS has outlined several seemingly different 
strategies, none of which include criteria and processes for 
eliminating excess capacity, which may prolong inefficiencies. Also, we 
reported that USPS's strategy lacks sufficient transparency and 
accountability, excludes stakeholder input, and lacks performance 
measures for results. In 2007, we reported that while USPS has made 
some improvements, it still is not clear how USPS intends to realign 
its mail processing network. The RDC initiative, which USPS referred to 
as the foundation of its processing network, is one key area of USPS's 
network realignment that is unclear. 

In February 2006, USPS testified to the PRC that it would be 
undertaking an initiative to develop a network of RDCs to serve as the 
foundation of its processing network.[Footnote 7] However, various 
developments have caused USPS to reexamine whether it will proceed with 
the RDC initiative. RDCs would serve as consolidation centers for mail 
of the same shape (i.e., letters, flats, or parcels), which would allow 
mailers to bring various classes of mail to one facility and facilitate 
the transportation of multiple mail classes on a single transportation 
network. When USPS first introduced the concept of RDCs to serve as the 
foundation of its processing network, it projected it would need 
between 28 and 100 RDCs nationally. 

In February 2007, officials told us that they would be reevaluating 
processing and transportation network plans in light of the December 
2006 Postal Accountability and Enhancement Act, the PRC opinion, and 
the planned deployment of new equipment to sort flats. In March 2007, 
USPS's Senior Vice President, Operations, told us that USPS is still 
determining the structure of its processing network foundation. He said 
that similar to the current network, the future network would be 
designed around USPS's processing and distribution centers, but how 
USPS will make determinations about these facilities appears largely 
uncertain. 

Mail Processing Realignment Efforts USPS Has Under Way Need Better 
Integration and Measurable Targets: 

USPS has developed initiatives to facilitate the realignment of its 
processing network, but without measurable targets for cost savings or 
benefits, it is not clear how these initiatives are meeting its END 
goals. The goals of USPS's END include (1) developing mail processing 
and transportation networks suited to current and future operational 
needs, (2) reducing inefficiency and redundancy, (3) making operations 
flexible, and, (4) reducing costs. 

The four major initiatives discussed in our June 2007 report are shown 
in Table 1. 

Table 1: Status and Purpose of Central Realignment Initiatives: 

Initiative: Area mail processing consolidations; 
Status: In progress; 
Purpose: Increase efficiency and use of existing machine capacity by 
consolidating mail processing operations,(of the 57 potential 
consolidations USPS studied in 2005 and 2006,10 have been implemented 
and most of the remaining will not be implemented). 

Initiative: Regional distribution center development; 
Status: Reconsidering; 
Purpose: Provide essential infrastructure for a more efficient 
processing network. 

Initiative: Flats Sequencing System[A]; 
Status: Under development; 
Purpose: Increase processing efficiency by automating flat mail sorting 
to carrier delivery sequence, (deployment of machines for this purpose 
is expected between October 2008 and October 2010). 

Initiative: Surface and air network development; 
Status: Near completion; 
Purpose: Improve transportation network flexibility and efficiency, (20 
of 23 surface transportation centers have been opened and the remaining 
are expected to open in 2007). 

Source: GAO presentation of USPS data. 

[A] Flat mail includes larger envelopes, catalogs, circulars, 
newspapers, and magazines. 

[End of table] 

USPS has established goals for its END infrastructure realignment and 
is making changes to its processing network with the aim of meeting 
these goals while still maintaining current levels of service. While 
GAO, PRC, and the President's Commission have supported these goals, 
USPS has yet to develop measurable targets for achieving them[Footnote 
8] It also is unclear how USPS's realignment initiatives are integrated 
with each other, that is, how the individual and collective costs and 
benefits of these initiatives impact the overall goal of network 
realignment. Without measurable targets, the impact of USPS's network 
realignment initiatives on achieving these goals is not apparent. For 
example, USPS's Senior Vice President, Operations, told us that there 
are no actual targets for cost savings in network realignment but an 
indicator of success would be the implementation of more AMP 
consolidations. 

Concerns with the AMP Consolidation Process: 

We also raised several issues in our June 2007 report about the AMP 
consolidations, in which certain mail-processing operations from 
multiple plant locations are consolidated into fewer plant locations. 
AMP consolidations are the initiative that most clearly addresses 
USPS's reduction of excess machine capacity due to increased 
worksharing and declining First-Class Mail volumes, yet the limited 
transparency in the AMP consolidation process makes it unclear the 
extent to which this initiative is meeting END goals. Many of the 
concerns about this lack of transparency in the planning and evaluation 
processes are primarily related to the criteria USPS used in selecting 
operations at certain facilities as opportunities for AMP 
consolidations, the lack of consistent data calculations used in the 
decision making and evaluation processes, the lack of the AMP 
consolidation's evaluation of impact on service performance, and the 
lack of appropriate stakeholder and public input. USPS is taking steps 
to address these areas by revising its AMP consolidation guidelines, 
but concerns still exist. 

AMP consolidations are intended to reduce costs and increase efficiency 
by reducing excess machine capacity. One way to reduce excess capacity 
is to consolidate mail-processing operations from one or more plants 
into another plant(s). This increases the amount of mail processed on 
machines and decreases the work hours used in mail processing by 
reducing the number of staffed machines. By decreasing the number of 
machines used to process mail, AMP consolidations can reduce postal 
costs. 

In 2005 and 2006, USPS considered 57 studies of opportunities for AMP 
consolidations, but has decided not to implement 34 of them. See the 
appendix for more detail on the status of these AMP consolidations. As 
summarized in table 2, in 2005, USPS considered 11 consolidations, of 
which it implemented 9, postponed 1, and did not implement 1. 

Table 2: Status of AMP Consolidations Studies in 2005 and 2006: 

Status of AMP consolidation: Approved for implementation[A]; 
2005: 10; 
2006: 2; 
Total: 12. 

Status of AMP consolidation: Implemented; 
2005: 9; 
2006: 1; 
Total: 10. 

Status of AMP consolidation: Implementation pending; 
2005: 1; 
2006: 1; 
Total: 2. 

Status of AMP consolidation: Decision not to implement; 
2005: 1; 
2006: 33[B]; 
Total: 34. 

Status of AMP consolidation: Decision still pending; 
2005: NA; 
2006: 11; 
Total: 11. 

Status of AMP consolidation: Total AMPs considered; 
2005: 11; 
2006: 46; 
Total: 57. 

Source: GAO presentation of USPS data. 

[A] USPS originally approved 11 AMP consolidations in 2005 and 
subsequently decided not to implement 1. 

[B] Decisions not to implement proposed AMP consolidations include 5 
consolidations USPS placed on indefinite hold. 

[End of table] 

In 2006 USPS initiated 46 AMP consolidation studies. As of May 2007, it 
had implemented 1 consolidation, approved but not yet implemented 1 
consolidation, decided not to implement 33 studies (5 placed on 
indefinite hold), was continuing to consider 10 consolidations, and was 
still completing the study of 1 consolidation. USPS officials explained 
that area officials decided to place 5 AMP consolidation studies on 
indefinite hold because of existing delivery service issues in the 
areas served by these facilities, which the officials wished to resolve 
before considering implementation. USPS officials said that the 
remaining 28 of the 33 decisions not to implement the proposed 
consolidations were made because, for example, studies had found that 
implementation would result in negligible savings or degrade existing 
service. USPS anticipates it will make final decisions for the 
remaining feasibility studies still under consideration this summer. 

Unclear Criteria Used in AMP Consolidation Decisions: 

The criteria USPS uses for both selecting locations that may serve as 
potential opportunities for AMP consolidations, and deciding whether to 
implement a consolidation are unclear. Therefore, USPS may not be 
targeting the best opportunities for consolidation. In 2005, USPS used 
modeling software that identified 139 sets of locations where 
operations could potentially be consolidated. Of these, 46 sets of 
locations were deemed feasible for initiating AMP consolidation studies 
in 2006; and of these sets, 2 have been approved so far for AMP 
consolidations, and 33 have been either rejected or put on hold. In its 
December 2006 advisory opinion, PRC questioned not the model itself, 
but rather the effectiveness of the model's use in identifying 
opportunities for AMP consolidations. PRC's concerns are related to the 
fact that the END model does not rely completely on location-specific 
data in identifying opportunities for consolidation. Instead, the model 
uses some location-specific data in combination with national 
productivity averages, which may not adequately target the best 
opportunities for consolidations. The USPS Inspector General also 
recently reported on USPS's selection process for AMP consolidations. 

In addition to having unclear criteria in selecting locations with 
potential for consolidating mail processing operations, USPS does not 
have specific criteria--such as definitive thresholds or principles-- 
for deciding whether or not to implement an AMP consolidation after the 
study has been completed. USPS's Senior Vice President, Operations, 
told us that USPS is considering prioritizing consolidations that are 
expected to achieve $1 million or more in cost savings annually. 

Inconsistent Data Calculations: 

We also reported that USPS did not use consistent data calculations in 
determining the impact and cost savings of these consolidations. 
Inconsistency in data calculations in the feasibility studies may limit 
USPS's ability to identify all of the foreseeable impacts of the 
consolidations and to accurately determine the expected cost savings of 
the AMP consolidations. The current AMP guidelines do not prescribe 
standardized sources for the data used in completing the worksheets, 
nor is there a standardized methodology for calculating some data in 
the worksheets. 

AMP consolidation guidelines require semiannual and annual post 
implementation reviews (PIR) of AMP consolidations, which ensure 
management's accountability for implementing an AMP plan. USPS's post 
implementation review process essentially replicates the AMP 
consolidation study process and compares the estimated annual savings 
submitted in the approved AMP consolidation study to the actual savings 
after 6 months, which is then projected to annualized savings. PIRs are 
completed by local managers, approved by area officials, and subject to 
final review by headquarters officials. 

We found that in some cases, reviewing officials in USPS headquarters 
made significant corrections and changes to the draft PIRs that were 
submitted for their review, resulting in revised projected annualized 
savings that were closer to the original estimates prepared for the AMP 
consolidation studies. As shown in table 3, the sum of estimated annual 
savings in the nine AMP consolidations approved in 2005, as provided in 
the AMP study documents, was about $28 million.[Footnote 9] According 
to the initial draft PIRs for these nine consolidations prepared by 
USPS officials at the local level 6 months after implementation, the 
annualized savings would be about $19 million. During the review of 
these PIRs by USPS headquarters, this sum was revised to about $28 
million. 

Table 3: Semiannual Post Implementation Projected Annualized Savings 
Versus Estimated Annualized Savings in AMP Studies Approved in 2005: 

Number of PIRs: 9; 
Estimated annualized savings in AMP studies: $28,142,829; 
Initial post implementation projected annualized savings (prepared by 
local officials): $19,017,453; 
Revised post implementation projected annualized savings (based on 
headquarters review): $28,112,909. 

Source: GAO presentation of USPS data. 

Note: The headquarters review of the PIRs has been completed for only 
three of the nine PIRs, and additional revisions to the projected 
annualized savings may be made, but USPS officials provided us with the 
most recent data available from their ongoing reviews. 

[End of table] 

While the differences in the savings from the AMP studies' estimated 
annualized savings and the revised PIR projected annualized savings are 
generally small, in the interim, drafts of the PIRs showed different 
projections before USPS headquarters officials revised them based on 
their review. USPS's Senior Vice President, Operations, told us that 
the headquarters review has shown that when PIRs have not been 
finalized, they do not always account for all of the actual savings 
achieved by the AMP consolidation. Another USPS official attributed the 
difference in the amounts reported in some PIRs and the revised 
projected annualized savings to unexpected events (e.g., changes in 
cost elements, such as work hour rates) and differences in the 
methodologies used by the individuals calculating the data impact of 
the results. 

Limited Delivery Performance Measures: 

The AMP consolidation process does not evaluate potential impacts to 
delivery performance; therefore, USPS cannot determine the actual 
impact of AMP consolidations on delivery service. As we reported in 
2006, USPS does not measure and report its delivery performance for 
most types of mail, and less than one-fifth of total mail volume is 
measured.[Footnote 10] While USPS is taking steps toward developing 
increased delivery performance measurements, limited mechanisms are 
currently in place to determine how AMP consolidations may potentially 
impact delivery performance or to evaluate the actual impact after 
implementation. USPS has systems in place to measure delivery 
performance for some of its First-Class Mail and segments of other 
types of mail. However, the External First-Class Measurement System 
(EXFC) is limited to single-piece First-Class Mail deposited in 
collection boxes in selected areas of the country (see fig. 1). Thus, 
some areas included in potential AMP consolidations may not be covered 
by the EXFC system; therefore, USPS would not have delivery performance 
information for these areas. 

Figure 1: Geographic Coverage of Delivery Performance Measurement for 
First-Class Mail Deposited in Collection Boxes as Measured by EXFC: 

[See PDF for image] 

Source: U.S. Postal Service. 

Note: Areas covered by EXFC are shaded. Boundaries within states are 
for 3-digit ZIP Code areas. 

[End of figure] 

While the AMP consolidation study does not take delivery performance 
into account, it does review impacts on service standards, which are 
USPS's official standards for how long it should take to process 
different classes of mail between the location where USPS receives the 
mail (originating ZIP codes) and its final destination (destinating ZIP 
codes). The AMP consolidation study considers whether standards for 
different classes of mail will be upgraded (a decrease in the time it 
takes mail to travel between certain ZIP codes) or downgraded (an 
increase in the time it takes mail to travel between certain ZIP codes) 
with implementation of the consolidation. Considering these service 
standards provides some insight into the potential impact of the AMP 
consolidation on USPS's ability to meet its internal standards; 
however, without service performance data or the ability to measure the 
AMP consolidation's impacts on delivery performance, it is unclear how 
USPS can accurately determine the cost and service impact of its AMP 
consolidations. 

Lack of Stakeholder and Public Input: 

USPS's AMP communication practices do not ensure appropriate 
stakeholder engagement in realignment decisions. More specifically, AMP 
consolidation communication processes (1) do not provide clear and 
useful notification to stakeholders, (2) do not provide for meaningful 
public input and lack transparency into the AMP decision-making 
process, and (3) provide limited information to the public after USPS 
makes AMP consolidation decisions. A town hall meeting is the only 
formal requirement for public input during the AMP consolidation 
process. Stakeholders and others have criticized the timing of the 
meeting, saying it occurs too late in the process, after USPS has 
already made major decisions. 

AMP consolidations have been taking place since the late 1960s, and 
USPS established AMP consolidation guidelines in 1979. However, until 
2006, USPS has had no statutory requirement to contact the public 
(other than USPS employees) concerning the consolidation of its 
operations, unless the consolidation would result in a retail facility 
closure. In 1995, prior to the statutory requirement, USPS established 
communication guidance requiring the notification of stakeholders when 
an AMP consolidation is implemented, and in 2005 this guidance was 
updated to require notification when AMP consolidation studies are 
initiated. AMP consolidation notification letters sent to stakeholders 
were not meaningful and provided little detail. The notification 
letters we reviewed were largely form letters, did not simply and 
clearly state the type of change or changes being studied, and provided 
no range of possible outcomes for the public to understand. Letters 
contained jargon with terms that may not be familiar to the public. For 
example, they stated that USPS was studying the facility's "total mail 
processing," "originating/destinating mail processing," or "originating 
mail processing." Also, the letters did not provide the name of the 
facility to which operations would be moved so that mailers affected by 
the change could plan their operations accordingly. Furthermore, USPS 
did not explain to stakeholders that "consolidating both originating 
and destinating mail" meant USPS was considering closing the facility, 
whereas consolidating "either destinating or originating mail" meant 
potential changes only to internal mail processing operations. 

AMP guidance requires USPS to "fully consider" both service and "other 
impacts on the community." Since 2006, USPS has included a requirement 
in its AMP guidance for a town hall meeting to provide a forum to 
obtain public input, but there are flaws with that requirement. As 
noted in our report, USPS held five town hall meetings that were open 
to the public and has held another since our report was issued. USPS 
provided little information about the study prior to the meetings--a 
series of bullets was posted on a USPS Web site several days prior to 
the meetings, and USPS neither publicized an agenda for the meetings 
nor employed a neutral party to facilitate them. According to the 
guidance, additional information in the form of briefing slides and a 
video screening, is not made available to attendees until a meeting 
occurs. Then, a USPS official will prepare a summary document after the 
meeting that is to be forwarded to USPS headquarters. Only after the 
meeting, do the stakeholders and the public have an opportunity to 
draft and submit comments to USPS.[Footnote 11] 

Additionally, we found that these meetings occur too late in the 
decision making process. Public meetings were held after the AMP 
consolidation studies were forwarded to USPS headquarters, and after 
USPS had gathered and analyzed most of the data, including the data on 
customer service impacts. USPS officials could not specifically explain 
how stakeholder and public input was used in reaching AMP consolidation 
decisions. Furthermore, USPS does not seek input from stakeholders or 
the public--including input regarding impact on delivery service--when 
evaluating completed AMP consolidations. However, USPS officials told 
us that as a matter of practice, USPS provides its employee 
organizations with copies of approved AMP studies and completed AMP 
evaluations. It is unclear how the information collected at, or 
subsequent to, the meetings, factors into consolidation decisions. 

Revised AMP Guidelines and New Legislation Are Addressing Some of These 
Issues, but Concerns Remain: 

Although USPS is revising its AMP consolidation procedural and 
communication guidelines to address some of these issues, we continue 
to have some concerns. Drafts of these revised procedural guidelines 
indicate that the new process will include several changes aimed at 
standardizing the AMP consolidation process and the data calculations 
used in studying potential consolidations. The use of consistent data 
sources should alleviate some of the delays that currently affect the 
AMP consolidation process. USPS officials stated that the revised 
guidelines are currently scheduled to be released this summer.[Footnote 
12] However, we have concerns about the draft guidance because it does 
not: 

* address USPS's limited use of facility-specific data in identifying 
facilities to consider for consolidation, 

* identify the criteria USPS uses when deciding to approve an AMP 
consolidation, or: 

* address USPS's limited ability to measure delivery performance. 

While USPS is updating its communication guidance--the AMP 
Consolidation Communication Plan and Toolkit--its proposed improvements 
would neither substantively improve information provided to 
stakeholders and the public, nor improve the public input process. 
Proposed improvements would help clarify which stakeholders USPS 
notifies but would not improve the content of the notifications. 
Furthermore, the draft AMP consolidation guidelines would not provide 
for transparency into the AMP consolidation decision-making process to 
the extent that Congress has encouraged and others have recommended or 
advised by, for example, holding the public meeting earlier or 
explaining how USPS uses public input. 

To address these concerns, in our recent report we made the following 
two recommendations to the Postmaster General: 

1. Strengthen the planning and accountability for USPS's realignment 
efforts by ensuring that the Facilities Plan required by the Postal 
Accountability and Enhancement Act[Footnote 13] includes: 

* a discussion of how the various initiatives that will be used in 
rationalizing the postal facilities network will be integrated with 
each other and: 

* the establishment of measurable targets USPS plans on meeting for the 
anticipated cost savings and benefits associated with network 
rationalization, and the timeline for implementation. 

2. Improve the way in which USPS communicates its realignment plans and 
proposals with stakeholders, particularly with regard to proposed AMP 
consolidations, by taking action to: 

* improve public notice by clarifying notification letters, 

* improve public engagement by holding the public meeting earlier in 
the study, and: 

* increase transparency by updating AMP guidelines to explain how 
public input is considered in the decision-making process. 

In its response to our recent report, USPS generally agreed with our 
findings and stated that it will be taking measures to address our 
recommendations. USPS commented that its compliance with the Postal 
Accountability and Enhancement Act will satisfy our recommendations for 
the Postmaster General to ensure that the required Facilities Plan 
addresses the integration and performance measurement issues we 
identified. We agree that the required Facilities Plan provides an 
opportunity for USPS to more fully discuss the integration of its 
realignment initiatives and establish measurable targets for meeting 
the cost savings and benefits of network rationalization. 

Additionally, USPS agreed to improve public notice by providing clear 
and simple language detailing the type of change being considered and 
forecasting changes to customer services, as well as by soliciting 
public input at the initiation of the feasibility study. The public 
notice will outline a formal comment period and inform stakeholders 
that comments will be addressed later at a public meeting. USPS agreed 
to improve public engagement by holding the public meeting earlier in 
the AMP process. We agree that this change in timing will improve 
USPS's public engagement process as well as the usefulness of public 
input in AMP consolidation decisions. The agenda and briefing slides 
will be posted on www.usps.com in advance of the public meeting. USPS 
also agreed to increase the transparency of the AMP process by adding 
information to the AMP guidelines on how USPS uses public input in the 
decision-making process. Public input information will be appended to 
the AMP proposal provided to the Area Vice President for a decision. 
The input will be weighed against the proposal's overall impact on cost 
savings and service. If the AMP proposal is approved by the Area Vice 
President, it will be forwarded along with the public input information 
to the Senior Vice President, Operations. The final report will be 
posted on www.usps.com and will summarize the impact of the approved 
proposals on savings, service, and other stakeholder concerns. 

Progress in Improving Delivery Performance Measures Has Been Slow and 
Inadequate: 

Our July 2006 report found that USPS does not measure and report its 
delivery performance for most types of mail, and less than one-fifth of 
total mail volume is measured (see table 4). We also reported that USPS 
has made inadequate progress in modernizing its delivery standards and 
in implementing delivery performance measurement for all major types of 
mail. Our report discussed multiple impediments that have contributed 
to USPS's slow progress toward implementing representative measures of 
delivery performance for all major types of mail. The most important 
impediment was the lack of management commitment and effective 
collaboration with the mailing industry to follow up on recommendations 
for improvement and to resolve issues between USPS and mailers. 
Additional impediments included technological limitations, limited 
mailer participation in providing information needed to facilitate 
performance measurement, data quality deficiencies, and costs. USPS's 
limited progress has left major gaps in each of these areas, despite 
numerous recommendations for improvement that have been made in these 
areas over the years, including those by USPS-mailer task forces and 
working groups, as well as some USPS initiatives to develop delivery 
performance measurement. We recommended that USPS take actions to 
facilitate greater progress in developing complete delivery performance 
information. 

Table 4: USPS Measurement and Reporting of Timely Delivery Performance: 

Type of mail: Standard Mail; 
Mail volume (percent): 47.7; 
Mail revenue (percent): 28.4; 
Representative measurement: None[A]; 
Reporting on USPS Web site: None. 

Type of mail: First-Class Mail: bulk; 
Mail volume (percent): 24.6; 
Mail revenue (percent): 23.7; 
Representative measurement: None[A]; 
Reporting on USPS Web site: None. 

Type of mail: First-Class Mail: single-piece; 
Mail volume (percent): 21.7; 
Mail revenue (percent): 30.4; 
Representative measurement: Partial; 
Reporting on USPS Web site: Partial. 

Type of mail: Periodicals; 
Mail volume (percent): 4.3; 
Mail revenue (percent): 3.2; 
Representative measurement: None[A]; 
Reporting on USPS Web site: None. 

Type of mail: Package Services; 
Mail volume (percent): 0.6; 
Mail revenue (percent): 3.3; 
Representative measurement: Partial; 
Reporting on USPS Web site: Partial. 

Type of mail: Priority Mail; 
Mail volume (percent): 0.4; 
Mail revenue (percent): 7.0; 
Representative measurement: Partial; 
Reporting on USPS Web site: Partial. 

Type of mail: International Mail; 
Mail volume (percent): 0.4; 
Mail revenue (percent): 2.6; 
Representative measurement: Partial; 
Reporting on USPS Web site: None. 

Type of mail: Express Mail; 
Mail volume (percent): 0.03; 
Mail revenue (percent): 1.3; 
Representative measurement: Full; 
Reporting on USPS Web site: Partial. 

Source: GAO analysis of U.S. Postal Service information. 

Note: Timely delivery performance is measured based on comparing the 
time for USPS to deliver mail against USPS's delivery standards. 
Reporting includes material on USPS's Web site. For purposes of this 
table, First-Class Mail does not include Priority Mail. Volume and 
revenue data are for fiscal year 2005 and do not add up to 100 percent 
because they do not include some small and unrelated types of mail. 

[A] No representative measure of delivery performance exists for this 
mail. Some mailers pay an additional fee to obtain data on the progress 
of their mail through USPS's mail processing system. However, these 
data are not representative, cover less than 2 percent of total mail 
volume, and do not include data on the date of delivery. 

[End of table] 

While USPS is taking steps toward developing increased delivery 
performance measurements, limited mechanisms are currently in place to 
determine how AMP consolidations may impact delivery performance or to 
evaluate the actual impact after implementation. A key concern of some 
stakeholders who may be affected by USPS's realignment decisions is 
whether their delivery service will be negatively affected. The Postal 
Accountability and Enhancement Act enacted in December 2006 provides 
additional opportunities for USPS to address the concerns we raised. 
The act requires USPS to establish modern delivery service standards by 
December 20, 2007, and implement annual reporting of the speed and 
reliability for most types of mail (market-dominant products[Footnote 
14]) according to specific requirements to be established by the PRC. 
In addition, the act requires USPS to annually report on the quality of 
service it provides for each of these products. USPS is in the process 
of consulting with mailers, PRC, and the public on how this modernized 
system of service standards and measures should be developed. We 
believe this process of dialogue and obtaining a broad cross-section of 
input is a good start and we look forward to new USPS and PRC 
regulations in this area, which are expected later this year. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 
to respond to any questions that you or the Members of the Subcommittee 
may have. 

Contact and Acknowledgments: 

For further information regarding this statement, please contact 
Katherine Siggerud, Director, Physical Infrastructure Issues, at (202) 
512-2834 or at siggerudk@gao.gov. Individuals making key contributions 
to this statement included Teresa Anderson, Tida Barakat, Tonnyť Conner-
White, Kathy Gilhooly, Kenneth John, Taylor Matheson, and Margaret 
McDavid. 

[End of section] 

Appendix I: Status of USPS 2005 and 2006 AMP Consolidations: 

Table 5: Status of AMP Consolidations Approved In 2005 (as of May 
2007): 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Bridgeport, CT/ Stamford, CT; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Greensburg, PA/ Pittsburgh, PA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Kinston, NC/ Fayetteville, NC; 
Implemented: [Empty]; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: Check. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Marina, CA/ Los Angeles, CA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Marysville, CA / Sacramento, CA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Mojave, CA/ Bakersfield, CA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Monmouth, NJ / Trenton, NJ & Kilmer, NJ; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Northwest Boston, MA/ Boston, MA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Olympia, WA/Tacoma, WA; 
Implemented: [Empty]; 
Implementation postponed: Check; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Pasadena, CA/ Santa Clarita, CA & 
Industry, CA; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Waterbury, CT/ Southern Connecticut, CT; 
Implemented: Check; 
Implementation postponed: [Empty]; 
Subsequent decision not to implement: [Empty]. 

Facilities involved in consolidation (facility losing operations/ 
facility gaining operations): Total; 
Implemented: 9; 
Implementation postponed: 1; 
Subsequent decision not to implement: 1. 

Source: GAO presentation of USPS data. 

[End of table] 

Table 6: Status of 46 AMP Consolidations Initiated in 2006 (as of May 
2007): 

AMP package under review at district or area management: 1; A
MP package under review by headquarters: 10; 
Proposed AMP review on hold: 5; 
Decision not to implement proposed AMP: 28; AMP approved: 2. 

AMP package under review at district or area management: Daytona Beach, 
FL/ Mid-FL, FL; 
AMP package under review by headquarters: Aberdeen, SD/ Dakotas 
Central,SD; 
Proposed AMP review on hold: Alamogordo, NM/ El Paso, TX; 
Decision not to implement proposed AMP: Beaumont, TX/ Houston, TX; 
AMP approved: Newark, NJ/ Kearny, NJ. 

AMP package under review by headquarters: Bronx, NY/ Morgan, NY; 
Proposed AMP review on hold: Batesville, AR/ Little Rock, AR; 
Decision not to implement proposed AMP: Binghamton, NY/ Syracuse, NY; 
AMP approved: Saint Petersburg, FL/ Tampa, FL. 

AMP package under review by headquarters: Canton, OH/ Akron, OH; 
Proposed AMP review on hold: Carbondale, IL/ Saint Louis, MO; 
Decision not to implement proposed AMP: Bloomington, IN/ Indianapolis, 
IN; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Dallas, TX/ North Texas, TX; 
Proposed AMP review on hold: Centralia, IL/ Saint Louis, MO; 
Decision not to implement proposed AMP: Bryan, TX/ Houston, TX; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Flint, MI/ NE Metro, MI; 
Proposed AMP review on hold: Las Cruces, NM/ El Paso, TX; 
Decision not to implement proposed AMP: Burlington, VT/ White River 
Jnt, VT; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Jackson, TN/ Memphis, TN; 
Proposed AMP review on hold: [Empty]; 
Decision not to implement proposed AMP: Cape Cod, MA/ Brockton, MA; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Kansas City, KS/ Kansas City, 
MO; 
Proposed AMP review on hold: [Empty]; 
Decision not to implement proposed AMP: Carroll, IA/ Des Moines, IA; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Oshkosh, WI/ Green Bay, WI; 
Proposed AMP review on hold: [Empty]; 
Decision not to implement proposed AMP: Cumberland, MD/ Frederick, MD; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Sioux City, IA/ Sioux Falls, 
SD; 
Proposed AMP review on hold: [Empty]; 
Decision not to implement proposed AMP: Fox Valley, IL/ South Suburban, 
IL; 
AMP approved: [Empty]. 

AMP package under review by headquarters: Waco, TX/ Fort Worth/Austin, 
TX; 
Proposed AMP review on hold: [Empty]; 
Decision not to implement proposed AMP: Gaylord, MI/ Traverse City, MI; 
AMP approved: [Empty]. 

Decision not to implement proposed AMP: Glenwood Springs, CO/ Grand 
Junction, CO.

Decision not to implement proposed AMP:Helena, MT/ Great Falls, MT. 

Decision not to implement proposed AMP: Hutchinson, KS/ Wichita, KS. 

Decision not to implement proposed AMP: LA Crosse, WI/ Rochester, MN. 

Decision not to implement proposed AMP: McAllen PO TX/ Corpus Christi, 
TX. 

Decision not to implement proposed AMP: McCook & N. Platte, NE/ Casper, 
WY. 

Decision not to implement proposed AMP: Plattsburg, NY/ Albany, NY. 

Decision not to implement proposed AMP: Portsmouth, NH/ Manchester, NH. 

Decision not to implement proposed AMP: Rockford, IL/ Palatine, IL. 

Decision not to implement proposed AMP: Sheridan, WY/ Casper, WY. 

Decision not to implement proposed AMP: Springfield, MA/ Hartford, CT. 

Decision not to implement proposed AMP: Staten Island, NY/ Brooklyn, 
NY. 

Decision not to implement proposed AMP: Twin Falls, ID/ Boise, ID. 

Decision not to implement proposed AMP: Utica, NY/ Syracuse or Albany, 
NY. 

Decision not to implement proposed AMP: Watertown, NY/ Syracuse, NY. 

Decision not to implement proposed AMP: Wheatland, WY/ Cheyenne, WY. 

Decision not to implement proposed AMP: Yakima, WA/ Pasco, WA. 

Decision not to implement proposed AMP: Zanesville, OH/ Columbus, OH. 

Source: GAO presentation of USPS data. 

Note: This table includes the facilities involved in proposed 
consolidations, both the facility losing operations and the facility 
gaining operations. 

[End of table] 

FOOTNOTES 

[1] GAO, U.S. Postal Service: The Service's Strategy for Realigning Its 
Mail Processing Infrastructure Lacks Clarity, Criteria, and 
Accountability, GAO-05-261 (Washington, D.C.: Apr. 8, 2005). 

[2] GAO, U.S. Postal Service: Mail Processing Realignment Efforts Under 
Way Need Better Integration and Explanation, GAO-07-717 (Washington, 
D.C.: June 21, 2007). 

[3] GAO, U.S. Postal Service: Delivery Performance Standards, 
Measurement, and Reporting Need Improvement, GAO-06-733 (Washington, 
D.C.: July 27, 2006). 

[4] Key worksharing activities include (1) barcoding and preparing mail 
so USPS can sort it on automated equipment; (2) presorting mail, such 
as by ZIP code or specific delivery location; and (3) entering mail 
closer to destination, commonly referred to its destination entry or 
dropshipping. 

[5] The Postal Regulatory Commission was previously named the Postal 
Rate Commission. Section 604 of the Postal Accountability and 
Enhancement Act (Pub. L. No. 109-435), enacted on December 20, 2006, 
redesignated the Postal Rate Commission as the Postal Regulatory 
Commission. 

[6] Flat mail includes larger envelopes, catalogs, circulars, 
newspapers, and magazines. 

[7] In February 2006 USPS, sought an advisory opinion from PRC on 
anticipated changes in the application of current service standards 
that may result from a systemwide review and realignment of its mail 
processing and transportation networks, and PRC issued its advisory 
opinion in December 2006. 

[8] In July 2003, the President's Commission provided recommendations 
on ensuring efficient USPS operations, while minimizing financial 
exposure to the American taxpayer. These recommendations supported 
USPS's realignment of its processing network. 

[9] USPS headquarters officials also revised the AMP studies' estimated 
annual savings for two consolidations after the consolidations were 
approved to eliminate duplicate savings, which reduced the AMP studies' 
total estimated annual savings by $2.8 million. We did not include this 
revised AMP estimate in the table because we wanted all the data in the 
table to be from consistent sources. 

[10] GAO-06-733. 

[11] For the five meetings that were held, USPS afforded stakeholders 
and the public 5 days to provide comments. USPS has since increased the 
comment period to 15 days. 

[12] USPS plans on providing a draft of the guidelines to employee 
unions for their review. Unions are allowed 60 to 90 days for review 
and comment. 

[13] The Postal Accountability and Enhancement Act requires USPS to 
develop a Facilities Plan that includes a strategy for how USPS intends 
to rationalize the postal facilities network and remove excess 
processing capacity and space from the network and the process for 
engaging policymakers and the public in related decisions. 

[14] The Postal Accountability and Enhancement Act defines market- 
dominant products to include: First-Class Mail letters and sealed 
parcels, First-Class Mail cards, periodicals, Standard Mail, single- 
piece parcel post, media mail, bound printed matter, library mail, 
special services, and single-piece international mail.

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