Postal Service:

Employee Issues Associated with the Potential Closure of the San Mateo IT Center

GAO-03-205: Published: Jan 31, 2003. Publicly Released: Mar 3, 2003.

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

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

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: If the Service decides to close the San Mateo IT Center, the PMG should consider, during discussions with APWU regarding the IT center's closure, offering some assistance--such as resume preparation and review services--to the trailing spouses of bargaining unit employees who decide to relocate to another postal IT center.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: In a memorandum to San Mateo IT Center employees dated March 2003, USPS announced that it had a continuing need for IT operations in San Mateo and had no plans to close the facility at this time.

    Recommendation: If the Service decides to close the San Mateo IT Center, the PMG should consider, during discussions with the American Postal Workers Union (APWU) regarding the IT center's closure, offering to help bargaining unit employees find jobs if they decide to remain in the Bay Area.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: In a memorandum to San Mateo IT Center employees dated March 2003, USPS announced that it had a continuing need for IT operations in San Mateo and had no plans to close the facility at this time.

    Recommendation: Before the Service makes its decision regarding whether to close the San Mateo IT Center, the Postmaster General (PMG) should direct the IT Department to review and update the economic assumptions and analyses used in the San Mateo Decision Analysis Report and make revisions, if appropriate, to better reflect current economic conditions and recent plans to automate and reengineer its field accounting activity.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: In a memorandum to San Mateo IT Center employees dated March 2003, USPS announced that it had a continuing need for IT operations in San Mateo and had no plans to close the facility at this time. However, if in the future USPS considers closing the San Mateo facility, USPS committed to update the DAR, as GAO recommended, before making any decision regarding the disposition of the facility.

    Recommendation: If the Service decides to close the San Mateo IT Center, the PMG should consider providing some assistance--such as resume preparation and review services--to the trailing spouses of Executive and Administrative Schedule employees who decide to relocate to another postal IT center.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: In a memorandum to San Mateo IT Center employees dated March 2003, USPS announced that it had a continuing need for IT operations in San Mateo and had no plans to close the facility at this time.

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