Information Technology:

U.S. Postal Service Needs to Strengthen System Acquisition and Management Capabilities to Improve Its Intelligent Mail Full Service Program

GAO-10-145: Published: Oct 29, 2009. Publicly Released: Nov 30, 2009.

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In 2003, the United States Postal Service (USPS) initiated the Intelligent Mail program, which is intended to use information-rich standardized barcodes to track mail and thus provide USPS and mailers with better and timely information. A major component of this program is the Full Service program, which, among other things, is intended to build a system that improves the visibility into end-to-end mail processing operations through the use of new barcodes, and create efficiencies by streamlining and automating certain aspects of the process. GAO was asked to determine (1) the current status and plans for the Intelligent Mail Full Service program and (2) if the Postal Service has capabilities in place to successfully acquire and manage the Intelligent Mail Full Service program. GAO obtained and analyzed USPS documentation, reviewed previous GAO reports, interviewed officials, and compared acquisition best practices with USPS's practices.

Program officials have completed key activities for implementing the Intelligent Mail Full Service program, such as deploying the first phase of the program; however, the current schedule for the program has been delayed by almost 10 months. As a result, the second phase of the program is not expected to be implemented until the end of November 2009. In addition, key functions of the program that were originally intended to be delivered have been deferred. Moreover, the life-cycle cost that program officials prepared does not capture all the costs associated with the acquisition and implementation of the program. As a result, program officials lack an accurate total cost estimate. Finally, the first deployed phase is currently experiencing operational problems. While the Full Service program has taken steps to implement acquisition management activities, it does not have the full set of capabilities it needs to fully manage the acquisition. A key cause of the program's acquisition management weaknesses in the areas of project planning, risk management, and product integration is that USPS organizational policies do not set forth sufficient requirements for establishing effective practices in these areas. Weaknesses exist in the program monitoring and control area because the program management contract creates a conflict of interest by requiring that the contractor assess the quality of its own deliverables and oversee the program's schedule, issues, and risks. Without these management capabilities in place, USPS increases the risk that this program will continue to encounter problems in meeting its performance, schedule, and cost objectives.

Status Legend:

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  • 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: To ensure that the USPS adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality to develop and maintain a systems integration plan for release 2 and beyond.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: In response to our recommendation, USPS program officials developed an integrated project plan that sets forth key milestones and implementation steps for integrating all systems, sub-systems, external systems and any components with the Full Service system.

    Recommendation: To ensure that the USPS adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality to develop a risk management process that enables the program officials to develop an adequate risk management plan that fully addresses the scope of their risk management efforts; ensures that a comprehensive list of risks and complete mitigation plans are identified and tracked; and includes milestones, mitigating actions, thresholds, and resources for significant risks.

    Agency Affected: United States Postal Service

    Status: Open

    Comments: According to USPS's 60-day letter, a robust Risk Management process has been in place for many months and is actively managed by the leadership of the Intelligent Mail. The program's top risks and mitigation plans are reviewed with the Steering Committee on a monthly basis. USPS provided GAO with high level information on its risk management process and documentation of its risk logs. USPS has identified potential delays to release 2 as a risk. However, it is unclear if USPS is tracking two risks identified in GAO-10-145 (page 54 hard copy): 1) having the same company performing program management activities that is providing development and implementation activities; and 2) risks to the contractor. According to program officials, The CIO Technology Management Office (TMO) recently created a dashboard that monitors the health of each program across the CIO. The dashboard includes the disclosure of issues and risks as well as risk mitigation plans. Full Service related programs are tracked on the CIO TMO Dashboard. As of Aug 26, 2011, the Full Service Program has identified 8 risks and included a mitigation strategy for each item. [Asked for supporting documentation of the dashboard on April 16, 2012. SGO)

    Recommendation: To ensure that the USPS adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality to define the core set of requirements for the entire program and use them as a basis for developing a reliable cost estimate.

    Agency Affected: United States Postal Service

    Status: Open

    Comments: According to USPS's letter, officials stated that Intelligent Mail is a dynamic program and the Vision Statement for Intelligent Mall will serve as the guiding document and will be updated annually. USPS has not yet provided a new cost estimate that is based off of the core requirements defined in the Intelligent Mail Vision Statement, and until this action is taken the recommendation will remain open. In September 2011, program officials stated that the life cycle cost estimate of $116.4 still supports the core requirements as defined in the Intelligent Mail Vision Statement. However, the full service program now contains 8 releases (originally the contract was for 2 releases for the $116.4).

    Recommendation: To ensure that the USPS adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality to reconsider the current contract arrangement to avoid having the contractor evaluate its own performance.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: In July 2011, the Intelligent Mail Full Service program managment office contract was transitioned to a different contractor than the contractor that is responsible for the development work. A condition of the contract is that the new vendor cannot bid on any IT development work. As a result, the contractor developing the new system is no longer evaluating its own performance.

    Recommendation: To ensure that the USPS adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality toto comnplete an overall program plan for the entire Full Service program, including an overview of the program's scope of all releases, deliverables and functionality within these releases, plans to phase out the approximately 30 barcodes currently being utilized, assumptions and constraints, roles and responsibilities, staffing and training plans, and the strategy for maintaining the plan.

    Agency Affected: United States Postal Service

    Status: Open

    Comments: According to USPS's 60-day letter, officials determined that this program will evolve based upon needs and capability of both USPS and its customers and USPS will continue to respond to changing regulatory requirements determined by the Postal Regulatory Commission. The letter indicates that the Intelligent Mail Vision Statement, July 2009 Version 2, will serve as the guiding document and will be updated on an annual basis. However, this Vision Statement is a strategy document and does not serve as an overall program plan for the entire Full Service program. Officials also stated that the Postal Service will effect a plan to evaluate and if possible, retire legacy barcodes aligned with Full Service releases. This plan is intended to include evaluation of customer barcode utilization and a communication strategy to help ensure customers are aware of proposed changes and retirement effective dates.

    Recommendation: To ensure that the United States Postal Service (USPS) adequately manages the acquisition of the Intelligent Mail Full Service program, the Postmaster General should direct the Chief Information Officer and Senior Vice President of Intelligent Mail and Address Quality to develop a comprehensive cost estimate to include both government and contractor costs over the program's full life cycle, from the inception of the program through design, development, deployment, and operation and maintenance to retirement.

    Agency Affected: United States Postal Service

    Status: Open

    Comments: According to program officials, the Full Service Program continues to evolve and expand to meet changing business and mailer requirements. As such, enhancements are grouped together into approved releases and a cost estimate is prepared based on the defined/baselined scope. Therefore, the officials stated that the cost per release changes and the cost of future releases is unknown. At this time, there isn't an expected retirement date for this program.

    Recommendation: The Postmaster General should direct USPS's Chief Information Officer to include in USPS's Technical Solution Life Cycle policy guidance for programs to develop (1) complete program plans that define overall budget and schedule, key deliverables and milestones, assumptions and constraints, description and assignment of roles and responsibilities, staffing and training plans, and an approach for maintaining these plans; (2) specific requirements for programs to establish a robust risk management process that identifies potential problems before they occur, such as requiring programs to develop a risk management plan; and (3) system integration plan that include all systems to be integrated with the system, roles and responsibilities for all relevant participants, the sequence and schedule for every integration step, and how integration problems are to be documented and resolved.

    Agency Affected: United States Postal Service

    Status: Open

    Comments: According to officials, the CIO Technology Management Office (TMO) has recently been established to create program management governance policies and to monitor and report on programs across the CIO organization. The TMO has reviewed and updated the Technical Solution Life Cycle process to add identification of project metrics, scope management plans and risk management plans. However, the documentation provided did not demonstrate that all aspects of the recommendation were addressed.

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