Conversion to Automated Mail Processing Should Continue:

Nine-Digit Zip Code Should Be Adopted

GGD-83-24: Published: Jan 6, 1983. Publicly Released: Jan 6, 1983.

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In response to a congressional request, GAO assessed the automatic mail processing equipment which the U.S. Postal Service (USPS) is buying and the nine-digit ZIP Code system (ZIP Plus-4) which USPS plans to implement. GAO reviewed the accuracy of USPS financial projections, the likelihood that the new equipment will perform as intended, and the potential impact of ZIP Plus-4 mailers.

Because the cost-effectiveness of ZIP Plus-4 would hinge heavily on voluntary participation by business mailers and such participation is not certain, GAO could not without qualification advise USPS to move forward with ZIP Plus-4. However, GAO believes that the incremental gain in moving to ZIP Plus-4 will be so great that the move would be more than justified. Householders' use of ZIP Plus-4 would help reduce mail processing costs but would not be critical to the cost-effectiveness of ZIP Plus-4. However, GAO endorsed the acquisition of the new equipment and its use to automate the processing of five-digit ZIP Code mail, provided that it will perform adequately. Even if the equipment performs adequately, there will still be risks associated with its use. Performance assumptions which USPS used in its economic analysis to justify the automation program were based on assumed future improvements. Furthermore, testing and evaluation procedures used during the analysis were not adequate to measure the performance of the equipment or determine the need for design changes, and USPS may have initial problems maintaining its new equipment. However, given the USPS labor intensive operations and the opportunity that automation offers to reduce labor costs, GAO considered these risks acceptable.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: USPS took the position that it would be impractical for postal acceptance units to take the time to closely screen mail to verify elgibility for the ZIP Plus-4 discount.

    Recommendation: USPS should develop clear and precise procedures and techniques to apply OCR readability guidelines to determine that mail is eligible for a reduced postage rate.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should obtain data on mailer reactions to its requests that they voluntarily improve the OCR readability of their mail, and determine whether additional management actions are needed to encourage cooperation.

    Agency Affected: United States Postal Service

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should conduct an 8-week test on the first unit or units built by each contractor.

    Agency Affected: United States Postal Service

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should thoroughly evaluate the criteria to be used for retesting the machines which fail the initial acceptance tests.

    Agency Affected: United States Postal Service

  5. Status: Closed - Implemented

    Comments: USPS agreed with this recommendation. It conducted the recommended first article test on a new production model OCR machine in November and December 1985.

    Recommendation: USPS should, for future OCR and other equipment procurements, conduct a comprehensive first article test of a representative machine, where the production machine is significantly different from: (1) machines currently in use; or (2) machines which were tested in a release-loan program. These first article tests should be conducted under expected environmental conditions and cover all operating parameters, to include processing of nine-digit mail.

    Agency Affected: United States Postal Service

  6. Status: Closed - Not Implemented

    Comments: USPS agreed with this recommendation. However, it is no longer applicable because no changes were proposed after the initial first article test.

    Recommendation: USPS should, for future OCR and other equipment procurements, perform a thorough engineering analysis of any changes proposed to the design of the machine after the initial first article test and retest a first article if these changes are deemed significant.

    Agency Affected: United States Postal Service

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should, if ZIP Plus-4 is implemented, provide local delivery unit employees the necessary indoctrination to understand the Zip Plus-4 program and the training to assist in keeping the National Zip Plus-4 Directory updated.

    Agency Affected: United States Postal Service

  8. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should, if ZIP Plus-4 is implemented, broaden the eligibility criteria for the manual-list conversion service in order to aid more mailers.

    Agency Affected: United States Postal Service

  9. Status: Closed - Not Implemented

    Comments: USPS has changed its position. It will now honor all requests from businesses for ZIP-Plus-4 codes regardless of the number of requests. Therefore, the recommended action is no longer necessary.

    Recommendation: USPS should, if the ZIP Plus-4 program is implemented, provide uniform guidelines for local postmasters to follow in honoring customers' requests for ZIP Plus-4 codes in order to provide consistent treatment of customers' requests.

    Agency Affected: United States Postal Service

  10. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should, if ZIP Plus-4 is implemented, modify its information system to track delivery times of five-digit ZIP Code mail when the switch to full manual sorting of such mail occurs, and make the resulting information a matter of postal management review to ensure that delivery times for five-digit ZIP Code mail do not fall below current levels.

    Agency Affected: United States Postal Service

  11. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should implement a test program to develop adequate data for improving optical character reader (OCR) readability guidelines.

    Agency Affected: United States Postal Service

  12. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: USPS should, if ZIP Plus-4 is implemented, provide businesses and householders, if they are to be included, with more and clearer information about the ZIP Plus-4 program such as its benefits, prerequisites for participation, expected impact on delivery times, and effects on other programs.

    Agency Affected: United States Postal Service

 

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