Opportunities To Improve the Postal Ratemaking Process

GGD-84-10: Published: Apr 23, 1984. Publicly Released: Jun 4, 1984.

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In response to a congressional request, GAO reviewed the postal ratemaking and classification processes to determine whether opportunities exist to improve them.

GAO found that, although the current ratemaking process can be lengthy, it works reasonably well. Further, GAO found that current Postal Rate Commission (PRC) procedures are appropriate for resolving mail classification cases. The ratemaking process provides interested parties with an opportunity to participate in the proceedings, develops an evidentiary record upon which rate decisions are based, and normally produces PRC recommendations to the Board of Governors for new postal rates within a reasonable time period. However, if the Board disagrees with a PRC-recommended decision, the reconsideration process may become excessively lengthy since there is no time limit set by law. Although the U.S. Postal Service (USPS), its Board of Governors, and PRC agree that time taken for reconsiderations can be a problem, they disagree on the remedies, with PRC favoring a flexible time limit. Other problem areas involve cost procedural issues, Board use of technical assistance, USPS and PRC reporting requirements, and the consumer advocate's role.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: This recommendation does not call for immediate action.

    Matter: If future reconsiderations raise problems, Congress should consider: (1) amending the Postal Reorganization Act to reduce the extent of the reconsideration process by limiting the time for reconsideration; and (2) limiting the number of reconsiderations prior to the Governors' either approving, allowing under protest with judicial review, or modifying the recommended action.

  2. Status: Closed - Not Implemented

    Comments: No congressional committees have expressed an interest in acting on this recommendation.

    Matter: To strengthen the enforcement authority of PRC to obtain necessary information with minimal delay in its proceedings, Congress should consider amending the Postal Reorganization Act, title 39, U.S. Code, by adding a new section to specifically provide subpoena authority.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The problem identified by GAO has not reoccurred and turnover of Board members makes this recommendation moot.

    Recommendation: In order to clarify the roles of the Governors, USPS, and PRC in the ratemaking process, the Board should amend its bylaws to: (1) define the nature and scope of the Board and USPS participation in considering postal rate proposals; and (2) establish the policies and procedures the Governors will follow when considering modifications to the PRC-recommended decision.

    Agency Affected: United States Postal Service: Board of Governors

  2. Status: Closed - Not Implemented

    Comments: USPS agreed with this recommendation; however, action was not taken. Actions being taken by PRC could make this recommendation no longer applicable. PRC is studying costing methods to be used in determining attribution for various costs.

    Recommendation: In order to streamline and clarify the provision and use of cost data in the rate-consideration process, the Postmaster General should direct USPS to seek informal PRC comments on proposed changes in cost procedures and special cost studies as they are being completed. If this process proves constructive, the Postmaster General should direct USPS to request periodic rulemaking proceedings from PRC to formalize the agreed upon procedures.

    Agency Affected: United States Postal Service

  3. Status: Closed - Not Implemented

    Comments: This recommendation does not call for immediate action.

    Recommendation: The Chairman, PRC, should seek specific legislative authority to compel the production of data in a form consistent with costing procedures which PRC considers acceptable, if the GAO recommendation to the Postmaster General does not result in agreement between USPS and PRC.

    Agency Affected: Postal Regulatory Commission

  4. Status: Closed - Implemented

    Comments: PRC agreed with this recommendation and reached an agreement with USPS on periodic reporting.

    Recommendation: Given the USPS current position, in order to resolve the current disagreements between PRC and USPS over periodic reporting needs and reporting milestones, the Chairman, PRC, should initiate a rulemaking proceeding to reconsider periodic reporting requirements. If the new periodic reporting requirements are not complied with, the Chairman, PRC, should seek specific legislative authority to enforce realistic periodic reporting requirements.

    Agency Affected: Postal Regulatory Commission

  5. Status: Closed - Not Implemented

    Comments: PRC took no official position on this recommendation and is not expected to act without encouragement from Congress.

    Recommendation: To improve the performance of the Officer of the Commission, the Chairman, PRC, should better define the role of the Officer of the Commission, giving emphasis to validating and critiquing USPS and other participants' rate proposals and, in addition, emphasis should be given to assisting PRC in developing a complete, accurate, and unbiased record. The Officer of the Commission should identify needed additional data, identify inaccuracies and fallacies in submitted data, and present supporting relevant and material evidence which critiques the record evidence. The generation of alternative proposals should be clearly identified as receiving less emphasis than critiquing other participants' and the USPS rate proposal.

    Agency Affected: Postal Regulatory Commission

  6. Status: Closed - Not Implemented

    Comments: This recommendation does not call for immediate action. There is no staff available to determine if the Officer of the Commission still suffers from the lack of resources.

    Recommendation: Once the role of the Officer of the Commission has been better defined, the Chairman, PRC, should initiate a reexamination of the PRC reduction in the Officer of the Commission's professional staff resources to ensure that the cutback does not restrict the Office of Consumer Advocate's ability to successfully perform its responsibilities.

    Agency Affected: Postal Regulatory Commission

 

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