Postal Service:

Sites for New Post Offices May Be Larger Than Needed

GGD-89-130: Published: Sep 29, 1989. Publicly Released: Oct 17, 1989.

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Pursuant to a congressional request, GAO reviewed 246 sample sites that the U.S. Postal Service (USPS) acquired during 1987 under its real estate acquisition program to determine the extent to which USPS: (1) had a choice among competing sites when acquiring land; (2) purchased only the land it needed to meet operational and customer service requirements; and (3) purchased the most economical alternative among competing sites.

GAO found that USPS: (1) projected community service needs over a 10-year period, and then routinely added a standard 50-percent growth factor, to determine its site needs; (2) routinely added to 20-year land requirements to allow for possible site restrictions without knowing whether it could meet those requirements without the additional allowance; (3) did not require its site selection committees to document reasons for selecting more costly sites; (4) frequently purchased sites that were larger than it needed, when less costly sites were available; (5) cited valid operational factors, in those site selection files which included documentation, to justify the purchase of larger or more costly sites; (6) frequently only had one contending site, due to its policy of advertising for sites larger than its actual requirements; (7) generally followed site appraisal procedures before purchasing sites and attempted to negotiate lower prices when the offer price exceeded the appraised market value; and (8) generally accepted without negotiation sites offered at prices equal to or lower than the appraised market value.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Action called for by GAO was taken.

    Recommendation: The Postmaster General should instruct the operating divisions to use judgment based on local community conditions, rather than a standard 50-percent growth factor, in developing 20-year site size requirements.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: Action called for by GAO was taken.

    Recommendation: The Postmaster General should issue guidelines standardizing the advertising practices of the five postal regions for soliciting sites for facility projects so that managers do not advertise for more land than needed. Advertisements should identify 20-year site requirements and say that site offers should be large enough to meet the site requirements plus whatever additional land is needed to accommodate any site use restrictions. If a range of sizes is used, that range should be centered on the net usable 20-year site requirements.

    Agency Affected: United States Postal Service

  3. Status: Closed - Implemented

    Comments: Action called for by GAO was taken.

    Recommendation: The Postmaster General should require site selection committees to fully document the reasons for purchasing sites larger than net usable requirements or more costly than other contending sites.

    Agency Affected: United States Postal Service

  4. Status: Closed - Implemented

    Comments: USPS needs to negotiate all offered prices in training courses and managers' meetings. The formal directive called for by GAO will not be issued.

    Recommendation: The Postmaster General should direct the facilities department to clarify USPS policy by specifying that the negotiation process on freely offered property is not limited by the appraised value or a lower offered price, and that negotiations may start below either. Further, the department should instruct managers to ensure that acquisition files contain complete documentation of the negotiation process in all projects.

    Agency Affected: United States Postal Service

 

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