Postage Stamp Production:

The Bureau of Engraving and Printing's Future Role

GGD-90-25: Published: Dec 12, 1989. Publicly Released: Dec 12, 1989.

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Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's (USPS) initiative to contract out more postage stamp production to the private sector, and how the initiative might affect the Bureau of Engraving and Printing's (BEP) role as primary stamp producer.

GAO found that: (1) the initiative currently constitutes a contract study to determine stamp production options; (2) increased private sector involvement may not reduce the Bureau's stamp production, since USPS officials projected that stamp demand would eventually surpass the Bureau's production capacity; (3) USPS began the initiative largely because relations with the Bureau had deteriorated as a result of disagreements on issues such as philatelic stamp quality, stamp adhesives, and other technical problems; (4) Bureau officials cited communication problems with USPS concerning production standards, but USPS attributed communication problems to the Bureau's nonresponsiveness; (5) USPS stated that the Bureau was not participating in the contract study, however, the Department of the Treasury cited concerns regarding information disclosure to private competitors as the reason for the Bureau's limited participation; and (6) the Bureau's future role as the main USPS stamp production source will rely on further relationship improvements, the USPS study's results, and the Bureau's ability to maintain agency and congressional support by meeting stamp requirements at reasonable prices.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Both USPS and BEP submitted reports to the Committee which detailed the progress made in implementing the GAO recommendations in a new interagency agreement.

    Matter: Given the uncertainty of the relationship between the Treasury/Bureau and USPS, the House Committee on Post Office and Civil Service should direct the Secretary of the Treasury and the Postmaster General to issue a joint report to the Chairman, within 180 days of the date of this report, on progress made regarding the GAO recommendations.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: BEP/Treasury would not ever participate in this study, which would help USPS privatize stamp production. Treasury made this point clear prior to the beginning of the study.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly review and resolve any disagreement about the extent to which the Bureau will participate in the Deloitte Haskins and Sells study.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Not Implemented

    Comments: The study is complete. The Bureau refused to participate in the study or provide certain information to Deloitte. USPS stated, for that reason, that the study's results were lessened considerably from what was originally intended.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly review and resolve any disagreement about the extent to which the Bureau will participate in the Deloitte Haskins and Sells study.

    Agency Affected: United States Postal Service

  3. Status: Closed - Implemented

    Comments: A new interagency agreement specifically states that joint evaluation should take place.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly ensure that any results of the Deloitte Haskins and Sells study are jointly evaluated by proper Treasury/Bureau and USPS officials so that the concerns and interests of all parties are adequately considered before plans for future stamp production are completed.

    Agency Affected: Department of the Treasury

  4. Status: Closed - Implemented

    Comments: The new interagency agreement specifically states that joint evaluation should take place.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly ensure that any results of the Deloitte Haskins and Sells study are jointly evaluated by proper Treasury/Bureau and USPS officials so that the concerns and interests of all parties are adequately considered before plans for future stamp production are completed.

    Agency Affected: United States Postal Service

  5. Status: Closed - Implemented

    Comments: A new, more specific agreement was signed on June 11, 1990. BEP is satisfied that the agreement should forestall the occurrence of past problems and stabilize the relationship.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly determine whether a more specific agreement detailing production standards and requirements would benefit the relationship between the Bureau and USPS, and whether such an agreement would help forestall problems such as those that occurred in the past that may have been exacerbated by the unspecific nature of the existing interagency agreement.

    Agency Affected: Department of the Treasury

  6. Status: Closed - Implemented

    Comments: The new agreement was signed on June 11, 1990. USPS is satisfied that the agreement should forestall the occurrence of past problems and stabilize the relationship.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly determine whether a more specific agreement detailing production standards and requirements would benefit the relationship between the Bureau and USPS, and whether such an agreement would help forestall problems such as those that occurred in the past that may have been exacerbated by the unspecific nature of the existing interagency agreement.

    Agency Affected: United States Postal Service

  7. Status: Closed - Implemented

    Comments: The agreement signed June 11, 1990 fully describes philatelic and mailstream quality. BEP is satisfied that the agreement will facilitate communication between USPS and BEP.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly ascertain whether information about philatelic stamp requirements and problems, as well as mailstream stamp requirements and problems, is being adequately communicated between USPS and the Bureau, thereby precluding recurrence of problems in those troublesome areas.

    Agency Affected: Department of the Treasury

  8. Status: Closed - Implemented

    Comments: The agreement signed June 11, 1990 fully describes philatelic and mailstream quality. USPS is satisfied that the agreement will go a long way toward ensuring clear communication between USPS and BEP.

    Recommendation: The Secretary of the Treasury and the Postmaster General should jointly ascertain whether information about philatelic stamp requirements and problems, as well as mailstream stamp requirements and problems, is being adequately communicated between USPS and the Bureau, thereby precluding recurrence of problems in those troublesome areas.

    Agency Affected: United States Postal Service

 

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