U.S. Postal Service:

Deficiencies Continue While Antelope Valley Project Status Remains Uncertain

GGD-99-147: Published: Aug 31, 1999. Publicly Released: Aug 31, 1999.

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Pursuant to a congressional request, GAO reviewed the project approval process the Postal Service used in proposing to relocate postal operations for the Antelope Valley, California, area from the Main Post Office in Mojave, California, to a new facility in Lancaster, California.

GAO noted that: (1) the Service followed most of its key requirements for acquiring a site in Lancaster in 1991 prior to obtaining approval for the proposed Antelope Valley project, although some requirements were vague; (2) one major exception was that review and approval of the proposed project justification and alternatives by the Headquarters Capital Investment Committee did not take place prior to the advance site acquisition in Lancaster, as required by Service policies; (3) Service guidance was unclear because it required that alternatives be identified and analyzed before a project could qualify for advance site acquisition, but it did not clearly state the type or depth of analysis required; (4) at the time of the Lancaster site acquisition, the analysis to support the decision was incomplete; (5) more detailed analyses were still under development; (6) GAO could not determine from available documentation why the alternative to construct a new facility in Lancaster was preferred over other alternatives that had been proposed or why various alternatives were not considered viable; (7) the Lancaster site purchased for $6.5 million in 1991 has remained unused since that time due to the Service's failure to decide how and when it will resolve the long-standing problems that the proposed Antelope Valley project was to address; (8) continuing negative effects have resulted from the incomplete status of the project for almost 10 years; (9) project approval and funding of the project remain uncertain due to delays resulting from two suspensions, limits on capital spending, and changes in project classification; (10) it is unclear how the Service intends to address the space deficiencies that have contributed to operational processing and delivery deficiencies in the Antelope Valley area; (11) because of continued space deficiencies, automated equipment was sitting unused in warehouses, some mail delivery was being delayed, and the projected operating efficiencies and savings have not been realized; (12) the Service has invested $6.5 million in land that has been unused for nearly 8 years; such an investment has a substantial annual interest cost estimated at over $300,000; (13) it has also incurred additional costs to update documents required for project approval and may incur more costs if some of these documents again have to be updated when the project is reviewed for approval; and (14) the Lancaster and Mojave communities have faced uncertainty over business development opportunities as a result of the project delays.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In February 2001, USPS froze capital spending for new facilities for the remainder of fiscal year 2001. USPS extended the freeze through fiscal year 2002. In May 2002, the CG testified that the Service should review its infrastructure to maximize the use of facilities and reduce costs. The Service is conducting a review of all its processing facilities to determine where consolidations and closings may be possible.

    Recommendation: To address the long-standing uncertainties related to the proposed Antelope Valley project, the Postmaster General should resolve the internal inconsistencies in the classification of this project, determine whether the site in Lancaster should be retained, and ensure that the project is considered in the appropriate funding and approval process.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: USPS reported that actions had been taken to address some operational deficiencies. For example, changes were made to eliminate the delays in mail deliveries in the Antelope Valley area. Also, improvements were made in retail mail services with the construction of a new facility in Lancaster. Decisions regarding the facilities in that area have not been made because of the Service's continuing freeze on capital projects. In May 2002, the CG testified that the Service should reassess its facility infrastructure to maximize the use of facilities and reduce costs. The Service is currently conducting a system-wide assessment of all its mail processing facilities.

    Recommendation: To address the long-standing uncertainties related to the proposed Antelope Valley project, the Postmaster General should require the Pacific Area office to determine whether immediate action is needed to address the operational deficiencies identified in the Antelope Valley area and report on planned actions and related timeframes for implementation.

    Agency Affected: United States Postal Service

 

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