U.S. Postal Service:

Chicago Main Post Office Cost Overruns and Graceland Station Mail Service

GGD-98-11: Published: Oct 31, 1997. Publicly Released: Oct 31, 1997.

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Pursuant to a congressional request, GAO reviewed: (1) the reasons for the $133 million in cost overruns incurred at the new Chicago Main Post Office; (2) the list of procedures the United States Postal Service (USPS) has established to prevent a recurrence of cost overruns experienced with the new Chicago Main Post Office in similar, future capital investment projects; (3) why the USPS Board of Governors approved some of the budget increases for the new Chicago Main Post Office in closed, rather than open, meetings; (4) the performance indicators for the Graceland postal station in Chicago, as compared to those at a similar station in another city with a higher first-class, overnight delivery (EXFC) score; and (5) the results of a 1997 USPS survey of the physical condition of postal facilities in the ninth congressional district of Illinois.

GAO noted that: (1) the cost overruns that were incurred in the construction of the new Chicago Main Post Office appeared to be due primarily to inadequate planning; (2) USPS has implemented procedures aimed at reducing the likelihood of cost overruns occurring in similar, future capital investment projects, including earlier notification of problems to the Board of Governors and more Inspection Service involvement with review of facilities construction; (3) USPS officials indicated that budget increases for the new Chicago Main Post Office were approved in closed meetings because it would not have been in USPS' best interest to disclose the amounts requested while negotiating change orders with contractors and because the Postal Inspection Service was investigating the project; (4) comparison of performance data between the Graceland station in Chicago and the Brookline station in Boston, Massachusetts, confirmed that differences existed in terms of performance indicator results, and also showed that the data provided were not informative about the causes of problems with mail service at Graceland or in Chicago; (5) analysis of this performance data did not suggest that Brookline's performance would be informative for Graceland; (6) this was compounded by the high number of variables affecting the performance indicators, such as the differences in the types of deliveries made by both stations and uncertainty about whether the total number of complaints was accurately reported; and (7) the 1997 USPS review of postal facilities in the ninth congressional district of Illinois indicated that the facilities were meeting operational needs.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Postmaster General directed the Inspection Service to monitor performance at Graceland Station and has been making periodic progress reports indicating that service improvements are being implemented.

    Recommendation: The Postmaster General should have an entity independent of the Chicago Postal Service management monitor the quality of mail service at the Graceland station by reviewing relevant performance data for the next two years. The independent entity should periodically report progress and any problems identified, along with corrective actions taken, to appropriate Postal Service officials.

    Agency Affected: United States Postal Service

 

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