USPS needs better management procedures for Parcel Select contracts, says GAO
A new report from the US Government Accountability Office (GAO) has found that US Postal Service needs to improve its management procedures for Parcel Select contracts. The GAO report, which was published on 23 April and made publicly available yesterday (26 May), claimed that the USPS’s standard procedures, established in June 2014, “lack documentation requirements and clearly defined management responsibilities for some activities”.
The GAO report gave, as an example, the finding that “the procedures do not require USPS to document some key management decisions, such as USPS’s decision to forego additional revenue when a mailer did not ship a minimum volume of packages, as contractually required”.
Furthermore, according to GAO, USPS’s costing method for Parcel Select negotiated service agreements (NSAs) does not account for package size or weight or use contract-specific cost estimates.
According to GAO: “Each Parcel Select NSA is required to earn sufficient revenues to cover USPS’s costs – referred to as “attributable costs” in the postal context. The Postal Regulatory Commission (PRC), which annually reviews compliance, determined that each contract met this requirement. However, USPS’s analysis of attributable costs for Parcel Select NSAs is limited, because USPS has not studied the impact of package size or weight on specific contracts or developed contract-specific cost estimates.”
GAO has recommended that USPS update its standard procedures to address the “gaps in documentation requirements and contract management responsibilities”. Furthermore, it argued that USPS should “identify cost-effective methods to collect and study information on delivery costs for Parcel Select packages of varying characteristics to develop contract-specific attributable cost estimates”.
Concluding its report, GAO noted that “USPS agreed with these recommendations, but stated that the cost impact of package size and weight is likely small given where these packages enter the mail stream”.
Click here to view the report, hosted on the GAO website.
