National Association of Postal Supervisors
Legislative and Regulatory Update – July 22, 2008

In This Issue:

* USPS Announces Early Out Details for Some Supervisor Positions
* House Hearing Will Examine USPS Network Realignment Plans
* PRC Universal Service Study Could Moot Congressional Inquiry on 5-Day Delivery

USPS Announces Early Out Details for Some Supervisor Positions

The Postal Service has released details of the voluntary early retirement (VER) offer for USPS employees in supervisor of distribution operations and supervisor of customer services positions, as well as clerk and mail handler positions. The USPS voluntary offer, recently approved by the Office of Personnel Management, will extend to approximately 20,000 employees — including approximately 5,300 EAS employees — who are at least 50 years of age with 20 years of creditable federal service or any age with 25 years of creditable federal service. Eligible employees will have from August 25 to September 30 to accept the VER offer and submit their retirement application. The effective date of retirement will be January 3, 2009.

According to USPS, it will mail an annuity estimate to all VER-eligible employees on August 18, followed on August 22 by a VER offer packet containing application materials and further information on the VER offer. The September 30 due date on the employee’s filing of the VER acceptance paperwork is also the date on which an employee’s voluntary choice to retire will become irrevocable. USPS says that by mid-November, the Human Resources Shared Services Center will notify employees as to the status of their VER application.

House Hearing Will Examine USPS Network Realignment Plans

A House panel will hold a hearing on Thursday, July 24, on Postal Service plans to realign its processing and transportation postal networks. The hearing of the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia, titled “The Three R’s of the Postal Network Plan: Realignment, Right-Sizing, and Responsiveness” will look at the impact of USPS realignment plans upon the public, the postal workforce, the mailing industry and the economic health of the Postal Service. Witness testimony is expected to include an assessment from the Government Accountability Office, which has been critical of USPS network planning efforts in the past. NAPS officials will monitor Thursday’s hearing, and may file comments with the Subcommittee on the network realignment issue if warranted.

Over the past two months, USPS has issued two important documents on network realignment: a network realignment strategy report, required under the postal reform law; and a draft RFP for a Time-Definite Surface Network, proposing to realign the Bulk Mail Centers and outsource to a private contractor the responsibility for sorting and end-to-end movement of origin-entered Standard Mail and Periodicals, as well as destination-entered Package Mail. The Postal Service has indicated that its current processing and distribution facilities were built when all mail entered the network at origin. Today approximately three-quarters of all mail is entered at destination, generating excess capacity.

The USPS network strategy document, which revealed few new details, reaffirmed continuing USPS intent to reorganize its processing and transportation networks, potentially leading to the elimination of significant numbers of jobs, starting at airport mail centers and continuing to mail processing plants and bulk mail centers. USPS did not identify in the report which facilities it is considering for further consolidation, indicating only the intent to continue to assess the feasibility of further restructuring through the use of “recently enhanced” AMP guidelines.

The draft RFP for the Time-Definite Surface Network, issued on July 1, anticipates USPS award of the BMC-related work through a contract to a single private sector contractor, with the contractor barred from subcontracting any portion of the distribution work. The contract would cover eight years, with the possibility for extensions for another six years. Activation of the network would occur within 18 months after the contract was awarded. Comments on the draft RFP by interested parties are due to USPS by August 1,

PRC Universal Service Study Could Moot Congressional Inquiry on 5-Day Delivery

Even if Congress commissions a study on the cost-effectiveness of 5-day mail delivery, as approved recently by the House Appropriations Committee, that inquiry will be preceded by another, potentially more conclusive study already underway by the Postal Regulatory Commission, as part of its report on the universal service obligation and the postal monopoly. The PRC report is required to be completed and sent to Congress by mid-December. Congress is not likely to approve a 5-day delivery study, at the earliest, until February, 2009, when the final version of the funding bill, in which the 5-day delivery study is tentatively lodged, comes up for approval, according to the timetable announced by Congressional leaders. And it is possible that the 5-day delivery study could be dropped from the final version, especially if the Senate opposes its inclusion.

Ann Fisher, Acting Director of Public Affairs and Government Relations, confirmed to NAPS that the PRC’s report on the universal service obligation would address the five-day versus six-day delivery issue. “The extent to which the PRC efforts would overlap any [Congressionally-ordered] study that might be conducted in response to the Kingston amendment would depend on the design of that study, ” Fisher said in an email.

The House version of the FY 2009 Financial Services and General Government appropriations measure, as approved by the House Appropriations Committee on June 25, includes an amendment, proposed by Rep. Jack Kingston (R-SC) requesting “a report on the cost effectiveness and fuel consumption of a five-day delivery system and the efficiency and consumer demand of Saturday delivery services of the United States Postal Service.” Kingston said his amendment was prompted by concern over the fuel use and cost-effectiveness associated with six-day delivery, According to Kingston, an estimated $85 million in annual fuel savings would be accomplished by five-day delivery. Kingston did not estimate how much USPS would actually save in total terms by a move to five-day delivery.

NAPS President Ted Keating, during his July 10 testimony before the Postal Regulatory Commission at its fourth and final public hearing on the USO study, strongly urged the continuance of six-day delivery. “While declining First Class mail volume and rising fuel costs will require the Postal Service to continue to consider and undertake measures necessary to assure the core viability of secure, efficient and affordable mail service, we believe six-day delivery service should continue,” Keating testified. All union and management association leaders joined Keating in urging the Commission to support the continuation of universal service as we understand it today — affordable and dependable service to every American, six-day-aweek delivery, the mailbox monopoly, and equal, affordable access to services.

Keating reminded the PRC commissioners, “You have more than 200 years experience on this panel, and I think it’s relevant that postal management and labor are delivering the same message.”

Editor’s Note: Interestingly, the debate on Capitol Hill surrounding the future of Fannie Mae and Freddie Mac, the private companies that bolster the nation’s housing market, mirrors in some respects the public policy tension underlying universal service and study by the PRC. In the Fannie/Freddie debate, Congress is wrestling with whether to commit billions of dollars to financially prop up two private corporations whose mission fulfills a necessary and public purpose in the country’s mortgage market. While the USPS is not a private corporation, the same private operating/public mission expectations apply to the Postal Service. Though the U.S. Postal Service is a government corporation, not a private company, it is expected to fulfill a very public mission. Yet it is also expected to turn a profit, walk and talk like a private business. Question: Were the USPS to fail, how many billions of dollars would the Congress be ready to commit to assure its solvency?

Bruce Moyer
Legislative Counsel, National Association of Postal Supervisors

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