|
|
|
|
 |
|
(39 U.S.C. 101(g)) |  |
|
 |
|
Within each Portfolio, buyers, market analysts, price analysts, item managers and others work in CMCs, specializing in the purchase and supply of particular commodities. The CMCs are located at Headquarters and in field locations. Separately, four purchasing service centers (PSCs) were established to purchase supplies and services for the day-to-day operational needs of field offices. The Operations group concentrates on inventory control and materials distribution within the organization. Field transactional purchases were the former responsibility of the purchasing and materials service centers (PMSCs). In centralizing commodity purchasing for greater efficiency, contracts formerly handled by the Hoboken and Minneapolis PMSCs were reassigned within the new Supply Management organization. Consequently, those two PMSCs were closed. Staff members at those locations were afforded opportunities to find employment in other offices within Supply Management and the Postal Service at large. Special counseling and job search sessions were conducted by Headquarters and local Human Resources organizations. In partnership with Delivery Confirmation, Supply Management Operations consolidated all delivery-confirmation label production in its Supply Label Print Shop, with a projected savings or cost avoidances to its postal clients of $1.6 million annually. With the Postal Service’s Network Operations customer not having new mailbag requirements for the next two years, Supply Management closed the bag shop within the Mail Equipment Shop. Operational savings of $4 million are anticipated from this action in 2003. Within the new Supply Management organization, a Strategies group was put in place to provide SCM expertise and guidance to the Portfolios and CMC teams in identifying, developing, and implementing SCM-focused strategies. A new Supply Management Infrastructure group is responsible for policies and procedures, training and development, process review, and data integrity. c. Process Simplification During 2002, significant progress was made in simplifying policies and procedures throughout the buying and supplying organizations. Issue 2 of the Postal Service Purchasing Manual, published at the end of January, highlights the establishment of streamlined contract documents, largely based on terms and conditions used in the commercial marketplace. These new procedures have resulted in easier-to-understand solicitations and contracts, greater numbers of responsive proposals, and enhanced contract performance. The Postal Service continues to increase the flexibility of its purchasing policies in furtherance of best business practices and consistent with its Transformation Plan. The Postal Service’s e-purchasing system, eBuy, provides over 30,000 Postal Service employees with electronic requisitioning and approval capability. Employees with Internet access are able to access electronic catalogs and track purchases. During 2002, the system was enhanced to include several new features such as a paperless requisitioning and approval process, and access to Postal Service excess equipment. Over the next few years, 10–12 additional catalogs per year will be added to eBuy. The operational benefits of eBuy directly support the Information Technology and Supply Management strategies in the Transformation Plan. These benefits occur at every stage of the purchase and pay process and substantially lower operating and administrative costs. eBuy was awarded the E-Gov Trailblazer Award as an outstanding E-Government Best Practice application that has streamlined operations and improved government services. d. Anthrax Eradication The Postal Service was uniquely challenged by anthrax bioterrorism during 2002. Supply Management played a central role in the rapid and effective response to the anthrax crisis. To foster the safety and health of employees and customers and to secure the mail, Supply Management worked with the Postal Service’s national medical director and Employee Resource Management to identify and make available all supplies, equipment, and services required to protect against any anthrax contamination within the postal system. These supplies and services included irradiation equipment and services to ensure the safety of mail; biohazard transportation; mass communications to employees and the public on anthrax contamination and Postal Service progress in eradicating it from the mail system; High Efficiency Particulate Air (HEPA) vacuums; protective masks, gloves and bio-creams; flu vaccines; and, testing, decontamination, and cleanup services for affected facilities. Working with the Postal Service’s Engineering and Environmental Management Programs, in less than 60 days, Supply Management awarded contracts valued at over $105 million for these critical supplies and services. Supply Management Operations established standard operating procedures to safely cleanse possibly contaminated repair parts. Upon notification of potential cross-contamination from impacted sites, the processing, repair, and distribution of over 1,500 critical repairable equipment items was immediately halted. Operations at two repair centers, associated distribution centers, and the Mail Equipment Shop were immediately interrupted and facilities, equipment, and over 350 Postal Service and contractor personnel were immediately tested for anthrax exposure. One repair and distribution center tested positive for anthrax and the Postal Service moved swiftly to decontaminate the facility and equipment. During this process, Supply Management worked closely with national Maintenance operations to co-use field parts and ensure that all mail processing equipment remained operational. Supply Management made employee safety a priority while also being involved in uncharted processes for detection and decontamination. Constant communications kept employees, customers, and the public informed of eradication efforts. e. Major Purchases A contract for $28.2 million was awarded for the renovation of an existing 325,000 square foot mail processing building, consolidating mail processing operations from the existing Hackensack and Paterson Processing and Distribution Plants into one facility, the Northern New Jersey Metro Processing and Distribution Center. A contract for $8.5 million was awarded for construction of the new Main Post Office in Fairfax, VA. The new building will contain approximately 34,544 gross square feet and a multilevel parking structure situated on approximately 3.3 acres of land. Construction began in September 2002 and will be completed in January 2004. To improve the effectiveness of automated address identification systems for processing letter mail, the a contract was awarded to Siemens Dematic Postal Automation, L.P., for Phase One of the Postal Automated Redirection System (PARS). A firm fixed-price contract with performance incentive provisions was negotiated. Under the terms of the 30-month contract, Siemens Dematic will manufacture and install 53 systems and associated modifications to remote encoding equipment and the National Customer Support Center, and provide training, spare parts, support, and all required warranties. PARS will be capable of identifying undeliverable-as-addressed (UAA) letter mail at the first handling machine and automatically redirect it to the current, correct destination to improve operational efficiency and service. Siemens will provide a complete and comprehensive automated solution for mail forwarding. PARS Phase One deployment will begin in July 2003 and will end in May 2004. A contract was awarded to Bell and Howell Postal Systems for 1,003 Mail Evaluation, Readability, and Lookup Instrument (MERLIN) systems to verify mailings and validate correct postage. Under the firm-fixed price 23-month contract valued at $113.8 million, Bell and Howell will manufacture and install MERLIN units, providing training, spare parts, support, and all required warranties. A contract was awarded to Lockheed Martin Corporation for 8,839 wide field of view (WFOV) wide area bar code reader (WABCR) replacement camera systems. A fixed price contract was negotiated for $92.9 million. Under this 2-year contract, Lockheed Martin will manufacture and install camera systems, and provide training, spare parts, support, and all required warranties. The existing, aging WABCRs will be replaced at approximately 1,600 postal facilities. The WFOV systems will permit reading the information-based indicia (IBI) and other two-dimensional codes on full-height letter mail. IBI technology will give customers more flexibility in addressing and managing their mailing requirements by taking advantage of two-dimensional bar coding applications technologies. In the Services Portfolio, the Postal Service continued to consolidate its advertising agency contracts for the purchase of creative and strategic services, media planning and buying, direct mail advertising, and retail/in-store point of purchase promotions. By reducing its advertising services contracts to four, the Postal Service expects to reduce costs and implement a more integrated advertising strategy. The Supplies Portfolio awarded contracts for the Advanced Computing Environment (ACE) — a suite of services and hardware that replaces the existing Postal Service distributed computing environment with more central and standardized environment. The Postal Service leveraged strategic sources and awarded contracts for Compaq ADEPT II systems, the Electronic Data Systems (EDS) Help Desk, and Microsoft Licenses. In 2002, contract savings were $10 million for the EDS Help Desk and $5.5 million for the Microsoft license. In the Transportation Portfolio, the Postal Service signed contracts with Workhorse and Freightliner for 3,234 two-ton mixed delivery vehicles. The combined contract value is $130.7 million. The vehicles include features such as backup cameras, monitors, electronic door locks and ignition, and training programs and manuals. Although model year 2003 vehicles will be produced, through negotiations with suppliers, the Postal Service was able to retain 2002 contract pricing, reaping $1.9 million in savings for the Postal Service. Significant savings will also be realized during 2003 under these contracts. Due to post-September 11 national emergency security measures, the Postal Service was forced to find an alternative to tendering Priority Mail service to commercial carriers. The Postal Service negotiated significant expansion agreements with FedEx for the handling and transportation of expedited mail. The Postal Service and FedEx also have a retail agreement which enables FedEx to place its collection boxes at designated Postal Service facilities. The terms of this business alliance provide valuable customer service and allow the Postal Service to grow revenue and maintain and improve service levels at reasonable prices. The commercial air industry and the Postal Service will form new air system contracts (Commair2003) in 2003. In a process developed this year, these contracts will be competitively awarded, replacing the current negotiated set-rate contracting method. The Mail Transport Equipment Service Center (MTESC) program provides an integrated network (distribution, network management, and information services) for the processing and repair of the Postal Service's mail transport equipment (MTE). Five suppliers operate 22 MTESC contract sites. During 2002, the MTESCs processed and repaired more than one billion units resulting in payments of over $220 million to suppliers. The MTESC network provides the Postal Service savings in the form of fewer work hours, reductions in MTE purchases, and efficient MTE inventory management. f. Supply Management Operations The Supply Management Operations organization is responsible for managing thousands of line items required for daily Postal Service operations, providing Supply Management support to the areas through four material service centers (MSCs) and one Material Distribution Center (MDC). The Operations catalog includes over 25,000 stocked items and 5,000 items ordered directly from suppliers. Operations issued $269 million in parts, supplies, printed material, and equipment in 2002 ($155 million from inventory and $114 million delivered direct from 90 suppliers). Supply Management assisted Retail in saving $11 million on inventory costs and on the distribution of merchandise to all Postal Stores and outlets. In addition, Supply Management saved $7 million on the packaging and distribution costs of packaged stamps through better inventory management and planning. Additional savings of $20.5 million were obtained by reducing wholesale inventories from $138.6 million to $118.1 million, a reduction of 15 percent. In the same period over 3,000 new items with a value of $8.4 million were added to support new major programs. Reallocation of equipment in lieu of new purchases resulted in cost avoidance of over $65 million. g. Supplier Diversity The Postal Service’s Supplier Diversity program is a fundamental element of the corporate strategy to remain competitive and profitable in the marketplace. Modeled after private sector programs, Postal Service supply strategies seek to strengthen the organization’s supplier base by identifying strong suppliers and providing them the opportunity to compete for Postal Service contracts. The Postal Service continues to maintain close relationships with national associations and their affiliates that support supplier development and diversity throughout the country. During 2002, the Postal Service sponsored or actively participated in over 80 fairs and events focused on supplier diversity. The Postal Service website, www.usps.com, offers a variety of material providing information on doing business with the Postal Service, as well as on connecting to buyers and key contacts, and also offers current information on contract opportunities. Further, the Postal Service offers several publications and guides to increase access to business development. Publications 5, Let’s Do Business; Publication 5-S, Negociemos; and Publication 5-A-C, Let’s Do Business (Chinese version), help guide diverse businesses and organizations through the procedures of acquiring contract opportunities. The Postal Service periodically benchmarks its achievements in supplier diversity against the public and private sectors and, historically, has measured up well. During 2002, the Postal Service purchased more than $50 million dollars in goods and services under the terms of the Javits-Wagner-O’Day Act, which promotes purchases from firms that principally employ the blind and severely disabled. Additionally, contract commitments with minority businesses reached $272 million dollars; $361 million dollars in contract commitments were also made with woman-owned business; and, there were more than $2.4 billion in contract commitments with small businesses. In an effort to reduce cost and increase competitiveness, the Postal Service, in conjunction with the independent federal agency, The Committee for Purchase from People Who Are Blind or Severely Disabled, established a purchase negotiation process that will help reduce future price increases. The new purchasing process aligns with commodity price indexes. h. Training and Development Supply Management continued to transition from postal-specific training programs for its employees to a much more business-focused, and commercially available, supply management curriculum. Eighteen Institute for Supply Management 2-day seminars were conducted throughout the Postal Service’s purchasing and materials community. More than 400 purchasing and supplying professionals attended at least one of the courses. In terms of professionalism and professional achievement, approximately 69 percent of Supply Management’s purchasing and supplying professionals have an undergraduate degree and more than 60 percent are professionally certified in either the purchasing or materials management disciplines. Supply Management training courses heighten the expertise of our qualified professionals. Under the Office of Government Ethics (OGE) guidelines, the Postal Service must provide designated employees with annual ethics update training. Web-based ethics training was developed and provided to over 360 purchasing and supplying employees, meeting the OGE annual training requirement.
|
|
 A. Fundamental Service to the People B. Service to Small or Rural Communities C. Employee Compensation and Career Advancement D. Postal Cost Apportionment and Postal Ratemaking Developments E. Transportation Policies F. Postal Service Facilities, Equipment, and Employee Working Conditions |