Eight small and five large businesses were awarded Quality Supplier Awards. These suppliers were recognized primarily for partnering with the Postal Service to achieve positive bottom-line and performance results through successful supply chain management efforts.

b. e-Business

The Postal Service's electronic requisitioning and catalog purchasing system, eBuy, provides a Web-based strategic purchasing tool via automation of streamlined SCM workflow processes. More than 60,000 postal requisitioners and approval managers have access to eBuy. They regularly make requests, obtain approvals, budget, and receive advanced shipping notices for online e-catalog supplies electronically. The eBuy system also enables supplier collaboration via e-mail messages and uses online electronic invoicing, invoice certification, and payment processes. During 2004 eBuy processed $394 million worth of e-catalog requisitions. eBuy is also used for requisitioning off-catalog supplies and services in order to capture all requisition information. e-Buy performs invoice certification for paperless invoices from utility companies and telecommunications suppliers. Based on pilot studies in 2004, the scope of invoicing and invoice certification, to include other off-catalog commodities, will be increased next year.

Supply Management aims to become an industry-leading strategic e-sourcing organization. Consistent with best-in-class commercial business practices, the Postal Service has increased its use rate of the desktop reverse auction software tool. As a result of using several full- and self-service e-sourcing tools, the Postal Service conducted nearly 600 reverse auctions in 2004, accounting for over $320 million of total expenses.

c. Purchasing Reform

Supply Management will implement purchasing reform to gain new effectiveness in buying and supplying activities. It will institutionalize supply chain management business practices throughout the Postal Service under a new policies integration initiative that combines buying and supplying practices.

The Postal Service plans to replace current regulations with regulations that are more business-like, streamlined, and focused on obtaining the best value. The new regulations will be easily understood; focus on purchasing quality goods and services at fair prices, and provide an expedited and inexpensive means of resolving business disagreements. This change will help provide the flexibility necessary to be successful in a highly competitive environment.

The proposed regulations were published for review and comment in the March 24, 2004, Federal Register. Twenty companies, organizations, and individuals provided comments. After review, minor adjustments were made to the proposed regulations. Current schedules call for January publication of the new regulations in the Federal Register, and publication of accompanying Interim Internal Guidelines on usps.com.

Purchasing Integration conducted a comprehensive review of all buying and supplying directives, and designed a new, Web-based information architecture for access by employees. New Supply Management Web pages will detail overarching supply principles in a series of eight topical presentations on supplier relations, ethics and social responsibility, and best value and practices. Commodity-specific information will be made available, as will lessons learned and other resources. New policy development and oversight cross-functional processes also will be established.

d. Security- and Environmental-Related Purchases

Since the terrorist attacks and subsequent anthrax contamination in 2001, the Postal Service has acted decisively to protect and to provide security to its employees, customers, and postal facilities. A Biohazard Detection System (BDS) and ventilation and filtration systems (VFS) were developed as integral elements of this effort. After the initial contracts were awarded for that equipment, Supply Management has been dedicated to ensuring supplier performance, streamlining processes, and reducing costs for the required logistics network which supports these critical systems.

e. Major Purchases

Supply Management's facilities portfolio awarded a contract for $27.8 million for the renovation of Church Street Station in lower Manhattan, NY. This contract was awarded after the facility cleanup project was completed. The cleanup was required due to the significant damage sustained in the attacks of September 11, 2001 and the facility's close proximity to the World Trade Center. The station was returned to full operation in August 2004.

A contract for $28.9 million was awarded for cleaning and renovation of the Curseen-Morris Processing and Distribution Center, in Washington, DC, the final step in restoration of this facility after its contamination by anthrax in October 2001. This renovation project was started after a sterilization project was completed which eliminated anthrax at the site. The facility has returned to full operation.