The Fleet Card for purchasing fuel for Postal Service vehicles has been expanded to highway contractor routes (HCRs) adding 7,903 HCRs to the program. Use of the Fleet Card for HCRs generated more than $9 million in savings and rebates for the Postal Service by ensuring that contractors are paid for actual gallons used via the Fleet Card, not maximum gallons contained in each individual contract. The Postal Service awarded new 2-year contracts for $230 million to 11 qualified suppliers for the transportation of mail and equipment on 1,302 one-way, unscheduled, demand-responsive transportation services to and from various postal locations throughout the continental United States.

F. SUPPLIER DIVERSITY

In 2005 the Postal Service had contract commitments that exceeded $3.8 billion with small businesses; $292 million with minority businesses; and $572 million with woman-owned businesses.

Supplier Diversity continues to strengthen the Postal Service's competitiveness in the marketplace. Embedding supplier diversity in the routine practices and procedures that govern the purchasing process focuses the continuous development of suppliers through improving processes and procedures to ensure opportunities for all suppliers that provide value-added products and services to meet postal needs now and well into the future. The Supplier Diversity Corporate Plan (2004-2006) outlines essential elements that have improved overall supply management performance. The nine elements are: management involvement, communication and outreach, sourcing, subcontracting, innovative initiatives, training and development, performance indicators, tracking progress, and recognition.

Supplier Diversity launched several initiatives to emphasize supplier diversity as a core component of Postal Service operations. They include on-site and online training, establishment of a comprehensive supplier diversity sourcing matrix, and joint memberships with prominent multicultural business and trade groups such as National Minority Supplier Development Council, Women's Business Enterprise National Council, Hispanic Chamber of Commerce, U.S. Pan Asian American Chamber of Commerce, and the National Congress of American Indians. The results of these efforts have continued to promote the Postal Service as a leader in the marketplace.

The Postal Service's diversity efforts have been recognized by leading publications and organizations, including Forbes magazine, DiversityPlus magazine, and DiversityBusiness.com, which named the Postal Service as the "top organization for multicultural business opportunities in 2005."

4. Mail Security Equipment

A. VENTILATION AND FILTRATION EQUIPMENT

The Ventilation and Filtration System (VFS) program began in 2002 to counter the threat of biohazardous material in the mailstream. Its objective is to reduce the risk of biohazards and to prevent cross contamination of mail. The two systems supplied by different manufacturers are essentially large vacuums that incorporate high efficiency particulate air (HEPA) filter technology to capture and contain aerosolized particles expelled from the mail. Ventilation intakes pull airborne material into a filtering system that captures dust, potential contaminants, and particles of bacterial size and smaller. The VFS program fulfills the containment strategy of our Emergency Preparedness Plan. Deployment of all VFS equipment is expected to be completed during 2006.

B. BIOHAZARD DETECTION SYSTEM

The Biohazard Detection System (BDS) is a special set of equipment that acts as an early warning system for the detection of biohazards within the Postal Service's processing plants. It is designed to detect trace amounts of biological agents in the mailstream. The BDS system will automatically notify key individuals in the case of an alert. The purpose of the BDS is to reduce the risk to postal personnel and the general public from the threat of biohazardous materials sent through the mail. The BDS program fulfills the detection strategy of our Emergency Preparedness Plan. Deployment is scheduled to be completed in the first quarter of 2006.