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The Postal Service maintains sophisticated statistical systems to estimate costs attributable to specific products. Thousands of carrier routes, facilities, and transportation modes are sampled each year. These attributable cost estimates are reviewed by an independent auditor, the Postal Rate Commission, and the Office of the Inspector General. In 1999 the A.T. Kearney review of the cost systems, sponsored by the Postal Service, Postal Rate Commission, and General Accounting Office, concluded that these systems produced complete and accurate subclass cost estimates. The Postal Service is committed to continuous improvement of its cost systems. It will explore ways in which new data systems can contribute to obtaining the most accurate attributable cost estimates as expeditiously as possible and at the lowest cost. Systems with potential include Point of Service, Intelligent Mail, PostalOne!, and Surface Visibility. The Postal Service will continue to study the way in which volume changes cause costs to change. It will also continue to examine institutional costs to ensure that costs caused by providing specific products are attributed to those products by 2008.

Evaluate Opportunities for Outsourcing and Insourcing

The Postal Service recognizes the benefits of concentrating resources in core competencies while considering the outsourcing of activities that can be performed more efficiently and at lower cost by others. Historically, the Postal Service contracted out specific services relating to mail transportation, vehicle maintenance, information technology, custodial services, and investigations of Equal Employment Opportunity (EEO) complaints. Contracting out EEO investigations, which began in 2005, has proven to be cost efficient and an operational success. Over the next 5 years, the Postal Service will draw on its outsourcing experience to explore additional opportunities for outsourcing services.

The Postal Service would insource by contracting to provide services for which it has developed expertise, on a fee basis, to other organizations. For example, the Postal Service may find insourcing opportunities in the increasing centralization of services among federal agencies and in government initiatives that encourage agencies to share support systems such as information technology. Another opportunity is to provide management expertise to foreign postal services.