"Postal Service"

Is mail dead?  Let’s ask Google, the ubiquitous source of all things online. This should be a lay-up on the home court of those who would say yes. And guess what. The top ten results for a Google search of “Is mail dead?” produces seven articles on why e-mail is dead, two unrelated articles, and one article on why direct mail is not dead. Dig down for another ten results and you get about the same result – more articles on why email is dead and a few on why direct mail or “snail mail” isn’t dead.

At the National Postal Forum last month, a postal official responsible for large customer accounts noted that a while back, Circuit City was his 26th largest customer. Circuit City is now defunct. But if we asked people 15 years ago to predict whether USPS or Circuit City would still be around today, I don’t think many people would have picked the Postal Service.

Don’t get me wrong – mail has definitely changed. There’s much less First-Class Mail than before, and less total volume than before. But here’s what I learned about why mail is not dead and not going away any time soon.  No company is forced to use the mailbox as an advertising medium and there are strong competitors for most package services. But Standard Mail volume for the first quarter of Fiscal Year 2014 is the same as last year, and Shipping Services & Packages volume increased by 14 percent.

Federal Express Corporation was the U.S. Postal Service’s largest contractor in fiscal year 2013. The next largest USPS supplier was EnergyUnited, which provides consolidated telecommunication and energy billing services. Military air mail transportation provider Kalitta Air was third. Six of the Postal Service’s top 10 suppliers served the agency’s transportation needs. The Top 150 USPS supplier list is compiled annually by David P. Hendel, a partner in Husch Blackwell LLP’s Government Contracts practice group who focuses on Postal Service contracting matters.

When selecting a photo to use on its popular “Liberty” stamps, the Postal Service unknowingly used a replica of the 128-year old Statue of Liberty. Instead of the original version welcoming the tired, the poor, and the huddled masses in New York harbor,  USPS selected the “fresh-faced,” “sultry” and “sexier” 17-year old version summoning merry-makers to the New York-New York Hotel & Casino in Las Vegas, NV. Robert Davidson, sculptor of the Sin City version of Lady Liberty, has thus filed a copyright infringement action in federal court, seeking unspecified damages.

De-regulation of the U.S. Postal Service’s purchasing policies has stymied the prosecution of defective pricing fraud cases, according to a September 18, 2013 report issued by the USPS Office of Inspector General (OIG).  U.S. Attorney’s offices have thus declined to criminally prosecute suppliers for submitting defective cost or pricing data in procurement actions valued at $36 million. The OIG therefore recommends that the Postal Service require suppliers to certify that cost or pricing data are accurate, complete, and current. USPS management, however, disagrees. The Postal Service believes its interests are already fully protected and the disadvantages of imposing a new certification requirement would outweigh any benefits.

FedEx was the U.S. Postal Service’s largest contractor in fiscal year 2012 in a list of the agency’s Top 150 suppliers compiled and released today by Husch Blackwell’s Postal Service Contracting practice group. This marks a decade of Federal Express Corporation holding the No. 1 spot on the list. The next largest USPS supplier is military mail shipper Kalitta Air. Six of the Postal Service’s top ten suppliers served the agency’s transportation needs. The list is compiled annually by David P. Hendel, a partner in the firm whose government contracts practice focuses on Postal Service contracting matters.

While dozing over some catalogs that had arrived in the mail, I was visited by three Postal Service ghosts:  the Ghosts of Postal Past, Postal Present, and Postal Future.

The Ghost of Postal Past

The Ghost of Postal Past was a merry ole soul, though not even that old. He presented himself to me as he was in Fiscal Year 2006 – just six years ago. Back then, he was quite large. He had 673 processing facilities, 36,721 retail and delivery facilities, and a total volume of 213 billion pieces of mail. He had revenues of nearly $73 billion – almost $3 billion more than the year before. This had been his fourth consecutive year of positive net income, and the seventh consecutive year of increasing total factor productivity.

Contractors are entitled to recover consultant and attorney costs reasonably incurred in preparing, pricing, and negotiating a change order under federal government contracts, including U.S. Postal Service contracts. That’s the holding in Tip Top Constr., Inc. v. Donahoe, 695 F.3d 1276 (Fed. Cir. 2012). The court overturned a Postal Service Board of Contract Appeals decision that had erroneously limited the contractor’s recovery of these costs. End result: if an agency changes your contract (whether by unilateral direction or constructive change), your request for an equitable price adjustment may include reasonable consultant and attorney costs.

The Postal Service spent $2.8 billion on 16,993 Highway Contract Route (HCR) contracts in 2011, according to a newly released audit report by the U.S. Postal Service Office of Inspector General (OIG).  The OIG conducted the audit to assess the integrity of data in the Transportation Contract Support System (TCSS). OIG found the TCSS data is accurate. In a spot-check of 196 sampled contracts, OIG did not find a single data error. But there was one area of disagreement with management. OIG contended that 94% of the sampled contracts did not have proper funding approval documentation prior to contract award. Postal management disagreed with this conclusion, saying that advance funding approval was obtained through other methods.