oversight

U.S. Postal Service: Chicago Main Post Office Cost Overruns and Graceland Station Mail Service

Published by the Government Accountability Office on 1997-10-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States General Accounting Office

GAO             Report to the Honorable
                Sidney R. Yates, House of
                Representatives


October 1997
                U.S. POSTAL SERVICE
                Chicago Main Post
                Office Cost Overruns
                and Graceland Station
                Mail Service




GAO/GGD-98-11
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   General Government Division

                   B-276037

                   October 31, 1997

                   The Honorable Sidney R. Yates
                   House of Representatives

                   Dear Mr. Yates:

                   In recent years, the United States Postal Service (USPS) has attempted to
                   improve the mail service in Chicago, IL, which has experienced some of
                   the lowest ratings in the nation on the percentage of overnight mail
                   delivered on time. One action USPS took was to construct a new main post
                   office in Chicago, a project that experienced a $133 million cost overrun
                   during construction.

                   This report responds to your request that we (1) determine the reasons for
                   the $133 million in cost overruns incurred at the new Chicago Main Post
                   Office; (2) provide a list of procedures that USPS has established to prevent
                   a recurrence of cost overruns experienced with the new Chicago Main
                   Post Office in similar, future capital investment projects; and (3) inquire
                   why the USPS Board of Governors approved some of the budget increases
                   for the new Chicago Main Post Office in closed, rather than open,
                   meetings. You also asked us to review issues relating to complaints you
                   have received regarding mail service in your district (the Ninth
                   Congressional District of Illinois).

                   With regard to service, you specifically asked us to (1) compare the Postal
                   Service’s performance indicators for the Graceland postal station in
                   Chicago to those at a similar station in another city with a higher
                   First-Class, overnight delivery (EXFC) score1 than Chicago’s; and (2) report
                   the results of a 1997 Postal Service survey of the physical condition of
                   postal facilities in your district. Graceland station’s customer service was
                   particularly problematic in the Chicago District. Your objective in having
                   us compare the performance indicators of the two stations was to attempt
                   to determine potential causes of problems at Graceland.


                   Based on our review of the events that occurred and the results of an
Results in Brief   investigation conducted by the Postal Inspection Service, the $133 million
                   in cost overruns that were incurred in the construction of the new Chicago
                   Main Post Office appeared to be due primarily to inadequate planning. The

                   1
                    The Postal Service currently uses a measurement known as External First-Class Measurement System
                   (EXFC) as a means of indicating how well it is serving its customers. The quarterly EXFC,
                   administered by Price Waterhouse, measures the delivery time of First-Class mail from deposit to
                   delivery (collection box to mail slot).



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Postal Service approved construction on a site that was opposed by the
city of Chicago and then used a cost estimate for an alternative site that
did not adequately reflect the complexity and cost of building over active
railroad tracks and other factors. Further, management’s incorporation of
increased automation plans into the facility while it was being constructed
resulted in costly design changes. The Postal Service has implemented
procedures aimed at reducing the likelihood of cost overruns occurring in
similar, future capital investment projects, including earlier notification of
problems to the Board of Governors and more Inspection Service
involvement with review of facilities construction.

Postal officials indicated that the USPS Board of Governors approved some
of the budget increases for the new Chicago Main Post Office in closed,
rather than open, meetings, because it would not have been in the Postal
Service’s best interest to disclose the amounts requested while negotiating
change orders with contractors. An additional reason cited was that the
Postal Inspection Service was investigating the project.

At your request, we asked the Postal Service to provide performance data
on Chicago’s Graceland station, which has been the focus of constituent
complaints, and on a station in another city with a higher EXFC score than
Chicago’s that also served a densely populated area with many high-rise
residential units. The Postal Service identified Boston’s Brookline station
and provided data for performance indicators that the USPS maintains on
workload, workforce, timeliness, and complaints during two, 1-week
periods in September 1996 and January 1997 for the Graceland and
Brookline stations. Those two periods were chosen to compare whether
the performance had changed over time, starting with the week that a new
manager started working at Graceland and 4 months later.

Our comparison of data provided for the two stations confirmed that
differences existed in terms of the performance indicator results, and it
also showed that the data provided were not informative about the causes
of problems with mail service at Graceland or in Chicago. Postal Service
records showed that Graceland delivered about 20 percent more mail than
Brookline during the week reviewed in September 1996, but both stations
delivered about the same amount of mail during the week reviewed in
January 1997. Regarding workforce issues, from September 1996 through
January 1997, the number of part-time and temporary carriers increased
from 17 to 37, or 118 percent, at Graceland; the number increased from 17
to 20 at Brookline, or 18 percent. In September 1996, Graceland incurred




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more carrier overtime and sick leave than Brookline, but it incurred less
than Brookline in January 1997.

With respect to the timeliness indicators provided, for both time periods,
Graceland station had more bulk business mail2 that was delayed (which
occurs when bulk business mail takes more than 48 hours to leave the
station) and curtailed (which is mail that is not yet scheduled for delivery)
than Brookline. More carriers at Graceland left the station late (foot
carriers leaving more than 10 minutes after their scheduled departure
times) during the week in September 1996 than at Brookline (17 vs. 9).
However, during the week in January 1997, considerably more carriers at
Brookline left the station late than at Graceland (48 vs. 15). For the quarter
that included the week in September 1996 in our review, Boston’s EXFC
scores were 3 percentage points higher than in Chicago (87 vs. 84), but
Boston’s score was only 1 percentage point higher than Chicago’s for the
quarter that included the week in January 1997 that we reviewed (91 vs.
90).

Brookline received more delivery-related customer complaints than
Graceland for the quarters that included the two, 1-week periods reviewed
in September 1996 and January 1997. However, Postal officials cautioned
that the number of complaints reported may not be reliable and could
have been affected by several factors not related to actual performance,
such as the availability of customer complaint cards in the station lobbies.

Our analysis of the performance data provided by the Postal Service on
the two stations did not suggest that Brookline’s performance would be
informative for Graceland. This was compounded by the high number of
variables affecting the performance indicators, such as the differences in
the types of deliveries made by both stations and uncertainty about
whether the total number of complaints was accurately reported.

The 1997 USPS review of postal facilities in the Ninth Congressional District
of Illinois indicated that the facilities were meeting operational needs.




2
 The Postal Service refers to bulk business mail as periodical mail; “Standard A” mail (letters, flats, and
parcels that do not require the security of First-Class mail or the speed of Priority Mail); and “Standard
B” mail (parcels and bound printed matter), formerly called second-, third-, and fourth-class mail.



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             Chicago’s new Main Post Office, located at 433 W. Harrison Street, opened
Background   in May 1996.3 The Main Post Office contains a two-floor mail processing
             facility, seven floors of office space, and a retail sales operation. It
             replaced the old Main Post Office, which was located across the street
             from the new facility. The old Main Post Office was completed in 1932 and
             consisted of nine floors of workroom space. In 1990, the USPS Board of
             Governors approved a plan to construct the new Main Post Office as a
             means of improving mail service in Chicago, which until this year had EXFC
             scores that were significantly below the national average.

             The new Main Post Office was part of the Postal Service’s 1987 Greater
             Chicago Area Facility Plan, which called for decentralizing postal
             operations in the Chicago area to accommodate population and mail
             volume shifts from the city to the suburbs. The new Main Post Office was
             to be a state-of-the-art mail processing facility, which would be
             supplemented by six new or expanded mail processing facilities
             throughout the Chicago area.4 Although construction of the new Post
             Office originally was estimated to be complete by April 1993, the new
             facility did not open until May 1996. In addition, in September 1997,
             renovation of an annex called the “Sugar House” was completed—work
             that was done after the Postal Service discovered that the new Main Post
             Office would not be large enough to house all operations that the Postal
             Service planned to move into the new facility and that the new facility
             would not meet operational needs.

             About 5,300 employees work at the new Main Post Office, including about
             4,900 mail processing and distribution staff, 300 district support staff, and
             about 100 Postal Inspection Service employees. The new Main Post Office
             has automated mail handling equipment and occupies about 900,000
             square feet of space, compared to about 2.3 million square feet of space at
             the old facility.

             In March 1990, the USPS Board of Governors initially approved
             $199.7 million for construction of the new Main Post Office. From
             December 1991 through February 1996, the Board of Governors approved




             3
              The new Main Post Office is formally called the Chicago Central Processing and Distribution Center.
             The move into the new facility began in May 1996 and was completed in September 1996.
             4
              These included new Processing and Distribution Centers in Palatine, IL; Carol Stream, IL; Aurora, IL;
             and at Irving Park Road in Chicago, plus expansions of the Chicago Bulk Mail Center in Forest Park,
             IL; and the Processing and Distribution Center in Bedford Park, IL.



             Page 4                                                       GAO/GGD-98-11 Chicago Mail Service
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four additional funding requests totaling $133.2 million. The facility’s final
projected cost was $332.9 million, including the annex renovation.5

Your congressional district, which consists of the northern part of Chicago
and adjacent suburbs, is served by both the Chicago and Northern Illinois
postal districts, 2 of 85 nationwide postal districts.6 The Chicago Postal
District, headquartered in the new Main Post Office, serves ZIP Codes
beginning with 606, 607, and 608, including the Chicago portion of your
congressional district and part of Niles, IL. The Northern Illinois Postal
District, headquartered in Carol Stream, IL, serves ZIP Codes beginning
with 600, 601, 602, 603, 610, and 611, including the cities of Evanston, Golf,
Lincolnwood, Morton Grove, and Skokie and parts of Harwood Heights
and Glenview. Appendix I shows which ZIP Codes are served by the two
postal districts in the Ninth Illinois Congressional District. Figure 1.1
shows which portions of the Ninth Congressional District are served by
the Northern Illinois and Chicago postal districts.




5
 The Postal Service recovered $5 million of this amount from the Chicago Union Station Company.
6
 In addition to 85 districts, the Postal Service is further organized into 95 “performance clusters,”
which are organizational units used to track performance data. In Boston and Chicago, the postal
districts are also performance clusters.



Page 5                                                          GAO/GGD-98-11 Chicago Mail Service
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Figure 1.1: Postal Service Provided by the Chicago and Northern Illinois Postal Districts Within the Ninth Congressional
District of Illinois




                              Northern Illinois
                               postal district                                                WI
           Chicago
         postal district



                                                                                                                                   MI




                                                     Chicago                                            Chicago
                                                  (downtown)                                         (downtown)

                           Detailed enlargement
                                                                                               IL                      IN




                                                      Source: USPS.




                                                      Mail for your constituents who are served by the Chicago Postal District is
                                                      processed by the Irving Park Road facility in Chicago, rather than by the
                                                      new Main Post Office. The Irving Park Road facility, which opened in 1994,7


                                                      7
                                                       The move into the Irving Park Road facility began in June 1994 and was completed in September 1996.



                                                      Page 6                                                      GAO/GGD-98-11 Chicago Mail Service
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handles an average of 3.5 million pieces of mail a day, and the Main Post
Office handles an average of 5.1 million pieces of mail a day. Constituents
who are served by the Northern Illinois Postal District receive mail
processed in Palatine, IL, which processes about 5.5 million pieces of mail
a day.

You indicated that your constituents have complained about mail service
in your district for many years. In conversations with your office, we were
told that many of the complaints focused on service provided by the
Graceland postal station in Chicago. The complaints related to the delivery
of mail, including misdelivery and nondelivery, as well as problems with
forwarding of mail. Graceland station serves a densely populated area of
Chicago that contains many high-rise residential units. According to the
Postal Service, Graceland station handles the second-highest volume of
mail in Chicago and makes about 40,000 deliveries daily.

Complaints about mail service in Chicago were discussed during USPS
appropriations hearings before Congress in 1987 and were the subject of a
separate congressional hearing in 1996. In 1990, at your request, we
reviewed Postal Service management and operations in your district. This
work involved reviewing a lengthy record of correspondence between you
and the Postal Service. Letters from the Postal Service contained
descriptions of numerous commitments and promised actions that were
unfulfilled or did not have a lasting impact on the mail delivery problems.
At that time, mail service problems focused on the high-growth areas of
your district, such as Lincoln Park. We identified three potential causes of
the problems: inadequate postal facilities; improper mail processing and
delivery practices; and incomplete addresses on mail, coupled with
incomplete information on customers’ mail boxes.8 In response to our
work, the Postmaster General provided a list of corrective steps that we
believed at the time would address the problems if they were properly
implemented.9

However, in 1994, continuing complaints about mail service in Chicago
prompted the Postmaster General to visit the city and establish a task
force to address the problems. The task force found mail that was late,
lost, or had been thrown away; a “bunker mentality” when it came to
interacting with customers; and facilities without telephone service for
customers and staff ill-equipped to answer and respond to simple
inquiries. The task force worked to address these problems by helping

8
 Letters from GAO to the Postmaster General, dated February 26, 1990, and March 27, 1990.
9
 Letter dated March 15, 1990, from the Postmaster General to GAO.



Page 7                                                      GAO/GGD-98-11 Chicago Mail Service
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              management staffs plan their daily workloads; hiring additional carriers;
              streamlining processes; and increasing employee training. In addition, a
              new management team was installed in Chicago.

              EXFC scores for Chicago have improved considerably in recent years. The
              percentage of First-Class, overnight mail delivered on time increased from
              66 percent in the second quarter of fiscal year 1994 to 90 percent in the
              third quarter of fiscal year 1997, 2 percent below the national average. The
              Chicago Postal District Manager said the improved EXFC scores were the
              result of (1) more automation, (2) new and expanded facilities throughout
              the Chicago area, (3) more and better training of employees, (4) better
              management and more accountability, and (5) dismissal of poor
              performers and recognition of good employees.

              In recent years, the Postal Service has also undertaken a major effort to
              automate its operations and reduce labor costs, including using more
              temporary and part-time employees.


              In June 1996, you requested that we review the reasons for the cost
Scope and     overruns at the new Chicago Main Post Office. You also indicated that
Methodology   Chicago has been heavily criticized for its poor mail service. In
              December 1996, we briefed your office on the results of our work to date.
              At that time, you requested that we perform additional work regarding
              Graceland station, which is located in your congressional district.

              To obtain information on the reasons for the cost overruns at the new
              Chicago Main Post Office, we interviewed USPS officials; submitted written
              questions to the Postal Service; reviewed documentation of the cost
              estimates for the facility, including justifications for cost increases, project
              planning documents, and Board of Governors meeting minutes; and
              reviewed Postal Inspection Service reports on the project.10 We also met
              with Chicago postal officials, including the Great Lakes Area Operations
              Vice President, Chicago District Manager, Chicago District Senior Plant
              Manager, and a Postal Inspection Service official; and we toured the new
              Main Post Office. We questioned Postal officials about the sequence of
              events regarding the project and related issues, but we did not repeat work
              that had already been done by the Inspection Service.


              10
                From November 1994 to May 1995, the Postal Inspection Service conducted an extensive review of
              the Chicago Main Post Office project and presented it to the Board of Governors on May 1, 1995. In
              addition, from 1993 through 1994, the Chicago Division of the Inspection Service prepared six reports
              on different aspects of the project.



              Page 8                                                       GAO/GGD-98-11 Chicago Mail Service
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We obtained information on the policies and procedures that the Postal
Service implemented to prevent a recurrence of cost overruns in similar,
future capital investment projects. We did this by reviewing
recommendations made by the Inspection Service and Board of
Governors’ Capital Improvement Committee and by interviewing Postal
officials.

To determine why the USPS Board of Governors approved some of the
budget increases for the new Chicago Main Post Office in closed, rather
than open, meetings, we questioned Postal officials and submitted written
questions to the Postal Service.

During the course of our review, Chicago Postal Service officials offered
to review the physical condition of postal facilities within your
congressional district. This review was performed from February to
May 1997 by two teams of operational, retail, and administrative staff from
the Chicago and Northern Illinois postal districts serving the Ninth Illinois
Congressional District. The teams were supported by a real estate
specialist, a design and construction specialist, and an operations analyst
from the Chicago Facilities Service Office. In addition, an outside
architectural/engineering firm was retained to assist in the review. We
reviewed the report that resulted from this facility survey.

To obtain performance data on the Graceland station, we first interviewed
postal officials to determine what performance data and indicators are
maintained by the Postal Service. We then asked Postal officials to provide
data pertaining to workload/workforce issues (the number of deliveries,
routes, and carriers, volume of mail delivered, amount of carrier sick leave
and overtime); timeliness (EXFC scores, the number of routes with delayed
mail, amount of curtailed and delayed mail, and the number of carriers
leaving the station late); and the number of delivery-related complaints
received during the weeks of September 14 through 20, 1996, and
January 18 through 24, 1997.11 We chose these 2 weeks to compare
Graceland station’s performance when a new station manager began
working there and its performance 4 months later12 to determine whether
change had occurred. According to the Postal Service, the data provided
were the best performance measures available on the two stations.



11
  The Postal Service compiles complaints received by quarter, rather than by week.
12
 Graceland’s current station manager was detailed to the station on September 14, 1996. She was
promoted to permanent station manager on March 4, 1997.



Page 9                                                      GAO/GGD-98-11 Chicago Mail Service
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To compare Graceland’s performance with a similar station in another city
with a higher EXFC score than Chicago’s, we reviewed the EXFC scores for
1996 in other U.S. cities and contacted the Postal District Managers in
three Northern cities (Philadelphia, New York, and Boston) where the
weather conditions and population densities were similar to those in
Chicago. We provided the Postal District Managers in those three cities
with data on the volume of mail processed and the number of business and
residential deliveries at Graceland station and asked them to identify any
similar stations in their districts serving densely populated areas with
many high-rise residential units. The Boston Postal District Manager
identified the Brookline, MA, station and provided performance data on
that station for the two time periods in our review. The Postal District
Managers in Philadelphia and New York did not identify any stations in
their districts that were comparable to Graceland.13

We recognized certain limitations of comparing performance data on two
stations. These limitations included the number of variables that affect
mail delivery, such as the makeup of residential, business, and curbside
deliveries being made and the type of terrain covered. We attempted to
minimize these limitations by selecting a station similar to Graceland that
also served a densely populated area serving many high-rise residential
units and, to approximate weather conditions, was located in another
northern city.

We also interviewed the Graceland station manager and the Chicago
Postal District Manager about mail service complaints and plans for
improvement and questioned the Northern Illinois Postal District Manager
about mail service in his district.

We did not verify the station workload, workforce, timeliness, and
complaint data provided by the Postal Service and the results of its facility
review or validate the EXFC scoring system and data.

We did our work in Washington, D.C., and Chicago, IL, in accordance with
generally accepted government auditing standards. We did our work from
September 1996 through July 1997.

On September 11, 1997, we requested comments on a draft of this report
from the Postmaster General. On October 17, 1997, he provided written
comments, which are contained in appendix VI and discussed on page 25.

13
 Although the New York Postal District Manager identified a station in his district that was similar to
Graceland, we determined that it was not comparable, since Graceland had about 10 times the volume
of delivered mail as the New York station.



Page 10                                                       GAO/GGD-98-11 Chicago Mail Service
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                         In March 1990, the USPS Board of Governors approved $199.7 million for
Cost Overruns at the     the construction of a new Chicago Main Post Office. The Board also
New Chicago Main         approved four subsequent funding requests totaling $133.2 million, for a
Post Office              total authorization of $332.9 million.14 Appendix II summarizes the
                         changes in funding for the facility and the reasons provided to the Board
                         of Governors for making the requests.


Initial Funding          When the Board approved initial funding in March 1990, it authorized the
                         facility to be built at either a developer-owned site on Clark Street in
                         Chicago at a cost of $211.6 million or at an alternative USPS-owned site on
                         Harrison Street at a cost of $199.7 million. The estimates for the two sites
                         differed because the developer-owned Clark Street site included
                         $39 million for land, while the Harrison Street site had no land acquisition
                         costs because it was owned by the Postal Service. However, compared to
                         the Clark Street site, construction costs were higher on Harrison Street
                         because it was a smaller site,15 and the structure had to be built on piers
                         above the railroad tracks.

                         The Postal Service preferred constructing on the Clark Street site and only
                         considered the Harrison Street site as an alternative. However, the city of
                         Chicago was opposed to constructing the postal facility on the Clark Street
                         site because it conflicted with the city’s long-range plans for the area.
                         Postal officials said that the Board was aware of the city’s opposition to
                         constructing on the Clark Street site when it approved the initial funding,
                         but the Board was informed by the Assistant Postmaster General for
                         Facilities that he hoped the Postal Service could solve its problems with
                         the city and conclude negotiations on the Clark Street site.


December 1991 Increase   In December 1991, the Postal Service approved an additional $41.7 million
                         in funding for the new Main Post Office to cover increased costs
                         associated with constructing the facility on the alternative, Harrison Street
                         site, rather than on Clark Street. According to the USPS Decision Analysis
                         Report (DAR) that was used to justify the funding increase to the Board,
                         negotiations with the city to construct the facility on the Clark Street site
                         were unsuccessful, forcing the Postal Service to build on Harrison Street.
                         The $41.7 million in additional funding increased the total cost of the
                         project from $199.7 million, which the Board had approved for the
                         Harrison Street site in March 1990, to $241.4 million. The December 1991

                         14
                           The Postal Service recovered $5 million of this amount from the Chicago Union Station Company.
                         15
                           The Harrison Street site was about 16 acres in size, and the Clark Street site was over 37 acres.



                         Page 11                                                        GAO/GGD-98-11 Chicago Mail Service
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                      DARindicated that an additional $41.7 million was needed to cover
                      construction costs at the Harrison Street site that were not considered
                      adequately in the initial estimate. The DAR stated:

                      “While the building planned for the Harrison Street site is functionally very similar to the
                      facility planned on Clark Street, there is a marked difference in the site conditions and,
                      therefore, the structure of the building and associated docks, maneuvering area, and
                      parking. The Harrison Street site is interlaced with active railroad tracks, located in the
                      middle of the property. The tracks in question are located two blocks south of Union
                      Station, which handle all commuter rail lines serving the southern and western portions of
                      the city and suburbs. Amtrak also uses the same tracks for interstate passenger service.
                      While we were cognizant that construction on the Harrison Street site would pose some
                      constraints on our ability to keep costs within budget, the extent to which the tracks and
                      overall railroad operation would impact construction was not fully appreciated when initial
                      estimates were made.”


                      Further, the Harrison Street site was located next to the Chicago River.
                      The DAR indicated that the city opposed constructing the new postal
                      facility along the waterfront portion of the site at Harrison Street to permit
                      space for future high-rise retail and office buildings along the river.

                      The December 1991 DAR did not break out the additional costs at the
                      Harrison Street site associated with constructing over railroad tracks and
                      away from the riverfront. However, it indicated that construction over the
                      tracks was prohibited during peak rail traffic times, adding an estimated 11
                      months to the overall length of construction. Further, the DAR indicated
                      that building the facility away from the waterfront increased the
                      complexity of the building structure and therefore its construction cost.




April 1994 Increase   In April 1994, the Board approved another funding increase, raising the
                      total project budget from $241.4 million to $286.8 million. According to the
                      DAR, $45.4 million more was needed to complete construction:
                      (1) $14.3 million for operational changes to accommodate the relocation of
                      mail processing for 17 ZIP Code areas of South Chicago; (2) $14 million in
                      construction changes resulting from solicitation of bids prior to design
                      completion; (3) $7.8 million to repair the adjacent Polk Street bridge; and
                      (4) $9.3 million in contingency and other fees needed to complete
                      construction.

                      The Postal Service’s 1987 Greater Chicago Area Facility Plan called for 17
                      ZIP Code areas to be transferred from downtown Chicago to the South




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                     Suburban facility in Bedford Park, IL. However, in December 1993, the
                     Postal Service decided to retain mail processing for the 17 ZIP Codes in
                     the new Main Post Office because of political concerns about moving jobs
                     out of the city. According to the April 1994 DAR, about 60 percent of the
                     new Post Office’s construction was complete at that time. The DAR
                     indicated that the decision to incorporate processing for the 17 ZIP Codes
                     and automated mail processing plans16 into the new facility required a
                     complete redesign of the workroom layout. Further, the DAR said that
                     because of incomplete and poor quality contract drawings, the project’s
                     structural, mechanical, and electrical costs significantly exceeded original
                     estimates.17 Other unanticipated costs involved dealing with a water tunnel
                     and an abandoned freight tunnel under the site that were found after
                     construction began.

                     The DAR also indicated that the adjacent Polk Street bridge, which was
                     closed by the city in 1993 because of safety concerns, was needed to
                     provide access to the new facility. Postal officials believed that the
                     Chicago Union Station Company, an Amtrak subsidiary, took
                     responsibility for maintaining the bridge when it acquired the property.
                     The DAR indicated that the Postal Service was in the process of negotiating
                     an agreement for repairing the Polk Street bridge, that it was confident of
                     recovering the repair costs from the Chicago Union Station Company, and
                     that work on repairing the bridge should proceed to ensure truck access to
                     the new Main Post Office by the time the facility was completed.18


June 1995 Increase   In June 1995, the Board approved a third cost increase for the new Main
                     Post Office. The Board approved an additional $30.1 million for the
                     project, increasing the total budget from $286.8 million to $316.9 million.19
                     According to the June 1995 additional funding request, the costs of
                     incorporating automation plans and mail processing for 17 postal stations
                     into the facility, which required changes and redesign of the workroom
                     and building systems, were underestimated. The funding request said that
                     the workroom changes in turn affected the layout of office and support
                     space that had to be relocated to provide additional workroom space. The
                     changes required revisions to the heating, ventilation and air-conditioning,

                     16
                      The Postal Service’s Corporate Automation Plan, issued in January 1990, set a goal of barcoding all
                     mail by 1995.
                     17
                      The solicitation for construction contract was issued in July 1991 and was based on scope documents
                     with incomplete design and allowances. The construction contract was awarded in March 1992.
                     18
                      According to the Postal Service’s Facility Manager in Chicago, in 1996, the Postal Service recovered
                     $5 million from the Chicago Union Station Company in reimbursement for the bridge repair costs.
                     19
                       The Board approved $30.1 million of $40.9 million requested.


                     Page 13                                                      GAO/GGD-98-11 Chicago Mail Service
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                            lighting, and electrical systems. The request also included about $7 million
                            for a conveyor system and related mail processing equipment. The June
                            1995 funding request also said that in retrospect, the April 1994 DAR should
                            not have been submitted until operational systems layout, design, and
                            definitive construction cost estimates had been completed, but the request
                            also said if that had been done, construction would have stopped, and
                            greater delay claims would have been incurred.

                            The June 1995 funding request also noted that a special task force had
                            identified a 141,000-square-foot deficiency in the new Main Post Office,
                            which was attributed to the decision to include mail processing for the 17
                            ZIP Code areas and to incorporate automation plans. As a result, the
                            funding request said that space planned for use in the new Post Office for
                            carriers and parcel post operations would need to be identified and
                            relocated.


February 1996 Increase      Finally, in February 1996, the Board approved an additional $16 million to
                            renovate an aging postal annex adjacent to the old Main Post Office called
                            the “Sugar House” to house space for carriers and parcel post operations
                            originally planned for the new Post Office. The Sugar House renovation
                            was needed to accommodate the 141,000-square-foot space deficiency
                            identified in the June 1995 funding request. The renovated Sugar House
                            facility, which was completed in September 1997, is also to contain
                            operations that were not originally intended for the Main Post Office,
                            including the Inspection Service Forensic Laboratory and stamp
                            depository functions. The Postal Service also decided to retain the
                            second-class and third-class mail transfer operations and stamp registry
                            located in the Sugar House.


Postal Inspection Service   In November 1994, at the request of the Board of Governors, the Postal
Review Found Many           Inspection Service began a review of the cost overruns at the new Chicago
Reasons for Cost Overruns   Main Post Office. The purpose of the review was to determine whether
                            there was any evidence of fraudulent activity connected with the project;
                            identify process deviations or questionable decisions made by USPS
                            officials in connection with the project; and to make recommendations for
                            improvement. According to the Inspection Service, its review involved
                            over 8,000 investigative hours and interviews with 114 individuals; as well
                            as the review of 6 prior Chicago Division Inspection Service reports on the
                            project and contracts, architect/engineering files, and related documents.




                            Page 14                                      GAO/GGD-98-11 Chicago Mail Service
B-276037




In May 1995, the Inspection Service presented the results of its review to
the Board of Governors. Although the Inspection Service found no
evidence of fraud concerning the project, it identified several reasons for
the overruns. These reasons included (1) the city of Chicago’s opposition
to allowing construction on the preferred site and the lack of a separate
DAR for the alternative site; (2) increased costs resulting from having the
Postal Service build over active railroad tracks at the alternative site;
(3) construction during major changes in Postal Service structure,
operations, and management personnel; (4) proceeding with construction
despite incomplete designs and automation plans; and (5) an overall lack
of coordination between USPS headquarters and the field.

In addition, the Inspection Service reported that continuous turnover of
decisionmakers at the Postal Service diminished overall accountability for
the project. It also indicated that automation requirements developed by
USPS headquarters were not incorporated in the new facility in a timely
manner. Further, the Inspection Service said information that had been
presented to the Board of Governors in budget requests was inadequate
and minimized negative aspects of the project.

In its May 1995 presentation to the Board, the Inspection Service made the
following four recommendations20 about future major capital projects:
(1) an on-site Project Manager should be assigned responsibility for all
aspects of projects from start to finish; (2) the validation process for large
projects should include a thorough review and approval by personnel
familiar with operations, equipment, and fixed mechanization issues;
(3) recommendations made by the Board of Governors’ Capital
Improvement Committee should be followed;21 and (4) the Inspection
Service should selectively review projects costing under $10 million.

The Postal Service indicated that in response to the report, it has made the
following changes: (1) a Facility Activation Manager was selected to
oversee large projects; (2) the review and validation process for large


20
  According to the Postal Service, the first three recommendations were management
recommendations that were already under way and subsequently reported by the Inspection Service.
21
  In 1993, the Board of Governors formed the Capital Improvement Committee to examine the review
and approval process for capital investment projects. In February 1995, the committee made 10
process improvement recommendations and 4 accountability improvement recommendations, which
are listed in appendix III. A postal official said that two of those recommendations had the greatest
potential for preventing cost overruns similar to those experienced with the Chicago Main Post Office
in future projects—(1) more frequent project updates on capital investment projects and (2) the
implementation of an “early warning system” that provides the Board of Governors with prompt and
early notification of problems to avoid surprises. The Postal Service’s Office of Inspector General also
has been given authority to audit facilities construction projects costing over $10 million.



Page 15                                                       GAO/GGD-98-11 Chicago Mail Service
                         B-276037




                         projects has been enhanced through meetings with operating managers,
                         functional staff, and headquarters executives; and (3) the Postal Service is
                         adhering to the recommendations made by the Board of Governors’
                         Capital Improvement Committee (see app. III). With regard to the fourth
                         recommendation, the inspector in charge of the review told us that the
                         Inspection Service began selectively reviewing projects costing under
                         $10 million in fiscal year 1997 and is now more involved in monitoring
                         major capital projects early in the process, such as by reviewing
                         preliminary DARs, than it was during the new Chicago Main Post Office
                         project.

                         We asked the Postal Service why the additional funding requests in
                         April 1994 and June 1995 were presented in closed, rather than open,
                         sessions of the Board of Governors. The Postal Service responded that at
                         the time of those two meetings, USPS was negotiating with the architectural
                         firm and general contractor on change orders, and it would not have been
                         in the Postal Service’s best interest to disclose the amounts being
                         requested for various changes. An additional reason cited by the Postal
                         Service for closing the meetings was that the Inspection Service was
                         conducting an ongoing investigation of the project.

                         We also asked Postal officials whether they believed they would have
                         proceeded with the project or pursued an alternative, such as renovating
                         the old Main Post Office, had they initially known the new facility’s final
                         cost. An official who was involved in the facility’s planning said that the
                         old Main Post Office was too old and large to be feasibly renovated. In a
                         written response, the Postal Service said that it could not speculate what
                         alternatives management and the Board would have chosen in 1990 had
                         the final costs been known at the time. However, USPS indicated that there
                         were not many alternatives, and it could be assumed that the renovation
                         costs for the old Main Post Office, estimated at $250 million in the
                         March 1990 DAR, were understated, since full engineering studies had not
                         been done.


                         Your request also concerned complaints from constituents about the
Mail Service in the      quality of mail service in your district for many years. Your office indicated
Ninth Illinois           that service provided by the Graceland station, which is part of the
Congressional District   Chicago Postal District, was particularly problematic and asked us to
                         compare the performance of Graceland station to that of a similar station
                         in another city with a higher EXFC score than Chicago’s to attempt to
                         determine the causes of problems at Graceland. The Postal District



                         Page 16                                       GAO/GGD-98-11 Chicago Mail Service
                     B-276037




                     Manager for Boston identified the Brookline, MA, station as being similar
                     to Graceland in terms of the type of area served (a densely populated area
                     with many high-rise residences) and volume of mail delivered.

                     We asked the Postal Service to identify what indicators it compiles
                     regarding the performance of postal stations. Postal Service officials said
                     they did not measure the accuracy of mail delivery. It provided what data
                     it did have on workload/workforce issues (the number of deliveries,
                     routes, carriers, volume of mail delivered, amount of carrier sick leave and
                     overtime); timeliness (EXFC scores, the number of routes with delayed
                     mail, amount of curtailed and delayed mail, and the number of carriers
                     leaving the station late); and the number of delivery-related complaints
                     received. However, the Postal Service’s Manager of Delivery Policies and
                     Programs, who provided some of the data, said that measuring the
                     performance of one station against another was affected by variables other
                     than the actual performance of the stations. These other variables include
                     the differences between the makeup of residential, business, and curbside
                     deliveries made and the type of terrain covered. Appendix IV compares the
                     performance measures between Graceland and Brookline stations.


Workload/Workforce   As of May 1997, Graceland station had 37,981 possible daily residential
Measures             deliveries and 2,026 possible daily business deliveries, or a total of about
                     40,000 possible daily deliveries. Also as of May 1997, Brookline had 26,085
                     possible daily residential deliveries and 1,549 possible daily business
                     deliveries, or a total of about 27,600 possible daily deliveries.22

                     We asked USPS to provide workload and performance data on the two
                     stations as of September 14 though 20, 1996, and January 18 through 24,
                     1997. For both time periods, Graceland had 81 mail routes and Brookline
                     had 80. During the week of September 14 through 20, 1996, Graceland
                     delivered about 8,000 feet of mail, or about 20 percent more than
                     Brookline, which delivered about 6,700 feet of mail. Graceland delivered
                     about the same amount of mail as Brookline during the week of January 18
                     through 24, 1997 (about 6,500 feet vs. about 6,400 feet). During the week
                     reviewed in September 1996, Graceland employed 108 full-time carriers
                     and 17 part-time and temporary carriers, compared to 128 full-time and 17
                     part-time and temporary carriers at Brookline. From September 1996
                     through January 1997, the number of permanent carriers increased by two
                     at Graceland and by eight at Brookline. However, from September 1996 to

                     22
                      The Postal Service does not maintain historical data on the number of possible deliveries, so we
                     could not obtain data for the two periods we selected for review. The Chicago and Boston Postal
                     Districts provided data on the number of possible deliveries in May 1997.



                     Page 17                                                      GAO/GGD-98-11 Chicago Mail Service
                      B-276037




                      January 1997, the number of part-time and temporary carriers working at
                      Graceland increased from 17 to 37, or 118 percent; the number of part-time
                      and temporary carriers at Brookline increased from 17 to 20, or
                      18 percent.

                      In response to our request for performance data, the Postal Service also
                      provided data on the amount of carrier overtime and sick leave incurred
                      for the two time periods at Graceland and Brookline.23 During the week of
                      September 14 through 20, 1996, daily overtime averaged about 15 percent
                      of workhours at Graceland, compared to 12 percent at Brookline. For the
                      week of January 18 through 24, 1997, daily overtime averaged about
                      10 percent at Graceland and 19 percent at Brookline.

                      During the week of September 14 through 20, 1996, the amount of daily
                      average sick leave incurred at Graceland was about 2 percent, compared
                      to about one-half of 1 percent at Brookline. For the week of January 18
                      through 24, the amount of daily average sick leave incurred was about
                      1 percent at Graceland and nearly 4 percent at Brookline.


Timeliness Measures   The Postal Service collects data on on-time delivery of First-Class,
                      overnight mail in 95 major U.S. metropolitan areas, including Chicago and
                      Boston, and assigns EXFC scores, but it does not break down the scores by
                      ZIP Code. Therefore, the Postal Service could not provide EXFC scores for
                      individual ZIP Codes within the Ninth Congressional District of Illinois.
                      For both time periods reviewed, Boston had a higher EXFC score than
                      Chicago. For the first quarter of fiscal year 1997, Chicago had an EXFC
                      score of 84 and Boston had a score of 87, compared to the national
                      average of 91.24 For the second quarter of fiscal year 1997, Chicago had an
                      EXFC score of 90 and Boston had a score of 91, compared to the national
                      average of 91.25

                      Nearly half of the ZIP Codes within the Ninth Congressional District of
                      Illinois are served by the Northern Illinois Postal District. The Northern


                      23
                        According to a Postal Service headquarters official, standards for sick leave and overtime usage are
                      set at the postal district level. In Chicago, the standard is 3.86 percent of total workhours for sick leave
                      and 7.5 percent for overtime at postal stations. In Boston, the standard is 3.5 percent for sick leave and
                      less than 10 percent for overtime usage.
                      24
                        The Postal Service’s first quarter of fiscal year 1997 ran from September 14, 1996, through December
                      6, 1996.
                      25
                       The Postal Service’s second quarter of fiscal year 1997 ran from December 7, 1996, through
                      February 28, 1997.



                      Page 18                                                         GAO/GGD-98-11 Chicago Mail Service
                                          B-276037




                                          Illinois Postal District had an EXFC score of 86 for both the first and second
                                          quarters of fiscal year 1997.

                                          In recent years, EXFC scores for the Chicago and Northern Illinois postal
                                          districts have improved considerably, as has the national average. For
                                          Chicago, EXFC scores increased from a low of 66 in the second quarter of
                                          fiscal year 1994 to 90 in the third quarter of fiscal year 1997. For the
                                          Northern Illinois Postal District, the scores increased from 77 in the
                                          second quarter of fiscal year 1994 to 91 in the third quarter of fiscal year
                                          1997. The national average also increased from 79 in the second quarter of
                                          fiscal year 1994 to 92 for the third quarter of fiscal year 1997.

                                          Since 1994, Boston’s EXFC scores have been an average of 3 percentage
                                          points higher than Chicago’s. As shown in table 1.1, Boston had a higher
                                          EXFC score than Chicago in 13 of the last 15 quarters surveyed.



Table 1.1: Overnight EXFC Scores for the Boston, Chicago, and Northern Illinois Postal Districts and the National Average
From FY 1994 Through the Third Quarter of FY 1997
                         Q1     Q2      Q3    Q4     Q1     Q2    Q3       Q4     Q1     Q2      Q3     Q4     Q1     Q2  Q3
                       FY 94 FY 94 FY 94 FY 94 FY 95 FY 95 FY 95 FY 95 FY 96 FY 96 FY 96 FY 96 FY 97 FY 97 FY 97
Boston                    81     73    81      81       82      82       86       83      83       80      87       88       87      91          88
                                                                                                                       a
Chicago                   76     66    75      71       78      79       82       82      81       85      86       80       84      90          90
No. IL                    81     77    80      82       82      82       82       84      83       85      89       90       86      86          91
National
average                   84     79    83      83       84      85       87       87      88       87      90       91       91      91          92
                                          a
                                           Chicago Postal officials attributed the 6 percentage point decline in the EXFC score for the fourth
                                          quarter of fiscal year 1996 to the impact of moving into the new Main Post Office from May
                                          through September 1996.



                                          Figure 1.2 shows the EXFC scores from fiscal year 1994 through the third
                                          quarter of fiscal year 1997 for the Boston, Chicago, and Northern Illinois
                                          Postal Districts and the national average.




                                          Page 19                                                       GAO/GGD-98-11 Chicago Mail Service
                                                         B-276037




Figure 1.2: Overnight EXFC scores for the Boston, Chicago, and Northern Illinois Postal Districts and the National Average
From FY 1994 Through the Third Quarter of FY 1997

95   EXFC scores



90



85



80



75



70



65

Q1 FY     Q2 FY       Q3 FY         Q4 FY        Q1 FY        Q2 FY   Q3 FY     Q4 FY     Q1 FY      Q2 FY      Q3 FY      Q4 FY     Q1 FY      Q2 FY      Q3
1994      1994        1994          1994         1995         1995    1995      1995      1996       1996       1996       1996      1997       1997       FY
                                                                                                                                                           1997

Quarters surveyed


             National average
             Boston Postal District
             Northern Illinois Postal District
             Chicago District


                                                         Source: USPS.




                                                         The Chicago Postal District Manager said the improved EXFC scores were
                                                         the result of (1) more automation, (2) new and expanded facilities
                                                         throughout the Chicago area, (3) more and better training of employees,
                                                         (4) better management and more accountability, and (5) dismissal of poor
                                                         performers26 and recognition of good employees.

                                                         In response to our request for performance indicators on Graceland and
                                                         Brookline stations, the Postal Service provided data on the number of

                                                         26
                                                           The Postal Service provided data showing that in 1996, 122 of its 13,397 Chicago Postal District
                                                         career employees were dismissed, or about 0.9 percent of its workforce. In Boston, 27 of 8,645 career
                                                         employees were dismissed in 1996, or 0.3 percent. Nationally, 2,181 career employees were dismissed
                                                         in 1996 out of 755,475 employees, or 0.3 percent.



                                                         Page 20                                                        GAO/GGD-98-11 Chicago Mail Service
             B-276037




             routes with delayed mail, amount of curtailed and delayed mail, and
             number of carriers leaving the station late. For both time periods in our
             review, Graceland had more routes with delayed mail than Brookline. Bulk
             business mail is considered delayed if it takes more than 48 hours to leave
             the station. First-Class mail is considered to be delayed if it does not leave
             the station on the same day it arrives. During the week of September 14
             through 20, 1996, Graceland had a daily average of 26 routes with delayed
             mail and Brookline had 1. During the week of January 18 through 24, 1997,
             Graceland had a daily average of six routes with delayed mail, and
             Brookline had none. For both time periods, Graceland station had more
             curtailed or delayed bulk business mail than Brookline. Mail is curtailed if
             it is not yet scheduled for delivery—for example, to coincide with a
             mailing advertiser’s sale, or if the workload is heavy on a particular day.
             During the week of September 14 through 20, 1996, Graceland had a daily
             average of 135 feet of curtailed bulk business mail and 171 feet of delayed
             bulk business mail, compared to a daily average of 120 feet of curtailed
             mail and no delayed mail at Brookline. During the week of January 18
             through 24, 1997, Graceland had a daily average of 211 feet of curtailed
             bulk business mail and 93 feet of delayed bulk business mail, compared to
             no curtailed or delayed bulk business mail at Brookline.

             Graceland averaged more carriers leaving the station late during the week
             of September 14 through 20, 1996, than Brookline (17 vs. 9). However,
             during the week of January 18 through 24, 1997, Brookline averaged
             considerably more carriers leaving the station late than Graceland (48 vs.
             15). A carrier is considered leaving the station late when a foot carrier
             leaves more than 10 minutes after the scheduled departure time or a
             motorized carrier leaves the station more than 20 minutes late.


Complaints   The Postal Service compiles complaints received at the station, district
             office, or USPS headquarters. Postal Service complaint data showed that the
             Brookline station received more delivery-related customer complaints
             than Graceland during the quarters that included the 2 weeks we
             reviewed.27 For the first quarter of fiscal year 1997, Brookline received 71
             delivery-related complaints, compared to 32 for Graceland. For the second
             quarter of fiscal year 1997, Brookline received 47 delivery-related
             complaints, and Graceland had 14. Many complaints for both stations
             concerned delayed and nonreceipt of mail and change of address
             problems. However, Postal officials cautioned that the number of
             complaints reported may not be reliable and could be affected by several

             27
               The Postal Service collects data on complaints by quarter, rather than by week.



             Page 21                                                      GAO/GGD-98-11 Chicago Mail Service
                         B-276037




                         factors other than performance, such as whether customer complaint
                         cards in the station lobbies were available, whether the station manager
                         accurately reported the number of complaints to the Postal Service, and
                         whether certain customers were more likely to register complaints when
                         they experienced problems.


Service-Related          We asked the Graceland station manager, who was assigned temporarily
Improvement Efforts at   to the station in mid-September 1996 and selected permanently for the
Graceland                position in March 1997, what actions she had taken to improve mail
                         service. She said that she has tried to improve customer service by
                         keeping the same substitute carriers on routes, implementing an improved
                         mail-sorting process, and soliciting feedback about service from citizen
                         advisory councils and local officials. She also said that she regularly goes
                         out into the community on Saturdays to meet with customers about their
                         mail service, has established a phone center to receive complaints, and has
                         taken disciplinary action against poor-performing employees. In addition,
                         the District Manager said a new late-night shift to sort mail was added at
                         Graceland in December 1996, and two new supervisors were transferred to
                         the station to monitor carriers.

                         In April 1997, the Chicago Postal District distributed 39,000 customer
                         surveys to measure the level of service improvement at Graceland during
                         the previous 3 months. Of the surveys delivered, 2,295 were returned, or
                         about 6 percent. The respondents rated the level of improvement as
                         follows: major improvement, 6 percent; significant improvement,
                         13 percent; some improvement, 26 percent; little improvement, 16 percent;
                         and no improvement, 39 percent. The surveys also contained 442
                         comments, including 90 complaints about misdelivery; 58 about delayed
                         delivery; 31 about nondelivery; and 18 about change of address problems.
                         The rest were reports of multiple problems (92), employee compliments
                         (11), miscellaneous matters such as damaged or tampered mail (11), and
                         131 that were not identified in the survey results.


Facilities Review        During the course of our review, Chicago Postal Service officials offered
                         to review the physical condition of postal facilities within your
                         congressional district. This review was performed during the period from
                         February through May 1997 by two teams of operational, retail, and
                         administrative staff from the Chicago and Northern Illinois Postal Districts
                         serving the Ninth Illinois Congressional District. The teams were
                         supported by a real estate specialist, a design and construction specialist,



                         Page 22                                      GAO/GGD-98-11 Chicago Mail Service
              B-276037




              and an operations analyst from the Chicago Facilities Service Office. In
              addition, an outside architectural/engineering firm was retained to assist
              in the review. We reviewed the report that resulted from this facility
              survey.

              The report indicated that the condition of all facilities enabled USPS to
              meet operational needs. The report identified miscellaneous repairs and
              alterations and items for customer convenience that could be made at the
              facilities. The report did not indicate the cost of making the identified
              improvements; however, it did say that the facilities would have to
              compete with other sites in the area for very limited funds. With regard to
              Graceland station, the facilities review team said that signs in and around
              the station should be replaced and that the station should be upgraded to
              Postal Store standards, but with closed, rather than open, shelf
              merchandising of postal products.28 Appendix V shows the results of the
              review, by facility.

              Postal Service officials said that complaints regarding mail service may not
              necessarily be caused by facilities problems. They said that the new
              Chicago Main Post Office, for example, would not be responsible for
              misdelivery of mail. In addition, they said that more money would not
              solve problems at the Graceland station, problems they attributed
              primarily to employee nonperformance.


              Based on our review of the events that occurred and the Postal Inspection
Conclusions   Service’s investigation, the cost overruns at the Chicago Main Post Office
              appeared to be due primarily to shortcomings in planning the construction
              project. The Postal Service approved construction on a site that was
              opposed by the city of Chicago and then used a cost estimate for an
              alternative site that did not adequately reflect the complexity and cost of
              building over active railroad tracks and other factors. Further,
              management’s incorporation of increased automation plans into the
              facility while it was being constructed resulted in costly design changes.

              The Postal Service has implemented several process changes that could
              reduce the likelihood of cost overruns in future capital investment
              projects, such as more Inspection Service involvement earlier in
              construction projects and the establishment of an early warning system to
              alert the Board of Governors to problems.

              28
               The Postal Store is the Postal Service’s name for its new retail operations in post offices offering a
              variety of postal products, such as sheets and books of postage stamps, mailing supplies, and
              postal-themed merchandise, which are displayed on open shelves for customer pick-up and selection.



              Page 23                                                       GAO/GGD-98-11 Chicago Mail Service
                 B-276037




                 Our comparison of data provided for the two stations confirmed that
                 differences existed in terms of the performance indicator results but also
                 showed that the data provided were not informative about the causes of
                 problems with mail service at Graceland or in Chicago. This was partly
                 due to the differences in the types of deliveries made by both stations and
                 uncertainty about whether the total number of complaints was accurately
                 reported.

                 Although recent EXFC scores suggest that mail service is improving in
                 Chicago, the Postal Service has no way of knowing whether this
                 improvement will be sustained. Further, postal problems that have
                 plagued Chicago, and Graceland station in particular (which receives the
                 second-highest mail volume in the city), have been long-standing.

                 The Postal Service has made efforts to improve mail service in Chicago by
                 installing a new management team, investing in new facilities and
                 equipment, and taking measures to improve employee performance, and
                 EXFC scores are improving. However, the city of Chicago’s EXFC score still
                 could be improved. Further, because EXFC scores are not compiled at the
                 individual ZIP Code level, they do not necessarily reflect whether the
                 quality of service being provided within the Ninth Congressional District
                 of Illinois is improving. Also, whether the current, apparent increased
                 performance will be sustained remains to be seen.

                 In view of the history of problems experienced at the Graceland station
                 and the limitations of the EXFC scores, which are compiled for the Postal
                 Service by an independent contractor and do not measure individual
                 station performance, it seems appropriate for an entity independent of the
                 Chicago Postal Service management to monitor the performance of the
                 Graceland station to ensure that problems that may arise are identified
                 and resolved.


                 We recommend that the Postmaster General have an entity independent of
Recommendation   Chicago Postal Service management monitor the quality of mail service at
                 the Graceland station by reviewing relevant performance data for the next
                 2 years. The independent entity should periodically report progress and
                 any problems identified, along with corrective actions taken, to
                 appropriate Postal Service officials.




                 Page 24                                      GAO/GGD-98-11 Chicago Mail Service
                  B-276037




                  The Postmaster General provided written comments on a draft of this
Agency Comments   report, which are printed in appendix VI.

                  The Postmaster General said that the report accurately summarized the
                  circumstances and actions that caused the cost overruns at the new
                  Chicago Main Post Office. He also said that the Postal Service has
                  instituted a number of safeguards to strengthen the review process and
                  ensure more management involvement and accountability for large-scale
                  capital investment projects. With respect to mail service in Chicago, the
                  Postmaster General noted that Chicago’s EXFC score for the fourth quarter
                  of fiscal year 1997 was 92—a record score for the city. He also said that he
                  will instruct the Inspection Service, as well as postal managers in Chicago
                  and Washington, to periodically review Graceland station’s performance
                  and report its findings to appropriate officials. Other Postal Service
                  officials provided clarifying comments, which were incorporated
                  throughout the report, as appropriate.


                  This review was done by John S. Baldwin, Sr., Assistant Director; and
                  Robert Homan, Evaluator-in-Charge. If you have any questions about this
                  report, please call me on (202) 512-8387.

                  Sincerely yours,




                  Bernard L. Ungar
                  Director, Government Business
                    Operations Issues




                  Page 25                                      GAO/GGD-98-11 Chicago Mail Service
Contents



Letter                                                           1


Appendix I                                                      30

ZIP Codes and Postal
Districts Within the
Ninth Congressional
District of Illinois
Appendix II                                                     31

Summary of Cost
Overruns at the New
Chicago Main Post
Office
Appendix III                                                    32

USPS Board of
Governors’ Capital
Improvement
Committee
Recommendations for
Process
Improvements
Appendix IV                                                     33

Workload and
Performance
Indicators of
Graceland and
Brookline Stations




                       Page 26   GAO/GGD-98-11 Chicago Mail Service
                           Contents




Appendix V                                                                                              36

Physical Condition of
Postal Facilities in the
Ninth Illinois
Congressional District
Appendix VI                                                                                             39

Comments From the
Postal Service
Tables                     Table 1.1: Overnight EXFC Scores for the Boston, Chicago, and                19
                             Northern Illinois Postal Districts and the National Average From
                             FY 1994 Through the Third Quarter of FY 1997
                           Table I.1: ZIP Codes of the Ninth Congressional District of Illinois         30
                           Table II.1: Changes in Funding for the New Chicago Main Post                 31
                             Office
                           Table III.1: USPS Board of Governors’ Capital Improvement                    32
                             Committee Recommendations for Process Improvements
                           Table III.2: USPS Board of Governors’ Capital Improvement                    32
                             Committee Capital Investments Accountability Improvement
                             Recommendations
                           Table IV.1: Comparison of Selected Workload and Performance                  33
                             Indicators for Graceland Station in Chicago and Brookline
                             Station in Boston for the September 14 Through 20, 1996, Period
                           Table IV.2: Comparison of Selected Workload and Performance                  34
                             Indicators for Graceland Station in Chicago and Brookline
                             Station in Boston for the January 18 Through 24, 1997, Period
                           Table V.1: Repairs/Alterations Identified for Chicago Postal                 36
                             District Facilities Serving the Ninth Congressional District of
                             Illinois
                           Table V.2: Repairs/Alterations Identified for Northern Illinois              38
                             Postal District Facilities Serving the Ninth Congressional District
                             of Illinois


Figures                    Figure 1.1: Postal Service Provided by the Chicago and Northern               6
                             Illinois Postal Districts Within the Ninth Congressional District of
                             Illinois




                           Page 27                                       GAO/GGD-98-11 Chicago Mail Service
Contents




Figure 1.2: Overnight EXFC scores for the Boston, Chicago, and             20
  Northern Illinois Postal Districts and the National Average From
  FY 1994 Through the Third Quarter of FY 1997




Abbreviations

DAR        Decision Analysis Report
EXFC       External First-Class Measurement System
USPS       United States Postal Service


Page 28                                     GAO/GGD-98-11 Chicago Mail Service
Page 29   GAO/GGD-98-11 Chicago Mail Service
Appendix I

ZIP Codes and Postal Districts Within the
Ninth Congressional District of Illinois

                                     The Ninth Congressional District of Illinois is served by two USPS districts:
                                     the Chicago District and the Northern Illinois District. Table I.1 shows
                                     which ZIP Codes within the congressional district are served by the two
                                     postal districts.

Table I.1: ZIP Codes of the Ninth
Congressional District of Illinois                                                                              Northern Illinois
                                     Chicago Postal District                                                     Postal District
                                     60613a                                                                                60025a
                                     60626                                                                                 60029
                                           a
                                     60630                                                                                 60053
                                     60631a                                                                                60076
                                           a
                                     60640                                                                                 60077
                                     60645                                                                                 60201
                                           a
                                     60646                                                                                 60202
                                     60648a                                                                                60203
                                           a
                                     60656                                                                                 60204
                                     60657a                                                                                60208
                                           a
                                     60659                                                                                 60209
                                     60660                                                                                 60251
                                     60701
                                     60714a
                                     60799
                                     a
                                     Neighboring congressional districts also include these ZIP Codes.

                                     Source: USPS.




                                     Page 30                                                   GAO/GGD-98-11 Chicago Mail Service
Appendix II

Summary of Cost Overruns at the New
Chicago Main Post Office

                                            From December 1991 though February 1996, the Postal Service Board of
                                            Governors approved four requests totalling $133.2 million for additional
                                            funding for the new Chicago Main Post Office. Table II.1 summarizes the
                                            major reasons for the funding modifications.


Table II.1: Changes in Funding for the New Chicago Main Post Office
                     Additional
                        amount      Total project
Date of Board         approved            funding
approval           (in millions)     (in millions) Major reasons for modification
March 1990                 N/A           $199.7 Original estimate
December                 $41.7           $241.4 The city of Chicago opposed construction on the preferred site. The cost estimate
1991                                            for the alternative site, which involved construction over railroad tracks and
                                                restrictions on building near the waterfront, was not based on then-current and
                                                complete engineering estimates. Facilities management did not disclose to the
                                                Board of Governors that an in-depth analysis was not performed on the Harrison
                                                Street site when it was presented for approval.
April 1994               $45.4           $286.8 USPS decided to incorporate processing for 17 ZIP Code areas, originally planned
                                                for another facility, into the new Main Post Office, requiring a complete redesign of
                                                the workroom; and assumed responsibility for repairing the Polk Street bridge,
                                                which provided truck access to the new facility.a
June 1995                $30.1           $316.9 USPS underestimated the costs of adding the 17 postal stations to the facility.
                                                USPS also noted a 141,000-square-foot deficiency in the facility caused by adding
                                                the 17 stations.
February 1996              $16           $332.9 USPS decided to renovate the adjacent Sugar House building to fulfill the
                                                141,000-square-foot space deficiency caused by adding the 17 stations to the new
                                                Main Post Office.
                                            a
                                             Of the $7.8 million estimated cost to repair the bridge, the Postal Service recovered $5 million in
                                            1996 from the Chicago Union Station Company, an Amtrak subsidiary.

                                            Source: USPS.




                                            Page 31                                                       GAO/GGD-98-11 Chicago Mail Service
Appendix III

USPS Board of Governors’ Capital
Improvement Committee Recommendations
for Process Improvements
                                        In 1993, the USPS Board of Governors formed the Capital Improvement
                                        Committee to examine the review and approval process for capital
                                        investment projects. In February 1995, the Committee made 10 process
                                        improvement recommendations and 4 accountability improvement
                                        recommendations, which are listed in tables III.1 and III.2. The Postal
                                        Service indicated that these recommendations have been implemented.

Table III.1: USPS Board of Governors’
Capital Improvement Committee           Process improvement recommendations
Recommendations for Process             1. Management should standardize Decision Analysis Reports and improve the quality of
Improvements                            information provided for management and Board review.
                                        2. Management should ensure that the facility contracting process and contracting
                                        documents fully and consistently protect the interests of the Postal Service.a
                                        3. Management should ensure that the process for participation by minority contractors is
                                        followed.
                                        4. The Finance Department should look at the capital investment process in other
                                        organizations to see if any outside processes could be applied within the Postal Service.
                                        5. Management should continue to use the Inspection Service audit functions to
                                        determine if the process can be strengthened in any way.
                                        6. Project sponsors should carefully consider closed vs. open Board meetings when
                                        presenting capital investment projects to ensure that the procurement function is not
                                        harmed by disclosure of data.
                                        7. Project sponsors should provide the Decision Analysis Report to the Board for
                                        discussion in the first month and request a vote in the next or a subsequent month.
                                        8. Project sponsors should provide preliminary briefings to the Board on complex
                                        projects.
                                        9. Management should continually examine the review and approval process for capital
                                        projects so that it can act upon continual improvement opportunities.
                                        10. The Board of Governors should retain the $10 million approval authority.
                                        a
                                         According to a Postal official, this recommendation was made to address a concern about too
                                        many people being involved in facilities contracting. At the time, facilities contracting was done
                                        by both the facilities and procurement offices. As a result of this recommendation, facilities
                                        contracting was consolidated in the procurement office.



Table III.2: USPS Board of Governors’
Capital Improvement Committee           Accountability improvement recommendations
Capital Investments Accountability      1. Implementing managers should provide more frequent project updates to the Board
Improvement Recommendations             on the status of projects approved by the Board.
                                        2. Management should ensure that an “early warning system” exists to alert the Board of
                                        any problems that occur on projects.
                                        3. Finance should provide data to the Board on projects costing under $10 million and
                                        determine if any process improvements are needed for such projects.
                                        4. Management should reinforce procedures requiring prior approval before funds are
                                        reallocated within a project.
                                        Source: USPS Board of Governors.




                                        Page 32                                                       GAO/GGD-98-11 Chicago Mail Service
Appendix IV

Workload and Performance Indicators of
Graceland and Brookline Stations

                                                 We compared the performance of Graceland station to a similar station in
                                                 another city with a higher EXFC score than Chicago’s. The Postal Service
                                                 identified Boston’s Brookline station as being similar to Graceland in
                                                 terms of serving a densely populated area with many high-rise residential
                                                 units. At our request, the Postal Service provided workload/workforce
                                                 measures (the number of deliveries, routes, and carriers, volume of mail
                                                 delivered, amount of carrier sick leave and overtime); timeliness measures
                                                 (EXFC scores, the number of routes with delayed mail, amount of curtailed
                                                 and delayed bulk business mail, and the number of carriers leaving the
                                                 station late); and the number of delivery-related complaints received
                                                 during the weeks of September 14 through 20, 1996, and January 18
                                                 through 24, 1997, at the Graceland and Brookline stations. We chose these
                                                 2 weeks to compare the Graceland station’s performance for the week
                                                 when the new manager began working at the station and for 4 months
                                                 later.29 Tables IV.1 and IV.2 compare the performance of the two stations
                                                 during the two time periods.


Table IV.1: Comparison of Selected Workload and Performance Indicators for Graceland Station in Chicago and Brookline
Station in Boston for the September 14 Through 20, 1996, Period
                                                                                           Graceland             Brookline
Workload/workforce
  Number of possible residential deliveries (May 1997)                                                               37,981                     26,085
  Number of possible business deliveries (May 1997)                                                                    2,026                      1,549
  Number of routes                                                                                                        81                         80
  Volume of mail delivered (in feet)                                                                                   8,012                      6,701
  Number of permanent carriers                                                                                           108                        128
  Number of part-time and temporary carriers                                                                              17                         17
  Carrier overtime (percent of workhours)a                                                                             15.32                      11.99
  Carrier sick leave (percent of workhours)a                                                                              2.1                      0.55
Timeliness
  Rate of on-time overnight delivery of First-Class mail for city (EXFC score)                                           84                     87
                                                                                                     (first quarter FY 1997 (first quarter FY 1997
                                                                                                                for Chicago)b           for Boston)
  Number of routes with delayed maila,c                                                                                   26                              1
                                       a,d
  Feet of curtailed bulk business mail                                                                                   135                        120
  Feet of delayed bulk business maila                                                                                    171                              0
                                               a,e
  Number of carriers leaving the station late                                                                             17                              9
Number of complaintsf (first quarter FY 1997)
  Delayed mail                                                                                                            12                         22
                                                                                                                                           (continued)

                                                 29
                                                     Graceland’s current station manager was assigned temporarily to the station on September 14, 1996.



                                                 Page 33                                                       GAO/GGD-98-11 Chicago Mail Service
                                               Appendix IV
                                               Workload and Performance Indicators of
                                               Graceland and Brookline Stations




                                                                                                               Graceland                    Brookline
  Misdelivery                                                                                                              4                            6
  General service complaints                                                                                               4                            2
  Daily delivery time variation                                                                                            1                           15
  Change of address problems                                                                                               1                            7
  Improperly returned mail                                                                                                 3                            5
  Improper delivery/mode of delivery                                                                                       1                            5
  Nonreceipt of mail                                                                                                       6                            9
Total delivery-related complaints                                                                                        32                            71

                                               a
                                               Daily average.
                                               b
                                                The EXFC score for the Northern Illinois Postal District, which serves part of the Ninth
                                               Congressional District of Illinois, was 86 for the first quarter of fiscal year 1997.
                                               c
                                                First-Class mail is considered delayed if it does not leave the station the same day it is received.
                                               Bulk business mail is considered delayed if it takes more than 48 hours to leave the station.
                                               d
                                                Mail is curtailed if it is not yet scheduled for delivery—for example, to coincide with a mailing
                                               advertiser’s sale, or if workload is heavy on a particular day.
                                               e
                                                A carrier is considered as leaving the station late when a foot carrier leaves more than 10
                                               minutes after the scheduled departure time, or a motorized carrier leaves the station more than 20
                                               minutes late.
                                               f
                                                Delivery-related complaints received at the postal station, district office, or USPS headquarters.
                                               The “delayed mail” and “general service complaints” categories could include some other types
                                               of complaints that are not delivery related. Nondelivery complaints are those concerning no
                                               delivery of any mail, whereas nonreceipt of mail pertains to a complaint about a specific piece of
                                               mail not being received.

                                               Source: USPS.




Table IV.2: Comparison of Selected Workload and Performance Indicators for Graceland Station in Chicago and Brookline
Station in Boston for the January 18 Through 24, 1997, Period
                                                                                           Graceland             Brookline
Workload/workforce
  Number of possible residential deliveries (May 1997)                                                              37,981                      26,085
  Number of possible business deliveries (May 1997)                                                                   2,026                         1,549
  Number of routes                                                                                                       81                            80
  Volume of mail delivered (in feet)                                                                                  6,540                         6,428
  Number of permanent carriers                                                                                          110                          136
  Number of part-time and temporary carriers                                                                             37                            20
  Carrier overtime (percent of workhours)a                                                                             9.84                         18.66
  Sick leave (percent of workhours)a                                                                                   1.49                          3.69
Timeliness
                                                                                                                                           (continued)



                                               Page 34                                                        GAO/GGD-98-11 Chicago Mail Service
                                               Appendix IV
                                               Workload and Performance Indicators of
                                               Graceland and Brookline Stations




                                                                                                               Graceland                    Brookline
  Rate of on-time overnight delivery of First-Class mail for city (EXFC)                                             90                           91
                                                                                                     (second quarter FY           (second quarter FY
                                                                                                       1997 for Chicago)b            1997 for Boston)
  Number of routes with delayed maila,c                                                                                    6                            0
  Feet of curtailed bulk business maila,d                                                                               211                             0
                                      a
  Feet of delayed bulk business mail                                                                                     93                             0
  Number of carriers leaving the station latea,e                                                                         15                            48
Number of complaintsf (second quarter FY 1997)
  Delayed mail                                                                                                             2                           13
  Misdelivery                                                                                                              0                            3
  General service complaints                                                                                               1                            1
  Daily delivery time variation                                                                                            1                            3
  Change of address problems                                                                                               1                            6
  Improperly returned mail                                                                                                 2                            4
  Nondelivery                                                                                                              0                            1
  Improper or attempted delivery                                                                                           2                            4
  Hold order problem                                                                                                       0                            2
  Nonreceipt of mail                                                                                                       5                           10
Total delivery-related complaints                                                                                        14                            47

                                               a
                                                   Daily average.
                                               b
                                                The EXFC score for the Northern Illinois Postal District, which serves part of the Ninth
                                               Congressional District of Illinois, was 85 for the second quarter of fiscal year 1997.
                                               c
                                                First-Class mail is considered delayed if it does not leave the station the same day it is received.
                                               Bulk business mail is considered delayed if it takes more than 48 hours to leave the station.
                                               d
                                                Mail is curtailed if it is not yet scheduled for delivery—for example, to coincide with a mailing
                                               advertiser’s sale, or if workload is heavy on a particular day.
                                               e
                                                A carrier is considered as leaving the station late when a foot carrier leaves more than 10
                                               minutes after the scheduled departure time, or a motorized carrier leaves the station more than 20
                                               minutes late.
                                               f
                                                Delivery-related complaints received at the postal station, district office, or USPS headquarters.
                                               The “delayed mail” and “general service complaints” categories could include some other types
                                               of complaints that are not delivery related. Nondelivery complaints are those concerning no
                                               delivery of any mail, whereas nonreceipt of mail pertains to a complaint about a specific piece of
                                               mail not being received.

                                               Source: USPS.




                                               Page 35                                                        GAO/GGD-98-11 Chicago Mail Service
Appendix V

Physical Condition of Postal Facilities in the
Ninth Illinois Congressional District

                                             In November 1996, Postal officials offered to review the physical condition
                                             of postal facilities in Congressman Yates’ district. This review was
                                             performed by two teams of operational, retail, and administrative staff
                                             from the Chicago and Northern Illinois Postal Districts serving the Ninth
                                             Illinois Congressional District. The teams were supported by a real estate
                                             specialist, a design and construction specialist, and an operations analyst
                                             from the Chicago Facilities Service Office. In addition, an outside
                                             architectural/engineering firm was retained to assist in the review. Tables
                                             V.1 and V.2 summarize the review findings, by postal facility, in the
                                             Chicago and Northern Illinois Postal Districts, respectively.


Table V.1: Repairs/Alterations Identified for Chicago Postal District Facilities Serving the Ninth Congressional District of
Illinois
Postal facility and ZIP Code(s) Repairs/alterations identified, comments
Niles Branch, Niles, IL, 60714    New signage needed to identify the facility from the street.
                                  Minor repairs needed.
                                  A new Postal Store is planned.a
Harwood Heights Branch,           Recommend converting existing facility into a carrier annex.b
Chicago, 60656                    Incorporate safety items into carrier annex conversion.
                                  Recommend relocation of finance portion into a finance unitc to include a Postal Store, with open
                                  merchandising.d
Norwood Park Branch, Chicago,     Provide exterior signage to better identify facility from the street.
60631                             Minor interior repairs are needed.
                                  New Postal Store completed in March 1995.
Edgebrook Finance Station,        Facility is served by an adjacent carrier annex, which has noticeable overcrowding.
Chicago, 60646                    Facility needs interior housekeeping.
                                  New Postal Store with open merchandising was completed in July 1995.
Jefferson Park Finance Station,   The facility is supported by a leased garage that services postal vehicles.
Chicago, 60630                    Exterior repairs and remodeling are needed.
                                  Facility is served by a carrier annex and a parking lot, which is located across the street.
                                  Customers park at the carrier annex.
                                  Major remodeling for a new Postal Store with open merchandising is planned for completion in the
                                  spring of 1998.
Ravenswood Station, Chicago,      Additional objective is to relocate post office boxes into this facility from the detached post office
60625                             box unit,e which is located across the street from this station.
                                  Provide new exterior signage.
                                  Minor interior repair and alterations.
                                  This facility is also served by a second detached post office box unit in the delivery area.
                                  Consider conversion to Postal Store with open merchandising.
Station Q, Chicago, 60625         Add exterior signage.
                                  Minor repairs and alterations.
                                  Convert to Postal Store standards with closed merchandising.
Uptown Station, Chicago, 60640    Minor roof repairs are needed.
                                  Add stamp vending in customer service lobby.
                                  Upgrade appearance of interior customer and support areas.
                                                                                                                                 (continued)




                                             Page 36                                                      GAO/GGD-98-11 Chicago Mail Service
                                              Appendix V
                                              Physical Condition of Postal Facilities in the
                                              Ninth Illinois Congressional District




Postal facility and ZIP Code(s)    Repairs/alterations identified, comments
Northtown Station, Chicago,        Provide new exterior signage.
60645/59                           Reconfigure post office box lobby stamp vending.
                                   Reconfigure rest rooms.
                                   Install modified Postal Store with open merchandising.
Rogers Park Station, Chicago,      Station recently expanded for carrier and retail operations.
60626/60                           New Postal Store with open merchandising was completed in May 1995.
                                   Repairs and upgrading of the flooring and lighting are currently under way in this facility.
                                   Recommend working with the city to increase customer street parking.
                                   Make minor repairs and alterations.
                                   Provide exterior signage.
Station M, Chicago, 60626/60       Relocate finance unit and upgrade to Postal Store standards with closed merchandising.
Station F, Chicago, 60626/60       Upgrade entrance accessibility.
                                   Provide exterior signage.
                                   Add Postal Store with closed merchandising.
Lakeview Station, Chicago, 60613 Minor exterior and interior repair and alterations are needed.
                                 Add Postal Store with open merchandising to the lobby.
Graceland Finance Station,         Replace exterior signage.
Chicago, 60657                     Add pylon sign at Ashland Ave.
                                   Upgrade lobby signage.
                                   Upgrade to Postal Store standards with closed merchandising.
Lincoln Park Finance Station,      Replace exterior signage.
Chicago, 60614                     Provide safety devices on mechanical lifts.
                                   Customer parking is provided by validated parking across the street.

                                              a
                                               The Postal Store is the Postal Service’s name for its new retail operations in post offices offering a
                                              variety of postal products, such as sheets and books of postage stamps, mailing supplies, and
                                              postal-themed merchandise, which are displayed on open shelves for customer pick-up and
                                              selection.
                                              b
                                               A carrier annex is a facility that houses the carrier routes without a retail or post office box
                                              operation. Retail and post office boxes are provided at finance stations.
                                              c
                                               A finance unit is a nondelivery postal branch or station for financial services and acceptance of
                                              mail.
                                              d
                                               Open merchandising refers to displaying items for sale on open shelves, rather than behind the
                                              counter.
                                              e
                                               A detached Post Office Box Unit is usually established to augment a station or branch post office
                                              where additional post office boxes are needed to satisfy customer demand for this service. Stamp
                                              vending is also provided at these locations so that customers can purchase stamps.




                                              Page 37                                                         GAO/GGD-98-11 Chicago Mail Service
                                               Appendix V
                                               Physical Condition of Postal Facilities in the
                                               Ninth Illinois Congressional District




Table V.2: Repairs/Alterations Identified for Northern Illinois Postal District Facilities Serving the Ninth Congressional
District of Illinois
Postal facility and ZIP Code(s) Repairs/alterations identified, comments
Morton Grove, IL, Main Post         Add building signage.
Office, 60053                       Minor interior and exterior repairs needed.
                                    Asphalt repairs in parking lot and maneuvering area needed.
                                    Consider conversion to Postal Store.
Golf, IL, Main Post Office, 60029   Add post office boxes.
                                    Consider conversion to Postal Store.
Glenview, IL, Main Post Office,     Make needed safety improvements.
60025                               Replacement facility currently in progress.
                                    Facility is supported by leased parking and a detached post office box unit.
Skokie, IL, Old Orchard Branch,     New Postal Store recently completed.
60077                               Modify rear door hardware.
Skokie, IL, Main Post Office,       Upgrade safety items.
60076                               Interior repairs needed.
                                    This facility is supported by leased parking and a detached post office box unit.
                                    Consider conversion to Postal Store, which would enlarge lobby.
Evanston, IL, Main Post Office,     Refurbish historic lobby.
60201                               Remodel rest rooms.
                                    This facility is supported by leased parking and a detached post office box unit, as well as a vehicle
                                    maintenance facility.
                                    Consider adding merchandising cases.
Evanston, IL, South Station, 60202 Contact lessor to perform deferred maintenance on the facility.
                                   Remodel dock.
                                   Make safety improvements.
                                   Consider converting to Postal Store standards.
Evanston, IL, North Station, 60201 Upgrade building systems and address deferred maintenance.
                                   Consider converting to Postal Store standards.
                                               Source: USPS.




                                               Page 38                                               GAO/GGD-98-11 Chicago Mail Service
Appendix VI

Comments From the Postal Service




(240232)      Page 39         GAO/GGD-98-11 Chicago Mail Service
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