Summary: In response to a congressional request, GAO conducted a study of the possible savings and effects on services that would result from systematically closing and consolidating inefficient post offices and replacing them with contractor-operated stations, rural route extensions, and other alternative services. Specifically, GAO was asked to: (1) estimate the savings involved in closing inefficient post offices and replacing them with lower cost alternative services, and provide examples of inefficient post offices currently in operation; (2) survey the opinions of postal customers who have recently had their post offices replaced with alternative mail services; and (3) assess the efficiency and effectiveness of the current post office closing/consolidation process, including a review of the Service's use of the specific reorganization approach known as area planning.
GAO stated that the Service could save millions of dollars, without adversely affecting its current level of service, if it replaced thousands of post offices. The majority of postal patrons whose post offices have been replaced are satisfied with their current services. GAO believes that, by 1991, approximately $150 million could be saved annually if about 7,000 post offices were replaced with acceptable alternative mail services. In addition, other savings opportunities will exist if other offices are replaced on a case-by-case basis. The current post office replacement process significantly limits the Service's management discretion, and it can take up to 19 months to process a case. The Service must also address the nonpostal effects of replacement action to satisfy the applicable standards of the Postal Rate Commission for reviews of proposed replacements. Adjustments to the current process must be addressed from two perspectives: (1) whether major changes should be made to the process to accelerate replacement action; and (2) whether improvements can be made under the existing process to make it more efficient and workable. However, the final decision on major changes rests on the relative value that Congress places on the Service's quickly achieving the savings associated with replacement activities.
