Summary: Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's (USPS) initiative to contract out more postage stamp production to the private sector, and how the initiative might affect the Bureau of Engraving and Printing's (BEP) role as primary stamp producer.
GAO found that: (1) the initiative currently constitutes a contract study to determine stamp production options; (2) increased private sector involvement may not reduce the Bureau's stamp production, since USPS officials projected that stamp demand would eventually surpass the Bureau's production capacity; (3) USPS began the initiative largely because relations with the Bureau had deteriorated as a result of disagreements on issues such as philatelic stamp quality, stamp adhesives, and other technical problems; (4) Bureau officials cited communication problems with USPS concerning production standards, but USPS attributed communication problems to the Bureau's nonresponsiveness; (5) USPS stated that the Bureau was not participating in the contract study, however, the Department of the Treasury cited concerns regarding information disclosure to private competitors as the reason for the Bureau's limited participation; and (6) the Bureau's future role as the main USPS stamp production source will rely on further relationship improvements, the USPS study's results, and the Bureau's ability to maintain agency and congressional support by meeting stamp requirements at reasonable prices.
