NCR wins USPS pact

The U.S. Postal Service last week awarded a contract for the second stage of its effort to put point-of-service computer terminals in most post offices.

USPS tapped NCR Corp. for a $67 million contract to build terminals that have Microsoft Corp.'s Windows NT at their core and include printers, a scanner, a keypad, a scale and other peripherals. The terminals show post office customers information about delivery options on a small monitor so that they can compare prices before they decide how to send a letter or package, said Brian Banik, vice president of NCR Postal Solutions.

The Postal Service clerk views a different monitor that reminds the clerk to offer other services, such as postal insurance, that the customer might want.

"It lets customers see what's available to them," said Maribeth Richter, manager of communications at USPS. "It also gives the clerk comparisons about what best fits the needs of the customer. Perhaps they need a value-added product like a certified return receipt or an international money order. All of this is spelled out for the clerk, and it prompts them to offer it."

The award was Stage Two of the USPS' Point-of-Service (POS) One contract. NCR will add 3,500 terminals at USPS retail windows between August and April, NCR and USPS officials said.

NCR has designed its system to improve inventory management to avoid, for example, shortages of stamps. Early this year, many post offices ran out 1-cent stamps immediately after the USPS raised the price of a first-class stamp by a penny. The system also manages clerks' work schedules and automates the process of issuing a money order. This latter improvement will mean that a clerk will be able to print out a money order in 17 seconds, according to Banik, who said such improvements will help customer lines move faster.

The terminals give clerks access to more current information about things that could slow down delivery, such as a strike or an embargo, and customers will get a much faster answer when asking a clerk to look up a ZIP code, Richter said. Clerks have had to consult about 2,281 pages of manuals to look up information that a customer may request. "Now [all] that's at their fingertips," Richter said.

The terminals tie into the Managed Network Services (MNS) telecommunications infrastructure being built for USPS by MCI WorldCom. Clerks will get instant inventories and updates over the network to allow them to replenish supplies more efficiently and do a better job of tracking the whereabouts of a package.

That is the type of service USPS must offer to keep up with competitors United Parcel Service and Federal Express, said Warren Suss, president of Warren H. Suss Associates, a telecommunications consulting firm.

"There is no question that this is part of a very significant commitment of the Postal Service to bolster its IT and maximize productivity and become a stronger competitor," Suss said.

USPS initially awarded the contract three years ago to NCR and IBM Corp. Under that award, the first stage of POS One, NCR and IBM are installing 22,172 terminals in 4,283 post offices. The latest award to NCR is the first phase of Stage Two of the program. By the end of Stage Two, another 13,504 terminals will be added, Richter said. The technology will be installed in an additional estimated 38,000 retail windows under Stage Three.

When it awarded the contract to NCR and IBM, USPS divided installation into three stages, saying one company would be chosen to carry out most of the work. But USPS split the second stage into two phases to allow more time as the Postal Service completes Year 2000 fixes and gears up for high volume during the year-end holiday season, Richter said.

USPS plans to award a contract in the next few weeks to IBM under Stage Two, Richter said, but details have not been released. A spokesman for IBM confirmed that the company has been chosen to continue working into the first phase of Stage Two.

Richter also said it was a "pretty safe assumption" that both vendors would receive awards in the second phase of Stage Two.

"We are still moving forward with both vendors, but evaluation of projects will continue," Richter said. "We will probably continue to work with both through Stage Two."

Phase Two awards are to be made at the end of this year or beginning of next year, with the installation taking place from May 1, 2000, through April 30, 2001.

The total number of terminals to be deployed under POS One is 73,000, and Richter said once they are fully deployed, the terminals will handle about 96 percent of all lobby postal service transactions.


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