Postal Service rapped on e-commerce
- By Dan Caterinicchia, Dan Caterinicchia
- Sep 08, 2000
USPS home page
The U.S. Postal Service's e-commerce activities may be in their infancy,
but they face an uphill battle to meet the standards of federal watchdogs,
according to testimony presented at a Senate hearing Thursday.
The agency's e-commerce activities, including Stamps Online and eBillPay,
suffer from three main problems, according to the testimony of Bernard Ungar,
director of the General Accounting Office's government business operations
* Inconsistent definitions of e-commerce.
* Not adhering to formal project approval requirements and not properly
documenting those that are approved.
* Inconsistent financial reporting for cost and revenue data.
Ungar presented the GAO report, "U.S. Postal Service: Postal Activities
and Laws Related to Electronic Commerce," to the Senate Governmental Affairs
Committee's International Security, Proliferation and Federal Services Subcommittee.
To ensure more effective management and oversight, GAO recommended that
the postmaster general enact these moves to counter the e-commerce problems:
* Properly identify e-commerce programs and maintain accurate information
related to their status.
* Follow processes and controls for developing and approving the activities.
* Provide complete data on costs and revenues for the financial data
on these activities.
"We embrace the GAO recommendations," said John Nolan, deputy postmaster
general, adding that the agency's definition of e-commerce is "anything
that requires the Internet and gets revenue through either user charges
or license fees."
Nolan said USPS has already begun to address the GAO's concerns, including
instituting a new approval process for e-commerce activities that will provide
quarterly status reports to USPS' Board of Governors.
"It is difficult to assess the effectiveness of the Postal Service's
e-commerce initiatives thus far," said Robert Rider, vice chairman of the
Board of Governors. "It is also hard to establish meaningful benchmarks
in an industry that is in its infancy. Nevertheless, management has proven
its ability in other challenging modernization efforts, and the board expects
no less in this challenging arena."
But some at the hearing questioned whether USPS should be in the e-commerce
business at all. Edward Gleiman, chairman of the Postal Rate Commission,
said the bottom-line issue is whether the agency's e-commerce products can
be relied on to produce revenue.
"All things considered, I would have to say the signs are not encouraging,"
Gleiman said, noting that a market test of the Mailing Online service that
guaranteed a printing contractor a minimum revenue of $325,000 only produced
"Pursuit of e-commerce for its own sake may only serve to distract postal
management, and divert resources, from the critical demands of performing
its public mission," Gleiman said.