USPS rapped on e-biz

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Although the U.S. Postal Service's e-commerce activities are in their infancy,

they face an uphill battle to meet the standards of federal watchdogs, according

to testimony presented Sept. 7 at a Senate hearing.

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

issues:

* 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 the following 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 those activities.

"We embrace the GAO recommendations," said John Nolan, deputy postmaster

general.

Nolan said USPS has begun to address GAO's concerns, including instituting

a new approval process for e-commerce activities that will provide quarterly

status reports to USPS' Board of Governors. "Management has proven its

ability in other challenging modernization efforts, and the board expects

no less in this challenging arena," said Robert Rider, vice chairman of

the Board of Governors.

But Edward Gleiman, chairman of the Postal Rate Commission, questioned

whether USPS should be in the e-commerce business at all and whether the

agency's products will produce revenue. He noted that a market test of

the NetPost Mailing Online service that guaranteed a printing contractor

a minimum revenue of $325,000 only produced about $23,000. "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,"

he said.

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