November 12, 2013
While the news this week has been dominated by rave reviews for the Postal Service's announcement that it will deliver packages on Sunday to Amazon Prime customers (who pay $79 a year for the privilege), there’s another story going on about residents of single room occupancy (SRO) buildings who are fighting just to get their mail delivered at all. The Postal Service says they’re transients, and it’s up to management to put the mail in their boxes. The City of San Francisco is fighting the USPS policy in the courts, and last week the City appealed an earlier decision that went against the SROs.
There’s a law against discriminating against users of the mail. 39 U.S.C. 403(c) reads as follows:
“In providing services and in establishing classifications, rates, and fees under this title, the Postal Service shall not, except as specifically authorized in this title, make any undue or unreasonable discrimination among users of the mails, nor shall it grant any undue or unreasonable preferences to any such user.”
The Postal Service is going to deliver Amazon packages on Sundays only to customers who live in New York and Los Angeles; eventually the program will encompass a few other big cities like Dallas, Houston, and New Orleans. That seems like it would discriminate against people who live everywhere else, particularly the residents of rural America, who will probably never get Sunday delivery, no matter how successful the program turns out to be. The USPS-Amazon deal will also hurt brick-and-mortar retailers (who are also users of the mail), and it may also discriminate against businesses that won’t enjoy Sunday delivery, like e-Bay and other mail-order retailers.
But the SRO story is about another kind of discrimination. SRO tenants are typically economically disadvantaged, often seniors and individuals with disabilities — the kind of people who don’t have access to the Internet and who are most reliant on the mail. They’re not waiting for the new i-Pad they ordered on Amazon to show up in their mailbox. They’re waiting for their Social Security checks, prescription drugs, and food stamps.
So it's not very reassuring for SRO tenants to see their mail dumped in a pile on the desk of the SRO manager for “last mile" delivery. They worry about mail getting lost or delayed, and there have also been complaints that SRO building managers have harassed residents based on information gathered by looking at their mail.
When the City of San Francisco took the Postal Service to court over the Postal Service’s refusal to deliver the mail, the agency argued that SRO tenants are transients and too difficult to keep track of, SRO buildings are a type of hotel, and distributing the mail is the responsibility of the SRO’s management. A big issue in the case was also the Postal Service’s argument that if it were required to deliver to each resident’s box, the costs would be “onerous” and “unsustainable.”
November 11, 2013
The Postal Service has rather quietly announced a pilot program to put post offices inside of Staples. It’s part of what the USPS is calling the Retail Partner Expansion Program, and the first Staples to host a post office will be located in San Francisco and San Jose.
According to an article in the Burlingame-Hillsborough Patch, which was apparently based on a USPS press release of some sort (it’s not on the USPS website), the Postal Service and Staples are launching a pilot program to open postal retail counters inside select Staples locations, including 470 Noor Avenue in South San Francisco. (Update: Here are the press releases on San Jose and South San Francisco.)
Partnering with private retailers is nothing new for the Postal Service. Over the past few years, the Postal Service has developed a network of partners that encompasses over 70,000 businesses, ranging from small convenience stores and banks to national chains like Costco, CVS, and Office Depot. Nearly all of these locations, however, are authorized just to sell stamps and flat-rate boxes.
The new arrangement with Staples is different. The postal counter inside of Staples will sell stamps, First-Class Domestic and International Mail and package services, Priority Mail, Priority Mail Express, Domestic and International, Global Express Guaranteed and Standard Post. The employees behind the counter, however, will not be USPS employees. They will be specially trained Staples employees.
The arrangement with Staples sounds something like a contract postal unit, i.e., a postal site owned and operated by a private business under contract to the Postal Service. CPUs offer most of the products and services of a regular post office, but they are staffed by the private business, not USPS employees. There are about 3,500 CPUs, as well as about 400 Village Post Offices (VPOs), which are basically CPUs that just sell stamps and flat-rate boxes.
It’s not clear how the new arrangement with Staples differs from a regular CPU. The news item on the story is titled, “USPS Will Pay Rent to Local Staples Store.” But that’s probably not entirely accurate. It’s not likely the Postal Service would rent a space inside a Staples and then staff it with Staples employees. More likely, as with a CPU, the Postal Service will pay Staples a share of the revenues. For a typical CPU, the Postal Service gives the host business 6% to 10% of gross "walk-in" revenues.
But maybe the Retail Partner Expansion Program will involve some sort of new arrangement. Perhaps the Postal Service will pay some rent and share the revenues. Details are scant so far.
What’s clear, though, is that the Postal Service remains committed to shifting its retail operations from brick-and-mortar post offices to partnerships with private retailers. The Postal Service says it simply wants to make postal products and services more readily available, but it's not just about convenience for customers. The Postal Service is also looking to cut costs by getting away from running its own post offices. This strategy is encouraged by the big mailers — who don't use post offices and who see them as contributing to higher postal rates.
November 10, 2013
A former subcontractor and employee of Northrop Grumman named Beau Michaud has filed a lawsuit in the U.S. District Court of Virginia against Grumman. The Complaint claims that Grumman repeatedly gave “false reports and certifications to the USPS that materially misrepresent the speed, reliability, accuracy and efficiency of the FSS machines and that materially misrepresent the conformity of the machines to the Contract’s requirements.”
The FSS (Flats Sequencing System) machines are huge contraptions that sort catalogs, magazines, large envelopes, and newsletters. The Postal Service’s contract with Northrop Grumman to develop the FSS machines states that USPS would not pay the full amount of $874 million unless Grumman delivered 100 FSS machines meeting the performance and maintainability standards set forth in the contract.
The machines have been plagued with problems, and the Postal Service has withheld over $400 million in payments. In May 2012, Grumman filed a lawsuit against the Postal Service claiming it’s owed $180 million in extra costs it incurred because of changes made by the Postal Service while the machines were being developed. The Postal Service says Grumman owes it $341 million for losses allegedly tied to retesting costs, late delivery and other issues. Michaud’s whistleblower complaint will provide plenty of details that will probably make their way into the lawsuit between Grumman and the Postal Service.
Michaud worked on the FSS project for Northrop Grumman from January 2007 through February 2011, first as a subcontractor and then as an employee. During this time, Michaud says he witnessed Grumman’s fraud about the performance reports “and tried to stop it but was met only with resistance and retaliation.” At one point, he was summoned to a supervisor’s office and told to “mind [his] own business,” and “stop trying to undermine the program.”
Michaud’s Complaint is filled with specific details about the periodic reports of Failure Modes, Effects, and Criticality Analyses (FMECA) that Grumman was required to provide the Postal Service showing that the company was complying with the contract.
Michaud claims that he and his co-workers were told to provide a “best guess” on performance times for various operations involved with maintaining and repairing the machines. The numbers they were asked to report were essentially a fiction, then, and the workers began referring to the “measurements” as “tribal lore.”
November 6, 2013
When the Postal Service sold two historic post offices in Connecticut, there was probably a general sense that they would be protected by preservation laws. But over the past few weeks, the post offices in Fairfield and Greenwich have been totally gutted, and a good portion of the Fairfield exterior has been destroyed as well. About all that will remain of these two structures is the shell.
Maybe there wasn’t much worth preserving inside these buildings, but it still comes as a shock to see pictures like those in the slideshow. Apparently all that matters of history is the facade.
Gutted in Greenwich
The post office in Greenwich was built in 1917, and it served the community for 95 years. In May 2012, the building was sold for $15 million to Peter Malkin, a Greenwich resident who also happens to own the Empire State Building. Mr. Malkin is a trustee emeritus of the National Trust for Historic Preservation, and he apparently has a reputation for saving historic buildings.
When Malkin emerged as the buyer of the Greenwich post office back in May 2011, local officials said they were told the property would be rented by the high-end retailer Bergdorf Goodman. That deal fell through or it was a false rumor to begin with. The new tenant will be Restoration Hardware, a luxury brand in home furnishings.
Restoration Hardware describes itself as “a curator of the finest historical design the world has to offer,” so it is rather ironic that the “restoration” of the Greenwich post office has required a total gutting of the structure’s interior.
While the old Greenwich post office gets repurposed as a high-end retailer, the new post office in town is housed in a building that used to be a pet food store, for which the Postal Service pays over $21,000 a month in rent. As Evan Kalish observed on his website Going Postal, the two buildings make quite a contrast.
The historic Greenwich post office is on the National Register of Historic Places, so one might think that it would be protected, inside and out. But landmark status has turned out to mean a few more hurdles to overcome before the demolition could begin.
In September 2011, a news report said that any changes to the building would need to be approved by the state of Connecticut. According to documents filed with the Greenwich Town Clerk's office, "No construction, alteration or rehabilitation shall be undertaken or permitted to be undertaken that would affect the historic features ... without consultation with and the express permission of the Connecticut Historic Preservation and Museum Division."
Well, all that consultation took place and the plans were approved — by the town’s Planning and Zoning Commission, by the Historic District Commission, by the Architectural Review Committee, and probably by other government agencies as well. It sounds like the approval was quite enthusiastic.
According to the Greenwich Time, Donald Heller, chairman of the Planning and Zoning Commission, “lavished praise” on the planned transformation of the landmark. "I felt very good about it," Heller said after seeing a presentation of the plans. "It's just a magnificent job. Isn't it gorgeous?"