[Federal Register Volume 64, Number 111 (Thursday, June 10, 1999)]
[Rules and Regulations]
[Pages 31121-31124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14636]


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POSTAL SERVICE

39 CFR Part 111


Experimental Nonletter-Size Business Reply Mail Categories and 
Fees; Implementation Standards

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM) 
standards adopted by the Postal Service to implement the Decision of 
the Governors of the United States Postal Service on the Recommended 
Decision of the Postal Rate Commission on the Renewal of Experimental 
Classifications and Fees for Nonletter-Size Business Reply, Docket No. 
MC99-1.
    During the past two years, the Postal Service has studied the 
effects of two alternative experimental accounting methods for 
nonletter-size business reply mail (BRM) with a controlled number of 
recipients: The reverse manifesting method and the bulk weight 
averaging method. Until the implementation of a permanent 
classification and fees, the Postal Service intends to continue the 
experiment with up to 10 participants to resolve some administrative 
and technical issues related to permanent implementation of the bulk 
weight averaging accounting method.

EFFECTIVE DATE: June 8, 1999.

FOR FURTHER INFORMATION CONTACT: Paul Lettmann, (202) 268-6261, or 
Michael T. Tidwell, (202) 268-2998.

SUPPLEMENTARY INFORMATION: The Postal Service will review applications 
and select as many as six mailers to join the four current participants 
in the experiment. It is hoped that the BRM received by the 
participants will represent a diverse range of products returned by 
BRM. The limitation on the number of participants in the extension of 
the weight averaging experiment is consistent with the need to conduct 
an experiment that can be managed effectively, with the narrow scope of 
the administrative and technical issues the extension is expected to 
resolve, and with the relatively short time frame during which the 
extension is likely to be in effect.
    The selection of experiment participants depends on various 
criteria such as mail volume, product type and packaging, geographic 
location, ability to implement and maintain quality control procedures 
for accounting and documentation, and availability of postal resources. 
A prospective participant should be able to participate until February 
29, 2000, and, if selected, begin within a short period of time. Only 
the weight averaging method of counting the returned nonletter-size BRM 
pieces will be tested as part of this experiment.
    As part of this study, participants will be charged lower per piece 
BRM fees for qualifying pieces as follows:
    For participants using the weight averaging accounting method, the 
per piece accounting fee is 1 cent, plus the appropriate First-Class 
Mail or Priority Mail postage.
    Participants must pay an annual business reply mail permit fee and 
an annual business reply mail advance deposit accounting fee, which are 
currently $100.00 and $300.00, respectively. In addition, there will be 
a monthly audit and maintenance fee of $600.00 assessed per BRM account 
at each site where the experimental weight averaging accounting method 
is employed.

Background

    As a consequence of Postal Rate Commission Docket No. MC97-1, the 
United States Postal Service has engaged in an experiment since June 8, 
1997, which was designed to test the feasibility of two alternative 
methods of accounting for nonletter-size Business Reply Mail: the 
reverse manifesting method and the bulk weight averaging method. For 
each method, the experiment was designed to involve up to 10 recipients 
of nonletter-size BRM. On an experimental basis, separate experimental 
set-up/qualification, monthly auditing or sampling, and per piece fees 
were established for each method. All experimental classifications and 
fees are scheduled to expire on June 7, 1999.
    To date, four BRM recipients have participated in the experiment, 
which is scheduled to expire on June 7, 1999. One participant began the 
experiment utilizing the reverse manifest method. Three others elected 
to participate utilizing the weight averaging method.
    Approximately nine months ago, the one participant using the 
reverse manifest method unilaterally determined on the basis of 
internal operational considerations that it would switch to the weight 
averaging method. The Postal Service has since been unable to recruit 
any participants to experiment with the reverse manifest method. 
Although the Postal Service believes that the method has potential, the 
limited experience during the experiment did not provide an adequate 
opportunity to fully evaluate the method or overcome the shortcomings 
with the method that were identified when the experiment was initiated. 
As a consequence, the operational feasibility of the reverse manifest 
method remains unproved.
    The experiment has demonstrated the feasibility of the bulk weight 
averaging accounting method for nonletter-size BRM to the satisfaction 
of the Postal Service. At the same time, the Postal Service has 
determined that it must resolve some administrative and technical 
issues related to the operation of bulk weight averaging before 
implementing the method on a permanent basis.
    Accordingly, on March 10, 1999, the Postal Service filed two 
requests before the Postal Rate Commission. The first request sought an 
extension of the current bulk weight averaging experiment beyond its 
June 7, 1999, expiration date to allow for the continuation of work to 
resolve the aforementioned administrative and technical issues that 
stand in the way of

[[Page 31122]]

implementing weight averaging on a permanent basis. That proceeding was 
designated by the Postal Rate Commission as Docket No. MC99-1. The 
second request proposed the establishment of a permanent classification 
and fees for weight averaged nonletter-size BRM. That proceeding was 
designated as Docket No. MC99-2. The Postal Service intends to let the 
reverse manifest classification and fees expire as scheduled.

Manual BRM Verification Method

    The manual counting, weighing, rating, and billing for incoming 
nonletter-size BRM at delivery post offices is a labor-intensive and 
time-consuming task usually performed by postage due unit employees. 
These postal employees must weigh and rate each piece individually and 
calculate the appropriate postage and fees.
    This manual process frequently takes place during a short period 
between the arrival of the BRM at the postage due unit and the arrival 
of the BRM recipient at the post office to pick up the mail. Depending 
on mail volume, the necessary accounting sometimes delays the release 
and delivery of the mail. Such delays can adversely affect the 
recipient's ability to meet customer fulfillments expeditiously.

Weight Averaging Method

    Some recipients of large volumes of incoming nonmachinable BRM and 
local postal officials have developed an alternative accounting method, 
bulk weight averaging, that allows the recipients to take possession of 
their incoming mail sooner than mail manually weighed and rated on a 
piece-by-piece basis by the Postal Service.
    This method also makes it less expensive for the Postal Service to 
determine the postage and fees. This alternative method reduces postal 
workhours, provides more expeditious accounting, allows for earlier 
delivery of BRM pieces, and increases recipient satisfaction with BRM 
service.
    Application of the bulk weight averaging accounting method for a 
BRM permit account requires periodic sampling and monitoring of the 
permit holder's nonletter-size BRM. As a consequence, the added 
administrative overhead generates extraordinary postal costs not 
covered by the current $100.00 annual BRM permit fee and $300.00 annual 
BRM advance deposit accounting fee.
    For purposes of the current experiment, the Postal Service adopted 
additional fees for the nonletter-size BRM weight averaging accounting 
method:
     A one-time set-up/qualification fee of $3,000.
     A $3,000 monthly maintenance fee.
     A $0.03 per piece accounting fee.
    These fees expire on June 7, 1999. On May 14, 1999, in Docket No. 
MC99-1, the Postal Rate Commission recommended the extension of the 
nonletter-size BRM experiment until February 29, 2000, or until 
implementation of permanent fees, whichever comes first, which was the 
term requested by the Postal Service. The Commission also recommended 
the classification and fees proposed in a Joint Stipulation and 
Agreement by the parties in Docket No. MC99-1. The Commission's 
recommendations were approved in the May 26, 1999, Decision of the 
Governors of the United States Postal Service. Accordingly, on June 8, 
1999, the following fees will apply to nonletter-size BRM subject to 
the terms of the weight averaging experiment:
     A $600 monthly maintenance fee.
     A $0.01 per piece accounting fee.
    The one-time set-up/qualification fee has been eliminated. These 
new experimental fees expire on February 29, 2000, or upon 
implementation of permanent fees, whichever comes first.

Selection Process for Participants

    A reply mail recipient who wants to participate in the extension of 
the nonletter-size BRM experiment must submit a written request to: 
Manager, Mail Preparation and Standards, Postal Service Headquarters, 
475 L'Enfant Plaza SW, Room 6800, Washington, DC 20260-2405. The 
request must include sufficient data to assist in making an initial 
determination.
    Consideration is given to product type, geographic location, 
variability in the weight and daily volume of BRM, current accounting 
and quality control procedures, and availability of postal resources. 
In selecting participants, the manager of Mail Preparation and 
Standards also uses the following criteria:
     The applicant must receive at one site a yearly average 
volume of approximately 100,000 or more nonletter-size BRM pieces 
eligible for the current $0.08 per piece fee.
     The applicant must be prepared to participate in the 
experiment through February 29, 2000.
     The applicant must be prepared to begin operation at a 
mutually agreed upon time soon after selection.
    If the manager of Mail Preparation and Standards determines that 
the applicant is suitable for participation, the applicant is 
instructed to follow the appropriate application procedures for 
authorization, as described in Domestic Mail Manual G092 and published 
in this final rule. If the manager of Mail Preparation and Standards 
determines that the applicant is not suitable, that manager sends the 
applicant a written notice explaining the reasons for the determination 
and, if appropriate, requests additional information for further 
review.
    Decisions of the manager of Mail Preparation and Standards may be 
appealed to the BRM Experiment Review Board, Postal Service 
Headquarters, 475 L'Enfant Plaza SW, Room 6800, Washington DC 20260-
2405. Appeals must include sufficient information to assist the Review 
Board in reconsideration of initial determinations. Decisions of the 
Review Board are final.

Implementation

    Pursuant to 39 U.S.C. 3624, the PRC on May 14, 1999, issued to the 
Governors of the Postal Service its Recommended Decision on the Postal 
Service's Request to extend the weight averaging portion of the 
nonletter-size BRM experiment.
    After reviewing the PRC's Recommended Decision and its consequences 
for the Postal Service and postal customers, the Governors, pursuant to 
39 U.S.C. 3625, acted on the PRC's recommendations on May 26, 1999. 
(Decision of the Governors of the United States Postal Service on the 
Recommended Decision of the Postal Rate Commission on the Renewal of 
Experimental Classification and Fees for Nonletter-Size Business Reply 
Mail Categories and Fees, Docket No. MC99-1.)
    The Governors determined to approve the PRC's recommendations, and 
the Board of Governors set an implementation date of June 8, 1999, for 
the classification and fee changes to take effect. A notice announcing 
the Governors' Decision and the final Domestic Mail Classification 
Schedule and Fee Schedule changes is published elsewhere in this issue 
of the Federal Register.
    This final rule contains the DMM standards adopted by the Postal 
Service to implement the Governors' Decision.
    As described below, the Postal Service is limiting these 
experimental fee categories to those pieces of nonletter-size business 
reply mail that are outside the parameters of current automation-
compatible letter-size business reply mail. As a consequence, the final 
rule excludes letter-size pieces which could qualify for Qualified 
Business Reply Mail (QBRM) rates and fees. (Currently, pieces weighing 
two ounces or less can qualify for QBRM.)

[[Page 31123]]

    Because of the purpose and limited scope of this experiment, the 
Postal Service finds no need to solicit comment on the standards for 
nonletter-size BRM or to delay implementation of this extension.

List of Subjects in 39 CFR Part 111

    Postal Service.

    For the reasons discussed above, the Postal Service hereby adopts 
the following amendments to the Domestic Mail Manual, which is 
incorporated by reference in the Code of Federal Regulations (see 39 
CFR part 111).

PART 111--[REVISED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Revise G092 to the Domestic Mail Manual as follows:

G  GENERAL INFORMATION

* * * * *

G090  Experimental Classifications and Rates

[Revise G092 to remove references to reverse manifesting; remove 2.0, 
which explains reverse manifesting; and renumber 3.0 to 5.0 to leave 
weight averaging as the experimental accounting method as follows:]

G092  Nonletter-Size Business Reply Mail

1.0  BASIC ELIGIBILITY
[Amend 1.1 to remove references to reverse manifesting to read as 
follows:]

1.1  Description

    The standards in G092 apply to pieces claimed by an authorized 
mailer at the experimental fees for nonletter-size business reply mail 
(BRM). Draft Publication 405, Guide to Business Reply Mail, contains an 
explanation of weight averaging sampling procedures, calculations, and 
other information.

[Revise 1.2 to read as follows:]

1.2  Applicability

    BRM pieces eligible under G092 must:
    a. Be mailed as First-Class Mail or Priority Mail and meet the 
specific standards in 2.0.
    b. Meet the applicable physical standards for nonletter-size mail 
in C050 (i.e., flat-size mail, machinable parcels, irregular parcels, 
or outside parcels) and Cl00 for First-Class Mail, except any BRM piece 
accounted for under the weight averaging method in 2.0 may not exceed 5 
pounds. Reply mail letters which cannot qualify for Qualified Business 
Reply Mail (QBRM) because they weigh too much also are eligible for the 
weight averaging method.
    c. Meet the basic standards for BRM in S922 other than those 
specific to letter-size pieces or pieces processed as QBRM.
    d. Meet the addressing standards in A010 and bear a delivery 
address with the correct ZIP+4 code and barcodes assigned to the BRM 
permit holder by the USPS.
    e. Be marked as specified in the service agreement under 2.0 and 
comply with any current or future USPS marking standard.
    f. Meet the documentation and postage payment standards in 2.0 and 
the service agreement.
    g. Be received at the post office that serves the permit holder.

[Amend 1.3 by removing 1.3d concerning the set-up/qualification fee and 
redesignating current 1.3e as 1.3d to read as follows:]

1.3  Fees

    Each BRM piece eligible under G092 is charged the corresponding 
single piece rate for First-Class Mail or Priority Mail plus the 
appropriate fee as shown in 4.2. To receive pieces under this fee 
schedule, the participating mailer also must pay fees for these 
accounts and services:
* * * * *
    d. Applicable monthly maintenance fee.
[Amend 1.4 to remove the reference to reverse manifesting information 
and change the manager to whom BRM customer requests are submitted to 
read as follows:]

1.4 Participation in Test

    A business reply mail recipient who wants to participate in the 
experiment and receive an account for nonletter-size BRM under G092 
must submit a written request for consideration to the manager of Mail 
Preparation and Standards, USPS Headquarters (see G043 for address). 
The request must include sufficient data to assist the manager in 
making an initial determination. The manager may request additional 
data and an on-site visit to the applicant's plant. If the manager 
determines that the applicant is suitable for participation, the 
applicant follows the application procedures in 2.0. Consideration is 
given to product type, geographic location of the mailer's site of 
operation, variability in the weight and daily volume of BRM, current 
accounting and quality control procedures, and availability of postal 
resources. In selecting participants, the manager also uses the 
following additional criteria:
    a. The applicant must receive or expect to receive at one site a 
yearly average volume of approximately 100,000 or more nonletter-size 
BRM pieces eligible for the current $0.08 per piece fee under S922.
    b. The applicant must be able to participate in the experiment 
through February 29, 2000.
    c. The applicant must be prepared to begin operation at a mutually 
agreed upon time soon after selection.

[Remove current 2.0 in its entirety. Re-designate current 3.0 through 
3.4 as 2.0 through 2.4, respectively, to read as follows:]
2.0 WEIGHT AVERAGING
* * * * *
[Amend renumbered 2.2 to change the manager to whom customers submit 
requests to read as follows:]

2.2 Application

    A business reply mail recipient applying for participation in the 
extension of the weight averaging experiment must complete a standard 
application provided by the Postal Service. The applicant submits this 
application to the manager of Mail Preparation and Standards. The 
applicant includes with the application documentation that contains 
sample BRM pieces and labels representative of the weight range and 
types of pieces to be weight-averaged.

[Amend renumbered 2.3 to change the manager to whom customers submit 
requests and to change the effective dates to read as follows:]

2.3 Authorization

    The manager of Mail Preparation and Standards reviews the 
application and proceeds as follows:
    a. If the applicant meets the conditions required for the 
experimental weight averaging accounting method and the application is 
otherwise consistent with the purposes and goals of the experiment, the 
manager approves the application and prepares a service agreement with 
the applicant. The agreement details the operating procedures for 
weight averaging and the responsibilities of the applicant and the 
Postal Service. For the purposes of the experiment, the Postal Service 
may require additional documentation and periodic review and inspection 
of each experiment participant's BRM processing and accounting 
operations. No agreement may remain in effect beyond the February 29, 
2000, outside duration date established for the extension of the 
experiment. The

[[Page 31124]]

experimental classification and fees take effect on June 8, 1999; they 
will expire on February 29, 2000, or when the permanent classification 
and fees for weight averaged nonletter-size BRM are implemented, 
whichever comes first.
    b. If the application does not appear to meet the conditions 
required for the weight averaging method, the manager of Mail 
Preparation and Standards denies the application and sends written 
notice to the applicant, with the reasons for denial. The applicant has 
10 days after receipt of the notice to file a written appeal to the BRM 
Experiment Review Board, U.S. Postal Service Headquarters. Decisions of 
the Review Board are final.

[Remove renumbered 3.4, Renewal, in its entirety.]
[Re-designate current 4.0 as 3.0.]
3.0 REVOCATION
[Amend renumbered 3.1 to change the manager who may revoke a 
participant's authorization and remove the reference to a manifest to 
read as follows:]

3.1 Reasons

    The manager of Mail Preparation and Standards may revoke a BRM 
participant's authorization for the experiment if that participant:
    a. Provides incorrect data on the required documentation and 
appears unable or unwilling to correct the problems.
    b. Neglects to perform required quality control procedures.
    c. No longer meets the criteria in this standard and the service 
agreement.
* * * * *
[Revise 3.3 to shorten the appeal period to 10 days to read as 
follows:]

3.3 Appeal

    Revocation proceeds if the participant is unable or unwilling to 
correct the discrepancies found. The participant may file a written 
appeal of revocation within 10 days from the date of receipt of the 
notice, with evidence explaining why the authorization should not be 
revoked. The appeal must be filed with the BRM Experiment Review Board, 
which issues the final agency decision. The participant may continue to 
accept BRM under the authorization, pending a decision on appeal. The 
revocation decision takes effect 7 days after receipt by the 
participant.

[Re-designate current 5.0 as 4.0:]
4.0 RATES AND FEES
[Amend 4.1 to change references from ``5.2'' and ``5.3 and 5.4'' to 
``4.2'' and ``4.3 and 4.4,'' respectively, to read as follows:]

4.1 Rate Application

    Each BRM piece received under G092 is charged the applicable per 
piece fee in 4.2 and the appropriate single-piece First-Class Mail rate 
or Priority Mail rate. In addition to the fees in 4.3 and 4.4, the 
required BRM permit fee and BRM advance deposit account fee must be 
paid every 12 months.

[Amend 4.2 by removing 4.2b and revising 4.2 to read as follows:]

4.2 Per Piece Fee

    Per piece, in addition to single-piece rate First-Class Mail or 
Priority Mail postage for nonletter-size experimental (weight 
averaging): $0.01.

[Amend 4.3 by removing 4.3b and revising 4.3 to read as follows:]

4.3 Monthly Maintenance Fee

    Monthly fee for nonletter-size experimental (weight averaging): 
$600.00.

5.4 [Removed]

[Remove current 5.4. There is no longer a one-time set-up/qualification 
fee.]

    A transmittal letter making these changes in the pages of the 
Domestic Mail Manual will be published and will be transmitted to 
subscribers automatically. As provided by 39 CFR 111.3, notice of 
issuance will be published in the Federal Register.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 99-14636 Filed 6-8-99; 8:45 am]
BILLING CODE 7710-12-P