[Federal Register Volume 65, Number 112 (Friday, June 9, 2000)]
[Notices]
[Pages 36744-36746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14681]


=======================================================================
-----------------------------------------------------------------------

POSTAL SERVICE


Quality Control Reviews for Discounted Letters (Presorted/
Automation Rate Mail)

AGENCY: Postal Service.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This second notice provides responses to comments submitted 
concerning the notice published in the Federal Register (65 FR 141-142) 
about the Mail Quality Analysis (MQA) program. MQA is an automated 
quality control review tool for automation letter mail preparation. It 
focuses on presort and piece count accuracy. MQA uses existing 
automation equipment, software, and reports to compare actual sortation 
to mailer documentation for sampled mail.

DATES: Effective May 1, 2000.

FOR FURTHER INFORMATION CONTACT: Mark Richards, (703) 329-3684.

SUPPLEMENTARY INFORMATION: On January 3, 2000, the Postal Service 
published a Notice and Request for Comments concerning the MQA program 
in the Federal Register. Descriptions of the MQA program and 
announcements to business mailers about MQA were published in Postal 
Bulletin 22012 (December 2, 1999) and in the December issue of Mailers 
Companion. Further details will appear in Mailers Companion and will be 
presented at Postal Customer Council meetings.
    MQA will begin on May 1, 2000, and will phase in to full 
implementation on October 15, 2000. From May 1 to October 15, 2000, MQA 
reports will be provided to mailers as diagnostic information, enabling 
mailers to assure that their design, preparation, and production 
procedures result in mailings that qualify for the postage rates 
claimed. After October 15, 2000, mailings showing more than a 5 percent 
presort error rate will result in a postage adjustment if the 
adjustment totals more than $50. After October 15, a mailer's first-
ever MQA analysis will serve as a notice only. In all cases, MQA 
feedback will help mailers to identify and fix the root causes of any 
presort and/or piece count errors.
    The Postal Service and mailers have worked together for many years 
to improve the quality of mail, which ultimately benefits all customers 
through more stable postage rates. MQA incorporates a quality control 
analysis process, with feedback to the mailer on the results of the 
review. Only mailers with consistent quality control problems will 
experience routine postage adjustments. The MQA feedback process, 
however, is designed to help prevent consistent problems from 
happening. MQA, as a process management tool, is analogous to the in-
process quality/inventory/productivity indicators used by other 
businesses and industries in their quality control efforts.
    MQA uses existing equipment, software, and reports to compare mail 
sortation and piece counts with mail qualification reports submitted by 
the mailer. MQA provides an additional return to the Postal Service and 
our customers from ongoing investments in technology and software. MQA 
is not a developmental program, but a new application of existing 
capabilities. The Postal Service believes it is vital to create an 
environment that leads to high-quality mail and also bolsters the 
integrity of the worksharing discount program. MQA enhances an 
environment where each mailer pays postage commensurate with 
preparation of their mail.

Summary of Comments Received

    The Postal Service received five comments in response to the 
January 3, 2000, Federal Register notice. The commenters were two 
mailer associations, one mailing logistics firm, one mailing service, 
and one large mail-order firm.
    Specific issues raised in the comments are presented below. All 
commenters supported the goal of improving mail quality for the benefit 
of all postal customers. Concerns were primarily related to the postage 
adjustment aspect of MQA. One commenter limited his concern to say that 
calculations for postage adjustments need to be clearly stated, and the 
MQA reports as described do so. The following is a summary of the other 
comments:
    1. Implementation should not have occurred before the comment 
period expired. The mailing industry should have been involved up front 
in the development of MQA.
    2. Mailers should be given advance notice when their mail is to be 
reviewed under MQA.
    3. After initial verification and acceptance, can the Postal 
Service perform additional quality reviews?
    4. Can the Postal Service legally initiate a postage adjustment for 
mail after acceptance? There is a limited opportunity for ``rework'' of 
mail preparation errors.
    5. Mailers are not responsible for their mail after it has been 
accepted by the Postal Service.
    6. Are MQA reports linked to the sample and mailing (associated 
with the mailing and custody of sample), and are MQA samples dispatched 
in a timely manner?
    7. Do equipment issues (reading accuracy and availability of 
machine maintenance records) affect MQA?
    8. It is not fair to calculate postage adjustments against the 
entire mailing; the sample size is small compared to the potential 
postage adjustment.
    9. Postage adjustments are difficult for mailers to pay. Institute 
a delay for collection of postage.
    10. How will mailers know what to fix?
    11. Will mailers have appeal rights and protection from arbitrary 
determinations?
    12. The MQA program should be discontinued, and costs of presort 
errors spread among all mailers.
    13. MQA is a threat to customers and will not encourage more mail.
    14. MQA should be rolled out to all mailers, not just to larger 
mailers.

Responses to Comments

    Item 1: Full implementation of MQA was scheduled for June 3, 2000 
(well after expiration of the comment period on February 2), and has 
now been deferred to October 15, 2000. Mailers and their associations 
have been engaged in dialogue with the Postal Service for the past 
several months. It also is significant that the diagnostic and feedback 
provisions incorporated within MQA have been requested by a variety of 
mailers for some time. MQA uses existing equipment, software, and 
reports to compare mail sortation with mailer presort documentation and 
provides an additional return to the Postal Service and our customers 
from ongoing investments in technology and software.
    Item 2: To assure that MQA reviews are a true picture of mail as 
routinely submitted to the Postal Service, advance notification of 
mailings selected for review will not occur, either internally or to 
mailers. Mailers with on-site detached mail units (DMUs), however, 
likely will notice that a particular mailing has been selected for 
analysis, because trays will be isolated for the MQA review. Mailers 
whose mailings are submitted to a business mail entry unit (BMEU) may 
not know their mail was analyzed until they receive an MQA report. In 
recent industry discussion

[[Page 36745]]

groups, some mailers expressed the strong desire to be present at the 
USPS barcode sorting equipment when their mail is being analyzed. The 
Postal Service agreed to craft a procedure to offer mailers the 
opportunity to observe the analysis. This will be a straightforward 
procedure that maintains the integrity of the analysis while giving 
mailers the opportunity for first-hand observation of the MQA analysis. 
Information about this procedure will appear in an upcoming issue of 
Mailers Companion.
    Item 3: Authorization to mail at discounted rates is granted with 
the understanding that mail will be prepared to qualify for the rates 
claimed. Mail submitted with preparation problems leads to 
extraordinary processing costs as it is rehandled. Domestic Mail Manual 
(DMM) G020.2.1 states that all mailers are required to comply with 
applicable postal standards. DMM G020.2.2 and the mailer certification 
on each postage statement provide notice that when proper postage is 
not claimed on the postage statement, the Postal Service expects to 
collect the proper amount. The USPS will continue the verification 
process at mail acceptance units. However, to avoid ``double 
jeopardy,'' a mailing assessed a postage adjustment as the result of 
the presort verification and presort errors disclosed at acceptance 
will not be subject to MQA. The failure to use existing assets to 
provide an efficient method for feedback on mail quality would be a 
great disservice to all who have properly prepared their mail. 
Therefore, the Postal Service believes it is responsible and proper to 
administer MQA as defined. MQA will not impact mailers whose systems 
and procedures produce high-quality mailings, but will benefit all 
mailers through more stable postage rates.
    Items 4 and 5: The Postal Service has a statutory obligation to 
collect postage owed under 39 U.S.C. 404(a). Moreover, the Postal 
Service is prohibited from discriminating between mailers, as could 
occur if some do not pay the full legal rate of postage. Postal 
standards (such as DMM P011.4.0) provide the necessary mechanism for 
determining amounts owed to the Postal Service and provide appeal 
procedures for mailers if they dispute such postage adjustments. DMM 
G022.2.1 requires mailers to comply with all applicable postal 
standards, and payment of correct postage is an obvious and important 
component of compliance. DMM G022.2.2 states that the Postal Service is 
not restricted from demanding proper payment of postage after 
acceptance when it becomes apparent that such payment was not made. 
Further, mailers have ample additional notice of these standards and 
the requirement that each mailer must pay postage commensurate with 
their mail preparation through: (1) The application and approval 
process for authorization to mail at discounted rates; (2) the mailer 
certification on each postage statement that the mail qualifies for the 
rates claimed; and, (3) the mailer agreement in that same certification 
to pay any postage deficiencies assessed on the mailing. The MQA report 
is clear documentation of presort and piece count discrepancies, as 
compared to the mail qualification report and rates claimed on the 
postage statement. Fairness has been applied through the initial 
notification of presort errors exceeding 5 percent without a postage 
adjustment prior to October 15, 2000, and not assessing postage 
adjustments under $50 thereafter.
    MQA analyzes mail as it is run on delivery barcode sorters (DBCSs). 
It is not feasible to reconstruct a mailing and offer the mailer the 
opportunity to rework mail when presort errors are first disclosed 
during actual processing of that mail. This fact is true today and MQA 
does not change it.
    Item 6: Initial MQA reviews will be conducted at the origin postal 
facility. MQA samples (including DMU/destination entry trays) will be 
isolated and their integrity secured through special placarding, 
handling, and tray label recording procedures. The direct relationship 
between the MQA sampled mail and the MQA report is shown by recording 
information directly from the tray labels onto the MQA documentation. 
Scheduling of MQA reviews and processing of samples will be coordinated 
with Mail Processing. Dispatch of sampled mail will not normally be 
affected by MQA reviews, although in some cases alternative means of 
routing may be used. In cases where presort errors exceeding 5 percent 
are found, mailers will receive copies of all documentation involved as 
a final quality control check of the process.
    Item 7: DBCS equipment is used every day by the Postal Service to 
process live mail. Preventive maintenance is performed regularly and 
documented. It is important to note that MQA does not measure barcode 
readability but rather records mailer-applied barcodes to measure 
presort and piece count accuracy, as compared to mailer documentation 
for the sample. Because of the mathematical check digit incorporated in 
a barcode, DBCS equipment does not misinterpret barcodes. Only when the 
barcode and its check digit formula add up correctly is a barcode 
``read.'' Barcodes that are not read are rejected, and rejected pieces 
are not counted as errors under MQA. Rejected pieces will be analyzed 
and information reported to the mailer, as this may also assist mailers 
in improving quality. Moreover, for computer list sorted mailings, MQA 
will run thousands of similar pieces through the DBCS at the same time, 
optimizing the capabilities of the equipment to read barcodes on 
sampled mail.
    Item 8: Postage adjustments are applied only to the actual pieces 
sampled or to the sort level sampled (5-digit, 3-digit, AADC, Mixed 
AADC). Sample sizes for MQA reviews are larger than any possible to 
date.
    Items 9 and 10: Mailers with effective quality controls, who 
prepare mailings to qualify for the rates claimed, will not have 
difficulties. Difficulty in paying appropriate postage for a mailing is 
not used to establish the postage a particular mailer should pay and 
should not mean that one mailer is not required to meet the same 
preparation standards as others. If a postage adjustment is initiated, 
mailers also can discuss terms and conditions, or other alternatives 
that might be considered, with the USPS District Manager, Finance. Even 
mailers who have consistent quality control and qualification problems 
will not experience continuing postage adjustments if they make 
necessary corrections to their mail preparation procedures. Diagnostic 
feedback from the MQA report will be in sufficient detail to assist 
mailers in determining where in their operations a problem originated, 
but MQA also is designed to encourage mailers to perform ongoing self-
assessments of their quality controls. Until October 15, 2000, mailers 
will have ample opportunity to both review internal quality control 
procedures and use MQA feedback to improve their operations.
    Item 11: MQA postage adjustments will be based on objective data 
received from detailed machine reports of the presort and piece counts 
found in the mail sample. Mailers have appeal rights to the Rates and 
Classification Service Center for MQA determinations made at local or 
district offices.
    Item 12: Measuring and documenting the quality of mail at points 
where it is most efficient to do so will lead to improved operations, 
efficiencies, and lower costs for both the Postal Service and mailers. 
In preliminary testing of MQA, several mailers already have made 
significant improvements in quality and in some cases also increased 
their efficiency and reduced their internal costs. MQA is a benefit, 
not a

[[Page 36746]]

burden, to mailers. The many high-quality mailers should not bear the 
burden of paying additional costs associated with poor-quality mail 
submitted by a small number of mailers.
    Item 13: Improving quality throughout all mailing processes is a 
long-term need to which all members of the mailing industry should 
subscribe. As quality is improved and corresponding increases in 
efficiencies and stabilization of rates are achieved, more, not less, 
mail will result.
    Item 14: MQA will focus initially on the largest volume mailers, 
then move down the chain to smaller volume mailers. The USPS will 
monitor this process and has built an objective approach to selecting 
which mail will be analyzed.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 00-14681 Filed 6-8-00; 8:45 am]
BILLING CODE 7710-12-U