[Federal Register Volume 67, Number 84 (Wednesday, May 1, 2002)]
[Notices]
[Pages 21780-21785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10782]


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POSTAL SERVICE


Postage Evidencing Product Submission Procedures

AGENCY: Postal Service.

ACTION: Notice of proposed procedure.

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SUMMARY: The Postal Service is proposing to revise the product 
submission procedures for postage meters and other postage evidencing 
systems. The proposed procedures were originally published as interim 
procedures in the Federal Register on January 7, 1997 [Vol. 62, No. 4, 
pages 1001-1004], and were revised and published as draft procedures on 
September 2, 1998 [Vol. 63, No. 170, pages 46728-46732]. The draft 
procedures were again revised and published in the Federal Register on 
August 17, 1999 [Vol. 64, No. 158, pages 44760-44766], with submission 
of comments due by October 18, 1999. After receipt and consideration of 
comments, the procedures were amended and published in the Federal 
Register on April 14, 2000 [Vol. 65, No. 73, pages 20211-20218], with a 
request for submission of additional comments by May 15, 2000.
    The proposed procedures include extensive changes. We based the 
changes made since the April 2000 publication on public comments and 
the experience we have gained in approving postage evidencing systems. 
We are reissuing the proposed procedures in revised form for public 
comment because we consider the changes from the previous version to be 
extensive. We will revise the proposed procedures, if required, and 
publish them as a final rule after we review the comments. Since all 
comments will be made available for public inspection, any marked 
``proprietary'' or ``confidential'' will be returned to the sender 
without consideration.

DATES: The Postal Service must receive comments on or before May 31, 
2002. No extensions on the comment period will be granted.

ADDRESSES: Mail or deliver written comments to Manager, Postage 
Technology Management, United States Postal Service, 1735 N Lynn 
Street, Room 5011, Arlington, VA 22209-6050. You can view and copy all 
written comments at the same address between 9 a.m. and 4 p.m., Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: Wayne Wilkerson, manager, Postage 
Technology Management, by fax at 703-292-4050.

SUPPLEMENTARY INFORMATION: With the expansion of postage application 
methods and technologies, it is essential that the product submission 
procedures for all postage evidencing products be clearly stated and 
defined, while remaining flexible enough to accommodate evolving 
technologies. The Postal Service evaluation process can be effective 
and efficient if all suppliers follow these procedures. In this way, 
secure and convenient technology will be made available to the mailing 
public with minimal delay and with the complete assurance that all 
Postal Service technical, quality, and security requirements have been 
met. These procedures apply to all proposed postage evidencing products 
and systems, whether the provider is new or is currently authorized by 
the Postal Service.
    Title 39, Code of Federal Regulations (CFR) section 501.9, Security 
Testing, states, ``The Postal Service reserves the right to require or 
conduct additional examination and testing at any time, without cause, 
of any meter submitted to the Postal Service for approval or approved 
by the Postal Service for manufacture and distribution.'' For products 
meeting the performance criteria for postage evidencing systems that 
generate an information-based indicia (IBI), including PC 
Postage products, the equivalent section is 39 CFR section 
502.10, Security Testing, published as a proposed rule in the Federal 
Register on October 2, 2000. When the Postal Service elects to retest a 
previously approved product, the

[[Page 21781]]

provider will be required to resubmit the product for evaluation 
according to part or all of the proposed procedures. The Postal Service 
will determine full or partial compliance with the procedures prior to 
resubmission by the provider.
    The proposed submission procedures will be referenced in 39 CFR 
part 501 and will be published as a separate document titled ``Postage 
Technology Management, Postage Evidencing Product Submission 
Procedures.''

Product Submission Procedures for Postage Meters (Postage 
Evidencing Systems)

1. General Information

1.1  Independent Testing Laboratory
    To receive authorization from the Postal Service to manufacture, 
produce, or distribute a postage meter (postage evidencing system) 
under 39 CFR part 501, Authorization to Manufacture and Distribute 
Postage Meters, the provider must obtain approval under these product 
submission procedures. These procedures also apply to providers 
requesting approval to manufacture, produce, or distribute a product 
under proposed 39 CFR part 502, Authority to Produce and Distribute 
Postage-Evidencing Systems that Generate Information-Based Indicia 
(IBI) (65 FR 58689).
    The provider must select an independent testing laboratory, such as 
one accredited by the National Institutes of Standards and Technology 
(NIST) under the National Voluntary Laboratory Accreditation Program 
(NVLAP) to conduct the detailed product review and testing required by 
these procedures. When the product contains a postal security device 
(PSD) or cryptographic module, the laboratory must be a NVLAP-
accredited cryptographic modules testing laboratory.
    Technical documentation (section 4) and production systems (section 
5) must be provided to the selected test laboratory in sufficient 
detail to support testing. The testing laboratory will submit an 
executive summary containing the information referenced in the Required 
Documentation table set forth in paragraph 4.2, and the results of the 
product evaluation directly to the Postal Service. All supporting 
documentation, products, PSDs and cryptographic modules, and other 
materials used or generated during testing will be maintained by the 
testing laboratory for the life of the test. At the time of product 
approval, the manager, Postage Technology Management (PTM), will 
determine the ongoing disposition of all supporting documentation, 
products, PSDs and cryptographic modules, and other materials used or 
generated during testing.
    During the product's life cycle, the provider may choose to use a 
different laboratory. In that event, all materials used or generated 
during testing and product evaluation must be transferred to the new 
laboratory.
    Upon completion of the testing, the Postal Service may require that 
any or all of the following categories of information be forwarded 
directly from the accredited laboratory to the manager, PTM:
    (1) A copy of all information that the provider gives to the 
laboratory, including a summary of all information transmitted orally.
    (2) A copy of all instructions from the provider to the testing 
laboratory with respect to what is and what is not to be tested.
    (3) Copies of all proprietary and nonproprietary reports and 
recommendations generated during the test process.
    (4) Written full disclosure identifying any contribution by the 
test laboratory to the design, development, or ongoing maintenance of 
the system.
1.2  Product Submission Procedures
    To submit a postage meter (postage evidencing system) for Postal 
Service approval, the provider will complete the following steps:
    (1) Submit a letter of intent (section 2).
    (2) Complete and sign the nondisclosure agreements (section 3).
    (3) Submit the required documentation (section 4).
    (4) Submit the postage evidencing system for evaluation (section 
5).
    (5) Enable USPS to review the provider's system infrastructure 
(section 6).
    (6) Place the product into limited distribution for field testing 
(section 7), after completing any additional security testing that the 
Postal Service requires.
1.3  Additional Security Testing
    The Postal Service may choose to use resources under direct 
contract to the Postal Service to support the product review for 
additional security testing. The activities of these resources are 
independent of the testing laboratory selected by the provider and must 
be covered by nondisclosure agreements (section 3).
1.4  Product Approval Process
    When the field testing (section 7) is completed successfully, the 
Postal Service performs an administrative review of the test and 
evaluation results and, when appropriate, grants authorization to 
distribute the product, as described in section 8.
    At each stage of the product submission process, the manager, PTM, 
reserves the right to terminate testing if a review shows that the 
system as proposed will adversely impact Postal Service processes. The 
provider may resubmit the product after the problems have been 
resolved.
    The provider can avoid unnecessary delays in the review and 
evaluation process by testing the product thoroughly prior to 
submitting it to the independent testing laboratory and to the Postal 
Service. If the Postal Service determines that there are significant 
deficiencies in the product or in the required supporting materials, 
then the Postal Service will return the submission to the provider 
without reviewing it further.

2. Letter of Intent

    The provider must submit a letter of intent to Manager, Postage 
Technology Management (PTM), United States Postal Service, 1735 N. Lynn 
Street, Room 5011, Arlington, VA 22209-6050. The manager, PTM, will 
assign a point of contact to coordinate the submission and review 
process. The letter of intent must be dated and must include the 
following:
    (1) Name and address of all parties involved in the proposal, with 
a name, e-mail address, and telephone number of an official point of 
contact for each party identified. In addition to the provider, the 
parties listed must include those responsible for assembly, 
distribution, product management, and hardware/firmware/software 
development and testing, and other organizations involved (or expected 
to be involved) with the product, including all suppliers of 
significant product components.
    (2) Provider's business qualifications, including proof of 
financial viability and proof of the provider's ability to be 
responsive and responsible.
    (3) System concept narrative, including the provider's 
infrastructure that will support the product.
    (4) The target Postal Service market segment the proposed system is 
envisioned to serve.
    When there is a significant change to any aspect or name of the 
product described in the letter of intent prior to submission of the 
concept of operations (section 4), the provider must revise the letter 
of intent and resubmit it.

[[Page 21782]]

3. Nondisclosure Agreements

    When the Postal Service uses resources under direct contract to the 
Postal Service to support the product review, the provider must 
establish a nondisclosure agreement with these resources. These 
nondisclosure agreements may require extension to third-party suppliers 
or others identified in the letter of intent (section 2). Providers are 
encouraged to share copies of nondisclosure agreements provided by the 
Postal Service with all parties identified in the letter of intent, to 
ensure that these parties will execute the agreement if needed to 
support Postal Service review of the product. Failure to sign 
nondisclosure agreements, provided by the Postal Service to support 
review activities, might adversely affect a product submission. 
Questions regarding this process should be directed to the manager, 
PTM.

4. Technical Documentation

4.1  Introduction
    The provider must submit the materials listed in the Required 
Documentation table. If the provider considers that a given requirement 
is not applicable to the product, the provider should note this in the 
document submission. The table is not meant to be an exhaustive list of 
all possible areas that need to be documented to support the evaluation 
of a postage meter (postage evidencing system). Ongoing advances and 
changes in technology and new approaches to providing postage 
evidencing can add other components that must be considered. The 
provider should submit any additional information that it considers 
necessary or desirable to describe the product fully. The independent 
testing laboratory may determine the level of detail that must be 
submitted to meet its test and evaluation requirements. The laboratory 
or the Postal Service may request additional information if needed for 
a complete evaluation.
    Documentation must be submitted to the independent laboratory and 
the Postal Service as indicated in the Required Documentation table. 
The laboratory will prepare an executive summary and submit it to the 
Postal Service when required. Documentation must be in English and must 
be formatted for standard letter size (8.5"  x  11") paper, except for 
engineering drawings, which must be folded to letter size. Where 
appropriate, documentation must be marked as ``Confidential.'' The 
document recipient will determine the number of paper copies and the 
format of electronic copies of each document at the time of submission 
based on current technology and review requirements.
    The manager, PTM, will acknowledge the product concept as 
understood by the Postal Service based on the concept of operations 
(CONOPS) documentation. The provider should schedule a meeting with PTM 
staff shortly after or simultaneously with the submission of technical 
data to permit full discussion and understanding of the technical 
concepts being presented for evaluation. The manager, PTM, will 
indicate Postal Service agreement or concerns relevant to the concept, 
as appropriate.
4.2  Required Documentation
    The following table details all documents that the provider must 
prepare. The table shows the submission requirements for the Postal 
Service and for the independent testing laboratory.

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             Document/section              Submit to test laboratory?          Postal service requirement
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                                             Required Documentation
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Concept of Operations (CONOPS):
    System overview, including:
         Concept overview and      Yes.......................  Provider submits in full. Executive
         business model.                                                summary prepared by laboratory.
         Postal security device
         (PSD) implementation, features,
         and components, including the
         digital signature algorithm.
         System life cycle
         overview.
         Adherence to industry
         standards, such as FIPS PUB 140-
         1 or 140-2 (after May 25, 2002),
         as required by Postal Service.
    System design details, including:      Yes.......................  Executive summary prepared by laboratory.
                                                                        Laboratory report on indicium barcode
                                                                        compliance with postal requirements as
                                                                        given in the performance criteria.
         PSD features and
         functions.
         All aspects of key
         management.
         Client (host) system
         features and functions.
         Other components
         required for system use
         including, but not limited to,
         the proposed indicia design and
         label stock.
    System life cycle, including:          Yes.......................  Provider submits in full. Executive
                                                                        summary prepared by laboratory.
         Manufacturing...........
         Postal Service
         certification of the system.
         Production..............
         Distribution............
         Meter licensing.........
         Initialization..........
         System authorization and
         installation.
         Postage value download
         or resetting process.
         System and support
         system audits.
         Inspections.............
         Procedures for system
         withdrawal and replacement,
         including procedures for system
         malfunctions.
         Procedures to destroy
         scrapped systems.

[[Page 21783]]

 
    Finance overview, including:           Yes.......................  Provider submits in full. Executive
                                                                        summary prepared by laboratory.
         Customer account
         management (payment methods,
         statements, and refunds).
         Individual product
         finance account management
         (resetting or postage value
         download, refunds).
         Daily account
         reconciliation (provider
         reconciliation, Postal Service
         detailed transaction reporting).
         Periodic summaries
         (monthly reconciliation, other
         reporting as required by the
         Postal Service).
    Interfaces, including:                 Yes.......................  Provider submits in full. Executive
                                                                        summary prepared by laboratory.
         Communications and
         message interfaces with the
         Postal Service infrastructure
         for resetting or postage value
         downloads, refunds, inspections,
         product audits, and lost or
         stolen product procedures.
         Communications and
         message interfaces with Postal
         Service financial functions for
         resetting or postage value
         downloads, daily account
         reconciliation, and refunds.
         Communications and
         message interfaces with customer
         infrastructure for cryptographic
         key management, product audits,
         and inspections.
         Message error detection
         and handling.
    Configuration management and detailed  Yes.......................  Executive summary prepared by laboratory.
     change control procedures for all
     components, including, but not
     limited to:
         Software................
         Hardware and firmware...
         Indicia.................
         Provider infrastructure.
         Postal rate change
         procedures.
         Interfaces..............
    Physical security....................  Yes.......................  Executive summary prepared by laboratory.
    Personnel/site security..............  Yes.......................  Executive summary prepared by laboratory.
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                                           Software and Documentation
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Detailed design..........................  Yes.......................  Executive summary prepared by laboratory.
Executable code..........................  Yes.......................  On request.
Source code..............................  Yes.......................  On request.
Operations manuals.......................  Yes.......................  Executive summary prepared by laboratory.
Communications interfaces................  Yes.......................  Executive summary prepared by laboratory.
Maintenance manuals......................  Yes.......................  Executive summary prepared by laboratory.
Schematics...............................  Yes.......................  Executive summary prepared by laboratory.
Product initialization procedures........  Yes.......................  Executive summary prepared by laboratory.
Finite state machine models/diagrams.....  Yes.......................  Executive summary prepared by laboratory.
Block diagrams...........................  Yes.......................  Executive summary prepared by laboratory.
Details of security features.............  Yes.......................  Executive summary prepared by laboratory.
Description of cryptographic operations,   Yes.......................  Executive summary prepared by laboratory.
 as required by FIPS PUB 140-1 or 140-2
 (after May 25, 2002), Appendix A.
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                                                    Test Plan
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Postal Service requirements..............  Yes.......................  Executive summary prepared by laboratory.
FIPS PUB 140-1 or 140-2 (after May 25,     Yes.......................  Executive summary prepared by laboratory.
 2002) requirements.
Physical security of provider's Internet   Yes.......................  Executive summary prepared by laboratory.
 server, administrative site, and
 firewall.
Security for remote administrative access  Yes.......................  Executive summary prepared by laboratory.
 and configuration control.
Secure distribution or transmission of     Yes.......................  Executive summary prepared by laboratory.
 software and cryptographic keys.
Test plan for system infrastructure:       Yes.......................  Executive summary proeared by laboratory.
     Test parameters.............
     Infrastructure systems......
     Interfaces..................
     Reporting requirements......
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Test plan for limited distribution field   Yes.......................  Executive summary prepared by laboratory.
 tests:
     Test parameters.............
     System quantities...........

[[Page 21784]]

 
     Geographic location.........
     Test participants...........
     Test duration...............
     Test milestones ............
     System recall plan.................................................................................
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                                          Provider Infrastructure Plan
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Public key infrastructure................  Yes.......................  Executive summary prepared by laboratory.
Procedures for enforcement of all          Yes.......................  Executive summary prepared by laboratory.
 provider-related, customer-related, and
 Postal Service-related processes,
 procedures, and interfaces discussed in
 CONOPS or required by Postal Service
 regulations.
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5. Product Submission and Testing

5.1  General Submission Requirements
    The provider must submit complete production systems to the 
independent testing laboratory for evaluation. The laboratory will 
determine how many systems are needed for a complete evaluation. The 
provider must also provide any equipment and consumables required to 
use the submitted systems in the manner described in the CONOPS. The 
provider must also submit complete production systems, supporting 
equipment, and consumables directly to the Postal Service, if 
requested. The Postal Service may test these for compliance with Postal 
Service regulations and processes under section 6, System 
Infrastructure Testing.
5.2  Submission Requirements for Products Containing a Postal Security 
Device or Cryptographic Module
    The NVLAP-accredited cryptographic modules testing (CMT) laboratory 
must evaluate all postal security devices (PSDs) and cryptographic 
modules for FIPS PUB 140-1 or 140-2 certification, or equivalent, as 
authorized by the Postal Service. After May 25, 2002, FIPS PUB 140-2 
certification will be required. The Postal Service requires that the 
PSD or cryptographic module receive FIPS PUB 140-1 or 140-2 
certification as it is implemented. That is, the PSD or cryptographic 
module and the installed application must be considered as a whole in 
determining whether or not it receives FIPS certification. The FIPS 
certification of the PSD or cryptographic module is dependent on the 
application. Since any certification could be in question once any 
noncertified or untested software is installed, the PSD or 
cryptographic module must be certified as it will be implemented, and 
the accredited CMT lab must reevaluate any changes that would risk the 
certification.
    Upon completing FIPS PUB 140-1 or 140-2 certification, or 
equivalent, the CMT laboratory must forward the following documentation 
directly to the manager, PTM:
    (1) A copy of the letter of recommendation for certification of the 
PSD or cryptographic module that the laboratory submitted to the 
National Institute of Standards and Technology (NIST) of the United 
States of America.
    (2) A copy of the certificate, if any, issued by NIST for the PSD 
or cryptographic module.

6. System Infrastructure Testing and Provider System Security Testing

    To achieve Postal Service approval of a postage evidencing system, 
the provider must demonstrate that the system satisfies all applicable 
postal regulations and reporting requirements and that it is compatible 
with Postal Service mail processing functions and all other functions 
with which the product or its users interface. The tests must involve 
all entities in the proposed architecture, including the postage 
evidencing system, the provider infrastructure, the financial 
institution, and Postal Service infrastructure systems and interfaces. 
The tests may be conducted in a laboratory environment in accordance 
with the test plan for system infrastructure testing. Test and approval 
of system infrastructure functions must be completed before the postage 
evidencing system can be field tested under section 7. The functions to 
be tested include, but are not limited to, the following:
    (1) Meter licensing, including license application, license update, 
and license revocation.
    (2) System status activity reporting.
    (3) System distribution and initialization, including system 
authorization, system initialization, customer authorization, and 
system maintenance.
    (4) Total system population inventory, including leased and 
unleased systems, new system stock, and system installation, 
withdrawal, and replacement.
    (5) Irregularity reporting.
    (6) Lost and stolen reporting.
    (7) Financial transactions, including cash management, individual 
system financial accounting, account reconciliation, and refund 
management.
    (8) Financial transaction reporting, including daily summary 
reports, daily transaction reporting, and monthly summary reports.
    (9) System initialization.
    (10) Cryptographic key changes and public key management.
    (11) Postal rate table changes.
    (12) Print quality assurance.
    (13) Device authorization.
    (14) Postage evidencing system examination and inspection, 
including physical and remote inspections.
    In addition to testing the system infrastructure, the Postal 
Service must be assured that the provider's support systems and 
infrastructure are secure and not vulnerable to security breaches. This 
will require site reviews of provider manufacturing, distribution, and 
other support facilities, and reviews of network security and system 
access controls.

7. Limited Distribution Field Test

    To achieve Postal Service approval of a postage evidencing system, 
the provider must demonstrate that the system satisfies all applicable 
postal processing and interface requirements in a real-world 
environment. This is achieved by placing a limited number of systems in 
distribution for field testing. The Postal Service will determine the 
number of systems to be tested. The test will be conducted in 
accordance with the Postal Service-approved test plan for limited 
distribution field testing. The purpose of the limited-distribution 
field test is to demonstrate the product's utility, security, audit and 
control, functionality, and compatibility with other systems, including 
mail entry,

[[Page 21785]]

acceptance, and processing when in use. The field test will employ 
available communications and will interface with current operational 
systems to exercise all system functions.
    The manager, PTM, will review the executive summary of the 
provider-proposed test plan for limited distribution field testing. The 
review will be based on, but not limited to, the assessed revenue risk 
of the system, system impact on Postal Service operations, and 
requirements for Postal Service resources. Approval may be based in 
whole or in part on the anticipated mail volume, mail characteristics, 
and mail origination and destination patterns of the proposed system. 
For systems designed for use by an individual meter user, product users 
engaged in field testing must be approved by the Postal Service before 
they are allowed to participate in the test. These participants must 
sign a nondisclosure/confidentiality agreement when reporting system 
security, audit and control issues, deficiencies, or failures to the 
provider and the Postal Service. This requirement does not apply to 
users of systems designed for public use.

8. Postage Evidencing System Approval

    Postal Service approval of the postage meter (postage evidencing 
system) is based on the results of an administrative review of the 
materials and test results generated during the product submission and 
approval process. In preparation for the administrative review, the 
provider must update all documentation submitted in compliance with 
these procedures to ensure accuracy. The Postal Service will prepare a 
product approval letter detailing the conditions under which the 
specific product may be manufactured, distributed, and used. The 
provider must submit the following materials for the Postal Service 
administrative review:
    (1) Materials prepared for the Postal Service by the independent 
testing laboratory.
    (2) The final certificate of evaluation from the NVLAP laboratory, 
where required.
    (3) The results of system infrastructure testing.
    (4) The results of field testing of a limited number of systems.
    (5) The results of any other Postal Service testing of the system.
    (6) The results of provider site security reviews.

9. Intellectual Property

    Providers submitting postage evidencing systems to the Postal 
Service for approval are responsible for obtaining all intellectual 
property licenses that may be required to distribute their product in 
commerce and to allow the Postal Service to process mail bearing the 
indicia produced by the product.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 02-10782 Filed 4-30-02; 8:45 am]
BILLING CODE 7710-12-P