U.S. Postal Service: Little Progress Made in Addressing Persistent
Labor-Management Problems (Letter Report, 10/01/97, GAO/GGD-98-1).

Pursuant to a congressional request, GAO reviewed the Postal Service's
(USPS) efforts to improve employee working conditions and the overall
performance of the Service, focusing on: (1) the status and results of
the Postal Service's efforts in improving various labor-management
relations problems identified in GAO's 1994 report, including how USPS
implemented specific improvement initiatives; and (2) approaches that
could help USPS and its four labor unions and three management
associations achieve consensus on how to deal with the problems GAO
discussed in its 1994 report.

GAO noted that: (1) little progress has been made in improving the
persistent labor-management relations problems that had, in many
instances, resulted from autocratic management styles, the sometimes
adversarial attitudes of employees, unions, and management, and an
inappropriate and inadequate performance management system; (2) these
problems have generally contributed to a sometimes contentious work
environment and lower productivity for USPS; (3) also, the number of
employee grievances not settled at the first 2 steps of the grievance
process has increased from around 65,000 in fiscal year (FY) 1994 to
almost 90,000 in FY 1996; (4) these problems continue to plague USPS in
part because the parties involved, including USPS, the four major labor
unions, and the three management associations, cannot agree on common
approaches for addressing the problems; (5) this inability to reach
agreement has prevented USPS and the other seven organizations from
implementing GAO's recommendation to develop a framework agreement that
would outline common objectives and strategies for addressing
labor-management relations problems and improving the postal workroom
climate; (6) since 1994, USPS and its unions and management associations
have tried to improve the climate of the postal workplace by
implementing specific improvement initiatives; (7) many postal, union,
and management association officials told GAO that they believed some of
these initiatives held promise for making a positive difference in the
labor-management climate; (8) however, GAO's review of specific
improvement initiative showed that although some actions had been taken
to implement certain initiatives, little information was available to
measure their results; (9) in some instances, the initiatives were only
recently piloted or implemented, and some had been discontinued; (10) in
other instances, although postal and union officials agreed that
improvements were needed, they disagreed on approaches for implementing
specific initiatives; (11) generally, these disagreements have made it
difficult for USPS and its unions and management associations to move
forward and work together to ensure that the initiatives' intended
improvements could be achieved; and (12) with the significant future
challenges it faces to compete in a fast-moving communications
marketplace, USPS can ill afford to be burdened with long-standing
labor-management relations problems.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-98-1
     TITLE:  U.S. Postal Service: Little Progress Made in Addressing 
             Persistent Labor-Management Problems
      DATE:  10/01/97
   SUBJECT:  Labor-management relations
             Postal service
             Working conditions
             Collective bargaining
             Job satisfaction surveys
             Government employee unions
             Work measurement standards
             Personnel management
             Employee incentives
             Federal agency reorganization
IDENTIFIER:  USPS Associate Supervisor Program
             USPS Economic Value Added Program
             USPS CustomerPerfect Initiative
             USPS Employee Opinion Survey
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on the Postal Service, Committee
on Government Reform and Oversight House of Representatives

October 1997

U.S.  POSTAL SERVICE - LITTLE
PROGRESS MADE IN ADDRESSING
PERSISTENT LABOR-MANAGEMENT
PROBLEMS

GAO/GGD-98-1

Postal Service Labor-Management Relations

(240212)


Abbreviations
=============================================================== ABBREV

  AFL-CIO - American Federation of Labor-Congress of Industrial
     Organizations
  APWU - American Postal Workers Union
  ASP - Associate Supervisor Program
  EAS - Executive and Administrative Schedule
  EI - Employee Involvement
  EOS - Employee Opinion Survey
  EVA - Economic Value Added
  EXFC - External First-Class Measurement System
  FLSA - Fair Labor Standards Act
  FMCS - Federal Mediation and Conciliation Service
  MBP - Management by Participation
  NALC - National Association of Letter Carriers
  NAPS - National Association of Postal Supervisors
  NAPUS - National Association of Postmasters of the United States
  NLRA - National Labor Relations Act
  NPMHU - National Postal Mail Handlers Union
  NRLCA - National Rural Letter Carriers' Association
  PCES - Postal Career Executive Service
  PRA - Postal Reorganization Act of 1970
  PMG - Postmaster General
  QWL - Quality of Work Life
  RBCS - Remote Bar Coding System
  REC - Remote encoding center
  TFP - Total factor productivity
  UMPS - Union-Management Pairs

Letter
=============================================================== LETTER


B-272446

October 1, 1997

The Honorable John M.  McHugh
Chairman, Subcommittee on the
 Postal Service
Committee on Government Reform
 and Oversight
House of Representatives

Dear Mr.  Chairman: 

This report responds to your request that we review the Postal
Service's efforts to improve employee working conditions and the
overall performance of the Service.  These efforts, referred to in
this report as initiatives, reflect the Service's attempts to try to
enhance its working environment.  This report provides updated
information related to our September 1994 report\1 in which we
described the existence of various labor- management relations\2
problems in the Postal Service and made recommendations for
addressing such problems and improving the adversarial nature of
postal labor- management relations.  Our objectives in this report
were to (1) determine the status and results of the Postal Service's
efforts in improving various labor-management relations problems
identified in our 1994 report, including how the Service implemented
specific improvement initiatives; and (2) identify approaches that
could help the Service and its four labor unions and three management
associations achieve consensus on how to deal with the problems we
discussed in our 1994 report. 


--------------------
\1 U.S.  Postal Service:  Labor-Management Problems Persist on the
Workroom Floor (GAO/GGD-94-201A/B, Sept.  29, 1994). 

\2 "Labor-management relations" as used in this report is a broad
term encompassing relations between postal managers/supervisors and
employees as well as the traditional meaning of relations between
management and labor unions. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Since our report was issued in September 1994, little progress has
been made in improving the persistent labor-management relations
problems that had, in many instances, resulted from autocratic
management styles; the sometimes adversarial attitudes of employees,
unions, and management; and an inappropriate and inadequate
performance management system.  These problems have generally
contributed to a sometimes contentious work environment and lower
productivity for the Postal Service.  Also, the number of employee
grievances not settled at the first 2 steps of the grievance process
has increased from around 65,000 in fiscal year 1994 to almost 90,000
in fiscal year 1996.  These problems continue to plague the Service
in part because the parties involved, including the Service, the four
major labor unions, and the three management associations, cannot
agree on common approaches for addressing the problems.  This
inability to reach agreement has prevented the Service and the other
seven organizations from implementing our recommendation to develop a
framework agreement that would outline common objectives and
strategies for addressing labor-management relations problems and
improving the postal workroom climate. 

Since 1994, the Service and its unions and management associations
have tried to improve the climate of the postal workplace by
implementing specific improvement initiatives, such as programs for
selecting and training new postal supervisors and planning the
redesign of mail delivery routes for city letter carriers.  Many
postal, union, and management association officials told us that they
believed some of these initiatives held promise for making a positive
difference in the labor-management climate.  However, our review of
specific improvement initiatives showed that although some actions
had been taken to implement certain initiatives, little information
was available to measure their results.  In some instances, the
initiatives were only recently piloted or implemented, and some had
been discontinued.  In other instances, although postal and union
officials agreed that improvements were needed, they disagreed on
approaches for implementing specific initiatives.  Generally, these
disagreements have made it difficult for the Service and its unions
and management associations to move forward and work together to
ensure that the initiatives' intended improvements could be achieved. 

Improving labor-management relations at the Postal Service has been,
and continues to be, an enormous challenge and a major concern for
the Postal Service and its unions and management associations.  With
the significant future challenges it faces to compete in a
fast-moving communications marketplace, the Service can ill afford to
be burdened with long-standing labor-management relations problems. 
We believe that in order for any improvement efforts to achieve their
maximum intended benefits, it is important for the affected parties
to agree on common approaches for addressing labor-management
relations problems.  During our review, we identified some approaches
that could help the Postal Service and its unions and management
associations reach consensus on strategies for resolving such
problems.  Although we recognize that achieving consensus does not
come quickly or easily, we believe that continued disagreements on
approaches for improving the postal working environment without some
effort to achieve common ground may lead to escalating workplace
difficulties and hamper efforts to achieve desired improvements. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Postal Service is the nation's largest civilian employer with
approximately 861,000 employees as of the end of fiscal year 1996,
most of whom process and deliver mail and provide postal products and
services to customers, such as selling stamps and shipping parcels. 
According to the Service's database, the total number of postal
employees has increased from about 818,000 employees at the end of
fiscal year 1993 to about 861,000 employees at the end of fiscal year
1996, an increase of about 5 percent.  As shown in table 1, of the
approximately 861,000 postal employees, 86 percent were career
employees and 14 percent were noncareer employees.\3



                                Table 1
                
                Composition of Postal Service Workforce
                     at the End of Fiscal Year 1996

                                            Total number    Percent of
                                                 of paid         total
Employee functions                             employees     workforce
------------------------------------------  ------------  ------------
Headquarters and area offices employees\a         11,887           1.4
Postmasters, general managers, and                26,403           3.1
 installation heads
Supervisors and managers                          35,035           4.1
Professional, administrative, and                 10,966           1.3
 technical personnel
Clerks and nurses                                269,916          31.3
Mail handlers                                     56,182           6.5
City carriers                                    233,964          27.2
Special delivery messengers                        1,419            .2
Motor vehicle operators                            8,175            .9
Rural carriers/full-time                          47,738           5.5
Maintenance workers                               43,277           5.0
======================================================================
Total career employees                           744,962          86.5
Casuals\b                                         22,705           2.6
Transitional employees\c                          31,964           3.7
Nonbargaining temporary employees                    594            .1
Substitutes for rural carriers                    49,730           5.8
Postmaster relief/leave replacements              11,446           1.3
======================================================================
Total noncareer employees                        116,439          13.5
======================================================================
Total                                            861,401         100.0
----------------------------------------------------------------------
\a This category includes employees who work in postal headquarters,
at area offices in the field, and at the Service's training
facilities.  The work of these employees includes such administrative
functions as training, investigations, personnel matters, accounting,
and marketing. 

\b Casuals are noncareer employees with limited-term appointments who
supplement the work of the career workforce.  For example, casuals
may be temporarily hired as clerks to perform postal work during the
Christmas season. 

\c Transitional employees are noncareer, bargaining unit employees
used to fill vacated assignments, such as assignments due to be
eliminated as a result of automation.  The terms of appointment for
these employees cannot exceed 359 calendar days for each appointment. 

Source:  Postal Service On-Rolls and Paid Employee Statistics
National Summary, Accounting Period 13, Postal Fiscal Year 1996. 

Most postal employees were represented by four labor unions and were
called "bargaining unit" or "craft" employees.  As shown in table 2,
the four unions that represented the interests of most bargaining
unit employees included (1) the American Postal Workers Union (APWU),
(2) the National Association of Letter Carriers (NALC), (3) the
National Postal Mail Handlers Union (Mail Handlers), and (4) the
National Rural Letter Carriers' Association (Rural Carriers).  The
two largest unions are APWU and NALC.  Although union membership is
voluntary, approximately 80 percent of those represented by the four
major unions have joined and pay dues.\4



                                Table 2
                
                   Organizations Representing Career
                  Bargaining Employees as of September
                                  1996

                                                     Number of
                                                    employees\  Percen
Organizations and employee functions\a                       b       t
--------------------------------------------------  ----------  ------
American Postal Workers Union, AFL-CIO, (APWU)         322,599      49
 represents clerks, maintenance workers, special
 delivery messengers, and motor vehicle operators.
National Association of Letter Carriers, AFL-CIO,      233,964      35
 (NALC) represents city letter carriers.
National Postal Mail Handlers Union (Mail               56,182       9
 Handlers), a division of the Laborers'
 International Union of North America, AFL-CIO,
 represents mail handlers.
National Rural Letter Carriers' Association (Rural      47,738       7
 Carriers) represents rural carriers.
======================================================================
Total                                                  660,483     100
----------------------------------------------------------------------
\a In addition to the four major labor unions, two other unions
represent specific craft employees.  According to a postal official,
the 2 unions include the D.C.  Nurses Association (188 nurses) and
the Federation of Postal Police Officers (1,432 officers), which
together represent less than 1 percent of the Postal Service's
workforce. 

\b The number of employees shown is the number of career craft
employees represented and not the number of union members.  Also,
these 4 unions represented a total of 81,694 noncareer employees,
including transitional employees and substitutes for rural carriers. 
These employees are not included in the table. 

Source:  Postal Service On-Rolls and Paid Employee Statistics
National Summary, Accounting Period 13, Postal Fiscal Year 1996. 

Also, within the Postal Service, supervisors, postmasters, and other
managerial nonbargaining personnel are represented by three
management associations, including (1) the National Association of
Postal Supervisors (NAPS), (2) the National Association of
Postmasters of the United States (NAPUS), and (3) the National League
of Postmasters (the League).  Unlike craft unions, management
associations cannot bargain with postal management.  However, the
Postal Service is required under the Postal Reorganization Act (PRA)
of 1970 to consult with and recognize these associations.  NAPS
represents all supervisors and lower level managers, except those at
headquarters and area offices, for a total of about 35,000 employees
as of the end of fiscal year 1996.  Also, as of the end of fiscal
year 1996, approximately 26,000 postmasters and installation heads
were represented by NAPUS and the League.  Since 1970, many
postmasters have belonged to both organizations, which address issues
of interest to all postmasters. 

In September 1994, we reported that various labor-management
relations problems persisted on the workroom floor of postal
facilities.  We found that such problems were long-standing and had
multiple causes that were related to adversarial employee,
management, and union attitudes; autocratic management styles; and
inappropriate and inadequate performance management systems.  In
part, these problems were identified through our analysis of the
results of an employee opinion survey administered by the Service in
1992 and 1993, in which employees expressed their opinions about its
strengths and shortcomings as an employer.\5

Generally, craft employees believed that managers and supervisors did
not treat employees with respect or dignity and that the organization
was insensitive to individual needs and concerns.  The concerns of
supervisors and craft employees who worked in mail processing plants
focused mainly on (1) the insensitive treatment of employees who were
late or absent from work; (2) the lack of employee participation in
decisions affecting their work; and (3) the perception that some
employees were not held accountable for their performance, leading to
perceptions of disparate treatment.  Also, managers, supervisors, and
craft employees expressed dissatisfaction with the Service's
performance management and recognition and reward systems because
they generally believed that (1) performing their jobs well just got
them more work, (2) high levels of performance were not adequately
recognized or rewarded, and (3) poor performance was too often
tolerated. 

In 1994, we reported that these problems had not been adequately
dealt with, mainly because labor and postal management leadership at
the national and local levels were unable to work together to find
solutions.  We also reported that the effects of such problems were
multiple and included poor quality of work life for postal employees
and higher mail processing and delivery costs for the Postal Service. 

Furthermore, in our 1994 report, we stated that despite the efforts
of the Service and its major labor unions and management
associations, attempts to improve labor-management relations on the
workroom floor had met with limited success.  We recommended in the
report that the Service take various actions to try to improve
employees' working conditions and its overall performance. 
Generally, the recommendations involved some of the following
provisions. 

  -- Improve labor-management cooperation by having the Service, the
     four unions, and three management associations develop and sign
     a long-term (at least 10 years) framework agreement that would
     establish the overall objectives and approaches for
     demonstrating improvements in the workplace climate.  Also, to
     help ensure that such an agreement can be reached in a timely
     manner, consider arranging for outside assistance to learn
     alternative negotiation techniques that could help resolve
     disputes outside of binding arbitration. 

  -- Improve the workplace environment by training supervisors to
     promote teamwork, recognize and reward good performance, and
     deal effectively with poor performers; and by training employees
     in team participation efforts that are focused on serving the
     customer through the continuous improvement of unit operations. 

  -- Establish employee incentives by recognizing and rewarding
     employees and work units on the basis of performance. 

  -- Improve mail processing and delivery operations by testing
     various approaches for improving working relations, operations,
     and service quality and evaluating the results of such tests. 


--------------------
\3 Generally, the Service has defined career employees as persons who
have permanent work appointments and include such employees as
clerks, postmasters, mail handlers, and city and rural letter
carriers.  Noncareer employees are those persons who have
limited-term work appointments and include such employees as some
data conversion operators who work at postal remote encoding centers
and substitutes for rural carriers. 

\4 In response to a comment by the Mail Handlers union, we obtained
estimated figures from union officials on employees who had joined
and paid dues to each of the four labor unions.  The officials
estimated the following percentages of union members who had paid
dues as of September 1996:  81 percent for APWU, 83 percent for Rural
Carriers, 85 percent for Mail Handlers, and 92 percent for NALC. 

\5 The survey involved mailing a questionnaire to all postal
employees to determine their satisfaction on 12 performance
dimensions, such as employee treatment and participation. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :3

The objectives of our review were to (1) determine the status and
results of the Postal Service's progress in improving various
labor-management relations problems identified in our 1994 report,
including how the Service implemented 10 specific improvement
initiatives; and (2) identify any approaches that could help the
Service and its unions and management associations achieve consensus
on how to deal with the problems we discussed in our 1994 report. 

To identify the improvement initiatives mentioned in the first
objective, we reviewed various GAO and postal documents, including
our 1994 report, the unions' collective bargaining agreements, and
documents prepared by the Service that described the goals and
results of specific improvement initiatives.  Using this information,
we developed a list of 32 initiatives that the Service, the 4 labor
unions, and 3 management associations had piloted or implemented to
try to improve the postal workplace environment. 

Given time and resource limitations, we determined that detailed
follow-up on all 32 initiatives would be impractical.  Thus, starting
with the list of 32 initiatives, we established criteria that we
believed could help us select specific initiatives from the list that
warranted additional followup to determine their status and results. 
Generally, such criteria were based on (1) the results of discussions
on the 32 initiatives with the Postal Service and its unions and
management associations, and (2) the extent to which we determined
that various initiatives had the potential to address the
recommendations in our 1994 report. 

We discussed the list of 32 initiatives with officials who
represented the Service and its unions and management associations to
ensure that we had (1) appropriately identified all the initiatives
that should be included on our list, and (2) described the
initiatives as thoroughly and accurately as possible.  The Service
and the unions and management associations generally agreed that our
list of 32 initiatives included all known postal improvement efforts
that had been piloted or implemented.  Also, these organizations
provided us with additional comments and perspective on the
descriptions of specific initiatives. 

We reviewed the recommendations in our 1994 report to determine the
extent to which the 32 initiatives had the potential to address the
recommendations.  Using the information about the initiatives that we
obtained from our discussions with the Postal Service, the unions,
and the management associations, we focused our work efforts on 10 of
the 32 initiatives that in our judgment appeared to have significant
potential to address some of the Service's labor-management relations
problems that we identified, such as the difficulties experienced by
supervisors and employees on the workroom floors of various postal
facilities. 

To determine the status and results of the 10 initiatives, we visited
the national Postal Service headquarters in Washington, D.C., where
we interviewed key postal officials who were responsible for
establishing, implementing, and monitoring various labor-management
improvement initiatives.  These officials included the
Vice-Presidents responsible for Labor Relations, Human Resources, and
Quality.  We also interviewed program officials in these offices to
obtain more detailed information on the goals and results of specific
initiatives. 

Furthermore, to obtain information on status and results from
officials involved in implementing the 10 initiatives, we spoke with
various postal field officials in 4 area offices--the Mid-Atlantic,
Northeast, Southwest, and Western areas.  These locations were
selected because various initiatives had recently been piloted or
implemented in these areas.  Also, our staff from the Dallas and
Denver regional offices were available to visit these areas and
discuss such initiatives in person with responsible postal officials. 
At these locations, we interviewed the officials who were most
knowledgeable about labor-management relations activities in the area
offices, including the area vice-presidents, the managers for human
resources, and labor relations specialists.  Also, within the four
areas, we interviewed postal officials responsible for (1) processing
and delivering mail, which included the managers of processing and
distribution plants and managers of remote encoding centers (RECs);\6

and (2) providing services to postal customers, which included
district office managers.  These officials were close to the
activities performed on the workroom floor of postal facilities,
which is where the labor-management relations problems that we
identified in our 1994 report had become evident. 

In addition, to address the first objective, we interviewed various
union and management association representatives, including national
leaders located in the Washington, D.C., area and local
representatives in the four area offices we visited.  We interviewed
these officials to gain their views and insights on (1) the reasons
for the persistence of various labor-management relations problems;
and (2) the Service's efforts to implement the 10 improvement
initiatives, some of which were intended to address such problems. 
At the national level, we spoke with the presidents of APWU and NALC
as well as the presidents of the Mail Handlers and Rural Carriers
unions.  In addition, we interviewed the presidents of NAPS, NAPUS,
and the League.  At the local level, we interviewed various union
representatives, including national business agents responsible for
union activities in the states covered by the four area offices,
local union presidents, and shop stewards.  We also spoke with local
representatives of the three management associations. 

As mentioned in the first objective, to determine the overall extent
to which the Postal Service and its unions and management
associations had progressed in addressing persistent labor-management
relations problems, we obtained information on various events that
had occurred since the issuance of our 1994 report.  Specifically,
this information included (1) the results of the most recent contract
negotiations between the Service and each of the four major labor
unions; (2) data related to postal employee grievances; and (3)
efforts by the Service and the unions and management associations to
address the recommendations in our 1994 report, such as the
Postmaster General's (PMG) invitation to the other seven
organizations to attend a labor-management relations summit meeting
and the implementation of various improvement initiatives, including
their status and results. 

To address the second objective, we monitored congressional
activities that occurred since the issuance of our 1994 report,
including the annual oversight hearings on the Postal Service's
operations required by PRA.  In addition, we reviewed pending
legislation intended to reform postal laws that was developed by the
Chairman of the Subcommittee on the Postal Service, House Committee
on Government Reform and Oversight, and introduced in June 1996, and
again in January 1997 as H.R.  22.  We also reviewed the sections of
the Government Performance and Results Act of 1993 (referred to as
the Results Act) related to the Postal Service, as well as GAO and
congressional documents that provided guidance on implementing the
requirements of the Results Act.  Finally, to obtain more information
on how the Service was using a third party to serve as a facilitator
in labor-management discussions as was recommended in our 1994
report, we interviewed the Director of the Federal Mediation and
Conciliation Service (FMCS). 

We requested comments on a draft of this report from the PMG; the
presidents of the four labor unions (APWU, NALC, Mail Handlers, and
Rural Carriers) and the three management associations (NAPS, NAPUS,
and the League); and the Director of FMCS.  Of the nine organizations
from which we requested comments, six provided written comments,
including the Service, the four unions, and one of the three
management associations (the League).  These written comments are
reprinted in appendixes II through VII.  The remaining three
organizations--FMCS, NAPS, and NAPUS--provided oral comments.  The
comments are discussed in appropriate sections throughout the report
and at the end of the report.  We conducted our review from June 1996
through May 1997 in accordance with generally accepted government
auditing standards. 


--------------------
\6 Postal remote encoding centers (RECs) are installations
responsible for barcoding mail that cannot be read by the Service's
automated mail processing equipment. 


   LITTLE PROGRESS HAS BEEN MADE
   IN IMPROVING LABOR-MANAGEMENT
   RELATIONS PROBLEMS
------------------------------------------------------------ Letter :4

Since our 1994 report was issued, the Postal Service and its unions
and management associations have made little progress in improving
long-standing labor-management relations problems.  These problems
have generally contributed to a sometimes contentious work
environment and lower productivity.  Such problems may make it more
difficult for these organizations to work together to improve the
Service's performance so that it can remain competitive in a dynamic
communications market. 

According to Postal Service information, in fiscal years 1995 and
1996, the Service improved its overall financial performance as well
as its mail delivery services, particularly in the delivery time of
overnight First-Class Mail.  For example, in fiscal year 1996, the
Service reported a net income of about $1.6 billion, which was second
highest only to its fiscal year 1995 net income of about $1.8
billion.  The Service believed that in large part, improved control
over its expenses, including savings from automation efficiencies and
a restructuring and refinancing of its long-term debt, contributed to
the increased income.  In addition, the Service reported that its
national average of on-time delivery of overnight First-Class Mail
reached an all-time high of 89 percent for fiscal year 1996 compared
to 86 percent for fiscal year 1995.\7

Although the Service had made financial and First-Class Mail delivery
improvements, other data indicated that in some areas, its
performance had not improved.  For example, the rate of change in the
Service's overall productivity, known as total factor productivity
(TFP), has decreased in each of the last 3 fiscal years.  TFP
includes various performance indicators, such as usage rates of
automated mail processing equipment, the growth in the overall postal
delivery network, the development of postal facilities, and changes
in presorted and prebarcoded mail volumes.  Additionally, for fiscal
year 1996, the on-time delivery of 2-day and 3-day mail--at 79 and 80
percent, respectively--did not score as high as overnight delivery. 
Such performance has raised a concern among some postal customers
that the Service's emphasis on overnight delivery is at the expense
of 2-day and 3-day mail.  Also, although its mail volume continues to
grow, the Service is concerned that customers increasingly are
turning to its competitors or alternative communications methods.  In
1996, mail volume increased by about one-half of the anticipated
increase in volume.  As discussed in our 1994 report, the Service
recognized that it must focus on improving customer satisfaction to
enhance revenue and retain market share.  Also, the Service
recognized that in all likelihood, customers will not remain
satisfied in an environment where persistent labor-management
relations problems continue to cause employee dissatisfaction. 

Our recent work has shown little progress within the last few years
on addressing long-standing labor-management relations problems, and
the sometimes adversarial relationships between postal management and
union leadership at the national and local levels have persisted. 
These relationships have generally been characterized by (1) a
continued reliance by three of the four unions on arbitration to
settle their contract negotiation impasses with the Service, (2) a
significant rise not only in the number of grievances that have been
appealed to higher levels but also in the number of grievances
awaiting arbitration, and (3) the inability of the Service and the
other seven organizations to convene a labor-management relations
summit to discuss problems and explore solutions.  Various postal,
union, and management association officials whom we interviewed said
that the problems persist primarily because the leaders of these
organizations have been unable to agree on common approaches to
solving the problems.  As a result, our 1994 recommendation for
establishing a framework agreement of common goals and approaches
that could help cascade positive working principles and values from
top postal, union, and management association officials down
throughout the Service's approximately 38,000 postal facilities
nationwide has yet to be implemented. 


--------------------
\7 The Postal Service currently uses a measurement known as the
External First-Class Measurement System (EXFC) as a means of
indicating how well it is serving customers.  The quarterly EXFC,
administered by Price Waterhouse, measures the delivery time of
First-Class Mail from deposit to delivery (collection box to mail
slot). 


      ARBITRATION USED TO SETTLE
      MOST CONTRACT NEGOTIATIONS
---------------------------------------------------------- Letter :4.1

In our 1994 report, we discussed the occurrence of past contract
negotiations, which generally took place at the national level
between the Service and the four labor unions every 3 or 4 years. 
Since as far back as 1978, interest arbitration\8 has been used to
resolve bargaining deadlocks that occurred during contract
negotiations for three of the four unions, including APWU, NALC, and
Mail Handlers.  Specifically, interest arbitration occurred in 1978,
1984, and 1990 with APWU and NALC, and in 1981 with Mail Handlers. 

The most recent negotiations occurred for contracts that expired in
November 1994 for APWU, NALC, and Mail Handlers, during which
interest arbitration was used to settle bargaining deadlocks.  In the
case of the Rural Carriers, whose contract expired in November 1995,
negotiations resulted in the establishment of a new contract without
the use of interest arbitration.\9

With APWU, NALC, and the Mail Handlers, the issues that arose in
interest arbitration over their most recent contracts were similar to
issues that have surfaced at previous contract negotiations.  The
issues focused primarily on the unions' push for wage and benefit
increases and job security, in contrast to postal management's push
for cost-cutting and flexibility in hiring practices.  According to a
postal official, such negotiations over old issues that continually
resurface have at times been bitter and damaging to the ongoing
relationship between the Service and union leadership at the national
level.  Union officials also told us that a new issue--the
contracting out of specific postal functions, also known as
outsourcing--has caused the unions a great deal of concern, because
they believe that it could affect job security for employees. 

In his comments on a draft of this report, the president of the Rural
Carriers union stated that for the most recent collective bargaining
agreement, the negotiating team, including postal and union
representatives, held joint training sessions across the country and
invited various state and local postal management and craft
representatives to participate in the training.  The Rural Carriers
president believed that this training helped the parties to better
negotiate and reach agreement on the language that was included in
the most recent contract, which in this instance eliminated the need
for the use of an outside arbitrator.  Also, the president believed
that the training helped provide both union and postal management
officials a more thorough understanding of the contract's
requirements. 


--------------------
\8 The Postal Reorganization Act (PRA) of 1970 provided that labor
unions could collectively bargain with the Postal Service to
establish compensation, benefits, and other terms and conditions of
employment for the employees they represent.  Unlike employees in the
private sector, postal employees are prohibited from striking.  Thus,
PRA established procedures for interest arbitration that are designed
to resolve bargaining impasses that may occur during discussions over
the terms of a new contract. 

\9 The rural carriers have had a more cooperative relationship with
the Postal Service and generally have been able to negotiate
contracts without arbitration. 


      GRIEVANCES CONTINUE TO
      INCREASE
---------------------------------------------------------- Letter :4.2

In our September 1994 report, we discussed the problems associated
with the grievance/arbitration process, which is the primary
mechanism for craft employees to voice work-related concerns.  As
defined in postal labor agreements, a "grievance" is "a dispute,
difference, disagreement, or complaint between the parties related to
wages, hours, and conditions of employment." In our 1994 report, the
problems we described included (1) the high number of grievances
being filed and the inability of postal supervisors or union stewards
to resolve them at the lowest organizational level possible and (2)
the large backlog of grievances awaiting arbitration. 

The process for resolving postal employees' grievances is similar to
that used in many private sector and other public organizations. 
Generally, according to labor relations experts, a process that is
working effectively would result in most disputes being resolved
quickly at the lowest organizational level, that is, by the
supervisor, employee, and union steward who represents the employee's
interests.  Employees as well as the four postal unions that
represent them can initiate grievances. 

Depending on the type of grievance, the process may involve up to 4
or 5 steps, and each step generally requires the involvement of
specific postal and union officials.  For instance, at each of the
first 3 steps in the process, the parties that become involved
include lower to higher union and postal management level officials
in their respective organizations, such as post offices, mail
processing and distribution centers, and area offices.  Step 4 in the
grievance process occurs only if either the Service or the union
believes that an interpretation of the union's collective bargaining
agreement is needed, in which case, national level postal and union
officials would become involved.  The fifth and final step in the
grievance process involves outside binding arbitration by a neutral
third party. 

Generally, at each step in the process, the involved parties are to
explore and discuss the grievance to obtain a thorough understanding
of the facts.  During any of the first 4 steps that occur before
arbitration, the grievance may be settled by the parties.  If the
grievance is not settled, the Service makes a decision in favor of
either postal management or the employee.  If the Service denies the
grievance (i.e., makes a decision in favor of management), the
employee or union steward can elevate the grievance to the next
higher step in the process until the last step, which concludes the
process with a final and binding decision by a neutral arbitrator. 
Table 3 briefly describes the specific steps of the 5-step process
and the key parties involved.  A more detailed description of the
grievance/arbitration process is included in appendix I. 



                                Table 3
                
                  Brief Descriptions of Steps and Key
                   Parties Involved in the Grievance/
                          Arbitration Process

Step
number    Brief description of step      Key parties involved
--------  -----------------------------  -----------------------------
1         Oral discussion of grievance   Employee or union steward,
          occurs.                        and supervisor

2         If grievance was denied at     Union steward or
          step 1, a written grievance    representative and
          is filed.                      installation head or designee
                                         (e.g., postmaster, plant
                                         manager)

3         If grievance was denied at     Union area representative and
          step 2, a written appeal of    area office human resources
          the grievance is filed.        manager or other designated
                                         area-level postal official

4         Written decision interpreting  Representatives of national
          the union's national           union and postal headquarters
          collective bargaining
          agreement is made by the
          Service (if either the
          Service or union believes
          that such interpretation is
          needed).\a

5         Arbitration of grievance is    Neutral arbitrator
          decided (final and binding
          decision).
----------------------------------------------------------------------
\a This step may not occur with every grievance. 

Source:  U.S.  Postal Service:  Labor-Management Problems Persist on
the Workroom Floor (GAO/GGD-94-201A/B, Sept.  29, 1994). 

In our 1994 report, we highlighted issues associated with the
grievance/arbitration process, including the high number of
grievances that had been filed and the inability of supervisors or
installation heads and union stewards to resolve them at the step 1
and 2 levels.  The Postal Service's national grievance arbitration
database showed that in fiscal year 1994, a total of 65,062
grievances were not settled at the steps 1 and 2 levels and were
appealed at the step 3 level, which involved postal management and
union officials at the area office level.  According to the Service,
this number increased to 73,012 in fiscal year 1995 and 89,931 in
fiscal year 1996. 

As indicated in figure 1, in fiscal year 1996, the average rate of
step 3 grievances for every 100 craft employees had risen to 13,
compared to fiscal year 1994, when the average rate was 10 step 3
grievances for every 100 craft employees. 

   Figure 1:  Average Rate of
   Postal Service Grievances
   Appealed to Step 3 per 100
   Craft Employees During Fiscal
   Years 1994 Through 1996

   (See figure in printed
   edition.)

Note:  Step 3 grievances are grievances that have been appealed by
the unions to the area level because they could not be resolved at
the plant or district levels. 

Source:  U.S.  Postal Service. 

Also, figure 2 indicates that according to Service data, increases
had occurred in the number of grievances that were awaiting
arbitration by a third-party arbitrator, also referred to as
backlogged grievances.\10 Figure 2 shows that the number of
backlogged grievances had increased from 36,669 in fiscal year 1994
to 69,555 in fiscal year 1996, an increase of about 90 percent. 

   Figure 2:  Postal Service
   Grievances Awaiting Arbitration
   for Fiscal Years 1994 Through
   1996

   (See figure in printed
   edition.)

Note:  These figures include backlogged grievances for which no
arbitration decision had been made by the end of the fiscal year. 

Source:  U.S.  Postal Service. 

Figure 3 shows that in fiscal year 1996, the average rate of
grievances awaiting arbitration had risen to 10 grievances per 100
craft employees, an increase from the average rate of 6 grievances
per 100 craft employees in fiscal year 1994. 

   Figure 3:  Average Rate of
   Postal Service Grievances
   Awaiting Arbitration per 100
   Craft Employees for Fiscal
   Years 1994 through 1996

   (See figure in printed
   edition.)

Note:  These figures include backlogged grievances for which no
arbitration decision had been made by the end of the fiscal year. 

Source:  U.S.  Postal Service. 

Generally, the postal management and union officials we interviewed
said that the total volume of grievances was too high.  However, the
views of postal and union officials differed on the causes of this
high grievance volume.  These officials told us that their views had
not changed significantly since we issued our 1994 report. 
Generally, the officials tended to blame each other for the high
volume of grievances being filed and the large number of backlogged
grievances awaiting arbitration. 

In 1994, we reported that from postal management's perspective,
grievances have always been high because union stewards flooded the
system with frivolous grievances to demonstrate that they were
executing their responsibility to represent employees' interests. 
Also, a postal official told us that he attributed the high grievance
rate to what he termed an overall "entitlement mentality" on the part
of craft employees who believed that they were entitled to file
grievances. 

In contrast, union officials told us that postal management was
largely responsible for the huge volume of backlogged grievances. 
One union official told us that the key problem was not in the filing
of grievances by employees but in the inability of lower level postal
officials to settle disputes, especially at steps 1 and 2.  This
situation has often resulted in many grievances being escalated to a
higher decisionmaking level and has added to the delays in obtaining
such decisions.  Also, an APWU official explained that postal
management is generally reluctant to settle grievances awaiting
arbitration because the backlog benefits postal management.  The
official told us that postal management can continue to violate the
APWU labor agreement with impunity as long as grievances sit in the
backlog awaiting an arbitration decision.  In his comments, the
president of the Rural Carriers union stated that he strongly
encourages union members to file only meritorious grievances. 


--------------------
\10 For this report, the term backlog is used to describe only those
grievances awaiting arbitration. 


      SUMMIT MEETING ON
      LABOR-MANAGEMENT RELATIONS
      HAS NOT YET OCCURRED
---------------------------------------------------------- Letter :4.3

The Postal Service and its unions and management associations have
been unsuccessful in their attempts to convene a labor-management
relations summit that was proposed by the PMG over 2 years ago.  In
November 1994, the Subcommittee on Federal Services, Post Office, and
Civil Service of the Senate Committee on Governmental Affairs held a
hearing on labor-management relations in the Postal Service that in
large part focused on the information in our September 1994 report. 
Various witnesses testified at the hearing, including the PMG and the
national leaders of APWU, Mail Handlers, Rural Carriers, and NAPS. 
The PMG extended an invitation to the leaders of the four unions and
three management associations to join Service officials in a
labor-management relations summit at which postal, union, and
management association leaders could explore our recommendations for
improving the workroom climate and determine appropriate actions to
be taken. 

The responses from the other seven organizations to the PMG's
invitation were mixed.  For instance, around January 1995, the
leaders of the three management associations and the Rural Carriers
union accepted the invitation.  However, the union leaders for APWU,
NALC, and Mail Handlers did not.  They said they were waiting until
the contract negotiations were completed before making a decision on
the summit.  At the time the invitation was extended, the contracts
for these three unions had recently expired, and contract
negotiations had begun.  After all negotiations were completed for
the three unions in April 1996, they agreed to participate in the
summit. 

Given the difficulties initially encountered by the Service in trying
to convene a summit, in February 1996, the Postal Service requested
the Director of the Federal Mediation and Conciliation Service (FMCS)
to assist the Service by providing mediation services in helping to
set up the summit meeting.  Also, in March 1996, the Chairman of the
Subcommittee on Postal Service, House Committee on Government Reform
and Oversight, encouraged the FMCS Director to assist the Postal
Service by providing such services. 

According to a postal official, in September and December 1996, the
FMCS Director facilitated two presummit meetings that involved
representatives from the Service, APWU, and NALC.  In January 1997,
another meeting was held that involved only the Service, APWU, and
NALC officials.  Although postal and union officials declined to
reveal the specific issues that were discussed at the presummits,
they told us that such issues as performance-based compensation,
outsourcing of specific postal functions, and grievance resolution
will continue to be major concerns. 

Also, in March 1997, the Director of FMCS told us that another
presummit is currently being scheduled to provide the other five
affected parties an opportunity to discuss similar issues with the
Service.  However, as of May 1997 when we completed our review, no
summit involving all eight of the parties had taken place, nor was
one scheduled. 

In his comments on a draft of this report, the Director of FMCS
provided us updated information on the presummit and summit meetings. 
APWU, NALC, Rural Carriers, and the League also provided us their
comments on the presummit and summit meetings.  The Director of FMCS
told us that in addition to the presummit meetings held in September
and December 1996 with the Service, APWU, and NALC, another presummit
meeting was held in June 1997, which was attended by officials from
FMCS, the Service, the Mail Handlers and the Rural Carriers unions,
NAPS, NAPUS, and the League.  The purpose of the presummit was
similar to the purpose of the presummit meetings previously held with
APWU and NALC, which was to (1) discuss information on
labor-management relations problems that was obtained by an outside
contractor through interviews with various postal, union, and
management association officials; and (2) determine the next steps in
attempting to organize a summit meeting that would involve the
Service, the four major labor unions, and the three management
associations.  Generally, the Director believed that the presummit
meeting went well and that the stage is now set for what he envisions
will be a summit meeting that should provide the eight organizations
with a forum for openly discussing the status of labor-management
relations and the steps that can be taken to help resolve problems. 
He also told us that discussions are currently being held with the
eight organizations on proposed dates for the summit meeting. 

The president of APWU told us that the prospects of a summit meeting
being convened were not improved when the Service unexpectedly
announced its decision to contract out some Priority Mail
transportation and processing services to Emery Worldwide
Airlines.\11 According to the president of APWU, after one of the
presummit meetings, the PMG pledged full communication concerning the
Service's business plans.  However, APWU stated that it was not
consulted about this decision before it was finalized, and its
representatives were disappointed because they believed that the
Service did not solicit their views on the merits of such a decision. 
The president of NALC said that although a summit meeting has not yet
been convened, GAO should not use this fact as an indicator of the
extent to which labor-management relations problems exist.  NALC
commented that one of the reasons the summit meeting has not yet
occurred was because the timing of the PMG's suggestion for a summit
in November 1994 was not appropriate, given that sensitive and
difficult collective bargaining negotiations were about to begin. 
NALC also stated that some presummit meetings have already been held,
which could achieve some positive results. 

In its comments, the Rural Carriers union pointed out that it was the
first organization to accept the PMG's invitation soon after it was
first proposed.  Like NALC, the League also commented that the PMG's
attempts to convene a summit with all the employee organizations were
thwarted by contract negotiations, and since 1994, a summit with the
participation of all four unions and three management associations
simultaneously has failed to happen. 


--------------------
\11 The Service recently entered into a $1.7 billion contract with
Emery Worldwide Airlines to provide transportation services,
including trucking and airline services, to help move the Service's
Priority Mail, which the Service attempts to deliver within 2 to 3
days. 


   STATUS AND RESULTS OF
   INITIATIVES TO IMPROVE
   LABOR-MANAGEMENT RELATIONS
------------------------------------------------------------ Letter :5

Since our 1994 report was issued, the Postal Service and the other
seven organizations have continued in their efforts to address
long-standing labor-management problems by taking actions to
implement specific improvement initiatives, such as the program for
selecting and training new postal supervisors, known as the Associate
Supervisor Program (ASP).  Although many postal, union, and
management association officials we spoke with believed that some of
these initiatives held promise for making a positive difference in
the labor-management relations climate, little information was
available to measure the results of various initiatives. 

For the 10 initiatives that we selected for follow-up, table 4
includes brief descriptions of the initiatives, identifies the
organizations who participated in the implementation of the
initiatives, and indicates the recommendations in our 1994 report to
which each initiative is related. 



                                     Table 4
                     
                      List of 10 Selected Initiatives, Their
                     Major Participants, and Related 1994 GAO
                                 Recommendations

                                        Actual/potential    GAO
Initiative          Brief description   participants        recommendation(s)
------------------  ------------------  ------------------  --------------------
Associate           A 16-week training  --Postal Service    Provide for the
Supervisor Program  program that was    --APWU, NALC,\a     selection and
(ASP)               established in      Mail Handlers, and  training of postal
                    1994 and was        Rural Carriers      supervisors.
                    designed to         --NAPS, NAPUS, and
                    prepare candidates  the League
                    to assume postal
                    supervisory
                    positions.

New performance-    A revised           --Postal Service    Provide a system of
based compensation  compensation and    --NAPS, NAPUS, and  incentives for
system for          bonus system        the League          recognizing and
executives,         established in                          rewarding employees
managers, and       1995 that was                           based on corporate
supervisors         intended to                             and unit
                    provide postal                          performance.
                    executives,
                    managers, some
                    supervisors, and
                    some postmasters
                    with pay increases
                    and bonuses that
                    more closely
                    aligned each
                    individual's
                    performance with
                    the performance of
                    his or her work
                    unit and the
                    overall
                    performance of the
                    Service.

CustomerPerfect\    A process begun by  --Postal Service    Develop common goals
sm                  the Service in      --APWU, NALC, Mail  and strategies, and
                    1995 to establish   Handlers, and       test approaches at
                    a Service-wide      Rural Carriers      pilot sites for
                    system of           --NAPS, NAPUS, and  improving postal
                    continuous          the League          operations and
                    improvement for     --Employees         service quality.
                    conducting its      represented by the
                    business of         D.C. Nurses
                    processing and      Association and
                    delivering mail     the Federation of
                    and providing       Postal Police
                    postal products     Officers
                    and services to     --All other postal
                    its customers.      employees not
                                        represented by
                                        unions or
                                        management
                                        associations.

Summit meeting      The PMG's           --Postal Service    Establish a
                    invitation,         --APWU, NALC, Mail  framework agreement
                    extended in         Handlers, and       to develop common
                    November 1994, to   Rural Carriers      goals and
                    the leaders of the  --NAPS, NAPUS, and  strategies.
                    four labor unions   the League
                    and three
                    management
                    associations to
                    establish a task
                    force whose
                    purpose would be
                    to try to address
                    the labor-
                    management
                    relations problems
                    discussed in our
                    1994 report.

Delivery Redesign   A program begun in  --Postal Service    Develop and test
                    1995 that was       --NALC              approaches for
                    designed to                             improving mail
                    establish                               delivery by
                    appropriate                             providing for
                    changes to the                          greater employee
                    system by which                         independence in
                    city letter                             sorting and
                    carriers,                               delivering mail,
                    represented by                          greater incentives
                    NALC, sort and                          for early completion
                    deliver mail,                           of work, and a
                    which would                             system of
                    eventually serve                        accountability for
                    as the basis for                        meeting delivery
                    compensating these                      schedules.
                    carriers.

Labor-management    A 1993 memorandum   --Postal Service    Establish a
cooperation         of understanding    --APWU              framework agreement
memorandum          established                             to develop common
                    between the                             goals and
                    Service and APWU                        strategies.
                    to establish
                    principles of
                    mutual commitment
                    that would serve
                    as the basis for
                    their increased
                    cooperation
                    throughout the
                    Service.

Crew chief          A pilot program     --Postal Service    Develop and test
                    established         --APWU              approaches for
                    between the                             improving mail
                    Service and APWU                        processing
                    through the 1990                        operations through
                    collective                              the use of self-
                    bargaining process                      managed work units.
                    under which
                    bargaining
                    employees would be
                    allowed to assume
                    leadership roles
                    in work units.

Mediation of        A process           --Postal Service    Develop and test
grievances          established         --APWU              approaches for
                    between the                             improving working
                    Service and APWU                        relations at postal
                    through the 1994                        pilot sites.
                    collective
                    bargaining process
                    under which
                    trained mediators
                    from both
                    organizations
                    would work
                    together to try to
                    resolve employees'
                    grievances at the
                    lowest possible
                    level.

Employee            A program           --Postal Service    Train employees and
Involvement (EI)    established         --NALC              hold them
                    through contract                        accountable for
                    negotiations with                       working as members
                    NALC in 1981 that                       of work teams,
                    was intended to                         focusing on serving
                    end or alleviate                        the customer, and
                    the adversarial                         participating in
                    relationship on                         efforts to
                    the workfloor.                          continuously improve
                                                            unit operations.

Employee opinion    A survey that was   --Postal Service    Obtain employee
survey (EOS)        first sent out in   --APWU, NALC, Mail  views on and
                    1992 to all         Handlers, and       participation in
                    bargaining and      Rural Carriers      improving workfloor
                    non-bargaining      --NAPS, NAPUS, and  environment.
                    employees and was   the League
                    designed to obtain  --Employees
                    employees'          represented by the
                    assessments of the  D.C. Nurses
                    Service's           Association and
                    strengths and       the Federation of
                    shortcomings as an  Postal Police
                    employer.           Officers
                                        --All other postal
                                        employees not
                                        represented by
                                        unions or
                                        management
                                        associations
--------------------------------------------------------------------------------
\a In its comments, NALC stated that we had erroneously listed it as
a participant in ASP.  As shown in table 4, for each of the 10
initiatives, we identified the organizations that were participants
in or potential participants in specific initiatives.  According to
postal officials responsible for implementing ASP, generally, all
craft employees with at least 1 year of work experience in the
Service are eligible to apply for ASP.  Thus, our inclusion of NALC
as a participant in ASP was intended to show that NALC employees with
a minimum of 1 year of postal work experience can apply for and, if
accepted, participate in ASP. 

Source:  U.S.  Postal Service:  Labor-Management Problems Persist on
the Workroom Floor (GAO/GGD-94-201A/B, Sept.  29, 1994) and various
postal and union documents that described specific initiatives. 

As shown in table 4, all 10 initiatives required the participation of
the Postal Service.  However, the participation of the other seven
organizations--that is, the four major labor unions and the three
management associations--varied depending on the extent to which
employees represented by the unions and the associations were covered
by each initiative.  For example, the initiative involving the
mediation of grievances applied only to employees represented by
APWU, because this initiative was established through the 1994
collective bargaining process that occurred between the Service and
APWU.  Similarly, the Delivery Redesign initiative applied only to
employees represented by NALC, because this initiative focused on the
work performed by city letter carriers. 

In his comments on a draft of this report, the president of the
League of Postmasters believed that the list of 10 initiatives in our
report could be construed to mean that the League had a stronger
presence in the implementation of the initiatives than was actually
the case.  The League mentioned that in most instances, the Service
provided the League general information about the initiatives and a
timetable of what was to occur in their implementation. 

During our discussions with Service, union, and management
association officials on the 10 improvement initiatives, the
officials generally agreed with the overall goals of some of the
initiatives.  However, the results of our work indicated that in
large part, fundamental disagreements among the eight organizations
on strategies for implementing specific initiatives continued to
hamper their efforts to achieve these goals and improve the overall
working climate for postal employees. 

The purpose of some of these initiatives was generally to improve
labor-management relations, thereby enhancing the Service's
performance in providing postal products and services to its
customers.  During our review, we found that various actions had been
taken to implement all 10 initiatives that we reviewed.  However, we
found it difficult to determine what results, if any, were achieved
from 3 of the 10 initiatives primarily because the initiatives were
only recently piloted or implemented.  Also, for 5 of the 10
initiatives, disagreements among the involved participants on
approaches for implementation generally prevented full implementation
of these initiatives and full evaluation of their results.  In
addition, although results were available for 2 of the 10
initiatives, these initiatives were eventually discontinued,
primarily because the Service and the other involved participants
disagreed over how best to use the initiatives to help improve the
postal workplace environment. 


      ACTIONS HAVE BEEN TAKEN TO
      IMPLEMENT THREE INITIATIVES,
      BUT IT IS TOO EARLY TO
      DETERMINE RESULTS
---------------------------------------------------------- Letter :5.1

For three initiatives, results were difficult to determine, primarily
because they had only been recently piloted or implemented, which
made it too early to fully assess their results.  The three
initiatives included (1) the Associate Supervisor Program (ASP); (2)
the new performance-based compensation system for executives,
managers, and supervisors; and (3) CustomerPerfect! 


      ASSOCIATE SUPERVISOR PROGRAM
---------------------------------------------------------- Letter :5.2

In our 1994 report, we recommended that the Service select and train
supervisors who could serve as facilitator/counselors and who would
have the skills, experience, and interest to treat employees with
respect and dignity, positively motivate employees, recognize and
reward them for good work, promote teamwork, and deal effectively
with poor performers.  In an attempt to address this recommendation,
the Service established ASP, a 16-week supervisory training program
designed to ensure that candidates for postal supervisory positions
were sufficiently screened and trained so that after they were placed
in supervisory positions, these supervisors would have a solid
foundation that could help them work well with employees.  A test of
ASP was completed in the St.  Louis district office in the fall of
1994, after which the test was expanded to include a total of 10
pilot sites.\12 According to a postal official, as of March 1997,
about 254 candidates had completed ASP training.  Most of these
candidates have already been assigned to supervisory positions in
various postal locations.  The Service expects that by the end of
fiscal year 1997, 70 of the Service's 85 postal district offices will
have graduated ASP classes or will have classes ongoing. 

During our review, the Service was gathering data from the 10 pilot
locations to evaluate ASP.  For example, in March 1997, according to
an official from the Service's Office of Corporate Development and
Training, that office conducted a 3-day ASP workshop to obtain
feedback from the program participants, including the trainers,
coaches, coordinators, and supervisory candidates who attended ASP
training.  According to the postal official, all the participants in
the workshop commented that ASP was an "incredible success." In
addition, the official told us that a San Francisco post office went
from having the worst scores in productivity and the Service's
External First-Class (EXFC) Measurement System to being one of the
top post offices in the San Francisco district.  The official
attributed much of this improvement to the high-quality calibre of
the ASP supervisors who had been assigned to the post office. 

As of March 1997, the Service was still completing the last ASP
pilot.  Upon completion of the pilot, the Service plans to administer
a written survey to all ASP participants to obtain their comments on
the content of the ASP training course, including such matters as the
extent to which they believe the course met its objectives and
whether the ASP instructors were knowledgeable.  Also, the
participants are to be asked to assess how they have been able to
transfer their recently learned knowledge and skills to their current
supervisory positions. 

In addition, the Service plans to distribute a separate written
survey to the managers of the new ASP supervisors.  In this survey,
managers are to be asked to compare the quality of the on-the-job
performance of ASP supervisors to supervisors who had not received
ASP training.  Also, managers are to be asked to evaluate ASP
supervisors' communications and leadership skills as well as their
ability to promote and maintain a safe working environment for
employees.  Finally, the Service plans to collect overall performance
data, such as EXFC and productivity scores, to compare a specific
postal facility's performance before receiving ASP supervisors and
after receiving such supervisors to try to determine to what extent
ASP may have affected the performance of the facility. 

Various postal, union, and management association officials we
interviewed at some of the ASP pilot locations told us that although
they believed it was too soon to evaluate the results of the program,
they believed it had the potential for providing the Service with
more qualified and better trained supervisors.  Also, local union
officials we spoke with said that they liked the additional training
that is to be provided to current postal supervisors under ASP.\13


--------------------
\12 The 10 sites that participated in the ASP pilot included (1)
Dallas, TX; (2) Detroit, MI; (3) Hartford, CT; (4) Los Angeles, CA;
(5) Miami, FL; (6) Philadelphia, PA; (7) Providence, RI; (8) San
Francisco, CA; (9) St.  Louis, MO; and (10) Washington, D.C. 

\13 According to a postal official responsible for managing ASP, the
Service plans to make specific parts of ASP training available to
current postal supervisors, such as conflict resolution and methods
for dealing with problem employees.  The purpose of this effort is to
provide current postal supervisors with training that is similar to
the training that ASP candidates receive. 


      NEW PERFORMANCE-BASED
      COMPENSATION SYSTEM FOR
      EXECUTIVES, MANAGERS, AND
      SUPERVISORS
---------------------------------------------------------- Letter :5.3

In our 1994 report, we discussed past problems with the Service's
performance-based incentive systems for managers and supervisors. 
The problems concerned a system that emphasized providing these
employees with merit pay and promotions for achieving a variety of
productivity and budget goals.  Examples of such goals included
requiring supervisors to manage their assigned budgets and control
unscheduled employee absences and overtime usage.  However, we found
that some supervisors emphasized "making their numbers" over
maintaining good employee relations. 

To help address these problems, we recommended in 1994 that the
Service should provide incentives that would encourage all employees
in work units to share in the tasks necessary for success and that
would allow work units and employees to be recognized and rewarded
primarily on the basis of corporate and unit performance.  To address
this recommendation, the Service established a revised compensation
system in 1995 for employees under the Postal and Career Executive
Service (PCES).  Later, in 1996, the system was expanded to cover the
Executive and Administrative Schedule (EAS), which includes
executives, managers, and supervisors.\14 The purpose of this system
was to establish a performance-based incentive system of pay
increases and bonuses that would appropriately recognize and reward
employees for good performance.  The amounts of such increases and
bonuses would be based not only on the individual's performance
rating but also on the performance of the individual's work unit, as
well as the performance of the Service as an organization. 

A key aspect of the revised compensation system is called the
Economic Value Added (EVA) variable pay program, which is a program
intended to provide employees covered by the new compensation system
with bonuses based on specific performance measurements, such as the
financial performance of the Service and levels of customer
satisfaction.  Under EVA, in fiscal year 1996, the Service
distributed a total of $169 million in bonuses to a total of about
63,000 postal executives, managers, supervisors, postmasters, and
other higher level nonbargaining unit employees.  Nationally, the
average bonus paid to an executive under PCES amounted to $12,500. 
Postmasters covered by the new compensation system and higher level
professionals, administrative, and technical employees each received
a bonus that averaged $3,900.\15

Another important aspect of the new compensation system was the
inclusion of work unit and corporate measurements in EAS employees'
merit performance evaluations.  For fiscal year 1997, these
evaluations are required to include objectives that are aligned with
an individual employee's work unit goals.  The objectives must also
align with and support the Service's corporate goals.  According to
postal officials, this change is intended to (1) enhance EAS
employees' active involvement in setting objectives to support their
work units, (2) establish accountability for results, and (3) provide
monetary acknowledgment of an individual employee's contribution to
the success of the work unit. 

Although the leaders of the three management associations supported
the concept of a performance-based incentive system, two of the three
associations disagreed with the Service on how this system was to be
implemented.  Specifically, NAPS agreed to endorse the new pay
system.  However, in contrast, officials from NAPUS refused to
endorse the new pay system because they believed "it offered
virtually nothing to some of our members." Also, in its comments on a
draft of this report, the League stated that it refused to endorse
the new pay system because the means by which the Service implemented
EVA precluded most of the Service's postmasters, including most of
the League's members, from being eligible for bonuses. 

According to NAPUS and League officials, the Service determined that
certain employees who were covered by the requirements of the Fair
Labor Standards Act (FLSA), also known as nonexempt employees,\16
should not be eligible to receive EVA bonuses.  NAPUS and League
officials mentioned that the Service's decision eliminated about 60
percent of the employees represented by their associations because
they were nonexempt employees.  A postal official said that in large
part, this determination was based on the results of a wage
comparability study done recently for the Postal Service in which the
wages of postal employees were compared to wages for employees doing
similar work in the private sector.  The official said that the
results of the study showed that nonexempt postal employees were paid
from 30 to 60 percent higher wages compared to employees doing
similar work in the private sector.  Also, the official said that
nonexempt employees in private sector organizations with incentive
pay programs are generally not eligible to participate in such
programs.  Furthermore, the official said that since nonexempt
employees are entitled to receive overtime pay for work they perform
in excess of 40 hours per week, these employees are already
sufficiently compensated for their "extra" work. 

NAPUS and League officials also stated that many of the Service's
nonexempt employees are postmasters who are women and members of
minority groups.  Furthermore, the presidents of NAPUS and the League
told us that within recent months, their associations have filed
class-action lawsuits charging that the new compensation system
discriminates against women and minorities.  The lawsuits, which were
filed in November 1996, are still pending as of January 1997,
according to management association officials. 

In their comments on a draft of this report, three organizations--the
Rural Carriers union, the League, and NAPS--provided us their
insights into this initiative.  In his comments, the president of the
Rural Carriers union stated that he supported the concept of EVA but
had differences with the Postal Service in the application of EVA. 
He mentioned that at the national level, his union has met to try to
determine how the rural carriers' current compensation system could
be revised so that rural carriers could participate in EVA.  The
president further stated that his union was awaiting an opportunity
to participate in EVA, especially since rural carriers' individual
performance goals have always been aligned with their postal units'
goals, which were established under the Service's CustomerPerfect! 
system of management.  However, the president said that due to the
enormous resources that the Service has devoted to the implementation
of the Delivery Redesign initiative, it has been unable to provide
much assistance to the Rural Carriers union in developing any type of
performance pay system in addition to the one that the rural carriers
already have.  The Rural Carriers president also stated that it is
the individual employee who drives customer satisfaction, creates
revenue, and increases productivity.  As such, he believes that the
performance of rural carriers in these areas is already aligned with
the concepts of EVA. 

As previously mentioned, in his comments, the president of the League
expressed his concern that less than a majority of postmasters were
included under EVA, which caused the League not to support the new
pay system.  Also, he commented that (1) nonexempt postmasters who
receive additional pay for working over 40 hours per week should not
be excluded from eligibility for EVA bonuses, because such pay is due
these postmasters for additional work and should not be considered a
bonus; and (2) when trying to support new programs, such as EVA, the
Postal Service has often used the private sector as a basis for
comparing the work of postal employees to employees doing similar
work in the private sector.  However, the League president stated
that because the Postal Service is not a private business, the
Service should recognize that many postal positions are unique and
cannot be compared to positions in the private sector.  The president
of NAPS told us that he believed some postmasters were overpaid for
the work that they did, which included work that oftentimes was done
by craft employees, particularly clerks, such as sorting mail and
providing over-the-counter products and services to postal customers. 


--------------------
\14 Employees covered by this system basically include (1) postal
vice-presidents; (2) managers who work at Postal Service headquarters
in Washington, D.C., and at postal field locations; (3) some
supervisors at postal field locations, including district offices and
plants; (4) some postmasters; and (5) other higher level postal
professional, administrative, and technical personnel.  This system
does not cover compensation for bargaining unit employees whose pay
and benefits are specified in their unions' contracts. 

\15 Under the new compensation system, the payout percentage figure
for postmasters, managers, supervisors, and higher level
professional, administrative, and technical employees included under
the EAS was one-half the amount of the payout percentage figure for
postal PCES executives. 

\16 Under FLSA, nonexempt employees are required to receive overtime
payments for work they accomplish in excess of 40 hours per week. 


      CUSTOMERPERFECT! 
---------------------------------------------------------- Letter :5.4

In February 1995, the Service implemented CustomerPerfect!, which has
been described by the Vice President for Quality as a "management
system being constructed and operated by the Postal Service as a
vehicle for constructive change." He told us that CustomerPerfect! 
is designed to assess and, where necessary, improve all aspects of
Service operations so that it can better provide postal products and
services to its customers in a competitive environment. 

Postal officials told us that in fiscal year 1995, two
CustomerPerfect!  pilots were established in Washington, D.C., and
Nashville, TN.  Later, in February 1996, eight additional pilot sites
were added.\17 A postal official mentioned that these pilots
consisted primarily of implementing what the Service called process
management, which was described as a systematic approach to
continuously assessing, evaluating, and improving the design and
management of core work processes, including those that facilitate
the processing and delivery of mail products and services to postal
customers.  A key aspect of this approach involves the collection and
use of various service and financial performance data, such as EXFC;
EVA; and data on safety in the workplace, including postal vehicle
accidents.  A postal official mentioned that the Service plans to
expand the process management aspect of CustomerPerfect!  to all 85
postal performance clusters in fiscal year 1997.\18

According to postal officials, CustomerPerfect!  was not specifically
designed to address labor-management relations problems.  However,
they believe it provides an opportunity for management and craft
employees to work together on problem-solving teams to improve how
the Service accomplishes its overall mission.  Postal officials told
us that they believed they had good representation from craft
employees on several problem-solving teams that have been
established.  They further stated that all improvement initiatives
should be aligned with CustomerPerfect! 

According to a postal official, in 1995, the Service offered to
provide a briefing on the goals of CustomerPerfect!  to the four
unions and the three management associations.  According to a postal
official, representatives from two of the four unions--APWU and Rural
Carriers--attended the briefing.  The postal official told us that
Mail Handlers and NALC representatives declined to attend the
briefing.  Mail Handlers' officials told us that they had no interest
in the briefing, mainly because the Service had already made the
decision to implement CustomerPerfect!  and did not solicit the
union's input into the development of CustomerPerfect!  NALC
officials did not identify a specific reason for not attending the
CustomerPerfect!  briefing.  However, they told us that the Service
unilaterally terminated the joint Service-NALC improvement initiative
called Employee Involvement (EI) and is now emphasizing
CustomerPerfect!  Representatives from both Mail Handlers and NALC
also told us that CustomerPerfect!  was forced on the unions with no
attempt by the Service to solicit their input into the development of
CustomerPerfect! 

In their comments on a draft of this report, the Rural Carriers union
and the League of Postmasters provided us their insights on
CustomerPerfect!  The president of the Rural Carriers union mentioned
that he supported this initiative in concept and that many of his
union members have been involved in CustomerPerfect!  process
management activities.  Furthermore, he stated that individual
performance goals for rural carriers had always been aligned with a
postal unit's corporate goals under CustomerPerfect!  However, his
main concern dealt with how rural carriers could participate in EVA. 
The League commented that because Service goals have been established
for each performance cluster, a postal installation that achieves or
exceeds its goals will more than likely not receive any recognition
for such performance if it is included in a cluster with other
installations that have not achieved their goals.  According to the
League, this situation is not a good one for providing employees
incentives nor is it good for morale, customer service, or the Postal
Service. 


--------------------
\17 The locations of the 10 CustomerPerfect!  pilots included the
following district offices:  (1) the Capital District, Washington,
D.C.; (2) the Central Plains District, Omaha, NE; (3) the Connecticut
District, Hartford, CT; (4) the Greater Indiana District,
Indianapolis, IN; (5) the Harrisburg District, Harrisburg, PA; (6)
the Louisiana District, New Orleans, LA; (7) the New York District,
New York, NY; (8) the Sacramento District, Sacramento, CA; (9) the
Seattle District, Seattle, WA; and (10) the Tennessee District,
Nashville, TN. 

\18 A performance cluster is an organizational mechanism used by the
Service to help track performance data.  For each of the Service's 85
districts, a cluster usually consists of (1) a district office, which
is responsible for customer service functions mainly through its post
offices, stations, and branches; and (2) a large mail processing and
distribution center/facility, which is responsible for processing and
distributing mail mainly through other such centers/facilities, bulk
mail centers, and airport mail centers/facilities. 


      ACTIONS HAVE BEEN TAKEN TO
      IMPLEMENT FIVE INITIATIVES,
      ALTHOUGH DISAGREEMENTS EXIST
      OVER APPROACHES
---------------------------------------------------------- Letter :5.5

For five initiatives, the Service and some of the organizations,
especially APWU and NALC, fundamentally disagreed on how specific
improvement initiatives should be implemented.  As a result, progress
in implementing these initiatives was difficult to determine. 
Furthermore, during our discussions with Service, union, and
management association officials on the five improvement initiatives,
the officials generally agreed with the overall goals of some of the
initiatives.  However, in large part, fundamental disagreements among
the Service and some of the organizations on strategies for
implementing specific initiatives continued to hamper their efforts
to achieve these goals and improve the overall working climate for
postal employees.  The five initiatives included (1) the
labor-management relations summit meeting, (2) Delivery Redesign, (3)
the labor-management cooperation memorandum of understanding, (4) the
mediation of employee grievances, and (5) the crew chief program. 


         SUMMIT MEETING
-------------------------------------------------------- Letter :5.5.1

As discussed earlier in this report, the first initiative--the PMG's
proposed summit meeting--has not yet taken place, mainly because
negotiations on three of the four unions' most recent contracts
caused these unions to decline to attend such a summit until the
negotiations were completed.  Negotiations for all four unions were
not completed until April 1996.  Yet, as of May 1997 when we
completed our review, the PMG's proposed summit with all eight
organizations had not occurred, nor had it been scheduled.  However,
preliminary efforts to convene such a summit have occurred.  They
included presummit meetings in November and December 1996 with APWU
and NALC, an additional meeting with APWU and NALC in January 1997,
and plans for presummit meetings with the other remaining five
organizations. 

As mentioned previously, we received comments on the summit meeting
from five organizations, including FMCS, APWU, NALC, Rural Carriers,
and the League.  A discussion of their comments, which begins on page
20, has been included at the end of the section of the report
entitled "Little Progress Has Been Made in Improving Labor-Management
Relations Problems."


         DELIVERY REDESIGN
-------------------------------------------------------- Letter :5.5.2

One of our 1994 recommendations was for the Service and the unions to
jointly identify pilot sites where postal and union officials would
be willing to test revised approaches for improving working
relations, operations, and service quality.  Specifically, we
recommended that for city letter carriers, a system should be
established that incorporated known positive attributes of the rural
letter carrier system, including greater independence for employees
in sorting and delivering mail, incentives for early completion of
work, and a system of accountability for meeting delivery schedules. 
In our 1994 report, we said that problems experienced by city
carriers were often related to (1) the close supervision imposed on
city carriers, which often engendered conflicts between supervisors
and carriers, mainly on the amount of time it took for carriers to do
their work; and (2) the existence of performance standards for city
carriers that tended to discourage carriers from doing their best and
completing work quickly.  Postal, union, and management association
officials we interviewed generally agreed that such problems called
for a revision of the city letter carrier system. 

As discussed in our 1994 report, both the Service and NALC have
studied the city letter carrier system to determine how best to
revise it.  For instance, in 1987, the Service and NALC established a
joint task force to study possible changes and improvements in how
carrier assignments were designed, evaluated, and compensated.  The
study was to identify and examine those elements of the rural carrier
system that helped avert many of the conflicts common between postal
supervisors and city carriers.  However, the Service and NALC were
unable to reach any agreement on how to change the city carrier
assignments. 

Consequently, in March 1994, the Service and NALC established similar
but independent efforts to study possible changes to the city letter
carrier system.  A national NALC task force reviewed how city routes
could be restructured to better serve carriers, customers, and the
Service.  Under consideration was a suggestion made by the NALC Vice
President that NALC consider a route design similar to that used by
rural carriers to better deal with changes in office functions and
procedures that could threaten city carrier job opportunities.  At
the same time, the Service had also set up teams to study and propose
alternate approaches to the city carrier system, including examining
the possibility of adopting the rural carrier approach.  However, we
found no effort between the Service and NALC to coordinate and
consolidate these two studies for addressing the common concerns. 

According to postal officials, in 1997, after numerous discussions
with NALC and with no ultimate agreement on an approach, the Service
decided to test some revised processes for the delivery of mail by
city letter carriers.  These processes are collectively known as
Delivery Redesign.  The Service's plan was to use these revised
processes as a basis for helping to develop a city carrier delivery
system that could enhance mail delivery by (1) reducing friction
between supervisors and carriers, (2) providing increased
compensation for superior performance, and (3) removing existing
disincentives for doing the job well. 

In addition to the current delivery process, the Service is testing 3
revised delivery processes at 14 selected sites.\19 For example, some
sites are to test the separate case and delivery processes under
which some carriers would do only casing\20 while others would do
only delivery.  Also, one of the revised processes is to involve the
Service's implementation of performance standards, also known as
standard time allowances, to structure and monitor city carrier
performance at these 14 sites.  However, the Service is not testing
any compensation alternatives for these employees, because it needs
agreement from NALC.  According to an NALC official, NALC has not
agreed to such alternatives, because it considers compensation for
city carriers an issue that is most appropriately discussed in the
collective bargaining process. 

A postal official told us that the testing of the revised city
carrier delivery processes began in Louisville, KY, in March 1997 and
will have started in the other 13 test sites by May 1997.  He also
told us that although NALC officials were briefed several times (May,
July, and September 1996) on Delivery Redesign, they have not
endorsed the testing of the revised processes.  At the national
level, NALC officials declined to comment on the testing; they told
us that they believe the issue of delivery redesign is a subject to
be decided through the collective bargaining process.  However, the
officials added that they do not believe that the city letter carrier
delivery system should be structured similarly to the evaluated route
system used by rural carriers.  As we reported in 1994, rural
carriers work in environments substantially different from city
carriers.  As a result, rural carriers generally have more
independence in doing their work.  Also, the compensation systems for
rural and city carriers are different.  Rural carriers are salaried
workers who do not have to negotiate daily for overtime.  City
carriers are hourly workers whose daily pay can vary depending on the
amount of overtime hours they would be required to work to process
and deliver mail on their assigned routes. 

Two organizations--NALC and NAPS--provided us their comments on the
Delivery Redesign initiative.  NALC objected to the Service's
implementation of Delivery Redesign, stating that by implementing
this initiative, the Service has violated the requirements of NALC's
contract agreement regarding time and work standards for city letter
carriers.  Also, NALC mentioned that the Service has repeatedly
rejected NALC's invitations to study the city letter carrier system
in a cooperative manner.  In addition, the president of NAPS told us
that he believed that the Delivery Redesign initiative could help
improve the city carrier system partly because one purpose of this
initiative was to collect enough information to allow the city
carrier routes to be evaluated daily instead of annually, which is
how rural carrier routes are currently evaluated. 


--------------------
\19 The locations of the 14 test sites included Baton Rouge, LA;
Carson City, NV; Columbus, OH; Enid, OK; Ft.  Myers, FL; Grand
Rapids, MI; Houston, TX; Lewistown, ID; Los Angeles, CA; Louisville,
KY; New York, NY; Rochester, MN; St.  Augustine, FL; and Syracuse,
NY. 

\20 The process of casing involves manually putting the mail into
delivery order. 


         JOINT LABOR-MANAGEMENT
         COOPERATION MEMORANDUM
-------------------------------------------------------- Letter :5.5.3

In November 1993, the Service and APWU signed a joint memorandum of
understanding on labor-management cooperation.  The memorandum
included various principles that were intended to help the Service
and APWU (1) establish a relationship built on mutual trust and (2)
jointly explore and resolve issues of mutual interest.  An example of
one of the principles involved the parties' commitment to and support
of labor-management cooperation at all levels throughout the Service
to ensure a productive labor relations climate, a better employee
working environment, and the continued success of the Service. 
Another principle was a statement about the willingness of both
parties to jointly pursue strategies that emphasized improving
employee working conditions and satisfying the customer in terms of
both service and cost.  The memorandum did not include any
information as to how the Service and APWU planned to measure the
results of its implementation. 

The cooperation memorandum was a "quid pro quo"\21 for another joint
agreement signed at the same time, known as the Remote Barcoding
System (RBCS) Memorandum of Understanding.  Under this agreement, the
Service agreed that it would no longer pursue contracting out for
certain clerical services (i.e., keying address data) associated with
the automated mail processing, or RBCS, functions.  Instead, the
Service agreed to keep this work in-house, which would primarily be
performed at remote encoding centers (RECs). 

During our visits to various RECs located in the field, most postal
officials and union representatives told us that the cooperation
memorandum did not generally make any significant difference in their
ability to work well together.  Rather, they told us that they
believed their ability to work cooperatively was attributable
primarily to the differences in the nature of the work at RECs, which
had clean, office-like atmospheres, instead of in facilities such as
plants, which were similar to manufacturing facilities.  Also,
employees at RECs perform similar types of work (i.e., data entry
functions); at other types of postal locations, the work involves a
wide range of tasks performed by different employees, including
sorting mail, loading and unloading mail trucks, and serving
customers.  Also, REC managers we interviewed told us that because
REC employees had not previously worked in the postal environment,
they had no preconceived notions about labor-management relations. 

Both Service officials and APWU leaders agreed that the
labor-management relations memorandum had not accomplished its intent
of improving cooperation between the Service and APWU.  They told us
that the memorandum had generally not lived up to their expectations. 
Postal officials told us that although they and APWU officials
continue to work together, they do not believe that the "far-reaching
anticipated effect" of the memorandum has been achieved. 

Also, although the president of APWU stated that he considered the
cooperation memorandum to be a "framework agreement" between the
union and the Service, he told us that he believed the Service was
not sincere when it signed the memorandum, because the Service
continuously violates the spirit of the memorandum.  He mentioned
that a recent example of this type of violation was that the Service
tried to annul both the cooperation memorandum and the RBCS
memorandum in 1995.  However, an interest arbitrator refused the
Service's request for annulment. 

In its comments on a draft of this report, APWU agreed that the
memorandum had not lived up to its expectations.  However, the union
stated that cooperation between APWU and the Service exists, as
exemplified by the recent establishment of three additional
agreements with the Service.  These agreements, which were signed by
the Postal Service and APWU during the period May through July 1997,
were intended to (1) try to significantly reduce or eliminate
grievance backlogs; (2) establish a National Labor Relations Board
alternative dispute resolution procedure concerning information
requests; and (3) provide for the implementation of an administrative
dispute resolution procedure to help resolve employee complaints
about specific issues, such as pay.  APWU included copies of the
three agreements as enclosures to its written comments, all of which
are included in appendix III.  APWU believed that any assessment of
the status of postal labor-management relations should include an
evaluation of the impact of these agreements, despite the fact that
the agreements had only recently been signed by Service and APWU
officials.  Because these agreements were not available during the
period of our review, we could not evaluate their implementation. 


--------------------
\21 The term "quid pro quo" refers to the exchange between two
parties of something for something.  Specifically, one of the parties
provides or agrees to provide the other party with a good or a
service in exchange for the other party's agreement to provide a good
or service in return. 


         MEDIATION OF GRIEVANCES
-------------------------------------------------------- Letter :5.5.4

As a result of the 1994 contract negotiations, APWU and the Service
agreed to include in the union's contract a program of mediation in
which parties at local installations could request assistance to help
facilitate the grievance/arbitration process and improve the
labor-management relationship.  The purpose of this mediation program
was to address the problem of too many grievances not being settled
on the workroom floor. 

According to a postal official, the Service initially planned to use
the mediation program on a test basis as a means of reducing the
large backlog of grievances awaiting arbitration.  To begin this
test, the official told us that as of October 1996, the Service had
trained a total of 113 individuals to serve as mediators who could
assist in settling grievances awaiting arbitration at pilot sites
that were to be selected.  However, APWU officials told us that they
disagreed with the Service's plans to test the use of mediators in
this manner.  They believed that a massive arbitration effort was the
best means of reducing the large backlog of grievances awaiting
arbitration.  According to APWU officials, whenever a large backlog
of grievances awaiting arbitration occurs, such an effort should
involve sending an arbitrator to that installation to hear all the
backlogged grievances. 

Both postal and APWU officials told us that the details of how the
mediation program will be implemented are still under discussion. 
However, none of the postal or APWU officials we interviewed provided
any information on when these discussions were scheduled for
completion. 

In its comments on a draft of this report, APWU stated that after the
first joint agreement on mediation was included in the 1994 contract,
the Service tried to move ahead and implement its own type of
mediation program instead of trying to reach a joint understanding
with APWU on how the program should be implemented.  Nevertheless, as
previously mentioned in our discussion on the Joint Labor-Management
Cooperation Memorandum, in May 1997, APWU and the Service established
another agreement that includes provisions for using various types of
mediation processes to help (1) eliminate the current grievance
backlog, (2) prevent future reoccurrences of such backlogs through
the improvement of labor-management relations, and (3) address the
root causes that generate grievances.  A copy of this agreement is
included in appendix III. 


         CREW CHIEF
-------------------------------------------------------- Letter :5.5.5

In our 1994 report, we discussed the Service's testing of the crew
chief program, a program that was designed to allow craft employees
to take greater responsibility for moving the mail.  The purpose of
this program was to address craft employees' concerns that they had
only limited involvement in the daily decisions affecting their work
because management generally did not value their input on how to
organize and accomplish the work. 

During 1990 interest arbitration proceedings, APWU proposed the crew
chief concept because it believed the organization of postal work was
outdated and inefficient and created an unnecessarily adversarial and
bureaucratic work environment.  The Service was not opposed to the
concept but felt there were too many questions, such as how crew
chiefs would be selected, that needed to be addressed before any
agreement could be considered.  As a result of these proceedings, the
Service and APWU entered into a June 1991 Memorandum of Understanding
to pilot test the crew chief program with clerk craft employees. 

Beginning in July 1992, a pilot of the program was conducted in a
total of 12 postal locations, including 7 mail processing and
distribution plants and various post offices in 5 postal
districts.\22 These sites were jointly selected by the Service and
APWU from a list of sites that were willing to participate in the
program.  At the pilot sites, crew chiefs were chosen on the basis of
seniority or selected by a joint committee of union and postal
employees and were given 40 hours of on-site training.  Each of the
sites had the option of adopting an "unelection" process whereby
employees could vote every 90 days to replace their crew chief. 
Postal supervisors were prohibited by the APWU collective bargaining
agreement from doing craft work, but as a craft employee, the crew
chief could work with unit employees.  However, unlike supervisors,
crew chiefs could not approve leave for employees or take
disciplinary actions against them. 

In 1994, we reported that the pilot of the crew chief program was
completed in March 1994.  However, according to program participants,
including managers and supervisors as well as crew chiefs whom we
interviewed at specific postal sites, the results of the pilot were
mixed.  On the one hand, some program participants told us that they
believed craft employees were generally more comfortable taking
instructions from, and expressing their concerns to, crew chiefs
rather than to supervisors.  Participants also told us that crew
chief positions alleviated some of the increased pressure on
supervisors that resulted from the Service's 1992 reduction in
supervisory staffing.  However, on the other hand, we found that the
crew chief program did not address some important issues that caused
workfloor tensions between supervisors and employees.  Specifically,
the crew chief program did not give all employees more control over
their work processes; it empowered only the crew chief.  Also, this
program did not provide any new incentives for team performance or
procedures for holding employees and supervisors accountable for poor
performance. 

As discussed in our 1994 report, supervisors and crew chiefs often
did not fully understand their respective roles and responsibilities. 
They said that the duties that supervisors allowed crew chiefs to
perform varied significantly among the postal pilot sites and also
among the work tours at specific sites.  Supervisors and crew chiefs
also said that selecting the crew chief on the basis of seniority did
not ensure that the best- qualified person was selected for the
position.  Some supervisors perceived crew chiefs as a threat to
their job security, so they bypassed them and dealt directly with
employees.  Also, NAPS did not support the crew chief program, mainly
because its president considered crew chiefs to be another layer of
management.  The existing supervisors at the crew chief test sites
were left in place, and the Service did not redefine their roles in a
self-managed work environment. 

In recent interviews, a postal official said that although the
Service believed that crew chiefs in post offices generally had a
positive effect on postal operations, it did not believe that similar
positive outcomes were evident in the plant locations that used crew
chiefs.  Furthermore, this official told us that after the completion
of the pilot, the topic of crew chiefs was set aside because of the
1994 contract negotiations with APWU.  He also told us that after the
negotiations were completed, discussions began again on the results
of the crew chief pilot.  However, according to postal and APWU
officials, they were still evaluating these results as of February
1997. 

Two employee organizations--APWU and NAPS--provided us their comments
on the crew chief program.  According to APWU, a study of the program
by an individual at Wayne State University revealed that morale and
job satisfaction had improved at virtually all the sites that used
crew chiefs and that such improvements were more evident at postal
installations that provided retail services than at mail processing
installations.  Also, APWU mentioned that the Service still resists
the crew chief program because APWU believes that the Service is
intent on retaining what APWU termed ".  .  .  the same bureaucracy
and administrative hierarchy that has existed since [the 1992]
reorganization with all its consequent ramifications for continued
'contentiousness'." APWU stated that it considered the crew chief
program to be successful and expressed considerable concern that the
Service still resisted it.  Moreover, APWU commented that we ignored
the fact that crew chiefs--also referred to by APWU as negotiated
group leaders--were being successfully used at RECs, and the overall
performance of the RECs has exceeded expectations.  However, our
purpose for including RECs in our review was to determine the extent
to which the joint labor-management cooperation memorandum had been
implemented, not to review the overall operations of RECs.  Thus, we
did not review the use of crew chiefs or negotiated group leaders at
RECs or the overall performance of RECs. 

The president of NAPS also commented on the crew chief program,
stating that his organization generally did not favor the program,
mainly because it empowered only one person on the mail processing
team--the crew chief, who often functioned as a second supervisor in
addition to the team's primary supervisor.  The president believed
that all employees on a mail processing team should be empowered to
work together to do whatever it takes to process and distribute the
mail efficiently and that only one team supervisor was needed to
coordinate mail processing and distribution activities.  By
empowering all the team's employees in this manner, the NAPS
president believed that a crew chief was not needed. 


--------------------
\22 The locations of the seven pilot plants included (1) Birmingham,
AL; (2) Lehigh Valley, PA; (3) Louisville, KY; (4) Rochester, NY; (5)
Royal Oak, MI; (6) Sacramento, CA; and (7) St.  Paul, MN.  The 5
pilot district offices included (1) Las Vegas, NV; (2) Louisiana, LA;
(3) South Jersey, NJ; (4) Sun Coast, FL; and (5) Western New York,
NY. 


      DISCONTINUED INITIATIVES
---------------------------------------------------------- Letter :5.6

For two initiatives, efforts to continue implementing them were
hampered primarily by disagreements among the Service and the other
involved participants over how best to use the initiatives to help
improve the postal workplace environment.  Also, according to postal
officials, a lack of union participation in one of the two
initiatives generally caused the Service to discontinue its use.  The
two initiatives included (1) the employee opinion survey (EOS) and
(2) the Employee Involvement (EI) program. 


         EMPLOYEE OPINION SURVEY
         (EOS)
-------------------------------------------------------- Letter :5.6.1

The nationwide annual employee opinion survey (EOS), which began in
1992 and continued through 1995, was a voluntary survey that was
designed to gather the opinions of all postal employees on the Postal
Service's strengths and shortcomings as an employer.  Postal
officials told us that such opinions have been useful in helping the
Service determine the extent of labor-management problems throughout
the organization and make efforts to address such problems. 

According to postal officials, problems with the EOS arose during
negotiations on some of the 1994 union contracts.  Both postal and
union officials stated that during those negotiations, the Service
used our 1994 report, which included the results of the 1992 and 1993
EOS, in its discussion of various contract issues with three unions
(APWU, Mail Handlers, and NALC).  In our 1994 report we found that
past EOS results have indicated that many mail processing and
distribution employees who had responded to the survey said that they
(1) were generally satisfied with their pay and benefits, (2) liked
the work they did, and (3) were proud to work for the Postal Service. 
However, a postal official stated that the Service's use of our
findings, which were partially based on the EOS results, caused
problems with some union officials.  He told us that NALC boycotted
the 1995 EOS because it believed EOS was inappropriately used during
the 1994 contract negotiations. 

According to postal officials, NALC and APWU encouraged their members
not to complete future surveys.  Also, the officials told us that
although the Mail Handlers and Rural Carriers unions did not urge
their members to boycott future surveys, the resistance by APWU and
NALC members was enough to skew the results of the EOS and render it
almost useless.  This action by the unions led to the discontinuance
of the EOS in 1996.  Also, officials from a management association
told us that they did not believe the results of employee surveys
should be used in determining management pay levels, because they
believed craft employees have manipulated, and would continue to
manipulate, surveys to discredit their supervisors. 

In their comments on a draft of this report, four
organizations--APWU, NALC, Mail Handlers, and the League--provided us
their insights on EOS.  Three of the four organizations--APWU, NALC,
and Mail Handlers--did not support the implementation of EOS nor the
use of its results.  Specifically, these three organizations objected
to what they believed was the Service's inappropriate use of EOS
results as a basis for justifying its position in collective
bargaining. 

APWU stated that it generally does not object to employee surveys and
did not object to EOS until postal officials began using the survey's
results in the 1994 contract negotiations to justify their bargaining
positions, which in part led to the APWU boycott of the 1995 EOS. 
NALC stated that although surveys such as EOS can be useful tools,
they can produce (1) data that can be manipulated, (2) results that
can be misinterpreted, and (3) conclusions that may be
inappropriately used.  Although NALC stated that it was willing to
work with the Service in developing and implementing an employee
survey, it believed that the Service's unilateral implementation of
EOS and its inappropriate use of results during contract negotiations
undermined the credibility of EOS. 

Also, Mail Handlers stated that during 1994 contract negotiations,
the Service used EOS results to support its position that union
members did not need increased wages and benefits.  As a result, in
July 1995, the Mail Handlers union stated that it adopted a
resolution, which included its reasons for objecting to EOS. 
According to the Mail Handlers union, the resolution stated that Mail
Handlers did not support EOS and requested that those of its members
who chose to complete the 1995 EOS should do so in a manner that
would render it useless.  In addition, the League commented that
although the Service implied that EOS was discontinued because of a
lack of union participation, the League understood that it was
because both the Service and the unions had used EOS data to support
their positions on various issues such as pay and benefits. 


         EMPLOYEE INVOLVEMENT
-------------------------------------------------------- Letter :5.6.2

As discussed in our 1994 report, the Employee Involvement (EI)
initiative began in 1982 and was designed to end or alleviate the
adversarial relationship in the workplace climate.  Through the
implementation of EI, the Service and NALC intended to (1) redirect
postal management away from the traditional authoritarian practices
toward a style that would encourage employee involvement and (2)
enhance the dignity of postal employees by providing them with a
chance for self-fulfillment in their work. 

According to a postal official, EI was discontinued, primarily
because it no longer contributed significantly to the goals of the
Service and was unable to address the root causes of conflict in the
workplace or foster the empowerment of city letter carriers.  The
postal official told us that when EI was first established in 1981,
it accomplished some positive results in the workplace.  However, in
recent years, EI has not helped to improve the postal workplace as
much as it once did.  The official told us that a key reason was that
for the past 3 years, all joint EI meetings between Service and NALC
officials were cancelled due to negotiations over NALC's most recent
contract.  The official also told us that during 1994 contract
negotiations, the Service and NALC disagreed over various aspects of
EI, including what type of work the 400 trained EI facilitators
should perform.  According to the official, these facilitators were
working in various postal field locations as full-time EI
facilitators, which prevented them from performing functions directly
related to mail processing and delivery. 

NALC disagreed with the Service's reasons for discontinuing EI.  An
NALC official characterized EI as a remarkable achievement in
labor-management cooperation.  He mentioned that EI represented one
of the Service's and NALC's earliest efforts to replace the
traditional authoritarian and hierarchical work processes in the
postal workplace climate with a system of increased cooperation and
enhanced worker empowerment.  Although the Service decided to
discontinue its support of EI, the NALC official told us that the
union intends to continue working to reinstate the EI program. 

In its comments on a draft of this report, NALC reiterated its
concern about the Service's April 1996 termination of EI, which NALC
termed ".  .  .  an extraordinarily regressive act." Shortly after EI
was terminated, the president of NALC mentioned that he had written
to the Vice President of Labor Relations for the Postal Service to
protest the action.  Also, the NALC president stated that he believed
the timing of EI's termination, which coincided with the time that
the Delivery Redesign initiative was begun, indicated that in its
approach to dealing with NALC, the Service had moved from a position
of jointness and cooperation to one of domination and confrontation. 
The president stated further that he believed the Service's revised
approach should be an issue of greater concern to us than any of the
initiatives we had selected to review.  As noted in the Objectives,
Scope, and Methodology section, we selected the initiatives included
in this review based primarily on (1) discussions with the Postal
Service and its unions and management associations and (2) the extent
to which the initiatives had the potential to address our previous
recommendations.  EI was not included in our review. 


   CONTINUED NEED TO IMPROVE
   LABOR-MANAGEMENT RELATIONS
------------------------------------------------------------ Letter :6

Improving labor-management relations at the Postal Service has been
and continues to be an enormous challenge and a major concern for the
Postal Service and its unions and management associations.  With the
significant future challenges it faces to compete in a fast-moving
communications marketplace, the Service can ill afford to be burdened
with long-standing labor-management relations problems.  We continue
to believe that in order for any improvement efforts to be sustained,
it is important for the Service, the four unions, and the three
management associations to agree on common approaches for addressing
labor-management relations problems so that positive working
principles and values can be recognized and encouraged in postal
locations throughout the nation, especially in locations where
labor-management relations are particularly adversarial.  Our work
has shown that there is no clear or easy solution to improving these
problems.  However, continued adversarial relations could lead to
escalating workplace difficulties and hamper the Service's efforts to
achieve its intended improvements. 

The limited experience the Postal Service and its unions and
management associations have had with FMCS in an attempt to convene a
postal summit meeting, although not fully successful to date,
nonetheless has suggested that the option of using a third-party
facilitator to help the parties reach agreement on common goals and
approaches has merit.  The use of FMCS, as recommended in our 1994
report, was requested by the PMG in early 1996 and encouraged by the
Chairman of the House Subcommittee on the Postal Service in March
1996.  Although efforts to arrange a summit continue, the window of
opportunity for developing such an agreement may be short-lived
because of contract negotiations involving three of the four unions
whose bargaining agreements are due to expire in November 1998.\23 As
previously mentioned, in 1994, after formal contract negotiations had
begun for APWU, Mail Handlers, and NALC, these unions were generally
reluctant to engage in discussions outside the contract negotiations
until they were completed. 

A second approach to improving labor-management relations was
included in the postal reform legislation introduced by the Chairman
of the House Subcommittee on the Postal Service in June 1996 and
reintroduced in January 1997.  Under this proposed legislation, a
temporary, presidentially appointed seven-member Postal
Employee-Management Commission would be established.  The proposed
Commission would be responsible for evaluating and recommending
solutions to the workplace difficulties confronting the Service and
would prepare its first set of reports within 18 months and terminate
after preparing its second and third sets of reports.\24 The
Commission would include two members representing the views of large
nonpostal labor organizations; two members from the management ranks
of similarly sized private corporations; and three members well-known
in the field of employee-management relations, labor mediation, and
collective bargaining, one of whom would not represent the interests
of either employees or management and would serve as the chair.  Some
concerns have been raised that the proposed Commission would not
include representatives of the Postal Service or its unions or
management associations, and thus the results of its work may not be
acceptable to some or all of those parties.  In July 1996,
representatives of each of the four major unions testified before the
House Subcommittee on the Postal Service that the Commission was not
needed to solve labor-management relations problems at the Postal
Service.  They said that the affected parties should be responsible
for resolving the problems. 

Finally, the Government Performance and Results Act provides an
opportunity for Congress; the Postal Service, its unions, and its
management associations; and other stakeholders with an interest in
postal activities, such as firms that use or support the use of
third-class mail for advertising purposes and firms that sell
products by mail order, to collectively focus on and jointly engage
in discussions about the mission and proposed goals for the Postal
Service and the strategies to be used to achieve desired results. 
Such discussions can provide Congress and the other stakeholders with
opportunities not only to better understand the Service's mission and
goals but also to work together to develop and reach consensus on
strategies to be used in attaining such goals, especially those that
relate to the long-standing labor-management relations problems that
challenge the Service. 

The Postal Service is currently developing its strategic plan as
required by the Results Act for submission to Congress by September
30, 1997.  The plan is intended to provide a foundation for defining
what the Service seeks to accomplish, identify the strategies the
Service will use to achieve desired results, and provide performance
measures to determine how well it succeeds in reaching
result-oriented goals and achieving objectives.  Also, as part of
this process, the Results Act requires that the Service solicit the
views of its stakeholders on the development of its strategic plan
and keep Congress advised of the plan's contents.  The Service
published notices in the Federal Register asking the public for input
on its proposed plan no later than June 15, 1997.  This comment
period provided an opportunity for those who might be affected by
decisions relating to the future of the Postal Service to voice their
views on the strategies to be used by the Postal Service. 
Furthermore, the strategic plan is intended to be part of a dynamic
and inclusive process that fosters communication between the Service
and its stakeholders--including the unions and management
associations--and that can help clarify organizational priorities and
unify postal employees in the pursuit of shared goals. 


--------------------
\23 The collective bargaining agreements for APWU, NALC, and Mail
Handlers are due to expire in November 1998.  The agreement for Rural
Carriers is due to expire in November 1999. 

\24 Under this proposed legislation, the Commission would submit its
recommendations in the form of a written report to the President and
Congress to the extent that such recommendations involved any
legislation and to the Postal Service to the extent that the
recommendations did not involve legislation. 


   COMMENTS FROM THE POSTAL
   SERVICE, LABOR UNIONS,
   MANAGEMENT ASSOCIATIONS, AND
   FMCS AND OUR EVALUATION
------------------------------------------------------------ Letter :7

We provided a draft of our report to nine organizations for their
review and comment.  The nine organizations included

  -- the Postal Service;

  -- the four labor unions, including APWU, NALC, Mail Handlers, and
     Rural Carriers;

  -- the three management associations, including NAPS, NAPUS, and
     the League of Postmasters; and

  -- FMCS. 

We received written comments from the Postal Service, the four major
labor unions, and one of the three management associations--the
League of Postmasters.  We also obtained oral comments from the
Director of FMCS and the presidents of NAPS and NAPUS. 

The comments we received from the 9 organizations included diverse
opinions on the 3 sections of the report that dealt with (1) the
report's basic message that little progress had been made in
improving labor-management relations problems; (2) the implementation
of and the results associated with the 10 improvement initiatives;
and (3) the opportunities that are available to help the Service, the
4 unions, and the 3 management associations reach agreement on how to
address labor-management relations problems.  Regarding the report's
basic message, although the nine organizations generally agreed that
little progress had been made and labor-management relations problems
have persisted, some of them expressed different opinions on the
reasons why such problems continued to exist.  With respect to the 10
improvement initiatives, many of the organizations expressed
different opinions about such matters as how some of the initiatives
were implemented, including what role the organizations played in
their implementation, and what results were associated with specific
initiatives.  Concerning the opportunities that could be used to help
the Service, the four unions, and the three management associations
agree on how to address persistent labor-management relations
problems, the organizations expressed various opinions about the
potential of these opportunities for helping the organizations
resolve such problems.  Also, some of the organizations believed that
entities outside the Postal Service, including Congress, should not
be involved in discussions about postal labor-management relations
problems.  Some of these organizations believed that the parties
directly affected by such problems, namely the Service, the four
unions, and the three management associations, should be the ones to
decide how best to address the problems. 

We understand that the nine organizations had different perspectives
on these matters.  However, we believe that the diversity of their
opinions reinforces the overall message of this report and provides
additional insight as to why little progress in improving persistent
labor-management relations problems has been made since the issuance
of our September 1994 report.  We continue to believe that the
establishment of a framework agreement, as recommended in our 1994
report, is needed to help the Service, the unions, and the management
associations agree on the appropriate goals and approaches for
dealing with persistent labor-management relations problems.  Also,
we believe that opportunities such as the ones discussed in this
report, including the use of a third-party facilitator, the proposed
labor-management relations commission, and the requirements of the
Government Performance and Results Act, can provide the Service, the
unions, and the management associations alternatives to explore in
trying to determine how best to reach agreement on dealing with such
problems, so that the Service's work environment can be improved and
its competitive position in a dynamic communications marketplace can
be maintained. 

We incorporated comments where appropriate from all nine
organizations, including the Service, the four unions, the three
management associations, and FMCS, as their comments pertained to the
three major sections of the report in which we discussed our
findings.  We have included copies of the written comments we
received from the Postal Service, APWU, NALC, Mail Handlers, Rural
Carriers, and the League of Postmasters, along with our additional
comments, as appendixes II through VII, respectively. 


      COMMENTS RELATED TO THE
      REPORT'S MESSAGE
---------------------------------------------------------- Letter :7.1

In the section of the report entitled "Little Progress Has Been Made
in Improving Labor-Management Relations Problems," which begins on
page 10, we discussed the report's basic message that these problems,
which were identified in our 1994 report, still persisted. 
Representatives from the nine organizations generally agreed that
labor-management relations problems continued to exist in the Postal
Service and that little progress had been made in addressing them. 
In their written comments, some organizations discussed in more
detail the reasons why they believed such problems still existed. 
Among other things, these reasons included concerns about the Postal
Service's contracting out of some postal functions, the lack of trust
between employees and managers, and the importance of permitting the
Postal Service and its unions and management associations to operate
without interference from outside parties. 

In addition to these written comments, the president of NAPS told us
that he believed the reason for the continued problems was that most
employee organizations were more concerned with trying to preserve
their own existence rather than trying to help ensure the future
security of the Postal Service as an organization.  He believed that
it was time for the unions and the management associations to begin
educating their members about the need for these organizations to
focus on maintaining the existence of the Service because, without
the Service, the employee organizations would have no reason to
exist. 


      COMMENTS RELATED TO SPECIFIC
      IMPROVEMENT INITIATIVES
---------------------------------------------------------- Letter :7.2

In the section of the report entitled "Status and Results of
Initiatives to Improve Labor-Management Relations," which begins on
page 21, we presented information on the efforts that the Service,
the 4 labor unions, and the 3 management associations have made to
implement 10 improvement initiatives.  In this section, we included
the comments that we received from some of these organizations, such
as APWU, NALC, and NAPS, which provided us their insights about
specific improvement initiatives, including the crew chief program,
the postal employee opinion survey, and EI.  The organizations that
commented on specific initiatives provided information that generally
(1) discussed the extent to which they participated in helping to
develop and implement specific initiatives, (2) described the
outcomes that they believed resulted from specific initiatives, and
(3) identified the reasons why they believed specific initiatives had
not achieved their intended outcomes. 


      COMMENTS RELATED TO
      OPPORTUNITIES FOR IMPROVING
      LABOR-MANAGEMENT RELATIONS
---------------------------------------------------------- Letter :7.3

In the section of the report entitled "Continued Need to Improve
Labor-Management Relations," which begins on page 44, we discussed
opportunities that are currently available for the Service, the 4
unions, and the 3 management associations to use in attempting to
reach agreement on strategies for improving labor-management
relations problems.  The opportunities we discussed in our report
included (1) the continued use of a third-party facilitator, such as
FMCS, to help these eight organizations agree on common goals and
approaches; (2) the establishment of a presidentially appointed
commission of outside experts to evaluate and recommend solutions to
labor-management relations problems; and (3) the inclusion of the
eight organizations, Congress, and other parties interested in postal
activities in a dialogue as part of the Government Performance and
Results Act that can help all postal stakeholders focus on defining
the Service's mission and goals and the means to achieve such goals. 

Some of the organizations provided us their comments on one or more
of these three issues.  Concerning the first issue about the use of a
third-party facilitator to help the eight postal parties reach
agreement, we received comments from five organizations.  However,
instead of the third-party facilitator, their comments generally
focused more on the PMG's proposed summit meeting for which the
Director of FMCS has been performing the facilitator role in
attempting to convene the meeting.  We received comments on the
meeting from FMCS, APWU, NALC, Rural Carriers, and the League, all of
which provided different perspectives on the anticipated merits of
the proposed summit meeting.  The information we obtained about the
meeting is included in the section of the report entitled "Little
Progress Has Been Made in Improving Labor-Management Relations
Problems." This section includes information on the summit meeting,
which begins on page 19, and the comments on the meeting that we
received from the five organizations. 

The second issue involved the establishment of the seven-member
labor-management relations commission that was included in proposed
legislation by the House Subcommittee on the Postal Service.  We
received comments on this issue from the Postal Service and one of
the three management associations--the League of Postmasters. 

In its comments, the Service endorsed the proposal by the House
Subcommittee on the Postal Service that a commission be established
to evaluate and recommend solutions to labor-management relations
problems.  The Service believed that it would prefer to support the
work of such a commission rather than engage in continued
recriminations and finger-pointing with the unions on why so little
progress in addressing such problems had been made, which has often
occurred in the past.  The Service had two suggestions for the
Subcommittee's consideration in the establishment of the commission. 
First, the Service suggested that a shorter time period (i.e., 1 year
instead of 3-1/2 years) be established for the commission to complete
its work.  The Service stated that 3-1/2 years was too long a period
of time for the commission to evaluate and recommend solutions to
persistent labor-management relations problems, mainly because a
significant amount of work by us and others has already been done to
identify that such problems continue to exist and that this work
should not have to be repeated.  Second, the Service suggested that
the commission be established under the auspices of an independent
academic organization to help ensure that (1) the commission's work
could be started as quickly as possible without having discussions
about its establishment tied to discussions about the postal reform
legislation and (2) the chances that the commission's recommendations
would be accepted could be increased. 

In its comments on a draft of this report, the League mentioned that
as described in the proposed legislation, the proposed commission
would not include representatives of postal employees or customers. 
The League also expressed concern about the fact that the members of
the commission would be making decisions about how to resolve
labor-management relations problems without being responsible for
ensuring that such problems were resolved. 

Recent discussions we held with the presidents of the four unions and
the remaining two of the three management associations (i.e., NAPS
and NAPUS) confirmed that they are also concerned about the
composition of the commission as well as the need for it.  Given
these opinions, the Service expressed a concern that without the
involvement of an independent body, implementation of the
commission's recommendations may be difficult to accomplish. 

Concerning the third issue--the opportunity for parties interested in
postal activities to engage in a dialogue as part of Results Act
requirements--only APWU provided comments.  According to the
president of APWU, he received a copy of the Postal Service's draft
strategic plan around June 16, 1997, which he considered rather late. 
The Results Act required that the final plan be submitted to Congress
no later than September 30, 1997.  Accordingly, the APWU president
believed that such lateness reduced the value of his input on the
draft plan and led him to question whether the Service's attempt to
seek input was sincere. 


---------------------------------------------------------- Letter :7.4

As arranged with you, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from its issue date.  At that time, we will send copies of this
report to the Ranking Minority Member of your Subcommittee, the
Chairmen and Ranking Minority Members of the House and Senate
oversight committees, the Postmaster General, and to other interested
parties.  Copies will also be made available to others upon request. 

If you or your staff have any questions about this report, please
contact me on (202) 512-4232; or Teresa Anderson, Assistant Director,
on (202) 512-7658.  Major contributors to this report are included in
appendix VIII. 

Sincerely yours,

Bernard L.  Ungar
Director, Government Business
 Operations Issues


DESCRIPTION OF
GRIEVANCE/ARBITRATION PROCESS
=========================================================== Appendix I

As defined in postal labor agreements, a "grievance" is "a dispute,
difference, disagreement, or complaint between the parties related to
wages, hours, and conditions of employment." The Postal Service's
process for resolving grievances is similar to that used in the
private sector and other public organizations. 

Depending on the type of grievance, the process may involve up to 4
or 5 steps, and each step generally requires the involvement of
specific postal and union officials.  For instance, at each of the
first 3 steps in the process, the parties that become involved
include lower to higher union and postal management level officials
in their respective organizations, such as post offices, mail
processing and distribution centers, and area offices.  Step 4 in the
grievance process occurs only if either the Service or the union
believes that an interpretation of the union's collective bargaining
agreement is needed, in which case national level postal and union
officials would become involved.  The fifth and final step in the
grievance process involves outside binding arbitration by a neutral
third party.  Both employees and the four unions that represent them
can initiate grievances.  The 5 steps of the process are described
below. 


         STEP 1:  ORAL GRIEVANCE
----------------------------------------------------- Appendix I:0.0.1

  -- The employee or union steward discusses the grievance with the
     supervisor within 14 days of the action giving rise to the
     grievance. 

  -- The supervisor renders an oral decision within 5 days. 

  -- The union has 10 days to appeal the supervisor's decision. 


         STEP 2:  WRITTEN
         GRIEVANCE
----------------------------------------------------- Appendix I:0.0.2

  -- The grievance is filed in writing on a standard grievance form
     with the installation head or designee. 

  -- The installation head and the union steward or representative
     meet within 7 days. 

  -- The installation head's decision is furnished to the union
     representative within 10 days. 

  -- The union has 15 days to appeal the installation head's
     decision. 


         STEP 3:  WRITTEN APPEAL
         OF GRIEVANCE
----------------------------------------------------- Appendix I:0.0.3

  -- The union files a written appeal with the Area Office's director
     of human resources. 

  -- The union's Area representative meets with the representative
     designated by the Postal Service within 15 days. 

  -- The Postal Service's step 3 decision is provided to the union
     representative within 15 days. 

  -- The union has 21 days to appeal the decision to arbitration
     (step 5). 


         STEP 4:  NATIONAL LEVEL
         REVIEW OF GRIEVANCES
         INVOLVING AN
         INTERPRETATION OF THE
         UNION'S NATIONAL
         AGREEMENT
----------------------------------------------------- Appendix I:0.0.4

  -- If either party maintains that the grievance involves a matter
     concerning the interpretation of the National Agreement, the
     union has 21 days to refer the matter to the national level of
     the union and the Postal Service. 

  -- Representatives of the national union and the postal
     headquarters meet within 30 days. 

  -- The Postal Service issues a written decision within 15 days. 

  -- The union has 30 days to appeal the Postal Service's decision to
     arbitration. 


         STEP 5:  ARBITRATION
----------------------------------------------------- Appendix I:0.0.5

  -- An arbitrator is selected and a hearing is scheduled under the
     terms of the National Agreement, depending on the type of
     grievance. 

  -- The arbitrator's decision is final and binding. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE POSTAL SERVICE
=========================================================== Appendix I



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(See figure in printed edition.)Appendix III
COMMENTS FROM THE AMERICAN POSTAL
WORKERS UNION
=========================================================== Appendix I



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Also see comment 3. 



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The following are GAO's comments on specific issues included in the
letter dated July 21, 1997, from the American Postal Workers Union
(APWU).  Other issues that were discussed in the letter have been
included in the report text. 

GAO COMMENTS

1.  We do not agree with APWU's assessment that the basic premise of
the report--that labor-management relations problems have generally
contributed to a sometimes contentious work environment and lower
productivity--was misleading.  In discussing these issues, we did not
suggest, as APWU stated, that such an environment resulted from some
top down directive from the unions.  Rather, as discussed in our 1994
report, such an environment appeared to have resulted from various
problems, including autocratic management styles, adversarial
employee and union attitudes, and inappropriate and inadequate
performance management systems.  We identified these problems mainly
through the results of the 1992 and 1993 postal employee opinion
surveys and our interviews with postal, union, and management
association officials. 

Also, we did not suggest that such problems as the high level of
grievance activity and poor relations between postal craft employees
and supervisors were the result of union propaganda or internal union
politics.  Instead, as discussed in our 1994 report, we determined
that various data, including (1) increased grievance rates, (2)
repeated uses of arbitration to settle contract negotiations, and (3)
responses to the 1992 and 1993 postal employee opinion surveys
indicated that postal, union, and management association officials
needed to change their relationships and work together to help
improve the Service's corporate culture, so that the Postal Service
can become more competitive and a better place to work. 

2.  In its comments, APWU stated that it believed the report's
premise--that the Service has experienced lower productivity or
insufficient productivity improvements compared to the private
sector--was flawed.  APWU also cited various problems with our
discussion of TFP in the report and believed that we had implied that
TFP was retarded by labor.  In addition, APWU expressed concern about
our characterization that the Service's economic performance was
causing it to lose market share to its competitors.  Furthermore,
APWU included in its comments specific data on such topics as (1)
comparisons of Service and APWU labor productivity to that of the
non-farm labor sector and (2) the Service's share of the advertising
revenue that has been generated by major communications participants,
such as newspapers, radio, and television. 

The discussion on TFP in our report was intended to provide
additional information and perspective on the Service's overall
productivity and performance compared to other performance indicators
such as net income and delivery scores for specific classes of mail. 
We did not verify the accuracy of the TFP information that we
obtained from the Service nor did we verify the data that APWU
included with its comments related to such topics as labor
productivity and advertising revenue.  Also, we did not suggest as
APWU stated that the behavior of TFP was retarded by labor.  In
addition, we stated in our report that the Service was concerned
about the fact that customers were increasingly turning to
competitors or alternative communications methods.  This information
was not our characterization, as asserted by APWU, but it was
information that we obtained from Service officials. 

3.  In discussing the crew chief program, APWU commented that we
ignored the fact that negotiated group leaders--employees whose
responsibilities are similar to those of crew chiefs--were being
successfully used at RECs, and the overall performance of the RECs
has exceeded expectations.  Our primary purpose for including RECs in
our review was to determine the extent to which the joint
APWU-Service labor-management cooperation memorandum had been
implemented, not to review the overall operations of RECs.  Thus, we
did not review the use of negotiated group leaders at RECs or the
overall performance of RECs. 




(See figure in printed edition.)Appendix IV
COMMENTS FROM THE NATIONAL
ASSOCIATION OF LETTER CARRIERS
=========================================================== Appendix I



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The following are GAO's comments on specific issues included in the
letter dated July 17, 1997, from the National Association of Letter
Carriers (NALC).  Other issues discussed in the letter have been
included in the report text. 

GAO COMMENTS

1.  We do not agree with NALC's opinion that our methodology in
reviewing improvement initiatives was fundamentally flawed.  The
methodology we used for our 1994 report laid the groundwork for
concluding that problems in labor-management relations persisted on
the workroom floor of various postal facilities.  The methodology
that supported the work for this review involved a similar approach,
which generally included (1) interviews with responsible postal,
union, and management association officials both in headquarters and
at selected postal field locations and (2) reviews of relevant
documents.  As discussed in the section of the report entitled
"Objectives, Scope, and Methodology," which begins on page 7, this
work was intended to help us determine the extent to which progress
in improving such problems had been made, including whether the
results of specific improvement initiatives had contributed to such
progress. 

As we mentioned in the methodology section, the 32 initiatives we
originally identified for our review covered a wide range of postal
improvement activities.  We recognize that such initiatives offered
opportunities for the Service and NALC, as well as the other three
unions and the three management associations, to try to improve the
postal work environment.  However, we determined that because we were
faced with a limited amount of time and resources, we were unable to
review all 32 initiatives.  We determined that our efforts could best
be spent by reviewing those initiatives that we believed had
significant potential to address the recommendations in the 1994
report, and that, of the 32 initiatives, 10 appeared to fit this
criterion.  As described in our methodology, our work included (1)
discussions with various headquarters and field postal officials
responsible for implementing and monitoring the 10 initiatives, (2)
discussions with national and field union and management association
representatives who were involved with or affected by the
implementation of the 10 initiatives we reviewed, and (3) reviews of
relevant documents associated with the implementation of the 10
initiatives.  We believe that by using this approach, we were able to
obtain sufficient information that enabled us to determine the
overall extent to which progress had been made in improving various
labor-management relations problems that were identified in our 1994
report. 

2.  In its comments, NALC stated that it believed it was
inappropriate to compare the rural letter carrier system to the city
carrier system.  Thus, NALC believed that we should not cite the
rural carrier system as a model for the Service and NALC to use in
their attempts to revise the city letter carrier system.  As
discussed in our 1994 report, both the Service and NALC agreed that
the city letter carrier system had problems and needed to be changed. 
We identified various positive attributes of the rural carrier
system, such as greater independence for employees in sorting and
delivering mail, that we believed the Service and NALC could consider
in attempting to revise the city carrier system.  However, we did not
advocate that city carriers merely adopt the rural carrier system. 
Rather, we recommended that working together, the Service and NALC
should test revised approaches that incorporate known positive
attributes of the rural carrier system to determine how such
attributes might be used in the city carrier system.  We continue to
believe that the implementation of this recommendation may help
address some of the problems that we found were associated with the
city letter carrier system. 

3.  In its comments, NALC expressed concern about the fact that we
did not discuss two initiatives in our report.  The two initiatives
included (1) the 1992 Joint Statement on Violence and Behavior in the
Work Place and (2) the Union-Management Pairs (UMPS) program. 

Concerning the joint statement on violence, NALC believed that it was
curious that although this initiative was included in the original
list of 32 initiatives, we did not include it in our report.  Also,
NALC stated that it believed the statement might have been ".  .  . 
an instructive area of inquiry, since it portrays the best and worst
of union-management joint efforts to address labor-management
cultural issues." According to NALC, the signing of the statement by
the Service and the unions was the best aspect of this initiative,
but the worst part was the Service's refusal to recognize the
statement as an enforceable agreement against postal supervisors. 

As explained previously in comment 1, time and resource limitations
prevented us from reviewing all 32 initiatives.  We believed that the
10 initiatives we selected were those that had significant potential
for addressing the recommendations included in our 1994 report. 
Since we did not review the joint statement on violence, we cannot
comment on NALC's statements about this initiative.  However, we
believe that such a statement provides the Service, its unions, and
management associations an opportunity to work together to solve
problems, which may help these organizations improve cooperation
between employees and supervisors and reduce workfloor tensions. 

Concerning the Union-Management Pairs (UMPS) program, NALC stated
that it was a joint, cooperative program, one in which postal
management and union officials worked together to try to resolve
disputes between employees and supervisors without lengthy delays or
arbitration.  NALC believed that UMPS was a successful program that
helped bring about a drastic reduction in grievances and arbitrations
and that in its 10 years of existence, it generated a positive
labor-management ambiance.  Although NALC stated that it wanted to
expand the use of UMPS, the Service has refused to do so. 

Like the joint statement on violence, UMPS had been included in the
original list of 32 initiatives, and, as mentioned previously, time
and resource limitations precluded us from reviewing all 32
initiatives.  However, as discussed in our 1994 report, UMPS provided
the Service and NALC an opportunity to try to jointly resolve
disputes between employees and supervisors before such disputes
escalated into formal grievances.  We believe that such an effort can
help these organizations improve communications and reduce conflicts
between employees and supervisors. 




(See figure in printed edition.)Appendix V
COMMENTS FROM THE NATIONAL POSTAL
MAIL HANDLERS UNION
=========================================================== Appendix I



(See figure in printed edition.)


The following is GAO's comment on a specific issue included in the
letter dated July 22, 1997, from the National Postal Mail Handlers
Union (Mail Handlers).  Other issues that were discussed in the
letter have been included in the report text. 

GAO COMMENT

1.  In its letter, the Mail Handlers union disagreed with our
statement that about 80 percent of employees represented by the four
major postal unions have joined and paid dues.  According to Mail
Handlers, this figure should be higher than 80 percent.  Also, Mail
Handlers mentioned in its letter the union security provisions of the
National Labor Relations Act (NLRA) and its desire to see such
provisions applied to the Postal Service, which, if enacted by
Congress, would mean that postal employees represented by a labor
organization must join and pay dues to that organization. 

According to PRA, employees have the right, but are not required, to
join a labor organization.  The overall percentage figure that we
included in the report on the number of union members was intended to
provide a general perspective on the extent to which those employees
represented by unions were actual members of the union. 

We obtained information on the total number of employees represented
by the four labor unions from the Postal Service's On-Rolls and Paid
Employees Statistics National Summary.  Also, we recently contacted
union officials in the four major postal labor unions to obtain
estimated figures on employees who had joined the unions and paid
dues.  As shown in the report text on page 5, union officials
estimated the following percentages of union members who had paid
dues as of September 1996:  81 percent for APWU, 83 percent for Rural
Carriers, 85 percent for Mail Handlers, and 92 percent for NALC. 

We did not verify the accuracy of the data in the Service's summary
nor did we verify the accuracy of the data provided by the four
unions.  In addition, since we did not address the union security
provisions of NLRA as they might apply to the Postal Service, we
could not comment on this issue. 




(See figure in printed edition.)Appendix VI
COMMENTS FROM THE NATIONAL RURAL
LETTER CARRIERS' ASSOCIATION
=========================================================== Appendix I

and 19. 



(See figure in printed edition.)

and 32. 


The following is GAO's comment on a specific issue included in the
letter dated June 11, 1997, from the National Rural Letter Carriers"
Association (Rural Carriers).  Other issues that were discussed in
the letter have been included in the report text. 

GAO COMMENT

1.  In its letter, the Rural Carriers union discussed its continued
involvement in the Quality of Work Life/Employee Involvement (QWL/EI)
initiative.  Rural Carriers stated that this initiative has been
ongoing since 1982 and QWL/EI participants have addressed various
substantive work-related issues, such as the implementation and
monitoring of automation, new rural carrier training and safety
issues.  Rural Carriers also mentioned that no permanent QWL/EI
structure exists mainly because rural carriers who participate are
not expected to devote their full time to QWL/EI activities and also,
participants rotate through the QWL/EI program. 

The QWL/EI initiative was included in the original list of 32
initiatives that we had identified at the onset of our review. 
However, as discussed in the section of this report entitled
"Objectives, Scope, and Methodology," which begins on page 7, time
and resource limitations precluded us from reviewing all 32
initiatives.  Thus, from the list of 32 initiatives, we selected 10
that we determined had significant potential to address the
recommendations in our 1994 report.  Although we did not review the
QWL/EI initiative in this report, as discussed in our September 1994
report, we found that when local postal management, unions, and
employees were committed to improvement initiatives such as QWL/EI,
the results were often positive and had the potential for helping to
(1) develop mutual trust and cooperation, (2) change management
styles, and (3) increase an awareness that quality of worklife is
just as important as the "bottom line."




(See figure in printed edition.)Appendix VII
COMMENTS FROM THE NATIONAL LEAGUE
OF POSTMASTERS OF THE UNITED
STATES
=========================================================== Appendix I



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The following are GAO's comments on specific issues included in the
letter dated July 22, 1997, from the National League of Postmasters
of the United States (the League).  Other issues that were discussed
in the letter have been included in the report text. 

GAO COMMENTS

1.  In its letter, the League commented on a statement we made in the
report, which indicated that since 1970, the distinction between
NAPUS and the League had become blurred and their memberships
overlapped (i.e., many postmasters belonged to both organizations). 
According to the League, this statement was unclear.  Thus, we
revised the text to indicate that many postmasters belong to both
NAPUS and the League and that both organizations address issues of
interest to all postmasters. 

2.  In its letter, the League mentioned that it asked the Service to
implement a specific project known as the Special Services
Implementation Task Force.  However, the League stated that the
Service did not consult or work with the League during the planning
stages of the project, and the League was consulted only near the end
of the project.  Also, the League mentioned that the Service asked
the League to participate in the development of training courses. 
Although the results have not yet been determined, the League stated
that the results of this work on training look promising.  Since we
did not review these initiatives, we cannot comment on the
information that the League provided on them. 

3.  In its comments, the League mentioned the Management by
Participation (MBP) initiative, which provided the Service and the
three management associations an opportunity to help eliminate
authoritarian management styles.  The League indicated that although
MBP was viewed as a worthwhile initiative and helped make various
improvements, it was discontinued during or shortly after the PMG's
1992 postal reorganization. 

At the beginning of our work, MBP was included in the list of 32
initiatives.  However, as discussed in the section entitled
"Objectives, Scope, and Methodology," which begins on page 7, time
and resource limitations precluded us from reviewing all 32
initiatives.  Thus, we focused our efforts on 10 initiatives that we
determined had significant potential for addressing our 1994
recommendations.  Since we did not review MBP in this report, we
cannot comment on the information that the League provided on MBP. 
However, in chapter 6 and appendix II of volume II of our 1994
report, we included information on MBP, which was a process for
disseminating participative management concepts to postal
supervisors, managers, and postmasters so that a more participative
work environment could be fostered and realistic solutions to
business problems could be developed. 

4.  In its letter, the League commented on the new compensation
system for managers and supervisors, including the EVA program.  The
League stated that our report implied that most postmasters were
included in EVA; but, according to the League, most postmasters were
excluded from EVA.  In our report, we stated that League and NAPUS
officials told us that based on the Service's decision that nonexempt
employees should not be eligible to receive EVA bonuses, about 60
percent of employees represented by these associations were
eliminated because they were nonexempt employees.  We believe that by
including this statement in the report, we had already indicated the
League's concern that a majority of the employees it represented was
excluded from EVA. 

The League also commented that it refused to endorse the new pay
system because it excluded most of the Service's postmasters,
including most of the League's members.  As suggested by the League,
we included this information in the text of the report where the new
compensation system was discussed. 

5.  In its letter, the League suggested that separate meetings
between each of the seven employee organizations and the Postal
Service might help develop cooperation and trust between the parties. 
According to the League, after such meetings had taken place, all
eight parties could come together for what would hopefully prove to
be a more productive and successful meeting.  As discussed in this
report, in November 1994, the PMG invited the four labor unions and
the three management associations to meet with the Service in trying
to determine, among other things, how best to implement the
recommendations included in our September 1994 report.  A key
recommendation in our report was the establishment by these eight
parties of a framework agreement to outline overall objectives and
approaches for demonstrating improvements in the workroom climate of
both mail processing and delivery functions.  However, we did not
specify the means by which the eight organizations should establish
such an agreement. 


MAJOR CONTRIBUTORS TO THIS REPORT
======================================================== Appendix VIII

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Michael E.  Motley, Associate Director
Teresa L.  Anderson, Assistant Director
James T.  Campbell, Assistant Director (Retired)
Anne M.  Hilleary, Evaluator-in-Charge
Tammy R.  Conquest, Senior Evaluator
Melvin J.  Horne, Senior Evaluator
Chau Vu Walters, Senior Evaluator
Arnel P.  Cortez, Evaluator

DALLAS REGIONAL OFFICE

Billy W.  Scott, Senior Evaluator
Hugh F.  Reynolds, Evaluator

DENVER REGIONAL OFFICE

Robert E.  Kigerl, Evaluator
Robert W.  Stewart, Evaluator


*** End of document. ***