The US Postal Service’s Inspector General issued a report last week suggesting that the USPS could save $675 million a year by outsourcing janitorial and truck driving jobs, and by slashing the pay of existing contractors. In its response to the audit, the USPS pointed out that it is already reducing wages under the new APWU agreement, which allows some USPS employees to be paid even less than a contractor: “…the new agreement provides for the establishment and use of non-career employees on a much wider scale than previously permitted and new employees will be paid at rates much lower than current career rates and, in some cases, lower than SCA [contractor's] rate”.
Here are some of the findings from the report, which was undertaken in response to a request from Congressman Darrell Issa:
Postal Service market research indicated that opportunities exist for cost savings if it did not have to comply with the SCA. In addition, our analysis showed that Postal Service wages for cleaning/janitorial and postal vehicle service (PVS) driver positions were higher than SCA rates. We estimate the Postal Service could save approximately $675 million annually if it outsourced cleaning/janitorial and PVS driver positions.Barriers to outsourcing the positions include current labor union agreements, concerns that new unions will be formed, workforce retention issues, fluctuations in market or economic conditions, and the potential for congressional constituency concerns.
We recommended the Postal Service seek exemption from the SCA to allow flexibility to negotiate contract rates closer to market rates. We also recommended the Postal Service review the benefits of outsourcing cleaning/janitorial service positions and Postal Service vehicle driver positions and restructure those positions to achieve the most cost effective solution. Lastly, we recommended that the Postal Service ensure that appropriate financial data is collected to aid in making in-sourcing/outsourcing decisions.