[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Proposed Rules]
[Pages 67399-67405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22156]


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POSTAL SERVICE

39 CFR Part 111


Proposal To Require the Electronic Verification System (e-VS) for 
Destination Entry Parcel Shipments

AGENCY: United States Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service is proposing to require the use of the 
Electronic Verification System (e-VS) which is an electronic manifest 
system, for postage manifesting and payment of all Parcel Select 
mailings. This includes all Standard Mail machinable parcels or other 
Package Services Parcels (Bound Printed Matter, Library Mail, or Media 
Mail) authorized for commingling with Parcel Select Mailings. This 
requirement would contribute to reduced costs and greater efficiencies. 
The Postal Service is also exploring expanding the program to all 
parcel mailings in the future. The proposed rule is being published 
with an intended implementation date of no sooner than 1 year from the 
date of publication of the Federal Register final rule. The proposed 
rule would apply as follows:
    <bullet> Parcel shippers/consolidators and mailers claiming Parcel 
Select rates would be required to use e-VS for postage manifesting and 
payment.
    <bullet> Parcel shippers/consolidators and mailers who commingle 
Standard Mail machinable parcels or other Package Services parcels with 
Parcel Select as authorized by Mailing Standards of the United States 
Postal Service, Domestic Mail Manual (DMM[supreg]), 705.6.0 and 
705.7.0, would be required to use e-VS for postage manifesting and 
payment.

DATES: Comments must be received on or before December 7, 2005.

ADDRESSES: Mail or deliver comments to the Manager, Business Mailer 
Support, U.S. Postal Service, 475 L'Enfant Plaza, SW., Room 2P846, 
Washington, DC 20260-0846. Copies of all written comments will be 
available for inspection and photocopying between 9 a.m. and 4 p.m., 
Monday through Friday, at the Postal Service Headquarters Library, 475 
L'Enfant Plaza, SW., 11th Floor North, Washington, DC.

FOR FURTHER INFORMATION CONTACT: John Gullo via e-mail at 
<a href="/cdn-cgi/l/email-protection#aac0c5c2c484cc84cddfc6c6c5eadfd9dad984cdc5dc"><span class="__cf_email__" data-cfemail="167c797e7838703871637a7a79566365666538717960">[email protected]</span></a>, by phone at (202) 268-8057 or by writing to e-VS 
Program Manager, Business Mailer Support, 475 L'Enfant Plaza, SW., Room 
2P846, Washington, DC 20260-0846. Additionally, the following technical 
guides should be reviewed for detailed program information:

[[Page 67400]]

    <bullet> The October 2005 draft of Publication 205, Electronic 
Verification System Technical Guide (Contact John Gullo for a copy.)
    <bullet> Publication 91, Confirmation Services Technical Guide, 
which is available at http://www.usps.com/cpim/ftp/pubs/pub91/welcome.htm.

SUPPLEMENTARY INFORMATION:

Background

    The Postal Service<SUP>TM</SUP> is moving towards a seamless 
acceptance process to promote customer convenience and flexibility in 
the mail induction and payment process. The current procedures for 
acceptance and verification of parcel mailings are paper-driven and 
often challenging. Large-volume parcel shippers are tied to the 
schedule of Postal Service verification clerks who visit their 
facilities to verify and accept their mail. For destination-entry 
parcel shippers this poses a greater challenge as they must prepare 
paper documentation for each scheduled induction event at the time of 
acceptance and verification. This paper documentation serves as proof 
of payment and must travel with the parcel shipments to each induction 
location. After mail is verified by Postal Service clerks, it often 
flows through consolidators and transporters who occasionally alter the 
presentation from what was originally presented to the Postal Service 
clerks on PS Form 8125, Plant-Verified Drop Shipment (PVDS) 
Verification and Clearance, at verification. The challenge to 
accurately project mail profiles for each induction event at the time 
of acceptance is most evident when parcels are commingled, for example 
by consolidators and transporters, making it even more difficult to 
update the original certified paper documentation (PS Form 8125) 
created at the time of acceptance. It is also challenging for Postal 
Service clerks at induction facilities to reconcile the paper 
documentation against the physical mail. Clearly there is a need to 
provide a more flexible and convenient mechanism for mailers to provide 
and update documentation, induct mail, and for the Postal Service to 
verify parcel mailings.
    In a move to simplify and improve the acceptance, verification, and 
induction process the Postal Service has worked with the mailing 
industry to develop a new model for acceptance, verification, and 
induction of package mailings. Under this model, commonly referred to 
as the Electronic Verification System (e-VS), mailers barcode all 
packages and submit an electronic manifest to the Postal Service. This 
manifest lists all barcoded packages and includes pertinent information 
such as weight, destination, and induction facility to support postage 
and fee information. Mail is no longer verified at mailers' plants and 
mailers are no longer required to create paper documentation (PS Form 
8125) describing induction activities. Mailers simply present the mail 
at the desired facilities. The Postal Service draws statistical samples 
of the mailings at the appropriate plants and delivery units, and 
compares these against the electronic manifest submitted to verify the 
accuracy of the mailing. Electronic reports provide information on the 
discrepancies noted which facilitate an automated reconciliation 
process.
    E-VS offers significant benefits to both the mailers and the Postal 
Service. Mailers no longer have to wait for Postal Service verification 
clerks to verify their mail. Each package is barcoded, providing 
greater specificity in accounting and postage. Electronic manifests 
eliminate the need for paper documentation, greatly improve the 
efficiency of operations and reporting, and provide greater flexibility 
for updating information. In today's environment where mailers engage 
in dynamic scheduling, electronic manifests enable them to update 
information as change occurs. Mailers can pay the Postal Service closer 
to the time of mailing as electronic manifests can be received right 
before the mail is inducted. E-VS also facilitates convenient payment 
capabilities as payment is debited electronically upon receipt of the 
documentation. The e-VS electronic infrastructure provides a wealth of 
online reports for the mailers to attain up-to-date mailing and 
transaction information. E-VS is accessible 24 hours a day, 7 days a 
week, which facilitates convenient information sharing between the 
Postal Service and mailers. E-VS eliminates the need for mailers to 
provide paper documentation and postage statements, thereby 
contributing to reduced costs and greater efficiencies.
    Given the significant benefits that e-VS offers, the Postal Service 
is announcing plans to mandate its use for postage manifesting and 
payment of all Parcel Select mailings. This includes all Standard Mail 
machinable parcels or other Package Services parcels (Bound Printed 
Matter, Library Mail, or Media Mail) authorized for commingling with 
Parcel Select mailings. The Postal Service is also exploring expanding 
the program to all parcel mailings in the future.
    Participation in e-VS has two fundamental requirements. The first 
is the ability to create and transmit an electronic manifest to the 
Postal Service. This information replaces today's hardcopy manifest, 
postage statement, and PS Form 8125. The second requirement is the 
application of a unique barcode on each parcel. Standardized e-VS 
barcode formats include the Confirmation Services barcodes (i.e., 
Delivery Confirmation\TM\ and Signature Confirmation\TM\) and the 
Package Services enroute barcode as an alternative for parcels not 
containing Confirmation Services.
    The Postal Service will mandate implementation no sooner than 1 
year from the date of a published final rule to allow mailers time to 
comply with the requirements for e-VS. The requirements and 
specifications for e-VS are outlined in the October 2005 draft of 
Publication 205, Electronic Verification System Technical Guide, and 
are available by contacting John Gullo via e-mail at 
<a href="/cdn-cgi/l/email-protection#b0dadfd8de9ed69ed7c5dcdcdff0c5c3c0c39ed7dfc6"><span class="__cf_email__" data-cfemail="43292c2b2d6d256d24362f2f2c03363033306d242c35">[email protected]</span></a>.
    E-VS represents a significant milestone in strengthening the 
partnership between the Postal Service and the mailing community by 
offering a convenient and flexible solution for parcel shippers.

Requirements for e-VS Participants

    The following requirements are mandatory for e-VS participants:
    <bullet> Mailers/Parcel shippers are required to pay any 
appropriate presort or destination entry mailing fees per the DMM;
    <bullet> Mailers/Parcel shippers must pay the appropriate postage 
by successfully transmitting electronic manifest files to the 
PostalOne! e-VS application using the electronic file format identified 
in the October 2005 draft of Publication 205;
    <bullet> Mailers/Parcel shippers must apply an authorized UCC/EAN 
128 e-VS barcode in compliance with Publication 205;
    [ctrcir] The mailer ID used in the barcode must be exclusive for 
the e-VS program and must be unique to the parcel shipper or its 
client.
    [ctrcir] Each barcode must be unique for a period of 1 year.
    [ctrcir] Since Delivery Confirmation service does not require any 
additional fees for Parcel Select items, mailers/shippers are 
encouraged to apply a Delivery Confirmation service barcode to all 
Parcel Select pieces.
    [ctrcir] Delivery Confirmation service is available on other 
Package Services and Standard Mail parcels for $0.13 when using the 
electronic option. Mailers/shippers may elect to apply an alternate e-
VS barcode as described in the October 2005 draft of Publication 205 to 
avoid paying the $0.13 fee. However, no

[[Page 67401]]

delivery information will be available when using this barcode.
    All specifications and requirements for e-VS can be found in the 
October 2005 draft of Publication 205 and Publication 91.

Manifest Mailing Operations Using e-VS

    Mailers and shippers who meet program requirements may ship parcels 
using the following procedure:
    1. The mailer/parcel shipper transmits an electronic manifest to 
the Postal Service detailing all e-VS parcels to be deposited into the 
mail stream on or before the date of mailing;
    2. The Electronic Verification System generates a postage statement 
based on the information received from the mailer's manifest and 
submits it to PostalOne!
    The PostalOne! system is a new information infrastructure deployed 
by the Postal Service to facilitate convenient centralized payment 
capabilities and electronic postage reporting. It features an 
automated, streamlined alternative to the existing hardcopy 
documentation used in the business mail acceptance process. The 
PostalOne! system links a customer's mailing information electronically 
with acceptance, verification, and payment systems, eliminating most of 
the paperwork. It also provides a wealth of online information 
customers can use to manage their businesses more efficiently.
    3. Postage is debited from the mailer's PostalOne! payment account, 
and account information including current balances and transactions is 
updated in the e-VS Web site. The mailer/parcel shipper is able to 
access the Web site to view postage statements and associated funds 
debited from the mailer's account;
    4. The mailer/parcel shipper transports and enters the mail at the 
appropriate destination entry Postal Service facility:
    <bullet> Destination Bulk Mail Center (DBMC).
    <bullet> Destination Auxiliary Service Facility (DASF).
    <bullet> Destination Sectional Center Facility (DSCF).
    <bullet> Destination Delivery Unit (DDU).
    5. As parcels are deposited at the destination entry facilities, 
random parcels are sampled and the resulting data is transmitted to the 
e-VS application. The sampling process collects information to verify 
that the postage paid for the sampled parcels has been correctly 
calculated based on parcel characteristics, including:
    <bullet> Entry and destination ZIP Code.
    <bullet> Zone.
    <bullet> Size.
    <bullet> Rate markings.
    <bullet> Weight.
    <bullet> Barcode information.
    Based on the data collected, e-VS calculates the appropriate 
postage for the sampled parcels and compares the calculated postage to 
the postage reported on the manifest. The results of the comparison are 
recorded in the e-VS database and used to calculate the postage 
adjustment factor (PAF) described in the next section.
    6. When barcodes are scanned during the normal processing and 
delivery operations (e.g., delivery scans collected for Delivery 
Confirmation), the barcode data is transmitted to the e-VS application 
to determine if parcels are ``mis-shipped'' or ``un-manifested''. 
``Mis-shipped'' parcels are mail pieces that have been dropped at the 
incorrect destination entry facility. ``Un-manifested'' parcels are 
mail pieces that have been scanned but do not appear on the mailer's 
manifest.
    7. As sample data is received, the e-VS application compares the 
data to the mailer's electronic manifest. This process is used to 
measure the accuracy of the mailer's electronic manifest for proper 
postage payment.
    8. The mailer/parcel shipper is assessed postage for discrepancies 
found in their electronic manifest through the processes previously 
described in items 5-7. These assessments include additional postage 
for mis-shipped and incorrectly rated parcels, as well as postage for 
un-manifested parcels.

Postage Assessments

    The e-VS program will collect postage daily based on the electronic 
manifest(s) received that day from mailers. In addition, postage will 
be calculated and assessed for the following types of errors when 
detected:
    <bullet> If parcels are dropped at an incorrect entry location and 
the Postal Service transports the parcels to the correct destination, 
mailers/parcel shippers will be charged the difference between the 
manifested postage and the single-piece rate for the parcel.
    <bullet> If a parcel is not identified on a manifest, the mailer ID 
in the barcode will be used to determine ownership and responsibility 
of the parcel and to establish accountability for payment of postage. 
Postage for these parcels will be based on data collected at 
destinating Postal Service facilities on these parcels. The mailer/
parcel shipper will be allowed to reconcile ``un-manifested'' parcels 
by transmitting an electronic manifest for the parcels within 10 days 
of the close of the mailing period. Any ``un-manifested'' parcels 
receiving a manifest record prior to the 10th day will be removed from 
this assessment.
    <bullet> If total paid postage for the parcels on a manifest is 
understated by more than 1.5%, a Postage Adjustment Factor, or PAF, is 
calculated by dividing the total postage from the sampled parcels by 
the postage claimed for the sampled parcels on the mailer's manifest. 
If the PAF exceeds 1.015, then the manifested postage amount for the 
entire mailing period is multiplied by the PAF to determine the 
additional postage due. A mailing period is defined as a calendar month 
for purposes of calculating adjustments in e-VS.

Postage Payment Schedule

    Under the e-VS program, the collection of postage occurs as 
follows:
    <bullet> The mailer's PostalOne! payment account is debited on a 
daily basis. Payment for each manifest is debited on the day the 
manifest is submitted.
    <bullet> The mailer's PostalOne! payment account is debited weekly 
for mis-shipped postage accumulated from the previous week.
    <bullet> At the end of each mailing period, defined as a calendar 
month, the mailer's PostalOne! payment account is debited for postage 
assessed for (1) un-manifested parcels and (2) for any postage 
adjustments necessary if their PAF is greater than 1.015. The PAF 
adjustment and postage assessment for un-manifested parcels are 
processed on the 21st day of the month following the mailing period to 
allow mailers time to investigate and reconcile discrepancies. Between 
the end of a mailing period and the 21st day of the following month, 
there are two 10-day review periods:
    <bullet> The first 10-day period is a mailer review period and 
begins immediately after the end of the mailing period and extends 
through the 10th day of the month following the mailing period. During 
this period, the mailer may submit manifests to account for un-
manifested parcels.
    <bullet> The second 10-day period is a Postal Service/mailer joint 
review period and begins immediately following the mailer review period 
and extends through the 20th day of the month following the mailing 
period. During this period, at the mailer's request, the mailer may 
jointly review the sampling data with the Postal Service to dispute any 
data indicating a postage adjustment is due.
    <bullet> Appeals and refund requests must be submitted in writing 
to the Business Mailer Support manager within 30 days following the end 
of the Postal Service/Mailer joint review period.

[[Page 67402]]

e-VS Implementation

    Implementation will occur no earlier than 1 year from the date of 
the published final rule. This one year implementation period will 
provide mailers with ample time to comply with e-VS standards, as well 
as time to perform testing necessary to ensure satisfactory operation.
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act [5 U.S.C. of 553(b), (c)] regarding 
proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites 
public comment on the following proposed revisions to the Code of 
Federal Regulations. See 39 CFR 111.1.

List of Subjects in 39 CFR Part 111

    Postal Service.

PART 111--[AMENDED]

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

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 
3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Revise the following sections of the Mailing Standards of the 
United States Postal Service, Domestic Mail Manual (DMM) as provided 
below:

Mailing Standards of the United States Postal Service

Domestic Mail Manual

* * * * *

400 Discount Mail Parcels

* * * * *

440 Standard Mail

* * * * *

446 Enter and Deposit

* * * * *
2.0 Destination Entry
* * * * *
2.3 Postage Payment
[Revise 2.3 to read as follows:]

    Except for mailings paid using the Electronic Verification System 
(e-VS), mailers pay postage at the Post Office where they are 
authorized to present mailings for verification. For mailings paid 
using e-VS, mailers must pay postage to the Post Office where they hold 
the permit imprint. Prior to mailing, mailers must ensure that they 
have paid the correct mailing fee(s) for the current 12-month period at 
the Post Office where they are paying postage for the mailing.
* * * * *

2.7 Verification

* * * * *

2.7.2 Mail Separation and Presentation

[Revise 2.7.2 to read as follows:]

    Effective January 1, 2007, mailers who commingle Standard Mail 
parcels with Parcel Select mailings authorized under 705.6.0 must 
present mailings and pay postage using the Electronic Verification 
System (e-VS) (See 705.2.9). Until January 1, 2007 or unless they are 
already presenting mailings using e-VS, mailers must present 
destination entry rate mailings for verification and acceptance as 
follows:
    a. Present mailings for verification and acceptance at a business 
mail entry unit (BMEU) located at a destination BMC, destination 
sectional center facility, or other destination postal facility 
designated by the Postal Service; or
    b. Present mailings for Postal Service verification under a plant-
verified drop shipment (PVDS) system (see 705.15.0), and then enter 
mailings at destination entry facilities under the following 
conditions:
    1. Mailers must ensure that mailings are accompanied by a Form 
8125, 8125-C, or 8125-CD completed by the mailer and the verifying Post 
Office.
    2. Mailers must separate mailings for deposit at one destination 
postal facility from mailings for deposit at other facilities to allow 
reconciliation with each accompanying Form 8125, 8125-C, or 8125-C.
    3. Mailers may deposit only PVDS mailings at a destination delivery 
unit not co-located with a postal facility having a BMEU.
    c. When Periodicals mail is on the same vehicle as Standard Mail, 
mailers should load the Periodicals mail toward the tail of the vehicle 
so that it can be offloaded first.

[Delete 2.7.3 and renumber 2.7.4 to 2.7.7 as 2.7.3 to 2.7.6.]
* * * * *

450 Parcel Post

* * * * *

454 Postage Payment and Documentation

1.0 Basic Standards for Postage Payment
* * * * *
1.2 Postage Payment
[Revise 1.2 to read as follows:]
    Mailers must pay postage and fees to the Post Office where they are 
authorized to present mailings for verification. See 456.2.2.4 for 
additional information about paying postage and fees for Parcel Select 
mailings.
* * * * *

456 Enter and Deposit

* * * * *

2.0 Parcel Select

* * * * *

2.2 Rate Eligibility for Parcel Select Rates

* * * * *

2.2.4 Postage Payment

[Revise 2.2.4 to read as follows:]

    Postage payment is subject to the following:
    a. Mailers must pay postage and fees to the Post Office where they 
are authorized to present mailings for verification, except under 
2.2.4b. Except for plant-verified drop shipments (see 705.15.0) or 
metered mail drop shipments (see 705.17.0), mailers must have a meter 
license or permit imprint authorization at the parent Post Office for 
mailings deposited for entry at a DBMC or ASF, at a DSCF, or at a DDU.
    b. Effective January 1, 2007, mailers who mail parcels claimed at 
the Parcel Select rate must use the Electronic Verification System (e-
VS) as described in 705.2.9. Mailers using e-VS must pay postage and 
fees to the Post Office where they hold the permit imprint.
* * * * *

2.4.3 Mail Separation and Presentation

[Revise 2.4.3 to read as follows:]

    Effective January 1, 2007, mailers must present all Parcel Select 
mailings using the Electronic Verification System (e-VS) (see 
705.2.4.3). Until January 1, 2007, mailers may present Parcel Select 
mailings without using e-VS. Mailers must have destination entry rate 
mail verified under a PVDS system (see 705.15.0) or present mailings 
for verification and acceptance at a BMEU located at a designated 
destination postal facility. Mailers may deposit only PVDS mailings at 
a destination delivery unit not co-located with a Post Office or other 
Postal Service facility having a business mail entry unit. Mailers 
presenting destination entry mailings to the Postal Service must meet 
the following requirements:
    a. Mark each piece of DBMC, DSCF, or DDU rate Parcel Post as either 
``Parcel Post'' or ``Parcel Select,'' according to standards in 
402.2.2. Also, effective January 1, 2007, mailers also must mark each 
piece ``e-VS,'' adjacent to the rate marking.
    b. Separate DBMC rate mailings by zone for permit imprint mailings 
of

[[Page 67403]]

identical-weight pieces that are not mailed using a special postage 
payment system under 705.2.0 through 705.4.0, or that are not mailed 
under 455.1.4.
    c. Except for PVDS mailings presented using e-VS, mailers must 
ensure that all PVDS mailings are accompanied by a Form 8125, 8125-C, 
or 8125-CD completed by the mailer and the verifying Post Office.
    d. Separate each mailing from other mailings for verification. For 
PVDS mailings, separate mailings for deposit at different destination 
postal facilities to allow for reconciliation with each Form 8125, 
8125-C, or 8125-CD, unless presenting mailings using e-VS.
    e. Separate mail from freight transported on the same vehicle.
    f. If Periodicals mail is on the same vehicle as Parcel Post, load 
the Periodicals mail toward the tail of the vehicle so that, for each 
destination entry, the Periodicals mail can be offloaded first.
* * * * *

460 Bound Printed Matter

* * * * *

466 Enter and Deposit

* * * * *
2.0 Destination Entry
* * * * *

2.3 Postage Payment

[Revise 2.3 to read as follows:]

    Postage payment is subject to the following:
    a. Mailers must pay postage and fees to the Post Office where they 
are authorized to present mailings for verification, except for mail 
paid using the Electronic Verification System (e-VS).
    b. Effective January 1, 2007, when parcels for any destination 
rates are commingled with Parcel Select mail under 705.7.0, mailers 
must document and pay postage using e-VS under 705.2.9.
    c. For mailings paid using e-VS, mailers must pay postage and fees 
to the Post Office where the mailer holds the permit imprint.
* * * * *

2.8 Verification

* * * * *

2.8.2 Mail Separation and Presentation

[Revise text of 2.8.2 to read as follows:]

    Effective January 1, 2007, mailers must present all BPM parcel 
manifest mailings commingled with Parcel Select mail (under 705.7.0) 
using the Electronic Verification System (e-VS) (see 705.2.4.3). Until 
January 1, 2007, mailers may present mailings using a Manifest Mailing 
System (MMS) without participating in e-VS. Mailers must have 
destination entry rate mail verified under a PVDS system (see 705.15.0) 
or present mailings for verification and acceptance at a BMEU located 
at a designated destination postal facility. Mailers may deposit only 
PVDS mailings at a destination delivery unit not co-located with a Post 
Office or other Postal Service facility having a business mail entry 
unit. Mailers presenting destination entry mailings to the Postal 
Service must meet the following requirements:
    a. Except for mailings presented using e-VS, mailers must ensure 
that all PVDS mailings are accompanied by a Form 8125, 8125-C, or 8125-
CD completed by the mailer and the verifying Post Office.
    b. Separate each mailing from other mailings for verification. For 
PVDS, separate mailings for deposit at different destination postal 
facilities to allow reconciliation with each Form 8125, 8125-C, or 
8125-CD, unless presented using e-VS.
    c. Separate mail from freight transported on the same vehicle.
    d. If Periodicals mail is on the same vehicle as Standard Mail, 
load the Periodicals mail toward the tail of the vehicle so that, for 
each destination entry, Periodicals mail can be offloaded first.
* * * * *

700 Special Standards

* * * * *

705 Advanced Preparation and Special Postage Payment Systems

* * * * *
2.0 Manifest Mailing System (MMS)

2.1 Description

[Add new 2.1.1 and transfer text from old 2.1 to new 2.1.1. Change the 
last sentence in new 2.1.1 to read as follows:]

2.1.1 Using an MMS

    * * * The standards in 2.2 describe how to mail using an MMS.
[Add new item 2.1.2 to read as follows:]

2.1.2 Required Use of Electronic Verification System (e-VS)

    Effective January 1, 2007, mailers using MMS when presenting Parcel 
Select mailings under 456.2.0 or commingled mailings with Parcel Select 
under 705.6.0 or 705.7.0 also must document and pay postage using e-VS 
under 2.9. Business Mailer Support (BMS) can provide mailers with 
information for developing and receiving approval for these systems.
* * * * *

2.4 Authorization

* * * * *

2.4.1 Application

[Revise by adding the following sentence to the end of 2.4.1 to read as 
follows:]

    * * * Publication 205, Electronic Verification System Technical 
Guide provides the application procedures for mailers required to use 
e-VS (see 2.1.2). To receive a copy, contact the Business Mailer 
Support manager, USPS Headquarters (See 608.8.0 for address.).
* * * * *

2.4.3 General Requirements for Authorization

* * * * *
[Revise item b, renumber items c, d, and e as items e, f, and g, and 
add new items c and d to read as follows:]

    b. If total postage of pieces sampled during verification indicates 
that the mailer has underpaid postage by more than 1.5% when compared 
to the manifest, USPS will adjust total postage in accordance with 
procedures in Publication 205. USPS will charge e-VS participants at 
the end of the review period at the end of the mailing period.
    c. USPS will charge e-VS participants the appropriate single-piece 
rate for mis-shipped parcels (parcels deposited at incorrect 
destination facilities). USPS will transport these mis-shipped parcels 
to the correct destination.
    d. USPS will charge e-VS participants for any parcels that do not 
appear on the mailer's manifest but are identified by USPS processing 
scans as being mailed. In addition, USPS will remove these un-
manifested parcels from any sampling adjustments.
* * * * *

2.4.4 Approval Authority

    The final authority for manifest mailing approval is as follows:
* * * * *
[Revise 2.4.4 b. to read as follows:]

    b. The Business Mailer Support manager, USPS Headquarters, approves 
manifest mailing systems that produce presorted First-Class Mail and 
Standard Mail mailings, Package Services mailings, PVDS mailings, and 
all mailings using e-VS.
* * * * *
[Add new 2.9 to read as follows:]

[[Page 67404]]

2.9 Electronic Verification System (e-VS)

2.9.1 Required Use

    Effective January 1, 2007, mailers depositing parcels at Parcel 
Select rates must document and pay postage using e-VS as described in 
2.9. In addition, mailers authorized to commingle Standard Mail 
machinable parcels or Package Service parcels with Parcel Select under 
705.6.0 and 705.7.0 must document and pay postage for all parcels in 
the mailing using e-VS.

2.9.2 Mailer System

    Mailers must have an automated system that produces mail according 
to USPS standards and calculates postage accurately. Mailers must 
assign a barcode to each mailpiece in accordance with Publication 205, 
Electronic Verification System Technical Guide. USPS will scan barcodes 
during sampling to verify information from the mailer's manifest. 
Mailers also must produce and submit an electronic manifest, as 
described in Publication 205, for each mailing deposited at a 
destination postal facility. USPS will scan barcodes during sampling to 
verify information from the mailer's manifest. The electronic manifest 
must account for every piece in the mailing, under the following 
conditions:
    a. For each mailpiece produced, the electronic manifest must list 
the postage for the piece and the factors used to calculate the correct 
amount of postage, such as the piece weight and destination postal 
zone.
    b. For each record produced, the manifest must include the unique 
package identification code represented by the barcode on the 
mailpiece.
    c. When extra services are requested, the manifest must include the 
correct fees for each piece.

2.9.3 Mailer Quality Control

    Mailers must implement a quality control program that ensures 
proper mail preparation and provides accurate documentation. The 
service agreement must detail the USPS-approved quality control 
procedures.

2.9.4 Required Barcode

    Mailers must apply an approved barcode on the address side of each 
mailpiece. Barcodes must meet specifications described in Publication 
205, Electronic Verification System Technical Guide.

2.9.5 Postage Payment

    USPS will calculate postage payment and electronically debit 
postage from the mailer's postage account based on information received 
from the mailer's electronic manifest and data collected through USPS 
operational and sampling scans. Mailings deposited under the e-VS 
program must meet the standards for permit imprint mail in 604.6.0. 
Mailers must pay for postage through a Centralized Account Payment 
System (CAPS) account.

2.9.6 General Requirements for Participation

    General requirements for participation are as follows:
    a. Mailers must apply on each mailpiece a unique barcode with the 
mailer ID number.
    b. Mailers must transmit an electronic manifest on or before the 
date of mailing.
    c. USPS randomly samples parcels and considers verification samples 
to be representative of the entire mailing period. USPS applies postage 
adjustment calculations, based on verification samples, to all 
mailpieces mailed during the mailing period. A mailing period is 
defined as a calendar month for purposes of calculating adjustments in 
e-VS.
    d. USPS will adjust the total postage for the mailing period if the 
total postage or the total weight of pieces sampled during the mailing 
period results in an underpayment by 1.5% or greater.
    e. The mailer must pay additional postage for any underpayments 
identified by USPS verification. Mailers must maintain sufficient funds 
in their postage accounts to cover any underpayments discovered after 
acceptance of the mail.

2.9.7 Authorization

    Mailers must be authorized to participate in e-VS according to the 
following procedures:
    a. Mailers must submit an e-VS application and supporting 
documentation as specified in Publication 205, Electronic Verification 
System Technical Guide, to the Business Mailer Support manager, USPS 
Headquarters (See 608.8.0 for address.).
    b. After mailers successfully complete development and testing for 
e-VS, the USPS will grant temporary approval. USPS will conduct a 
review within 90 days of the temporary approval and will give final 
approval if the mailer's system is working as required. The Business 
Mailer Support manager, USPS Headquarters, has final authority for e-VS 
participation approval.
    c. After receiving final authorization, the mailer and a USPS 
representative must sign a service agreement. The agreement contains 
provisions regarding mailer and USPS responsibilities, including 
electronic documentation, document retention, quality control, and the 
duration of the agreement.

2.9.8 Denial

    If USPS denies an e-VS application, the mailer may appeal the 
decision within 15 days from the receipt of the notice by filing a 
written appeal, including evidence showing why they should be 
authorized to use e-VS. Send the appeal to the Business Mail Acceptance 
manager, USPS Headquarters, who issues the final agency decision (See 
608.8.0 for address).

2.9.9 Revocation

    The Business Mailer Support manager has authority to revoke 
authorization for e-VS participation for any of the following reasons:
    a. A mailer provides incorrect data in the electronic manifest and 
is not able or willing to correct the problems.
    b. A mailer is not properly completing the required quality control 
procedures.
    c. The mailings no longer meet e-VS criteria established by this 
standard or in the e-VS service agreement.
    d. A mailer does not present mailings using e-VS for more than 6 
months (except as noted in the service agreement).
    e. A mailer presents mailings that are improperly prepared.
    f. A mailer is not paying proper postage.

2.9.10 Corrective Action

    After USPS issues a notice of revocation, to a mailer, the mailer 
and the USPS determine corrective actions, including an implementation 
schedule. At the conclusion of the implementation period, the USPS 
reexamines the mailer's system to determine if it complies with the 
program requirements. Failure to correct identified problems is 
sufficient grounds to sustain revocation of the mailer's e-VS 
authorization.

2.9.11 Appeal of Revocation

    After receiving initial notice of revocation, a mailer has 15 days 
from the date of receipt of the revocation notice to file a written 
appeal with the Business Mail Acceptance manager, USPS Headquarters. 
The appeal must include the reason the e-VS authorization should not be 
revoked. The mailer may continue to mail using e-VS during the appeal 
process. The Business Mail Acceptance manager issues the final agency 
decision. The final revocation takes effect 15 days

[[Page 67405]]

after the date of the final agency decision.
* * * * *
6.0 Preparation for Combined Mailings of Standard Mail and Package 
Services Parcels
[Revise title of 6.1 as follows:]

6.1. Combined Machinable Parcels--DBMC Entry

* * * * *
[Revise title of 6.1.2.]

6.1.2 Basic Standards

* * * * *

6.1.3 Postage Payment

[Revise 6.1.3 to add requirement for e-VS and reorganize to read as 
follows:]

    Mailers must pay postage for all pieces with a permit imprint at 
the Post Office serving the mailer's plant using one of the following 
postage payment systems. The applicable system agreement must include 
procedures for combined mailings approved by Business Mailer Support.
    a. Manifest Mailing System (MMS), under 2.0;
    b. Optional Procedure (OP) Mailing System, under 3.0, until January 
1, 2007; or
    c. Alternate Mailing System (AMS), under 4.0, until January 1, 
2007.
    d. Effective January 1, 2007, for mailings presented under 705.6.0, 
mailers must document and pay postage using the Electronic Verification 
System under 705.2.9.
* * * * *
[Revise title of 6.2 to read as follows:]

6.2 Combining Parcels--DSCF Entry, Parcel Post OBMC Presort and BMC 
Presort

* * * * *

6.2.3 Postage Payment

[Revise text of 6.2.3 to include e-VS requirement for DSCF Entry 
parcels, to read as follows:]

    Mailers must pay postage for all pieces with a permit imprint at 
the Post Office serving the mailer's plant using an approved manifest 
mailing system under 2.0. The following conditions also apply.
    a. The applicable system agreement must include procedures for 
combined mailings approved by Business Mailer Support.
    b. Effective January 1, 2007, for mailings presented under 705.6.0, 
mailers must document and pay postage using the Electronic Verification 
System under 705.2.9.
* * * * *

7.0 Combining Package Services Parcels for Destination Entry

* * * * *

7.1 Combining Parcels

* * * * *

7.1.2 Basic Standards

[Add the following sentence at the end of 7.1.2b.]
    b. * * * Effective January 1, 2007, for mailings presented under 
705.7.0, mailers must document and pay postage using the Electronic 
Verification System under 705.2.9.
* * * * *
    An appropriate amendment to 39 CFR 111 to reflect these changes 
will be published if the proposal is adopted.

Neva R. Watson,
Attorney, Legislative.
[FR Doc. 05-22156 Filed 11-4-05; 8:45 am]
BILLING CODE 7710-12-P


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