USPS is an independent establishment of the executive branch mandated by law to provide postal services to “bind the nation together through the personal, educational, literary, and business correspondence of the people.” Established by the Postal Reorganization Act of 1970, USPS is a vital part of the nation’s communications network, delivering more than 200 billion pieces of mail each year. USPS is required to provide “prompt, reliable, and efficient services to patrons in all areas” and “postal services to all communities,” including “a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining.” In determining all policies for postal services, USPS is mandated to “give the highest consideration to the requirement for the most expeditious collection, transportation, and delivery of important letter mail.” Also, in selecting modes of transportation, USPS is mandated to “give highest consideration to the prompt and economical delivery of all mail.” More generally, USPS is mandated to provide adequate and efficient postal services that meet the needs of different categories of mail and mail users. USPS has designated improving service as one of its four goals in its Strategic Transformation Plan. USPS’s strategy to improve service is to “provide timely, reliable delivery, and improved customer service across all access points.” Specifically, USPS plans to improve the quality of postal services by continuing to focus on the end-to-end service performance of all mail. The quality of mail delivery service has many dimensions, including the delivery of mail to the correct address within a time frame that meets standards USPS has established for timely delivery. USPS also plans to ensure that postal products and services meet customer expectations and that all customer services and forms of access are responsive, consistent, and easy to use. USPS has long recognized the importance of customer satisfaction and measures the satisfaction of its residential and business customers on a quarterly basis. USPS reports that its customer satisfaction measurement, which is conducted by the Gallup Organization, provides actionable information to USPS managers by identifying opportunities to improve overall customer satisfaction. In addition to gauging overall customer satisfaction, USPS measures customer satisfaction related to specific postal functions such as mail delivery and retail service. As USPS recognizes, dissatisfied customers can seek and find alternatives to using the mail. USPS faces growing competition from electronic alternatives to mailed communications and payments as well as private delivery companies. In this challenging environment, establishing and maintaining consistently high levels of delivery service are critical to success. Recognizing the importance of the timely delivery of mail, USPS has integrated performance targets and results for some types of mail into its performance management system. This system is used to establish pay-for- performance incentives for postal management employees. As we have reported, high-performing organizations use effective performance management systems as a strategic tool to drive change and achieve desired results. Among the key practices used is aligning individual performance expectations with organizational goals by seeking to create pay, incentive, and reward systems that clearly link employee knowledge, skills, and contributions to organizational results. Further, high- performing organizations often must fundamentally change their cultures so that they are more results oriented, customer focused, and collaborative in nature. As we have reported, the benefit of collecting performance information is only fully realized when this information is actually used by managers to make decisions oriented toward improving results. Performance information can be used to identify problems and take corrective action; develop strategy and allocate resources; recognize and reward performance; and identify and share effective approaches. Practices that can contribute to greater use of performance information include demonstrating management commitment; aligning agencywide goals, objectives, and measures; improving the usefulness of performance information; developing capacity to use performance information; and communicating performance information clearly and effectively. Some USPS standards for timely mail delivery are inadequate because of limited usefulness and transparency. In general, these standards have not kept up with changes in the way that USPS and mailers prepare and process mail for delivery. Outdated standards are unsuitable as benchmarks for setting realistic expectations for timely mail delivery, measuring delivery performance, or improving service, oversight, and accountability. According to USPS, service standards represent the level of service that USPS strives to provide to customers. These standards are considered to be one of the primary operational goals, or benchmarks against which service performance is to be compared in measurement systems. USPS has established standards for the timely delivery of each type of mail; these specify the maximum number of days for “on-time” delivery based on the time of day, the location at which USPS receives the mail, and the mail’s final destination. For example, USPS standards for 1-day delivery require the mail to be received by a specified cutoff time on the day that the mail is accepted, which varies depending on geographic location and where the mail is deposited (e.g., in a collection box, at a post office, or at a mail processing facility). In most cases, 1-day mail deposited before the cutoff time is considered to be delivered on time if it is delivered on the next delivery day, which generally excludes Sundays and holidays. USPS delivery standards vary according to the priority of delivery. Express Mail has the highest priority, followed by Priority Mail, other First-Class Mail, Periodicals, Package Services (e.g., packages sent via Parcel Post), and Standard Mail. Postal officials, including the Postmaster General, told us that differences in postage rates for different types of mail reflect differences in delivery standards and priority. The Postmaster General noted that variability in the delivery standards and timing of delivery is built into USPS’s pricing structure. He noted that lower-priced mail with lower delivery priority receives more variable delivery; this includes mail such as Standard Mail which receives discounts for presorting by ZIP Code and destination entry that is generally closer to where the mail is delivered. For example, USPS can defer the handling of Standard Mail as it moves through its mail processing, transportation, and delivery networks. Thus, some pieces of a large mailing of Standard Mail may be delivered faster than others. The Postmaster General explained that this variability of delivery is consistent with the relatively low rates afforded to mailers of Standard Mail, who pay lower rates than mailers of First-Class Mail. In addition, standards for types of mail within each class can vary. For example, Parcel Select, a type of Package Service, has a faster delivery standard than other Package Services because it is made up of bulk shipments of packages entered into USPS’s system close to the final destination. Delivery standards for each class and type of mail are summarized in table 1 and described in greater detail in appendix II. Some USPS delivery standards lack usefulness—notably, the delivery standards for Standard Mail, Periodicals, and most Package Services mail—because they have not been systematically updated in many years and do not reflect USPS’s operations or intended service. These standards are loosely based on distance and have tended to remain static despite changes in USPS networks, operations, and operational priorities. The delivery standards for Standard Mail are outdated. Although delivery standards are supposed to represent the level of delivery service USPS strives to provide to customers, differences between delivery standards and operational policies and practices for delivery service are evident for Standard Mail. For example, USPS operational policies state that Standard Mail entered at the delivery unit, where carriers pick up mail for final delivery, should be delivered in 2 days, whereas the standards call for such delivery in 3 days. Also, depending on mail preparation, such as presorting and destination entry, mail can be delivered faster than the standard. These differences can impede clear communication to mailers concerned with setting realistic expectations for when Standard Mail will be delivered and determining how to maximize the value of their mail. Correctly anticipating when advertising mail will be delivered is important to business planning and profitability. For example: Local retailers, ranging from department stores to restaurants, need realistic expectations as to when advertising mail will be delivered in order to effectively promote sales and plan for the appropriate level of staffing and inventory. To maximize customer response, retailers send advertising mail so that it will be received shortly before a sale—soon enough for potential customers to plan to shop during the sale, but not so early that they will forget about the sale. Also, if the advertising is delivered far in advance of a weekly sale, it can generate demand that is difficult to meet with available resources. Catalog companies also need realistic expectations about when catalogs will be delivered in order to plan for call center staffing and inventory. Thus, reliable and predictable delivery of advertising mail helps businesses efficiently schedule staff and inventory to respond to fluctuations in demand. Anticipating the level of inventory has become more important over time with the trend toward just-in-time inventory that helps minimize storage and financing costs. However, the delivery standards for Standard Mail are not adequate for advertisers to set realistic expectations for mail delivery, in part because these standards do not reflect some operational policies and practices that can lead to mail being delivered faster or slower than the standards call for. Substantial changes have occurred in how mailers prepare Standard Mail and how USPS processes it, but these changes are not reflected in the standards. Today, most Standard Mail is presorted and entered into the postal system close to its destination. The degree of presorting and destination entry alters the amount of handling it receives by USPS and potentially speeds or slows delivery. For example: Presorting: Beginning in 1979, USPS provided discounts to mailers who reduce USPS’s processing costs by presorting their Standard Mail to the level of carrier delivery routes—discounts extended in 1981 to Standard Mail presorted to the level of individual ZIP Codes. In fiscal year 2005, most Standard Mail was presorted by carrier routes (35 percent) or by individual ZIP Codes or ZIP Codes starting with the first three digits (57 percent).