Chicago’s new Main Post Office, located at 433 W. Harrison Street, opened in May 1996. The Main Post Office contains a two-floor mail processing facility, seven floors of office space, and a retail sales operation. It replaced the old Main Post Office, which was located across the street from the new facility. The old Main Post Office was completed in 1932 and consisted of nine floors of workroom space. In 1990, the USPS Board of Governors approved a plan to construct the new Main Post Office as a means of improving mail service in Chicago, which until this year had EXFC scores that were significantly below the national average. The new Main Post Office was part of the Postal Service’s 1987 Greater Chicago Area Facility Plan, which called for decentralizing postal operations in the Chicago area to accommodate population and mail volume shifts from the city to the suburbs. The new Main Post Office was to be a state-of-the-art mail processing facility, which would be supplemented by six new or expanded mail processing facilities throughout the Chicago area. Although construction of the new Post Office originally was estimated to be complete by April 1993, the new facility did not open until May 1996. In addition, in September 1997, renovation of an annex called the “Sugar House” was completed—work that was done after the Postal Service discovered that the new Main Post Office would not be large enough to house all operations that the Postal Service planned to move into the new facility and that the new facility would not meet operational needs. About 5,300 employees work at the new Main Post Office, including about 4,900 mail processing and distribution staff, 300 district support staff, and about 100 Postal Inspection Service employees. The new Main Post Office has automated mail handling equipment and occupies about 900,000 square feet of space, compared to about 2.3 million square feet of space at the old facility. In March 1990, the USPS Board of Governors initially approved $199.7 million for construction of the new Main Post Office. From December 1991 through February 1996, the Board of Governors approved four additional funding requests totaling $133.2 million. The facility’s final projected cost was $332.9 million, including the annex renovation. Your congressional district, which consists of the northern part of Chicago and adjacent suburbs, is served by both the Chicago and Northern Illinois postal districts, 2 of 85 nationwide postal districts. The Chicago Postal District, headquartered in the new Main Post Office, serves ZIP Codes beginning with 606, 607, and 608, including the Chicago portion of your congressional district and part of Niles, IL. The Northern Illinois Postal District, headquartered in Carol Stream, IL, serves ZIP Codes beginning with 600, 601, 602, 603, 610, and 611, including the cities of Evanston, Golf, Lincolnwood, Morton Grove, and Skokie and parts of Harwood Heights and Glenview. Appendix I shows which ZIP Codes are served by the two postal districts in the Ninth Illinois Congressional District. Figure 1.1 shows which portions of the Ninth Congressional District are served by the Northern Illinois and Chicago postal districts. Mail for your constituents who are served by the Chicago Postal District is processed by the Irving Park Road facility in Chicago, rather than by the new Main Post Office. The Irving Park Road facility, which opened in 1994,handles an average of 3.5 million pieces of mail a day, and the Main Post Office handles an average of 5.1 million pieces of mail a day. Constituents who are served by the Northern Illinois Postal District receive mail processed in Palatine, IL, which processes about 5.5 million pieces of mail a day. You indicated that your constituents have complained about mail service in your district for many years. In conversations with your office, we were told that many of the complaints focused on service provided by the Graceland postal station in Chicago. The complaints related to the delivery of mail, including misdelivery and nondelivery, as well as problems with forwarding of mail. Graceland station serves a densely populated area of Chicago that contains many high-rise residential units. According to the Postal Service, Graceland station handles the second-highest volume of mail in Chicago and makes about 40,000 deliveries daily. Complaints about mail service in Chicago were discussed during USPS appropriations hearings before Congress in 1987 and were the subject of a separate congressional hearing in 1996. In 1990, at your request, we reviewed Postal Service management and operations in your district. This work involved reviewing a lengthy record of correspondence between you and the Postal Service. Letters from the Postal Service contained descriptions of numerous commitments and promised actions that were unfulfilled or did not have a lasting impact on the mail delivery problems. At that time, mail service problems focused on the high-growth areas of your district, such as Lincoln Park. We identified three potential causes of the problems: inadequate postal facilities; improper mail processing and delivery practices; and incomplete addresses on mail, coupled with incomplete information on customers’ mail boxes. In response to our work, the Postmaster General provided a list of corrective steps that we believed at the time would address the problems if they were properly implemented. However, in 1994, continuing complaints about mail service in Chicago prompted the Postmaster General to visit the city and establish a task force to address the problems. The task force found mail that was late, lost, or had been thrown away; a “bunker mentality” when it came to interacting with customers; and facilities without telephone service for customers and staff ill-equipped to answer and respond to simple inquiries. The task force worked to address these problems by helping management staffs plan their daily workloads; hiring additional carriers; streamlining processes; and increasing employee training. In addition, a new management team was installed in Chicago. EXFC scores for Chicago have improved considerably in recent years. The percentage of First-Class, overnight mail delivered on time increased from 66 percent in the second quarter of fiscal year 1994 to 90 percent in the third quarter of fiscal year 1997, 2 percent below the national average. The Chicago Postal District Manager said the improved EXFC scores were the result of (1) more automation, (2) new and expanded facilities throughout the Chicago area, (3) more and better training of employees, (4) better management and more accountability, and (5) dismissal of poor performers and recognition of good employees. In recent years, the Postal Service has also undertaken a major effort to automate its operations and reduce labor costs, including using more temporary and part-time employees. In June 1996, you requested that we review the reasons for the cost overruns at the new Chicago Main Post Office. You also indicated that Chicago has been heavily criticized for its poor mail service. In December 1996, we briefed your office on the results of our work to date. At that time, you requested that we perform additional work regarding Graceland station, which is located in your congressional district. To obtain information on the reasons for the cost overruns at the new Chicago Main Post Office, we interviewed USPS officials; submitted written questions to the Postal Service; reviewed documentation of the cost estimates for the facility, including justifications for cost increases, project planning documents, and Board of Governors meeting minutes; and reviewed Postal Inspection Service reports on the project. We also met with Chicago postal officials, including the Great Lakes Area Operations Vice President, Chicago District Manager, Chicago District Senior Plant Manager, and a Postal Inspection Service official; and we toured the new Main Post Office. We questioned Postal officials about the sequence of events regarding the project and related issues, but we did not repeat work that had already been done by the Inspection Service. We obtained information on the policies and procedures that the Postal Service implemented to prevent a recurrence of cost overruns in similar, future capital investment projects. We did this by reviewing recommendations made by the Inspection Service and Board of Governors’ Capital Improvement Committee and by interviewing Postal officials. To determine why the USPS Board of Governors approved some of the budget increases for the new Chicago Main Post Office in closed, rather than open, meetings, we questioned Postal officials and submitted written questions to the Postal Service. During the course of our review, Chicago Postal Service officials offered to review the physical condition of postal facilities within your congressional district. This review was performed from February to May 1997 by two teams of operational, retail, and administrative staff from the Chicago and Northern Illinois postal districts serving the Ninth Illinois Congressional District. The teams were supported by a real estate specialist, a design and construction specialist, and an operations analyst from the Chicago Facilities Service Office. In addition, an outside architectural/engineering firm was retained to assist in the review. We reviewed the report that resulted from this facility survey. To obtain performance data on the Graceland station, we first interviewed postal officials to determine what performance data and indicators are maintained by the Postal Service. We then asked Postal officials to provide data pertaining to workload/workforce issues (the number of deliveries, routes, and carriers, volume of mail delivered, amount of carrier sick leave and overtime); timeliness (EXFC scores, the number of routes with delayed mail, amount of curtailed and delayed mail, and the number of carriers leaving the station late); and the number of delivery-related complaints received during the weeks of September 14 through 20, 1996, and January 18 through 24, 1997. We chose these 2 weeks to compare Graceland station’s performance when a new station manager began working there and its performance 4 months later to determine whether change had occurred. According to the Postal Service, the data provided were the best performance measures available on the two stations.