Summary

In recent years, the United States Postal Service has tried to improve mail service in Chicago, which has seen some of the lowest nationwide rankings on the percentage of overnight mail delivered on time. One measure the Postal Service took was to build a new main post office in Chicago, a project that was plagued by $133 million in construction cost overruns. This report (1) discusses the reasons for the $133 million in cost overruns incurred at the new Chicago Main Post Office; (2) provides a list of procedures that the Postal Service has established to prevent a recurrence of such cost overruns in future capital investment projects; and (3) discusses why the Postal Service Board of Governors approved some of the budget increases for the new Chicago Main Post Office in closed, rather than open, meetings. GAO also reviews issues related to complaints about mail service in the Illinois' Ninth Congressional District.

GAO noted that: (1) the cost overruns that were incurred in the construction of the new Chicago Main Post Office appeared to be due primarily to inadequate planning; (2) USPS has implemented procedures aimed at reducing the likelihood of cost overruns occurring in similar, future capital investment projects, including earlier notification of problems to the Board of Governors and more Inspection Service involvement with review of facilities construction; (3) USPS officials indicated that budget increases for the new Chicago Main Post Office were approved in closed meetings because it would not have been in USPS' best interest to disclose the amounts requested while negotiating change orders with contractors and because the Postal Inspection Service was investigating the project; (4) comparison of performance data between the Graceland station in Chicago and the Brookline station in Boston, Massachusetts, confirmed that differences existed in terms of performance indicator results, and also showed that the data provided were not informative about the causes of problems with mail service at Graceland or in Chicago; (5) analysis of this performance data did not suggest that Brookline's performance would be informative for Graceland; (6) this was compounded by the high number of variables affecting the performance indicators, such as the differences in the types of deliveries made by both stations and uncertainty about whether the total number of complaints was accurately reported; and (7) the 1997 USPS review of postal facilities in the ninth congressional district of Illinois indicated that the facilities were meeting operational needs.