USPS streamlines NSA rules

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The U.S. Postal Service is working to speed the process for negotiated service agreements.

The agency published a final rule this month in the Federal Register explaining that a bylaw change lets USPS management submit certain NSAs to the Postal Rate Commission for consideration without first submitting them to the USPS Board of Governors. The board adopted the change at its Sept. 11 meeting.

"We are happy with it, and everyone who hears about it is pleased," said Mike Plunkett, USPS manager of pricing strategy. "For some of our customers, especially the smaller ones, anything we can do to take time out of the process reduces their costs and makes the offer more appealing. Those few weeks can make a difference."

NSAs are special service and rate arrangements between the USPS and a mailer or group of mailers. Proponents say NSAs encourage greater volume by rewarding postal service customers with discounts and premium services. The changes in rates and mail classifications needed to implement NSAs require review and recommendation by the PRC and then approval by the USPS governors. This bylaw, however, is changing.

The USPS has said it is devoting more staff to develop more negotiated service agreements and to do them on a larger scale, as results are exceeding expectations.

Mr. Plunkett said that the rule change means "faster turnaround, and faster time to filing [for NSAs]. Essentially, it takes weeks out of the process, and those few weeks can help. Will there be a sudden flood of [NSAs]? No, but now, once the negotiations are finished, we can file them faster."

Earlier this year, Mr. Plunkett told DM News that business mailers are less interested in working with the agency on NSAs because a case involving Bookspan was taking too long to be completed.

The Bookspan case, however, was the first NSA for Standard Mail and the first time the agency had an NSA approved by the PRC that had no explicit cost-savings component.

The bylaw change applies only for requests to renew an existing NSA or to add one that is "functionally equivalent" -- similarly structured -- to an existing baseline NSA. Proposals for new baseline NSAs still would require board approval in advance.

"The Bookspan NSA is a baseline NSA, not a functionally equivalent one, so it would still require a board vote," Mr. Plunkett said. "But if we do any more that are functionally equivalent" to the Bookspan NSA, then a vote is not needed.

The NSA with Bookspan took effect June 2. Bookspan (www.bookspan.com), Garden City, NY, is a direct marketer of general-interest and specialty book clubs. It is a partnership between Doubleday Direct Inc. and Book-of-the-Month Club Holdings LLC. Bookspan joins Capital One, Bank One (now JPMorgan Chase), Discover Financial Services Inc. and HSBC North America Holdings Inc. in having approved NSAs. The USPS also has filed an NSA with Washington Mutual Bank.

In all future cases, when the PRC completes its proceedings and submits a recommended decision, final consideration by the board is still required.

"The board was just looking at the processes we have, deciding when we have cases of this type, where we have no new types of litigation issues, and the models are straightforward, we don't have to get a vote," Mr. Plunkett said.

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