[Federal Register Volume 64, Number 111 (Thursday, June 10, 1999)]
[Rules and Regulations]
[Pages 31121-31124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14636]
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POSTAL SERVICE
39 CFR Part 111
Experimental Nonletter-Size Business Reply Mail Categories and
Fees; Implementation Standards
AGENCY: Postal Service.
ACTION: Final rule.
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SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM)
standards adopted by the Postal Service to implement the Decision of
the Governors of the United States Postal Service on the Recommended
Decision of the Postal Rate Commission on the Renewal of Experimental
Classifications and Fees for Nonletter-Size Business Reply, Docket No.
MC99-1.
During the past two years, the Postal Service has studied the
effects of two alternative experimental accounting methods for
nonletter-size business reply mail (BRM) with a controlled number of
recipients: The reverse manifesting method and the bulk weight
averaging method. Until the implementation of a permanent
classification and fees, the Postal Service intends to continue the
experiment with up to 10 participants to resolve some administrative
and technical issues related to permanent implementation of the bulk
weight averaging accounting method.
EFFECTIVE DATE: June 8, 1999.
FOR FURTHER INFORMATION CONTACT: Paul Lettmann, (202) 268-6261, or
Michael T. Tidwell, (202) 268-2998.
SUPPLEMENTARY INFORMATION: The Postal Service will review applications
and select as many as six mailers to join the four current participants
in the experiment. It is hoped that the BRM received by the
participants will represent a diverse range of products returned by
BRM. The limitation on the number of participants in the extension of
the weight averaging experiment is consistent with the need to conduct
an experiment that can be managed effectively, with the narrow scope of
the administrative and technical issues the extension is expected to
resolve, and with the relatively short time frame during which the
extension is likely to be in effect.
The selection of experiment participants depends on various
criteria such as mail volume, product type and packaging, geographic
location, ability to implement and maintain quality control procedures
for accounting and documentation, and availability of postal resources.
A prospective participant should be able to participate until February
29, 2000, and, if selected, begin within a short period of time. Only
the weight averaging method of counting the returned nonletter-size BRM
pieces will be tested as part of this experiment.
As part of this study, participants will be charged lower per piece
BRM fees for qualifying pieces as follows:
For participants using the weight averaging accounting method, the
per piece accounting fee is 1 cent, plus the appropriate First-Class
Mail or Priority Mail postage.
Participants must pay an annual business reply mail permit fee and
an annual business reply mail advance deposit accounting fee, which are
currently $100.00 and $300.00, respectively. In addition, there will be
a monthly audit and maintenance fee of $600.00 assessed per BRM account
at each site where the experimental weight averaging accounting method
is employed.
Background
As a consequence of Postal Rate Commission Docket No. MC97-1, the
United States Postal Service has engaged in an experiment since June 8,
1997, which was designed to test the feasibility of two alternative
methods of accounting for nonletter-size Business Reply Mail: the
reverse manifesting method and the bulk weight averaging method. For
each method, the experiment was designed to involve up to 10 recipients
of nonletter-size BRM. On an experimental basis, separate experimental
set-up/qualification, monthly auditing or sampling, and per piece fees
were established for each method. All experimental classifications and
fees are scheduled to expire on June 7, 1999.
To date, four BRM recipients have participated in the experiment,
which is scheduled to expire on June 7, 1999. One participant began the
experiment utilizing the reverse manifest method. Three others elected
to participate utilizing the weight averaging method.
Approximately nine months ago, the one participant using the
reverse manifest method unilaterally determined on the basis of
internal operational considerations that it would switch to the weight
averaging method. The Postal Service has since been unable to recruit
any participants to experiment with the reverse manifest method.
Although the Postal Service believes that the method has potential, the
limited experience during the experiment did not provide an adequate
opportunity to fully evaluate the method or overcome the shortcomings
with the method that were identified when the experiment was initiated.
As a consequence, the operational feasibility of the reverse manifest
method remains unproved.
The experiment has demonstrated the feasibility of the bulk weight
averaging accounting method for nonletter-size BRM to the satisfaction
of the Postal Service. At the same time, the Postal Service has
determined that it must resolve some administrative and technical
issues related to the operation of bulk weight averaging before
implementing the method on a permanent basis.
Accordingly, on March 10, 1999, the Postal Service filed two
requests before the Postal Rate Commission. The first request sought an
extension of the current bulk weight averaging experiment beyond its
June 7, 1999, expiration date to allow for the continuation of work to
resolve the aforementioned administrative and technical issues that
stand in the way of
[[Page 31122]]
implementing weight averaging on a permanent basis. That proceeding was
designated by the Postal Rate Commission as Docket No. MC99-1. The
second request proposed the establishment of a permanent classification
and fees for weight averaged nonletter-size BRM. That proceeding was
designated as Docket No. MC99-2. The Postal Service intends to let the
reverse manifest classification and fees expire as scheduled.
Manual BRM Verification Method
The manual counting, weighing, rating, and billing for incoming
nonletter-size BRM at delivery post offices is a labor-intensive and
time-consuming task usually performed by postage due unit employees.
These postal employees must weigh and rate each piece individually and
calculate the appropriate postage and fees.
This manual process frequently takes place during a short period
between the arrival of the BRM at the postage due unit and the arrival
of the BRM recipient at the post office to pick up the mail. Depending
on mail volume, the necessary accounting sometimes delays the release
and delivery of the mail. Such delays can adversely affect the
recipient's ability to meet customer fulfillments expeditiously.
Weight Averaging Method
Some recipients of large volumes of incoming nonmachinable BRM and
local postal officials have developed an alternative accounting method,
bulk weight averaging, that allows the recipients to take possession of
their incoming mail sooner than mail manually weighed and rated on a
piece-by-piece basis by the Postal Service.
This method also makes it less expensive for the Postal Service to
determine the postage and fees. This alternative method reduces postal
workhours, provides more expeditious accounting, allows for earlier
delivery of BRM pieces, and increases recipient satisfaction with BRM
service.
Application of the bulk weight averaging accounting method for a
BRM permit account requires periodic sampling and monitoring of the
permit holder's nonletter-size BRM. As a consequence, the added
administrative overhead generates extraordinary postal costs not
covered by the current $100.00 annual BRM permit fee and $300.00 annual
BRM advance deposit accounting fee.
For purposes of the current experiment, the Postal Service adopted
additional fees for the nonletter-size BRM weight averaging accounting
method:
A one-time set-up/qualification fee of $3,000.
A $3,000 monthly maintenance fee.
A $0.03 per piece accounting fee.
These fees expire on June 7, 1999. On May 14, 1999, in Docket No.
MC99-1, the Postal Rate Commission recommended the extension of the
nonletter-size BRM experiment until February 29, 2000, or until
implementation of permanent fees, whichever comes first, which was the
term requested by the Postal Service. The Commission also recommended
the classification and fees proposed in a Joint Stipulation and
Agreement by the parties in Docket No. MC99-1. The Commission's
recommendations were approved in the May 26, 1999, Decision of the
Governors of the United States Postal Service. Accordingly, on June 8,
1999, the following fees will apply to nonletter-size BRM subject to
the terms of the weight averaging experiment:
A $600 monthly maintenance fee.
A $0.01 per piece accounting fee.
The one-time set-up/qualification fee has been eliminated. These
new experimental fees expire on February 29, 2000, or upon
implementation of permanent fees, whichever comes first.
Selection Process for Participants
A reply mail recipient who wants to participate in the extension of
the nonletter-size BRM experiment must submit a written request to:
Manager, Mail Preparation and Standards, Postal Service Headquarters,
475 L'Enfant Plaza SW, Room 6800, Washington, DC 20260-2405. The
request must include sufficient data to assist in making an initial
determination.
Consideration is given to product type, geographic location,
variability in the weight and daily volume of BRM, current accounting
and quality control procedures, and availability of postal resources.
In selecting participants, the manager of Mail Preparation and
Standards also uses the following criteria:
The applicant must receive at one site a yearly average
volume of approximately 100,000 or more nonletter-size BRM pieces
eligible for the current $0.08 per piece fee.
The applicant must be prepared to participate in the
experiment through February 29, 2000.
The applicant must be prepared to begin operation at a
mutually agreed upon time soon after selection.
If the manager of Mail Preparation and Standards determines that
the applicant is suitable for participation, the applicant is
instructed to follow the appropriate application procedures for
authorization, as described in Domestic Mail Manual G092 and published
in this final rule. If the manager of Mail Preparation and Standards
determines that the applicant is not suitable, that manager sends the
applicant a written notice explaining the reasons for the determination
and, if appropriate, requests additional information for further
review.
Decisions of the manager of Mail Preparation and Standards may be
appealed to the BRM Experiment Review Board, Postal Service
Headquarters, 475 L'Enfant Plaza SW, Room 6800, Washington DC 20260-
2405. Appeals must include sufficient information to assist the Review
Board in reconsideration of initial determinations. Decisions of the
Review Board are final.
Implementation
Pursuant to 39 U.S.C. 3624, the PRC on May 14, 1999, issued to the
Governors of the Postal Service its Recommended Decision on the Postal
Service's Request to extend the weight averaging portion of the
nonletter-size BRM experiment.
After reviewing the PRC's Recommended Decision and its consequences
for the Postal Service and postal customers, the Governors, pursuant to
39 U.S.C. 3625, acted on the PRC's recommendations on May 26, 1999.
(Decision of the Governors of the United States Postal Service on the
Recommended Decision of the Postal Rate Commission on the Renewal of
Experimental Classification and Fees for Nonletter-Size Business Reply
Mail Categories and Fees, Docket No. MC99-1.)
The Governors determined to approve the PRC's recommendations, and
the Board of Governors set an implementation date of June 8, 1999, for
the classification and fee changes to take effect. A notice announcing
the Governors' Decision and the final Domestic Mail Classification
Schedule and Fee Schedule changes is published elsewhere in this issue
of the Federal Register.
This final rule contains the DMM standards adopted by the Postal
Service to implement the Governors' Decision.
As described below, the Postal Service is limiting these
experimental fee categories to those pieces of nonletter-size business
reply mail that are outside the parameters of current automation-
compatible letter-size business reply mail. As a consequence, the final
rule excludes letter-size pieces which could qualify for Qualified
Business Reply Mail (QBRM) rates and fees. (Currently, pieces weighing
two ounces or less can qualify for QBRM.)
[[Page 31123]]
Because of the purpose and limited scope of this experiment, the
Postal Service finds no need to solicit comment on the standards for
nonletter-size BRM or to delay implementation of this extension.
List of Subjects in 39 CFR Part 111
Postal Service.
For the reasons discussed above, the Postal Service hereby adopts
the following amendments to the Domestic Mail Manual, which is
incorporated by reference in the Code of Federal Regulations (see 39
CFR part 111).
PART 111--[REVISED]
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, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.
2. Revise G092 to the Domestic Mail Manual as follows:
G GENERAL INFORMATION
* * * * *
G090 Experimental Classifications and Rates
[Revise G092 to remove references to reverse manifesting; remove 2.0,
which explains reverse manifesting; and renumber 3.0 to 5.0 to leave
weight averaging as the experimental accounting method as follows:]
G092 Nonletter-Size Business Reply Mail
1.0 BASIC ELIGIBILITY
[Amend 1.1 to remove references to reverse manifesting to read as
follows:]
1.1 Description
The standards in G092 apply to pieces claimed by an authorized
mailer at the experimental fees for nonletter-size business reply mail
(BRM). Draft Publication 405, Guide to Business Reply Mail, contains an
explanation of weight averaging sampling procedures, calculations, and
other information.
[Revise 1.2 to read as follows:]
1.2 Applicability
BRM pieces eligible under G092 must:
a. Be mailed as First-Class Mail or Priority Mail and meet the
specific standards in 2.0.
b. Meet the applicable physical standards for nonletter-size mail
in C050 (i.e., flat-size mail, machinable parcels, irregular parcels,
or outside parcels) and Cl00 for First-Class Mail, except any BRM piece
accounted for under the weight averaging method in 2.0 may not exceed 5
pounds. Reply mail letters which cannot qualify for Qualified Business
Reply Mail (QBRM) because they weigh too much also are eligible for the
weight averaging method.
c. Meet the basic standards for BRM in S922 other than those
specific to letter-size pieces or pieces processed as QBRM.
d. Meet the addressing standards in A010 and bear a delivery
address with the correct ZIP+4 code and barcodes assigned to the BRM
permit holder by the USPS.
e. Be marked as specified in the service agreement under 2.0 and
comply with any current or future USPS marking standard.
f. Meet the documentation and postage payment standards in 2.0 and
the service agreement.
g. Be received at the post office that serves the permit holder.
[Amend 1.3 by removing 1.3d concerning the set-up/qualification fee and
redesignating current 1.3e as 1.3d to read as follows:]
1.3 Fees
Each BRM piece eligible under G092 is charged the corresponding
single piece rate for First-Class Mail or Priority Mail plus the
appropriate fee as shown in 4.2. To receive pieces under this fee
schedule, the participating mailer also must pay fees for these
accounts and services:
* * * * *
d. Applicable monthly maintenance fee.
[Amend 1.4 to remove the reference to reverse manifesting information
and change the manager to whom BRM customer requests are submitted to
read as follows:]
1.4 Participation in Test
A business reply mail recipient who wants to participate in the
experiment and receive an account for nonletter-size BRM under G092
must submit a written request for consideration to the manager of Mail
Preparation and Standards, USPS Headquarters (see G043 for address).
The request must include sufficient data to assist the manager in
making an initial determination. The manager may request additional
data and an on-site visit to the applicant's plant. If the manager
determines that the applicant is suitable for participation, the
applicant follows the application procedures in 2.0. Consideration is
given to product type, geographic location of the mailer's site of
operation, variability in the weight and daily volume of BRM, current
accounting and quality control procedures, and availability of postal
resources. In selecting participants, the manager also uses the
following additional criteria:
a. The applicant must receive or expect to receive at one site a
yearly average volume of approximately 100,000 or more nonletter-size
BRM pieces eligible for the current $0.08 per piece fee under S922.
b. The applicant must be able to participate in the experiment
through February 29, 2000.
c. The applicant must be prepared to begin operation at a mutually
agreed upon time soon after selection.
[Remove current 2.0 in its entirety. Re-designate current 3.0 through
3.4 as 2.0 through 2.4, respectively, to read as follows:]
2.0 WEIGHT AVERAGING
* * * * *
[Amend renumbered 2.2 to change the manager to whom customers submit
requests to read as follows:]
2.2 Application
A business reply mail recipient applying for participation in the
extension of the weight averaging experiment must complete a standard
application provided by the Postal Service. The applicant submits this
application to the manager of Mail Preparation and Standards. The
applicant includes with the application documentation that contains
sample BRM pieces and labels representative of the weight range and
types of pieces to be weight-averaged.
[Amend renumbered 2.3 to change the manager to whom customers submit
requests and to change the effective dates to read as follows:]
2.3 Authorization
The manager of Mail Preparation and Standards reviews the
application and proceeds as follows:
a. If the applicant meets the conditions required for the
experimental weight averaging accounting method and the application is
otherwise consistent with the purposes and goals of the experiment, the
manager approves the application and prepares a service agreement with
the applicant. The agreement details the operating procedures for
weight averaging and the responsibilities of the applicant and the
Postal Service. For the purposes of the experiment, the Postal Service
may require additional documentation and periodic review and inspection
of each experiment participant's BRM processing and accounting
operations. No agreement may remain in effect beyond the February 29,
2000, outside duration date established for the extension of the
experiment. The
[[Page 31124]]
experimental classification and fees take effect on June 8, 1999; they
will expire on February 29, 2000, or when the permanent classification
and fees for weight averaged nonletter-size BRM are implemented,
whichever comes first.
b. If the application does not appear to meet the conditions
required for the weight averaging method, the manager of Mail
Preparation and Standards denies the application and sends written
notice to the applicant, with the reasons for denial. The applicant has
10 days after receipt of the notice to file a written appeal to the BRM
Experiment Review Board, U.S. Postal Service Headquarters. Decisions of
the Review Board are final.
[Remove renumbered 3.4, Renewal, in its entirety.]
[Re-designate current 4.0 as 3.0.]
3.0 REVOCATION
[Amend renumbered 3.1 to change the manager who may revoke a
participant's authorization and remove the reference to a manifest to
read as follows:]
3.1 Reasons
The manager of Mail Preparation and Standards may revoke a BRM
participant's authorization for the experiment if that participant:
a. Provides incorrect data on the required documentation and
appears unable or unwilling to correct the problems.
b. Neglects to perform required quality control procedures.
c. No longer meets the criteria in this standard and the service
agreement.
* * * * *
[Revise 3.3 to shorten the appeal period to 10 days to read as
follows:]
3.3 Appeal
Revocation proceeds if the participant is unable or unwilling to
correct the discrepancies found. The participant may file a written
appeal of revocation within 10 days from the date of receipt of the
notice, with evidence explaining why the authorization should not be
revoked. The appeal must be filed with the BRM Experiment Review Board,
which issues the final agency decision. The participant may continue to
accept BRM under the authorization, pending a decision on appeal. The
revocation decision takes effect 7 days after receipt by the
participant.
[Re-designate current 5.0 as 4.0:]
4.0 RATES AND FEES
[Amend 4.1 to change references from ``5.2'' and ``5.3 and 5.4'' to
``4.2'' and ``4.3 and 4.4,'' respectively, to read as follows:]
4.1 Rate Application
Each BRM piece received under G092 is charged the applicable per
piece fee in 4.2 and the appropriate single-piece First-Class Mail rate
or Priority Mail rate. In addition to the fees in 4.3 and 4.4, the
required BRM permit fee and BRM advance deposit account fee must be
paid every 12 months.
[Amend 4.2 by removing 4.2b and revising 4.2 to read as follows:]
4.2 Per Piece Fee
Per piece, in addition to single-piece rate First-Class Mail or
Priority Mail postage for nonletter-size experimental (weight
averaging): $0.01.
[Amend 4.3 by removing 4.3b and revising 4.3 to read as follows:]
4.3 Monthly Maintenance Fee
Monthly fee for nonletter-size experimental (weight averaging):
$600.00.
5.4 [Removed]
[Remove current 5.4. There is no longer a one-time set-up/qualification
fee.]
A transmittal letter making these changes in the pages of the
Domestic Mail Manual will be published and will be transmitted to
subscribers automatically. As provided by 39 CFR 111.3, notice of
issuance will be published in the Federal Register.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 99-14636 Filed 6-8-99; 8:45 am]
BILLING CODE 7710-12-P
