[Federal Register: June 10, 1999 (Volume 64, Number 111)] [Rules and Regulations] [Page 31121-31124] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr10jn99-11] ======================================================================= ----------------------------------------------------------------------- POSTAL SERVICE 39 CFR Part 111 Experimental Nonletter-Size Business Reply Mail Categories and Fees; Implementation Standards AGENCY: Postal Service. ACTION: Final rule. ----------------------------------------------------------------------- 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