Northrop Grumman Sues US Postal Service Over Automated Snail-mail Sort Contract 80
McGruber writes "The Federal Times is reporting that Northrup Grumman has filed suit against the US Postal Service, accusing the USPS of violating the terms of the 2007 fixed-price ($875 million) contract to produce 100 massive automatic sorting systems, each capable of handling millions of magazines, catalogs and other pieces of flat mail. The Postal Service embarked on the project just as mail volume was beginning to nosedive, cutting into anticipated efficiency gains. The sorting machines' performance has been uneven, according to a series of reports by the Postal Service's inspector general."
Dirty Northrop (Score:5, Interesting)
Northrop Grumman is so fucking bad, that I refuse to believe that anything they do is malicious. They're not competent enough to try to really screw the taxpayers. Every interaction I've had with them indicates that NG corporate is hostile to actually producing hardware and software, and desire to only create IP that NG can then charge the government to use. They are, however, so fucking incompetent that when I tried to get them to give me a proposal for a sole source, small change, that they were going to charge us 5x cost for, they failed to provide a compliant proposal before the money got pulled. You got that right. 80% profit and overhead, and they couldn't actually execute their core business function, which is extracting money from the federal government. Granted, our acquisition system is it's own disaster, but only NG could be so bad as to fail to ask when we're throwing money.
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From the first page of that PDF:
There are three major problems with the starve-the-beast argument: (1) it is not a plausible economic theory;
Breakign news: Person who thinks an economic theory isnt viable has produced a paper saying said theory isnt viable. Details at eleven.
Re:Dirty Northrop (Score:4, Interesting)
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Im taunting it for saying, paraphrased,
We think that this policy is a bad idea for the following reasons:
1) this policy is a bad idea.....
Wow, what amazing insight.
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We think this policy is bad for the following reasons:
Despite being pushed as an "economic theory" it is not related to economics (in the textbook definition, it obviously relates to money, confusing the ignorant and stupid, which is why we are explicitly stating this is not an economic theory, for all the idiots like LordLimecat who think it is and continue to give the nutters free PR by pushing it as such). Thus, as it is outside "economic theory" it can't, by definition, be a plausible economic theory. We apologize to all idiots and morons reading this (like you, LordLimecat) who don't understand the definitions of "plausible", "economic" and "theory" sufficiently to understand this distinction.
They stated that the "argument" is not an "economic theory". That you think that to be self-contradicting does not make it so. They are correct, and you are wrong.
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If you actually READ the pdf in question, you would see that that is not at all what he is saying. He thinks that it isnt plausible, not that it isnt an economic theory.
Its right there on page two, first section, in big bold letters.
You also seem to think that I am some staunch supporter of Starve the Beast. Maybe I am, maybe Im not, I was just posting to call a spade a spade, or in this case, a bad post.
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I actually commented on this in an article a while back. 80k for them to repair a part that broke for the military, Under 5k for a military maintenance facility to. And the kicker? The military base repairs actually worked long enough to be useful, while the Grumman ones were often faulty just back from repair.)
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80% profit? I can believe that NG was slow to submit, but this was not a government contract. Either that, or you don't really know what you're talking about here.
Makes me wonder (Score:3, Insightful)
Comment removed (Score:5, Informative)
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That interesting.
Meanwhile, I'm wondering why, when any of these companies completely botches a defense contract, the taxpayers eat the cost of their fuck-ups for years on end. And really, which project DON'T they fuck up?
But when they make a bogus machine that the USPS doesn't want, they sue!
I love how some companies get to have their cake and eat it too, on my dime.
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Is the USPS bankrupt? No? Then they HONOR THE DAMN CONTRACT.
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Perhaps you missed TFS: THE DAMN MACHINES DON'T WORK.
lame lameness lame lameness lame lameness lame lameness
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That interesting.
Meanwhile, I'm wondering why, when any of these companies completely botches a defense contract, the taxpayers eat the cost of their fuck-ups for years on end. And really, which project DON'T they fuck up?
But when they make a bogus machine that the USPS doesn't want, they sue!
I love how some companies get to have their cake and eat it too, on my dime.
Perhaps the laws should be changed so that these companies can be allowed to be defense contractors for North Korea and Iran...
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Hi.
I read your journal entry. Thanks for the warning.
Remember what you said about your father and the guards that the Jews appreciated and how the big wigs left? I just saw a documentary about Buchenwald. I bet that your father was there. The documentary mentioned that the place was very disciplined and efficiently organized.
I want to make a disclaimer, though. The video is a holocaust denial video.
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Sorry, I meant your grand father.
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You realize that if they were to stop giving such a massive discount on flats/off-loading the cost of flats to the paying customer (the ones who buy stamps and ship packages, never mind fund them through taxes), several things would/could happen:
* The USPS would not be bankrupt and would be a net profit center for the Federal Government. Yeah, they'd make money at it, even if they try to fail through other means.
* Most nonsense magazines which are shipped to the house (and infrequently paid for by the recip
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The USPS is not taxpayer-funded.
Then who the hell is buying all those stamps?
You should have said: "The USPS is not funded by tax dollars."
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Cancel All Defense Projects with Grumman (Score:5, Insightful)
Re:Cancel All Defense Projects with Grumman (Score:5, Informative)
Apple keep buying Samsung DRAM, NAND, processors, and maybe even screens, despite ongoing litigation.
Re:Cancel All Defense Projects with Grumman (Score:5, Insightful)
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2. There are 537 reasons that the government does dumb shit.
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In Soviet Russia (Score:1)
In Russia, back in the days of USSR, all letters had to be sent in special envelopes upon which you had to trace machine-readable destination code in specially provided boxes. No code - no delivery. And in the US, the supposed birthplace of computing and internet, letters still have no required machine-readable codes (at least) 30 years after the USSR had them.
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Every post office I've been in has big signs up about how to make your addressing machine readable so it's sorted faster. It mostly boils down to using blue or black ink on a light or white background and printing in large letters.
Re:In Soviet Russia (Score:5, Informative)
You should have started with "In Soviet Russia, letters send you!"
Seriously, my understanding is that the USPS relies on OCR rather than a special format to handle a lot of sorting and routing, and secondarily on humans to figure out what goes where. In the US, the zip code was invented in 1963 to get a letter at least as far as the correct post office, and the zip+4 came about in 1983 to get you within a typical city block - by that point, it's in the right carrier's bag, and can be delivered correctly fairly easily.
Re:In Soviet Russia (Score:4, Interesting)
Fedex, on the other hand, you expect the barcodes and the little scanner/PDA widget.
As noted, it isn't obvious that this cultural orientation is a good fit for the position that the service finds itself in; but it has always struck me as an interesting phenomenon...
Re:In Soviet Russia (Score:5, Informative)
Something like 99.7% of USPS mail is autosorted. There are three (IIRC on the number) centers were a few dozen human-type people view (remotely, from the regional sorting center) the 0.3% that doesn't autosort. Again IIRC those people are able to sort 99% of the remaining, usually within 10 seconds. The rest go to the dead mail office.
The pictures people have in their minds of USPS "inefficiency" are the way things were done in the 1950s; the USPS started automating in a big way in the 60s and funded a lot of research in machine vision and OCR in the 60s and 70s.
sPh
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You nailed it:
USPS cannot set service standards.
USPS cannot set prices.
USPS cannot set service areas.
USPS cannot own planes.
USPS cannot own trains.
USPS cannot own boats.
USPS cannot open or close processing plants.
USPS cannot lock out workers.
USPS is required to participate with non-competitive government benefit plans.
USPS is the just about the only entity in the entire US that has to prefund retiree health benefits (which, by the way, is a good idea, but puts them at a competitive disadvantage).
USPS is req
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Actually, no. Commercial bulk mail gets most of its discount from pre-sorting. The POSTNET barcode has always just added an additional (and much smaller) discount to the bulk rate, but has never been required.
Starting in 2013 (though this date has been pushed back several times already) POSTNET is being phased out in favor of the "Intelligent Barcode" system, though I'm not sure if the barcode will actually become mandatory at that point or if POSTNET will just become invalid.
Re:In Soviet Russia (Score:4, Informative)
Last I checked, machine recognition of handwritten zip codes was better than 99.5%.
That was about 5 years ago. Presumably it has improved since.
So, there is no need for special machine codes. They can read your writing as-is, or pass the rare piece of mail to a human sorter if the confidence margin is too low.
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Even though there is no need for special machine codes for typical personal mail, they have them anyway [usps.com] to reduce the amount of computing that has to be done to process the mail, and continue to develop and refine their standarda [usps.gov].
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How is paper mail and/or the USSR relevant to anything in 2012?
In a shrinking economy ... (Score:3, Insightful)
We are certainly going to be seeing more of this. The problem is businesses have contracted for services based on at least things staying the same. We have five years now of shrinkage in the economy, jobs, everything. And it is going to continue down the same road.
A big part of the problem is expectations and perceptions. What really torpedoed the housing market was a perception that things were suddenly different. It made no difference whatsoever that a house valued at a million dollars one day hadn't changed in any way but the next day people were only willing to pay a half a million for the same house because of a perception that the housing market was crashing. This, obviously, led to a crash in most of the country. Yes, there was a possibility that people might default on some loans - and then because a lot of goods and services were no longer selling as they did a lot of people lost their jobs - and once again, perception became reality and people defaulted on loans after they lost their jobs.
Of course the Postal Service is going to try to weasel out from this contract for stuff they no longer need. They might get away with it, unlike most other businesses and individuals. A lot of the time a business will purchase equipment and hire people based on a contract that isn't really cancellable and often it is difficult to get out of those. Try signing up for a lawn service for five years and cancelling after the first year - you might get sued as well.
A far bigger problem is that there will be a ripple effect here. Northrop Grumman will fire a bunch of people that were supposed to be working on this. Then will in turn stop buying as much stuff leading to further contractions spreading out through the economy. It is what happens in a shrinking economy rather than a growing one. This has happened before, but the problem is this time there is no confidence that the government is capable of fixing things in any manner other than throwing money around like a drunken sailor. And rather than just a crisis of confidence, there is actually a great deal of confidence that things are just going to get worse and worse.
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It's not all gloom and doom, and maybe our economy needed a little contracting, but when you have one party opposed in lock step to anything that might fix things for purely ideological and "don't let the economy get better or they'll re-elect a black guy" reasons, this is what happens.
Some people's belief in government's ability to fix things, as opposed to abillity, is about the same as my lack of faith that corporations will ever have loyalty to their people or their country, or that CEOs will ever stop
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It wasn't just perception that killed the housing market. The homes were objectively over valued. Things like rental value to investment cost actually matter. The change in perception involved people waking up to that.
Here's the hardware. But it's not needed any more. (Score:5, Informative)
The previous generation of flat sorting machine. [youtube.com] The new flat sorting machine. [youtube.com] The mechanical problems of sorting large volumes of flats of varied size and thickness with flapping loose pages have finally been solved. But it doesn't matter. Putting ads on glossy paper and shipping them to people who don't really want them much is a dying industry.
The USPS really wants to get out of the deal for the flat sorting system, because the flats business (mostly catalogs and magazines) is declining. Mail volume overall peaked in 2006, and has been in a screaming dive [usps.com] since then. The USPS doesn't need a new generation of flat sorting machinery. But the USPS signed a firm fixed-price contract for the gear, and they're stuck with it.
Paper mail, as a business, is tanking. [usps.com] "We forecast U.S. postal volumes to decrease from 177B pieces in 2009 to around 150B pieces in 2020 under business-as-usual assumptions. Notably, volumes will not revisit the high-water-mark of 213B pieces in 2006 -- on the contrary, the trajectory for the next 10 years is one of steady decline, which will not reverse even as the current recession abates. Expressing the decline in terms of pieces per delivery point highlights the challenge: we project pieces per household per day to fall from four pieces today to three in 2020 -- driven by decreasing volumes delivered to an increasing number of addresses." That's the optimistic scenario - recession over in 2012, no "Do Not Mail" bulk mail opt-out legislation. It's also from a 2010 study that didn't really consider the move to smartphones.
Re:Here's the hardware. But it's not needed any mo (Score:5, Interesting)
Paper mail, as a business, is tanking.
And yet parcel (package) mail volume is increasing.
The funny thing is that UPS makes more money than everyone else in the package business combined,
but for rural deliveries, they (and FedEx) farm out the packages to USPS because it would cost to much to deliver it themselves.
That said, the United States Postal Service isn't really in financial trouble.
Their problem mostly has to do with a bad law that forces them to devote enormous amounts of cash to prefund pension plans [wikipedia.org]
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Excellent point.
sPh
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AFAIK private industry is not required to pre-fund pension plans. That is one of the competitive disadvantages against the USPS. (IMHO pension plans, if offered, should be pre-funded, and not 'owned' by the company so they can't be raided, and not funded by the company's own stock. But that's another topic.) See a comment higher up for the list of things that USPS is not allowed to do by Congress - including setting rates, and other things that other companies can do.
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Agreed. I'd go a step further and require any pension to be defined-contribution as well - so that offers are strictly comparable.
I'm not a big fan of deferred pay in general - it is WAY too open to abuse, and I've seen firsthand the problems that arise when companies imply that workers are earning some benefit only to yank it away from them.
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And yet parcel (package) mail volume is increasing.
The funny thing is that UPS makes more money than everyone else in the package business combined,
but for rural deliveries, they (and FedEx) farm out the packages to USPS because it would cost to much to deliver it themselves.
I suppose that it largely depends on how exactly you're shipping things, what you're shipping, and where you're sending it.
In certain parts of the country, FedEx is the only way to go. In rural NE and SD, for example, I know FedEx will stop/drive by 2, 3 times a day. By 'rural' I mean anything from a couple dozen people per square mile (or less) to small towns to cities of 150-200k people.
In these places, UPS is the one that's more likely to do things like leave the packages at the local gas station (also t
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Define makes (Score:2)
ups revenue 53 billion
USPS annual budget 70 billion
fedex 39.3 billion
dhl 65 billion in annual sales
I believe your link/assertion re the pension plans-- I think some law makers are trying to break the back of USPS-- but I disagree with your claim re ups marketshare...
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A decade or two ago I read about a guy who lived out in the boonies, and for some reason couldn't get or afford firewood one year. So he subscribed to every junk mail and catalog he could get, and used that in his wood stove. Stayed warm all winter, and helped support USPS! :D
Just Say No? (Score:2)
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I'm not saying this is a good policy, but doesn't the United States government reserve the right to decline any lawsuit filed against it in the United States?
Yes, it's called Soverign Immunity. The U.S. government waives immunity in some cases, and possibly the contract with Grumman includes a clause that allows either party to sue for breach of contract. Also, the post office is not entirely part of the government any more, so it may not even have soverign immunity.
This Wikipedia article has more detail.
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According to that Wiki entry, under the Tucker Act, the US Government does not have immunity from suits regarding commercial contracts, so the US government is not protected from suit. NG's case will likely make it to court, and then its a coin toss.
CAPTCHA: meddled
Fixed-price contract YES. (Score:2)
I don't care about the details of the lawsuit, the courts can sort it out. What I like is that the USPS had the foresight to sign a fixed-price contract with a major federal contractor. Northrup Grumman, Lockheed, General Dynamics and friends are in the business of navigating federal bureaucracy and milking it for every last over-budget dollar.
Three cheers for USPS for drawing a line in the sand.
Military contractor for the USPS? (Score:2)
By the way, if you're surprised to see an aerospace company providing mail sorting services to the USPS, you misunderstand what Northrup Grumman, Lockheed, General Dynamics, and Boeing are. They're not really aerospace companies, they're federal government contracting companies. Their primary expertise is in navigating the federal bureaucracy, attaching a money hose to it, and pumping it dry. That includes both admirable and unethical skills: they've got a ton of experience with the reams of required fed
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+1. Most folks don't realize what a PITA it is to work on a government contract. It affects every element of your business, so for most companies it is just not worth doing. This becomes an effective 'barrier to entry', so those companies that are tuned and structured to work for the government can price things in a much less competitive way. And that tuning and structuring does have a significant cost, so things are more expensive to produce.