USPS set to award $1B retail pact

The U.S. Postal Service is expected this week to award its landmark $1 billion, 10-year Point of Service I contract, which is designed to deliver new retail and electronic commerce services and boost the service's mail delivery business.

POS I will replace Unisys Corp. Integrated Retail Terminals (ITRs) with sophisticated point-of-sale machines that can calculate rates for different classes of mail and offer a suite of services, including electronic postmarks. The devices also will support the use of credit cards, phone cards and smart cards and permit USPS for the first time to collect and analyze market data on what products and services are selling well and store that information in central corporate databases.

It is a "change agent for the USPS to become more customer-focused," a source close to the contract said. "The idea is to use information to operate the USPS in a more efficient way and provide better service."

"It's a major effort on the part of the Postal Service to improve its relationship with the customer" and make it more competitive, agreed Al Burman, vice president of Jefferson Strategic Marketing, a professional services firm.

POS I has moved faster than expected. It was intended to be conducted in three phases, but the agency opted to skip Phase Two and award the rest of the contract in order to speed up deployment of the system. The agency awarded Phase One of the contract last October to Cordant Inc., IBM and AT&T Global Information Solutions, which since has been renamed NCR. These companies are also the vendors in the running for the final award. USPS may select one or more of these bidders.

The request for proposals calls for 121,000 POS units to be installed during the first three years, beginning with the 7,000 largest post offices. The POS units will be connected to a Windows NT client/server network that will be extended to some 34,000 post offices and other sites across the country. Postal officials believe that it will be the largest Windows NT server network in the world once it is completed.

Pat Ways, group vice president of business development at Computer Sciences Corp., said POS I and other large contracts, such as the $500 million-plus Managed Network Services (MNS) contract, all will be coordinated through a services contract called Distributed Systems Operations Support. MNS would provide the communications backbone and tie the POS network together. USPS has already released an RFP for MNS and has pre-qualified vendors for DSOS.