Tad DeHaven of the Cato Institute reports on the US Postal Service’s so-called “Intelligent” Mail program.
In 2003, the U.S. Postal Service initiated the Intelligent Mail program, which would integrate thirty different barcode systems used by commercial mailers into a single system. Ideally, the new barcode system would improve efficiency, reduce costs, and improve timeliness of delivery. However, a new report from the Government Accountability Office details numerous problems with the program’s implementation that are all-too-common in government:
Delays. The entire program was supposed to have been deployed by January 2009. Now it’s being done in phases, with the second phase completed by the end of November. Key components of the program have been “deferred,” including performance measurement capabilities required by law. Greater automation of the business mail verification process, which was one of the key justifications for the program, has also been left out.
Cost Overruns. To incorporate all the components as originally planned, the USPS will need to spend more money on a third phase. However, the GAO says that program managers aren’t sure money will be made available given the USPS’s poor financial condition. The GAO also found that program managers didn’t include all the costs associated with the program, and they therefore “lack an accurate total cost estimate.”
Poor Performance. The first phase is already being plagued by operational problems. As of June 2009, 73 issues had been identified by mailers and the USPS.
Mismanagement. The GAO sensibly recommended that the USPS define the program’s core requirements and use them as a basis for developing reliable cost estimates. But in a prime example of bureaucratic chutzpah, the USPS responded: “Any attempt to define the ‘entire program’ and the cost associated is a waste of funding and resources.”
Fraud. There is no evidence of fraud yet, but the GAO notes that “a conflict of interest exists because the prime contractor for the development of the program also manages program management office activities.”
Which of these problems is common among private companies? Certainly among successful private firms they are absolutely unheard of. The core problem is that government has no incentive to be efficient. Whereas the quest for efficiency is pursued with an almost religious fervor by private industry.
That private industry is more efficient – and thus more profitable – is seldom argued, even by capitalism’s harshest critics. What is hotly contested is the worthiness of pursuing profits. I would remind every detractor of capitalism that if a person does not profit (earn more than he consumes) he will not progress, in fact he will barely survive. The profiteers of capitalism are all that keeps humanity fed, and the profit motive is the only force capable of maintaining human progress (albeit a slow progress) when the crushing weight of government control is attempting to drag humanity down into stagnation and, ultimately, destruction.