The U.S. Postal Service’s Use of Contractors to 
Deliver Mail: Background and Recent 
Developments 
Kevin R. Kosar 
Analyst in American National Government 
May 29, 2012 
Congressional Research Service 
7-5700 
www.crs.gov 
R42549 
CRS Report for Congress
Pr
  epared for Members and Committees of Congress        
The U.S. Postal Service’s Use of Contractors to Deliver Mail 
 
Summary 
Currently, the U.S. Postal Service (USPS) is collectively bargaining with the National Association 
of Letter Carriers (NALC) and National Rural Letter Carriers Association (NRLCA). One issue 
that may or may not be settled is the Postal Service’s use of non-USPS employees (i.e., 
contractors) to deliver mail. If the parties cannot come to a satisfactory arrangement, Congress 
may be approached to consider the matter.  
Contractors have delivered mail to homes and businesses since 1900. Controversy over this 
practice arose in 2007 when the NALC alleged that the USPS had expanded the use of contractors 
into city areas at the expense of unionized membership. Congress held hearings on the matter, and 
legislation was introduced in both houses. The USPS and NALC came to a memorandum of 
understanding (MOU) in October 2008 to govern the practice, which appeared to quell the 
controversy.  
The expiration of the USPS-NRLCA and USPS-NALC collective bargaining agreements and 
contracting MOU may reopen the issue. The USPS and the two unions have been unable to come 
to agreement through negotiations and mediation. The USPS has entered binding arbitration with 
the NRLCA and soon will do the same with the NALC. Whether a mutually agreeable solution to 
the use of private contractors to deliver mail will be found remains to be seen. 
By law, the USPS is obliged to provide for an “efficient” system of mail delivery. Federal statute 
provides the USPS with considerable freedom to enter into contracts with private parties. Wage-
earning contractors cost less to employ than wage- and benefits-earning USPS employees. 
However, federal law also requires the USPS to collectively bargain its employees’ compensation. 
Thus, a conflict arises between these competing legal imperatives when the USPS employs a 
contractor to perform work that was or could be performed by a postal employee.  
The USPS has increased its use of contractors in recent years, but USPS employees continue to 
serve 98% of all U.S. homes and businesses.  
This report will be updated as developments warrant. 
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The U.S. Postal Service’s Use of Contractors to Deliver Mail 
 
 
Contents 
Background...................................................................................................................................... 1 
The 2007 Mail Delivery Contracting Controversy.................................................................... 1 
Congressional Action................................................................................................................. 2 
Recent Developments ...................................................................................................................... 4 
The USPS’s Authority to Contract vs. Employee Compensation .................................................... 4 
The Extent of the USPS’s Use of Contractors to Deliver Mail........................................................ 5 
Concluding Observations................................................................................................................. 8 
 
Tables 
Table 1. Postal Carrier Routes: Who Delivers? ............................................................................... 6 
Table 2. Postal Carrier Routes: Who Delivers? (%) ........................................................................ 6 
Table 3. Delivery Points: Who Delivers?......................................................................................... 7 
Table 4. Delivery Points: Who Delivers? (%).................................................................................. 7 
 
Contacts 
Author Contact Information............................................................................................................. 9 
 
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The U.S. Postal Service’s Use of Contractors to Deliver Mail 
 
Background 
Private individuals and firms, often called “contractors” and “subcontractors,” have transported 
mail between postal facilities since at least 1792 (1 Stat. 233), and according to the U.S. Postal 
Service (USPS), contractors have delivered mail to homes and businesses since 1900.1 Today, 
contractors transport mail between postal facilities via land, air, water, and rail.2 
One type of land (i.e., “surface”) mail transportation contract is the “highway contract route” 
(HCR).3 HCR contracts come in three subtypes.  
•  “Transportation” contracts have private “suppliers”4 transport mail between 
postal facilities.  
•  “Combination” contracts require suppliers to make a small number of mail 
deliveries in the course of transporting mail between the USPS’s facilities.  
•  “Contract delivery service” (CDS) contracts compensate suppliers for collecting 
and delivering mail in rural areas.5  
This latter subtype of contract became the focus of controversy in 2007.6 
The 2007 Mail Delivery Contracting Controversy  
The National Association of Letter Carriers (NALC), the union for mail delivery persons, and the 
USPS signed a collective bargaining agreement in autumn 2006.7 The agreement covered a wide 
range of compensation and workplace matters. It included two memoranda of understanding 
(MOUs) concerning contracting letter carrier work.8 The MOUs established a six-month 
moratorium on any new contracting of mail carrier work in post offices employing city carriers.9 
They also pledged the NALC and USPS to create a joint USPS-NALC committee to review  
                                                 
1 U.S. Postal Service, “Contracting by the U.S. Postal Service—Not New!,” press release, April 2007. 
2 U.S. Postal Service, Mail Transportation Contracting Guide (Washington: USPS, 2004). 
3 HCR contractors are sometimes called “star contractors.” In 1845, Congress first mandated that the Postmaster 
General openly bid mail transportation contracts and award them to the lowest bidders who tendered “sufficient 
guarantees for faithful performance, without other reference to the mode of such transportation than may be necessary 
to provide for the due celerity, certainty, and security of such transportation” (5 Stat. 738). To save time and effort, 
postal clerks often substituted asterisks for the words “celerity, certainty, and security” when they recorded these postal 
contracts in ledgers; hence, the terms “star contracts” and “star contractors.” National Postal Museum, “What Is a Star 
Route?” at http://www.postalmuseum.si.edu/starroute/sr_02.html. 
4 Here, a “supplier” refers to a person or private firm that has a contract with USPS. 
5 USPS, Highway Contract Routes—Box Delivery Service, Handbook P-5 (Washington: USPS, 2004). 
6 The NALC had expressed concerns regarding the use of contractors to deliver mail in 2006. National Association of 
Letter Carriers, “Young Warns That Contracting Out Mail Delivery Could Weaken Nation’s Defense Against 
Terrorism,” press release, August 14, 2006, at http://www.nalc.org/news/release/pr081406.html. 
7 National Association of Letter Carriers, “2006-2011 National Agreement between the National Association of Letter 
Carriers and the U.S. Postal Service,” September 2011. 
8 Ibid., pp. 191-193. 
9 Ibid., p. 192. 
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The U.S. Postal Service’s Use of Contractors to Deliver Mail 
 
existing policies and practices concerning the contracting out of mail delivery. The 
Committee shall seek to develop a meaningful evolutionary approach to the issue of 
subcontracting, taking into account the legitimate interests of the parties and relevant public 
policy considerations.10 
The National Rural Letter Carriers Association (NRLCA), which represents rural delivery 
persons, also reached a collective bargaining agreement with the USPS in 2006.11 Its Article 32 
carries the following language on the use of contractors to deliver mail: 
The Employer will give advance notification to the Union at the national level when 
subcontracting which will have a significant impact on bargaining unit work is being 
considered and will meet to consider the Union’s views on minimizing such impact. No final 
decision on whether or not such work will be contracted out will be made until the matter is 
discussed with the Union [....]No expansion of the Employer’s current national policy on the 
use of contract service in lieu of rural carriers will be made except through the provisions of 
this Article, which are intended to be controlling. The parties recognize that individual 
problems in this area may be made the subject of a grievance.12 
In 2007, representatives of both NALC and NRLCA alleged that the USPS was expanding its use 
of CDS carriers. William Young, then-president of the NALC, called upon Congress to “stop the 
cancer of contracting out before it spreads.”13 Members of the NALC picketed the USPS’s 
national headquarters and post offices in Florida and New Jersey.14 
The USPS denied the unions’ accusation, and argued that contract mail delivery was “not new.”15 
The USPS also stated that its contracts with the postal unions recognize the USPS’s authority to 
use contractors.16 Nevertheless, the USPS further noted that “cost pressures, competition, and a 
changing marketplace demand cost-effective options from the Postal Service.”17  
Subsequently, a 2008 Government Accountability Office (GAO) study found that the average 
annual cost of delivery by a city carrier was nearly twice that of a CDS carrier.18 
Congressional Action 
Some Members of the 110th Congress expressed concern about the USPS’s practice of hiring 
contractors to collect and deliver mail. 
                                                 
10 Ibid., p. 191. 
11 National Rural Letter Carriers Association, “Agreement between the United States Postal Service and the National 
Rural Letter Carriers’ Association 2006–2010,” December 2006. 
12 Ibid., pp. 128-129. 
13 National Association of Letter Carriers, “Young Urges Congress to Block USPS Policy of ‘Contracting Out,’” NALC 
Bulletin, April 20, 2007, p.1. 
14 National Association of Letters Carriers, press releases from 2007, at http://www.nalc.org/news/release/index.html. 
15 USPS, “Contracting by the U.S. Postal Service—Not New!,” press release, April 2007, p. 1. 
16 For example, see National Association of Letter Carriers, “2006-2011 National Agreement between the National 
Association of Letter Carriers and the U.S. Postal Service,” pp. 191-193. 
17 U.S. Postal Service, “Contracting by the U.S. Postal Service—Not New!” pp. 1-2. 
18 U.S. Government Accountability Office, U.S. Postal Service: Data Needed to Assess the Effectiveness of 
Outsourcing, GAO-08-787, July 24, 2008, p. 10. 
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On March 28, 2007, Representative Albio Sires introduced H.Res. 282, which expressed “the 
sense of the House of Representatives that the United States Postal Service should discontinue the 
practice of contracting out mail delivery services.” H.Res. 282 was referred to the House 
Committee on Oversight and Government Reform (HCOGR) and was cosponsored by 256 
Members. Not quite two months later, Senator Tom Harkin introduced S. 1457 on May 23, 2007. 
The bill would have forbidden the USPS from entering “into any contract ... with any motor 
carrier or other person for the delivery of mail on any route with 1 or more families per mile.” 
The bill would have permitted all existing CDS contracts to remain in effect and to be renewed. 
S. 1457 was referred to the Senate Committee on Homeland Security and Governmental Affairs 
and had 38 cosponsors.19  
The HCOGR’s Subcommittee on Federal Workforce, Postal Service, and the District of Columbia 
considered the issue at April and July hearings.20 Both the NALC and the NRLCA said that 
contractors should not be trusted to deliver the mail.21 Three Members present at the July hearing 
spoke of contractors delivering mail in suburban and city locations, including the Bronx of New 
York.22 The NALC stated that private employers—unlike the USPS—are not required to give 
preference to veterans in hiring.23 The USPS testified that it was not replacing career carriers with 
contractors, and that it assigned only new delivery routes to contractors.24 John Potter, then-
Postmaster General, declared that the USPS had “made a commitment for the life of this 
agreement [with the NALC] not to contract out any city delivery in big cities” and to work with 
both unions on the use of contractors in suburban and rural areas.25 The use of contractors to 
deliver mail also was discussed at a Senate hearing.26 
After lengthy negotiations, the NALC and the USPS signed an MOU in October 2008.27 This 
agreement extended through the life of the collective bargaining agreement the moratorium 
                                                 
19 Ultimately, none of these bills were reported by their committees. 
20 U.S. Congress, House Committee on Oversight and Government Reform, Subcommittee on Federal Workforce, 
Postal Service, and the District of Columbia, The U.S. Postal Service: 101, hearing, 110th Cong., 1st sess., April 17, 
2007 (Washington, DC: GPO, 2008); and U.S. Congress, House Committee on Oversight and Government Reform, 
Subcommittee on Federal Workforce, Postal Service, and the District of Columbia, Inquiring Minds Want to Know: 
What Is the Postal Service Contracting Out? hearing, 110th Cong., 1st sess., July 19, 2007, (Washington: GPO, 2009). 
21 See Statement of Donnie Pitts, President, National Rural Letter Carriers Association, U.S. Congress, House 
Committee on Oversight and Government Reform, Subcommittee on Federal Workforce, Postal Service, and the 
District of Columbia, The U.S. Postal Service 101, p. 160. CRS has not located data to substantiate this claim. On the 
USPS’s screening and oversight of its employees and contractors, see U.S. Government Accountability Office, U.S. 
Postal Service: Data Needed to Assess the Effectiveness of Outsourcing, GAO-08-787 (Washington: GAO, July 2008), 
pp. 24-30. 
22 U.S. Congress, House Committee on Oversight and Government Reform, Subcommittee on Federal Workforce, 
Postal Service, and the District of Columbia, Inquiring Minds Want to Know: What Is the Postal Service Contracting 
Out? pp. 1-2, 8, and 10. 
23 Statement of William H. Young, President, National Association of Letter Carriers, in U.S. Congress, House 
Committee on Oversight and Government Reform, Subcommittee on Federal Workforce, Postal Service, and the 
District of Columbia, Inquiring Minds Want to Know: What Is the Postal Service Contracting Out? p. 161. 
24 Statement of Alan Kessler, Vice Chairman, Board of Governors, U.S. Postal Service, in ibid., p. 49.  
25 Statement of John G. Potter, Postmaster General, U.S. Postal Service, in ibid., p. 45. 
26 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Sub-Committee on Federal 
Financial Management, Government Information, Federal Services, and International Security, Views from the Postal 
Workforce On Implementing Postal Reform, hearing, 110th Cong., 1st sess., July 25, 2007, S.Hrg. 110-320 (Washington, 
DC: GPO, 2008). 
27 National Association of Letter Carriers and U.S. Postal Service, “Memorandum of Understanding re: Assignment of 
City Delivery,” M01694, October 22, 2008. 
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against new CDS contracts in post offices employing city carriers. Additionally, the MOU 
required any new deliveries to be assigned according to geographic boundaries agreed upon by 
the NALC, NRLCA, and USPS.28 That same year, the NRLCA and the USPS worked out their 
differences over the use of private mail delivery contractors via the grievance process set forth in 
the NRLCA-USPS collective bargaining agreement.29  
Recent Developments 
In November 2010, the NRLCA-USPS collective bargaining agreement expired. A year later, the 
NALC-USPS contract expired. The USPS and the two unions had negotiations and entered 
mediation, but were unable to settle their differences. At the time of the writing of this report, the 
USPS and the NRLCA had entered binding arbitration, and the USPS and the NALC were 
expected to soon do the same.30  
Although the USPS and the two unions have pledged to honor the expired collective bargaining 
agreements, it is unclear whether the mail contracting MOU’s remain in force.31 Arbitration for 
both the NRLCA and the NALC contracts likely will be completed in the coming months.32 
Should arbitration fail to address the hiring of CDS carriers to deliver mail in a mutually 
agreeable way, Congress again may be approached to consider the matter. 
The USPS’s Authority to Contract vs. Employee 
Compensation 
The Postal Reorganization Act of 1970 (PRA; P.L. 91-375; 84 Stat. 725) replaced the U.S. Post 
Office Department with the USPS, an independent establishment of the executive branch (39 
U.S.C. 201). The PRA requires the USPS to “maintain an efficient system of collection, sorting, 
and delivery of the mail nationwide” (39 U.S.C. 403(b)(1)). To this end, the PRA provides the 
USPS with considerable discretion over its operations. 39 U.S.C. 5005 authorizes the USPS to 
“obtain mail transportation service ... by contract from any person or carrier for surface and water 
transportation under such terms and conditions as it deems appropriate.” Additionally, Congress 
provided the USPS with the authorities to (1) “enter into and perform contracts” (39 U.S.C. 401); 
(2) “provide for the collection, handling, transportation, delivery, forwarding, returning, and 
holding of mail” (39 U.S.C. 404(a)(1)); and (3) “establish mail routes and authorize mail 
transportation service thereon” (39 U.S.C. 5203(a)).33  
                                                 
28 Ibid., p. 2. 
29 National Rural Letter Carriers Association, “Agreement between the United States Postal Service and the National 
Rural Letter Carriers’ Association 2006–2010,” Article 15. An example of a grievance over the use of CDS is 
grievance COOR-4C-C03150754, class action, Maineville, OH 45039-9998, July 11, 2008. 
30 39 U.S.C 1207 sets this three-step collective bargaining process between the USPS and its employee unions. 
31 The NALC claims the USPS does not believe the MOUs remain in force. Jim Sauber, Chief of Staff, National 
Association of Letter Carriers, e-mail to CRS, May 16, 2012. 
32 39 U.S.C. 1207 requires an arbitration board, once impaneled, to render its decision within 45 days. The impaneling 
of an arbitration board, however, can take considerable time. 
33 On USPS’s power to contract with private carriers for the transportation of mail, see 39 U.S.C. 5001 et seq. and 39 
(continued...) 
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However, the PRA also carries provisions relating to USPS employee compensation. For one, the 
PRA sets a compensation and benefits floor: 
It shall be the policy of the Postal Service to maintain compensation and benefits for all 
officers and employees on a standard of comparability to the compensation and benefits paid 
for comparable levels of work in the private sector of the economy (39 U.S.C. 1003(a)). 
Additionally, letter carriers are civil servants and, under the PRA, are entitled to wages 
established through contracts collectively bargained by the USPS and postal unions (39 U.S.C. 
1001(b) and 39 U.S.C. 1201 et seq.). The NALC has contended that the USPS’s use of CDS 
carriers instead of USPS mail carriers “violates the spirit of the nation’s basic postal law.”34 Using 
contractors, the union has said, circumvents the collective bargaining process and opens the door 
for the USPS to replace all career mail carriers with contractors. 
Hence, the PRA’s provisions regarding the USPS’s authority to contract and operate an “efficient” 
system of mail may be at tension with the statute’s provision on USPS employee compensation. 
The Extent of the USPS’s Use of Contractors to 
Deliver Mail 
Between 1998 and 2012, the number of carrier routes35 served by CDS carriers increased from 
5,424 to 9,991, or 84.2% (Table 1). Similarly, over the past 15 years the number of delivery 
points served by CDS carriers has increased from 1,828,257 to 2,680,140, or 46.6% (Table 3). 
However, throughout this period, the USPS career city and rural carriers delivered mail on the 
vast majority of postal carrier routes—not less than 95.6% (Table 2). City and rural carriers also 
have served at least 98% of the nation’s delivery points (Table 4). 
Thus, although the USPS has increased its use of CDS carriers to deliver mail, these contractors 
serve on 4.4% of all routes and deliver mail at 2% of all delivery points.36 
Additionally, the data show a shift between the portions of the total routes and deliveries handled 
by city and rural letter carriers. The percentage of routes served by rural carriers has grown from 
26.5% to 32.4%, while the percentage of routes served by city carriers has declined from 71.2% 
to 63.2%. Additionally, the percentage of delivery points served by rural carriers has increased 
from 25.4% to 30.7%; whereas the percentage of delivery points served by city carriers has 
decreased from 73.0% to 67.3%. 
                                                                  
(...continued) 
U.S.C. 5201 et seq. 
34 NALC, “Contracting Out, Collective Bargaining and the NALC Contract,” press release, April 18, 2007. 
35 A “carrier route” refers to a set of addresses to which a letter carrier delivers mail. 
36 The figures comport with GAO’s analysis. See U.S. Government Accountability Office, U.S. Postal Service: Data 
Needed to Assess the Effectiveness of Outsourcing, pp. 22-23. A “delivery point” is the address or location of a 
dwelling or place of business to which mail is delivered. 
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Table 1. Postal Carrier Routes: Who Delivers? 
Fiscal Year 
City Carriers 
Rural Carriers 
CDS Carriers 
Total Routes 
1998 167,262  62,338 
5,424  235,024 
1999 166,455  64,706 
5,500  236,661 
2000 167,470  67,372 
5,648  240,490 
2001 167,762  69,066 
5,760  242,588 
2002 165,816  69,361 
5,857  241,034 
2003 164,652  69,697 
5,953  240,302 
2004 164,412  70,792 
6,026  241,230 
2005 164,419  72,658 
6,127  243,204 
2006 163,412  74,937 
6,346  244,695 
2007 163,530  76,008 
6,531  246,069 
2008 163,389  76,597 
6,676  246,662 
2009 150,808  76,938  10,538  238,284 
2010 149,920  74,822  10,385  235,127 
2011 143,521  74,277  10,096  227,894 
2012a 143,692  73,596 
9,991  227,279 
 Source: Data provided by the USPS. 
a.  FY2012 data are from the end of the second quarter of FY2012.  
Table 2. Postal Carrier Routes: Who Delivers? (%) 
Fiscal Year 
City Carriers 
Rural Carriers 
CDS Carriers 
Total 
1998 71.2%  26.5% 
2.3% 
100% 
1999 70.3%  27.3% 
2.3% 
100% 
2000 69.6%  28.0% 
2.3% 
100% 
2001 69.2%  28.5% 
2.4% 
100% 
2002 68.8%  28.8% 
2.4% 
100% 
2003 68.5%  29.0% 
2.5% 
100% 
2004 68.2%  29.3% 
2.5% 
100% 
2005 67.6%  29.9% 
2.5% 
100% 
2006 66.8%  30.6% 
2.6% 
100% 
2007 66.5%  30.9% 
2.7% 
100% 
2008 66.2%  31.1% 
2.7% 
100% 
2009 63.3%  32.3% 
4.4% 
100% 
2010 63.8%  31.8% 
4.4% 
100% 
2011 63.0%  32.6% 
4.4% 
100% 
2012a 63.2%  32.4% 
4.4% 
100% 
 Source: Data provided by the USPS. 
a.  FY2012 data are from the end of the second quarter of FY2012.  
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Table 3. Delivery Points: Who Delivers? 
Fiscal Year 
City Carriers 
Rural Carriers 
CDS Carriers 
Total Delivery Points 
1998 82,253,861 28,584,565  1,828,257 
112,666,683 
1999 82,751,573 29,710,113  1,903,926 
114,365,612 
2000 83,329,025 30,928,654  1,987,629 
116,245,308 
2001 83,761,600 32,075,719  2,057,084 
117,894,403 
2002 84,211,501 33,273,630  2,128,507 
119,613,638 
2003 84,698,811 34,516,943  2,211,395 
121,427,149 
2004 85,152,346 34,990,114  2,220,856 
122,363,316 
2005 85,804,626 36,189,631  2,304,748 
124,299,005 
2006 86,292,173 37,365,860  2,410,317 
126,068,350 
2007 86,882,476 38,382,966  2,588,321 
127,853,763 
2008 87,285,388 39,092,100  2,542,627 
128,920,115 
2009 87,578,790 39,445,518  2,621,690 
129,645,998 
2010 87,958,109 39,605,344  2,642,875 
130,206,328 
2011 88,252,912 40,026,528  2,666,417 
130,945,857 
2012a 88,399,246 40,277,649  2,680,140 
131,357,035 
 Source: Data provided by the USPS. 
a.  FY2012 data are from the end of the second quarter of FY2012.  
Table 4. Delivery Points: Who Delivers? (%) 
Fiscal Year 
City Carriers 
Rural Carriers 
CDS Carriers 
Total 
1998 73.0%  25.4% 
1.6% 
100% 
1999 72.4%  26.0% 
1.7% 
100% 
2000 71.7%  26.6% 
1.7% 
100% 
2001 71.0%  27.2% 
1.7% 
100% 
2002 70.4%  27.8% 
1.8% 
100% 
2003 69.8%  28.4% 
1.8% 
100% 
2004 69.6%  28.6% 
1.8% 
100% 
2005 69.0%  29.1% 
1.9% 
100% 
2006 68.4%  29.6% 
1.9% 
100% 
2007 68.0%  30.0% 
2.0% 
100% 
2008 67.7%  30.3% 
2.0% 
100% 
2009 67.6%  30.4% 
2.0% 
100% 
2010 67.6%  30.4% 
2.0% 
100% 
2011 67.4%  30.6% 
2.0% 
100% 
2012a 67.3%  30.7% 
2.0% 
100% 
 Source: Data provided by USPS. 
a.  FY2012 data are from the end of the second quarter of FY2012.  
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Concluding Observations 
Current postal law requires the USPS to operate an “efficient” system of mail and provides the 
USPS with various authorities to achieve this objective. However, the law also sets a pay and 
compensation floor for USPS employees and requires the USPS to collectively bargain with its 
employees. 
These aspects of postal law come into conflict in the matter of the USPS using private persons or 
firms to deliver mail. The data above indicate that the USPS has increased its use of contractors 
over the past 15 years. Yet, the data also indicate that contractors serve only a very small 
percentage of carrier routes and deliver to very few homes and businesses. 
Whether the use of private persons and firms to deliver mail will arise as an issue of interest to 
Congress is unclear. The USPS, NALC, and NRLCA may settle the matter through arbitration 
and any ensuing agreements. 
In the event that the use of contractors cannot be settled through the parties themselves, there are 
at least two broad perspectives that might be taken on the situation. 
First, it might be argued that Congress should take no action. Historically, Congress has not 
enacted specific policies concerning the extent of the USPS’s use of contractors to deliver mail. It 
has left the matter to be decided by the Postal Service and its letter carrier unions through 
collective bargaining and the grievance process. Congress may continue this practice, reasoning 
that the USPS has legitimate grounds to pursue cost-savings via the use of contractors. Indeed, it 
might be further contended that the use of contractors to deliver mail is in keeping with long-time 
USPS practices. Contractors have been used to collect, transport, sort, and deliver mail; and 
machines built by private firms do much of the mail sorting work once performed by USPS 
employees. Letter carriage would not appear to be an inherently governmental function under 
current procurement policy, so the USPS should be free to outsource this work as it deems 
proper.37  
Second and alternately, Congress may choose to intervene, viewing the issue as involving an 
unintended conflict arising out of two national policies—USPS operational efficiency and the 
rights of unionized, federal employees. From this perspective, it could be argued that the USPS is 
supposed to be a self-supporting agency; but that does not necessitate that the USPS should be 
permitted to outsource however much postal work it chooses. It might be further argued that there 
is a positive societal benefit in the federal government hiring individuals (often minorities and 
veterans) and compensating them well.38 Thus, Congress might either ban the practice of using 
contractors to deliver mail (or perform other mail-movement activities); or it could limit the 
amount of mail delivery work performed by contractors—perhaps by capping the percentage of 
routes served by non-USPS employees. Were Congress either to ban or limit the use of 
contractors, it might wish to consider helping the USPS recoup any lost savings by providing it 
with additional authorities to increase its revenues or decrease its operating costs. 
                                                 
37 On inherently governmental activities, see CRS Report R42039, Performance of Inherently Governmental and 
Critical Functions: The Obama Administration’s Final Policy Letter, by Kate M. Manuel, L. Elaine Halchin, and Erika 
K. Lunder. 
38 According to the USPS, 21% of USPS career employees are veterans and 41% are minorities. Polly J. Gibbs 
Government Relations, U.S. Postal Service, “Requested Figures,” e-mail, April 25, 2012. 
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Author Contact Information 
 
Kevin R. Kosar 
   
Analyst in American National Government 
kkosar@crs.loc.gov, 7-3968 
 
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