SOLICITATION NOTICE
B -- Calculating Postal Price Changes When Quality of Service Varies - RFP PRC-2017-1 Calculating Postal Price Changes 11-14-16
- Notice Date
- 11/14/2016
- Notice Type
- Combined Synopsis/Solicitation
- NAICS
- 541618
— Other Management Consulting Services
- Contracting Office
- Postal Regulatory Commission, PRC Office of Administration, PRC HQ, 901 New York Avenue NW, Suite 200, Washington, District of Columbia, 20001
- ZIP Code
- 20001
- Solicitation Number
- PRC-2017-1
- Point of Contact
- Gregory Gray, Phone: 202-789-6840, Margaret Cigno, Phone: 202-789-6855
- E-Mail Address
-
gregory.gray@prc.gov, margaret.cigno@prc.gov
(gregory.gray@prc.gov, margaret.cigno@prc.gov)
- Small Business Set-Aside
- N/A
- Description
- Postal Regulatory Commission, OAC Background on the Postal Price Cap and Service Performance Background Postal Legislation : The Postal Accountability and Enhancement Act (PAEA) established an inflation-based cap on the annual rate of price increase in each major category of domestic mail service for which the Postal Service is considered the market-dominant supplier. The PAEA also required establishment of modern service standards (section 3691 of Title 39). In addition, the PAEA required the Postal Regulatory Commission (PRC) to make annual determinations on whether any service standards in effect during the previous fiscal year were not met (section 3653(b)(2) of Title 39). Further, section 3622(a) of Title 39 required the PRC to establish a modern system for regulating rates designed to achieve 9 objectives, taking into account 14 factors. One of those objectives is to maintain high quality service standards established under section 3691. Section 3622(d)(3) of Title 39 requires the PRC - ten years after the date of enactment for the PAEA - to "review the system for regulating rates and classes for market dominant products...to determine if the system is achieving the objectives in subsection (b)...The [PRC] may, by regulation, make such modification or adopt such alternative system for regulating rates and classes for market-dominant products as necessary to achieve the objectives." It is because of this review that the PRC is undertaking this study and issuing this RFP. Operational Changes Impacting Service Performance Results: In July 2012, the Postal Service closed approximately 150 mail processing plants and eliminated overnight delivery for roughly 20 percent of the mail that had been receiving it. In March 2013, the Postal Service implemented its Load Leveling plan, which allowed Standard Mail normally delivered on Monday to be pushed to Tuesday. This added a day to the delivery time of much of Standard Mail. On January 1, 2015, the Postal Service eliminated overnight delivery for all First-Class single-piece mail, and added an extra day of delivery time for some presorted First Class Mail. Potential Link between a Price Cap System and Service Performance Results : The PRC is exploring potential methods of identifying and quantifying a link between a price cap system and the Postal Service's service performance results. One method, described in Pearsall and Trozzo (2011), uses a fitted hedonic price equation (HPE ). [1] Hedonic pricing identifies price factors on the premise that price is determined by internal characteristics of the item as well as external factors. In the case of postal services, an HPE relates tariffs to the properties of the delivery service offered for various pieces of mail. The hedonic properties include shape, weight per piece, speed of delivery, degree of presortation, distance transported, automation preparation, destination entry, size of mailing, et cetera. Changes in the hedonic properties of a piece of mail may be converted to an equivalent change in the piece's postal rate by measuring along the fitted HPE. For example, if speed of delivery has fallen, this could be considered equivalent to a price increase that can be calculated from the HPE. The equivalent price increase would then be added to the nominal price increase to calculate the overall price increase for a hypothetical piece with a fixed speed of delivery. This method could be generalized to account for changes in all of the known hedonic properties of the U.S. mail stream. [1] Pearsall, E. S., and C. L. Trozzo (2011), " Evaluating the Demand Effects of Reductions in the Frequency of Delivery Service" in Reinventing the Postal Sector in an Electronic Age, M. A. Crew and P. R. Kleindorfer (eds), Edward Elgar, Northampton, MA.
- Web Link
-
FBO.gov Permalink
(https://www.fbo.gov/spg/PRC/POA/PRCHQ/PRC-2017-1/listing.html)
- Place of Performance
- Address: 901 New York Ave. NW, Suite 200W, Washington DC 20268, Washington, District of Columbia, 20268, United States
- Zip Code: 20268
- Zip Code: 20268
- Record
- SN04326842-W 20161116/161114234132-49adf845964dbd629ba0514bc079ceec (fbodaily.com)
- Source
-
FedBizOpps Link to This Notice
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