PRC Documents Shed Light on Shady Staples Privatization Deal

In response to a lawsuit filed by the APWU, the Postal Regulatory Commission (PRC) has coughed up 231 documents that shed new light on the secretive deal between Staples and the Postal Service.

Perhaps most jarring is the acknowledgement that the Staples’ deal was intended to serve as a model for transferring postal retail operations from the U.S. Postal Service to private retailers.

The PRC released the documents only after extended legal wrangling. The APWU filed a Freedom of Information Act (FOIA) request with the PRC on May 30, 2014, requesting documents pertaining to the agreement between the USPS and Staples.

The PRC initially denied the request, but finally handed over the information on April 29, 2015, after the union filed a lawsuit.

Template for Takeover

“These documents show that the management’s dirty deal with Staples was designed to be a blueprint for offering postal services through private retailers. This privatization would dismantle the public Postal Service and close post offices.” observed APWU President Mark Dimondstein.

PRC Order No. 1870, dated Nov. 7, 2013, (Doc. 165), did more than simply approve the Staples deal, he noted. It designated the Staples deal as the baseline model for an entire class of  contracts with private providers of international package handlers, known as “Global Reseller Expedited Package Contracts.”  The Postal Regulatory Commission “designates the [Staples] Agreement as the baseline agreement for the GREP Contracts 3 product.”

The Sept. 25, 2013, Shipping Services Agreement, Section I.E. (Doc. 53) reveals that although Staples must sell package shipping at the published retail price, the Postal Service must pay Staples a rebate every month based on an undisclosed lower figure. “This is further evidence that the deal privatizes postal work with hidden rebates,” Dimondstein said.

“The material shows that the Staples deal degrades postal work,” he added.  “It reduces postal retail service to a ‘product’ that low-wage employees sell, rather than a public service performed by highly-trained professionals.”

Section II of the agreement reveals the extent of the Postal Service’s influence over Staples’ postal operation. It requires Staples to conduct joint quarterly business reviews with USPS management of the office-supply chain’s performance as a postal operator. The agreement shows that Staples is not just a distant licensee of the Postal Service; it is an integral part of the Postal Service’s operation.

Stealth Privatization

A March 22, 2011, USPS Board of Governors Decision (Doc. 203) listed as “Restricted and Sensitive Business Information,” reveals that the USPS Board of Governors first cleared the way for the partnership in 2011, long before the program was publicly announced in the fall of 2013.

Governors’ Decision No. 11-06 sets out a schedule of prices for Negotiated Service Agreements that the Staples deal followed two years later. The Governors’ Decision states at Attachment A:  “Competitive instruments are often negotiated with customers and foreign postal operators for better cost coverage, higher overall contribution, and improved service with respect to postal services classified as competitive.” 

When considered in conjunction with the 2013 Staples Agreement, the Governors’ Decision reflects an alarming direction for the Postal Service – to use discounts and rebates to induce private firms such as Staples to take over postal work.

The lower cost of low-wage private retailers was – and is – an integral part of the USPS Board of Governors’ marketing plan.

“These documents provide more evidence of the importance of our campaign to stop privatization. Secret deals like the one with Staples cannot survive public scrutiny in the light of day,” Dimondstein said.

“It’s regrettable that the PRC – which is supposed to act in the public’s interest – was complicit in keeping the details of the deal secret,” he added. The PRC reviewed the deal and listed it on a public docket but hid all references to Staples and specifics on volumes and discounts the retailer receives from the Postal Service, making it impossible for the APWU – or anyone else – to weigh in on the deal.