Background
A key facet of the U.S. Postal Service’s Delivering for America plan centers around a nearly $10 billion investment – including $3 billion in federal funds – for modernizing and electrifying parts of its aging delivery vehicle fleet. The Postal Service plans to acquire 106,480 new vehicles between fiscal years (FY) 2023-2028, which includes a mix of purpose-built (such as the Next Generation Delivery Vehicles (NGDV)), commercial-off-the-shelf (COTS), and internal combustion engine (ICE) and battery electric vehicles (BEV). Modernizing the fleet will help reduce costs and enhance safety and service.
What We Did
Our objective was to assess the status of the Postal Service’s acquisition of new delivery vehicles. We met with Postal Service Headquarters officials; reviewed related policies, milestones, and other documentation; and observed new vehicle testing.
What We Found
The Postal Service acquired about 22,500 new delivery vehicles, mostly COTS ICE, between March 2023 and June 2024. Timely acquisition of these vehicles was mixed, with some arriving on time, while others experienced months-long delays due to supplier design, production, and supply chain issues, or inadequate Postal Service infrastructure preparedness. For example, the original NGDV plan was to acquire over 3,050 vehicles by June 2024, but the most recent plan included only 28. As delays occurred, the Postal Service negotiated with suppliers, refrained from making vehicle payments until receipt, and adjusted acquisition dates and quantities.
Ongoing vehicle acquisition delays will continue to put the timelines for fleet modernization, cost savings, and sustainability at risk. We estimate BEV and NGDV acquisition delays postpone over $77 million in expected savings between FYs 2024-2025. While the Postal Service continues to implement a variety of mitigation efforts and contingencies, they did not include data on financial and sustainability impacts associated with the ongoing delays or potential options or strategies going forward. Making enhancements in this area may help ensure the Postal Service meets its remaining acquisition balance of nearly 84,000 more vehicles by FY 2028.
Recommendation and Management’s Comments
We recommended the Postal Service include pertinent financial and sustainability impact data in its vehicle acquisition strategy and related contingencies. Management disagreed and we will work with them through the formal audit resolution process.
