PURCHASING AND CONTRACT ADMINISTRATION
This chapter of the report reviews the purchasing and central receiving operations of the Austin Community College (ACC) in the following areas:
- A. Purchasing
- B. Contract Administration
- C. Central Receiving
- D. Mail Services
D. MAIL SERVICES
Each ACC campus has a small mailroom operated in conjunction with the campus manager's office. Mailrooms are equipped with mail slots for each faculty and staff member for letters and flat packages.
The U.S. Post Office and various courier services deliver all general mail to the ACC Service Center where mail clerks sort it for delivery to the campuses. The mail clerks deliver mail to the major campuses twice per day-once in the morning and once in the afternoon-and package mail for the satellite sites for shipment every two to three days. Once the Service Center mail staff deliver general mail to each campus, and the U.S. Post Office delivers mail specifically addressed to individual campuses, either the campus mail clerk or another staff person in the campus manager's office places letters into recipients' mail slots. Service Center staff typically deliver large packages and large inventory items ordered by campus faculty and staff from the warehouse directly to intended recipients.
ACC does not operate Mail Services as a revenue generating division, nor does ACC provide mail or package services to students. Faculty and staff provide charge codes to mail services so that mail services can charge the actual cost of postage back to the user departments.
FINDING
ACC's Mail Services unit uses handheld electronic data organizers to track package delivery to departments in much the same manner that the large, national courier services use electronic devices. Mail clerks use a scanning device to capture package information from barcodes printed on shipping manifests; however, they must manually enter purchasing and inventory information into ACC's Datatel system. Upon delivery, recipients provide electronic signatures via the electronic data organizers. The mail clerks place the electronic data organizers into a docking station after making all deliveries. The docking station then inputs the electronic signatures into the mail management system along with previously entered shipping, purchase order and inventory information.
While this system requires that the Inventory/Receiving clerks use two non-integrated systems to record package receipt and delivery data, it has been effective for establishing package accountability because it allows all of ACC's mailroom clerks to know that a package is either en route or delivered, as well as the name of the individual who signed for the delivery. Prior to implementing the system, mailroom staff often wasted valuable time looking for misplaced packages. This system allows mailroom staff to concentrate on other mailroom functions.
ACC selected the lowest bidder providing comparable mail management systems through a competitive bid process. The Neopost Mail Manager MM620 system costs ACC $13,566 per year and includes unlimited training compared to a comparable system quoted at $29,052 per year that included limited training.
COMMENDATION
By maximizing its use of information technology devices to establish package accountability, ACC's Mail Services unit enhanced the effectiveness of operations.
FINDING
ACC does not take advantage of opportunities to minimize postage costs. The review team observed about 6,000 returned items each bearing full first-class postage rates. ACC also does not verify student addresses. Because of this, ACC annually wastes over $6,600 in postage, based on 18,000 returned items at the current first-class postage rate of $.37 per item, for items mailed to incorrect addresses.
While bulk mail rates and non-profit mail rates are not available for personal information such as grades and other sensitive correspondence that the law requires be sent first class, alternatives to full first-class postage rates exist. Houston Community College System (HCCS) uses the first-class barcode rate on all routine mailings at a rate of about $.253 per piece. HCCS applies barcodes using in-house presorting equipment and contends that they could save more money if they used a vendor to barcode and presort their correspondence.
Exhibit 7-20 presents potential cost savings that ACC could realize by changing from full first-class postage to the first-class barcode rate.
Exhibit 7-20 Source: ACC Fact Book 2001-02 and Spring and Summer 2002 registration updates provided by the Office of Institutional Effectiveness.
Potential Savings Generated by Use of First-Class Barcode Rate
2001-02
2001-02 Fall Enrollment 27,577 Spring Enrollment 28,505 Summer Enrollment 21,040 Total Number of Grade Reports mailed 77,122 Postage cost at regular first-class rate* $28,535
*Reflects postage rate of $.37, which became effective July 1, 2002.Also, the Address Management Services (AMS) Division of the United States Postal Service offers address clean-up services. AMS can verify addresses using an electronic file containing student addresses. AMS can also correct incorrect addresses such as those with missing apartment numbers. AMS does not, however, detect the misuse of genuine addresses.
Collin County Community College District minimizes postage costs by only providing students with routine information such as grades electronically.
Recommendation 79:
Use first-class barcode postage rates and regularly update the student database with correct mailing addresses to reduce postage costs.
Use of the first-class barcode rate for large volume mailings or personal information such as grades could reduce ACC's postage costs. Using the address clean-up services offered by the U.S. Postal Service could reduce the volume of returned mail, which would reduce postage costs as well.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The Purchasing manager issues request for qualifications solicitation package or instructs buyer to solicit three bids for presort and barcoding services from mail service providers. January 2003 2. The Purchasing manager and buyer review bid responses to determine top bidders based on price and qualifications. April 2003 3. The Purchasing manager selects a mail services vendor. May 2003 FISCAL IMPACT
ACC sends grades to its student population three times per year resulting in 77,122 pieces of mail at the current postage rate of $.37 per piece, or about $28,535 per year (77,122 x $.37 = $28,535). Using the first-class barcode rate could reduce the cost of postage by about $9,023 annually assuming ACC can obtain a similar barcode rate to that of Houston Community College System, which is approximately $.253 per piece (77,122 x $.253 = $19,512, a difference of $9,023
($28,535 - $19,512 = $9,023). First-year savings are prorated ($9,023/12 x 4 = $3,008).
Recommendation 2002-03 2003-04 2004-05 2005-06 2006-07 Use first-class barcode postage rates and regularly update the student database with correct mailing addresses to reduce postage costs. $3,008 $9,023 $9,023 $9,023 $9,023