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conversions pending the results of several competitive development and testing efforts. This means that the best performing company would have a good chance for the

conversion opportunity

contract (estimated at about $130 million). for participating companies to use the R&D

A second incentive is the results on the world market,

even

if

USPS

does

not

buy

any

multi-line

OCRs.

A

third

incentive

would

be

the

prospect

of competing for the 10 percent of the Phase II procurement reserved OCRs (estimated at $34 million) under a split procurement option.

for

multi-line

Thus, a 90-10 split procurement option could involve several elements: reissuing the Phase II RFP for 363 (rather than 403) single-line OCRs; initiating competitive release-loan testing on multi-line OCRs; and awarding several development contracts for conversion kits, either all on a competitive basis or at least one on an open competitive basis even if the others are awarded sole source to Phase I and Phase II single-line OCR companies.

In addition to revising current automation strategy to give greater emphasis to multi-line OCRs, USPS may also wish to strengthen its commitment to research and development, which is still well below industry averages, and aggressively pursue further opportunities for improved performance of postal automation.

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