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mail types, then the overall OCR accept, productivity, and savings rates would decline, all other things being equal.

As to the possibility of higher than expected costs, the greatest vulnerability appears to be in the labor area, not in equipment. Although it is too early to have hard figures, it is possible that OCR maintenance labor costs will be higher than anticipated.

All factors considered, OTA concluded that the USPS baseline estimate of clerk/carrier savings was probably somewhat optimistic. OTA assumed that there is a 5 percent chance that the actual savings rate will equal or exceed 100 percent of the USPS baseline savings estimate, a 50-50 chance that the savings rate will be above or below 90 percent of the USPS baseline estimate, and a 5 percent chance that the actual rate will be equal to or less than 80 percent of the USPS estimate.

Multi-line OCR Cost.

OTA noted some uncertainty about the purchase and

maintenance

costs

of

the

multi-line

OCR.

Firm

estimates

are

not

possible

in

the

absence

of

a

competitive

bidding

on

and

operational

experience

with

a

large

number

of

multi-line

OCRs.

USPS

has

estimated

that

multi-line

OCRs

would

cost

$200,000

more

per

unit

to

buy than single-line OCRs, or about $950,000 OCR unit (capital and expense) used in the Governors.

compared to the USPS proposal

$750,000 (per single-line to the Postal Board of

However, based on best available engineering judgment, OTA concluded that a

$100,000 purchase cost difference is more realistic. Also, OTA conducted a sensitivity analysis on multi-line OCR purchase prices of $750,000, $850,000, and $950,000 and found that the impact on ROI/NPV was negligible, as will be discussed in a later section.

48

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