As part of an initiative called the Advanced Computing Environment, or ACE, the USPS will centralize computer systems for 130,000 people at some 28,000 facilities nationwide, officials said.

Among other things, the project calls for the following:

• Eliminating redundant and older software packages, dropping the total number used from 270 to 60

• Replacing 85 district help desks with one central desk

• Dropping the number of servers from 13,000 to 1,500

• Consolidating the number of support locations from 11,000 to 540

"Our current infrastructure is a mixture of new and old--mostly old," USPS Chief Technology Officer Charles Bravo said in a statement. "Most equipment is five to seven years old. Seventy percent of our computers are no longer covered by warranty. We support an extremely wide range of software packages. It is a difficult balancing act to support, and integrate, multiple versions of operating software."

The $200 million in savings is certainly needed at the Postal Service, which lost $303 million in the second quarter and saw revenue come in $621 million short of expectations. The USPS has been struggling with declining mail volume as citizens turn more and more to e-mail and professional package delivery services.

Robert Otto, vice president of information technology at the USPS, said the overhaul is being paid for with money already budgeted. Otto joined the post office in March 2001 and began developing the ACE project soon afterward.

"You're taking a large organization and, in essence, redoing the entire organization's infrastructure," he said. "When it's all said and done, you have everything new, state-of-the-art, and it costs you less."

The Postal Service has been able to eliminate much of the infrastructure by transferring applications to the Web, Otto said.

"If you're running a mail-processing plant, you have all these applications within the plant to track mail, track expenditures, etc.," he said. "All these over the past 10 or 15 years were built on a client-server architecture.

"Two years ago, we started to rebuild many of the applications and set as policy that new development would be Web-based," he continued. "In doing that, I'm able to take a personal computer that used to have 150 applications loaded on it (and) now have nothing but a Web browser. It's almost a dumb terminal."

The Postal Service said it could also save money by renegotiating contracts, eliminating up to 800 contractor positions over the next 30 months, and cutting software license fees by reducing the number of packages used.

For instance, the USPS recently renegotiated a contract with Compaq Computer for PCs and workstations, extending its life span from six years to 10 years but reducing equipment costs by about 35 percent, Otto said. The USPS has also renegotiated deals with communications company WorldCom and services company EDS, he said.

Some of the upgrades in the plan will not result in immediate cost savings but should help the Postal Service become more efficient. For example, plans are under way to distribute BlackBerry handheld devices to some 2,000 post office executives and managers, replacing pagers and eventually cell phones.

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• Post office gives up on wireless service March 21, 2002
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