BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON,
D.C. 20268-OO@;
‘RECEIVED
25
r-j >:,, PM ‘36
Pl)jTAi RATECOHHISSIOH
OFFICE 0~ itii
SPECIAL SERVICES REFORM, 1996
Docket
SECF.ETCR'f.
'
No. MC96-3
COMMENTS
OF THE UNITED STATES POSTAL SERVICE CONCERNIN~G
REBUTTAL TESTIMONY
TO MAJOR MAILERS ASSOCIATIONWITNESSBENTLEY’S NEW ANALYSIS
,$<&gm--..
(November 25, 1996)
pr.yr;:;o
F
The United States Postal Service hereby files comments
con erni~g~\re$uttal:~
f ~.-testimony
to Major Mailers Association
(“MMA”)
witness Bentley’s new&@$+s$.rs&
_..,. d
proffered
allowed
at the hearing on November
witness
Service’s
wishing
Bentley’s
motion
testimony
The Postal Service
to
discovery
is simply
to make a reasoned
insufficient
of discovery
of
Association
Witness
United
new
cross-examination.
whether
Without
the
Service
Postal
applicable
Postal
Bentley’s
twice
Service
New Analysis,
to respond
See Letter
promptly
to questions,
from
See Supplemental
Major
1996,
at 1.
Bentley
fully
and to appear
Richard
there
for “the fwll range
to Strike
21,
full
sufficient
has indicated,
to allow
to make witness
rebuttal
for
nclt have
testimony.”
November
in filing
an opportunity
to Motion
and Attachme,?ts
any participant
Tr. 6/2031-32.
As the Postal Service
to all intervenor
has offered
that
does
schedule
Officer-,
a ruling on the Postal
it is interested
analysis.
decision.
States
for MMA
documents,
the Commission.
time left in the procedural
and rebuttal
Comments
Counsel
,_a-.
so inform
Bentley’s
pending
the,&esiding
and also requested
in unable to ascertain
witness
At that hearing,
into the record,
and oral cross-examination,
information
provide
new analysis
to strike the new analysis,
to file rebuttal
testimony
19, 1996.
Mailers
available
to
again for oral
L.ittell to Susan
M.
--~~-.
,/
“\
’
T
B
,&
Duchek,
November
appreciates
23,
counsel’s
of time available
offers,
or straightforward,
procedural
Bentley’s
that
documents.
added”
materials
discovery
period.
all source
materials
between
Allowing
record.
1
,.--,
analysis
of receiving
already
stand,
copies
The
point
is there
Bentley
appeared
on November
A similar situation
footnotes
is no time
Even had witness
properly
6, 1996,
footnoted,
examination
in the absence
Bentley’s
was presented
following
required
of adequate
with
time
tcl subject
by due process.
time for written
discovery
to cure the due procesis violation
materials
these
in a full
19, 1996,
testimony,
to
for first
there still was insufficient
the filing date for rebuttal
is not sufficient
if witness
witness
Mr. Littell goes on to state, “I am sendirlg
normally
testimony,
to
of the documents
additional
installments
rebuttal
is nol: simple
changes
or third
and everything
the lack
it at this late stage of
been
with
highlight
Service
new analysis.
Bentley’s
“I am enclosing
installment.”
to the comprehensive
have occurred
have
merely
less the second
and oral cross-examination,
will
added).’
then and December
his materials
there
The Postal
Bentley’s
witness
him on the witness
as a first
much
letter,
A.
those offers
to witness
As Mr. Littell states,
(emphasis
as Exhibit
the problem
In fact,
had with
to you
installments,
relating
Mr. Littell’s
schedule.
hereto
but, unfortunately,
thus compounding
Mr. Bentley
sources
attached
for full discovery
As can be seen from
the
1996,
2 -
are permitted
in Mail OrderAssociation
which
to remain
on the
ofAmerida
v. U.S.
As stated in one of the attachments
to the letter, OCA/MMA-XE-3
has been
“to supply the volume sources and the
revised by the addition of three footnotes
formula for making the adjusted PRC attributable
costs as well as corrections
to the
column heading numbers.”
-3-
_T-’
Postal
Service,
2 F.3d 408
Commission’s
mere
protections,
(D.C. Cir.
solicitation
of
1993).
There,
testimony
offered
the
Court
found
inadequare
due
tlhat
the
process
stating:
Nor can we accept
the Commission’s
contention
that
the initial
procedural defects were cured by the Commission’s
belated invitation to the
parties “to offer testimony.”
The simple taking of testimony
is no substitute
for the close scrutiny available in a full-blown
section 556 hearing onthe
record, replete with discovery, cross-examination
and rebuttal.
Thus,
mere rejection of the Commission’s
limited offer cannot be deemed a waiver
of the parties’ rights to insist on the full procedural panoply thalt was due.
Id. at 430
(citation
Likewise,
of revised
schedule
In that
and footnote
in Docket
estimates
burdening
_._.
by United
the Commission
the Postal Service
period of time before
the Commission
Parcel Service
stated,
by expecting
the corrected
Excluding
Testimony
from
Kolbe testimony.
the Evidentiary
concluded
witness
time for review
initial briefs are due.
excluding
1994.
No. R94-1,
did not allow adequate
instance,
omitted).
Kolbe late in the procedural
and evaluation
“[Tlhere
that the presentation
by other participants.
is no justification
for excessively
it to analyze this new testimony
On balance,
.I’
Record,
due process
Order Accepting
Order No.
in the short
is best served
Certification
103LS September
by
and
30,
,r--
-4For all of the foregoing
rebuttal
Moreover,
testimony
providing
of time for written
reasons,
to witness
the Postal Service
Bentley’s
solely for rebuttal
discovery
new
is unable to determine
analysis
testimony,
is necessary
in the absence
and oral cross-examination,
vvhether
or appropriate.
of a sufficient
period
does not meet the strictures
of due process.
Respectfully
UNITED
submitted,
STATES POSTAL SERVICE
By its attorneys:
Daniel J. Foucheaux, Jr.
Chief Counsel, Ratemaking
-.#A4
Susan M. Duchek
CERTIFICATE
I hereby certify
participants
of record
of Practice.
OF SERVICE
that I have this day served the foregoing document
upon all
in this proceeding in accordance
with section 12 of the Rules
+57ZZLh.&Susan M. Duchek
475 L’Enfant Plaza West, S.W.
Washington,
D.C. 20260-I
137
(202) 268-2990;
Fax -5402
November 25, 1996
LAW OFFICES
RICHARD LITTELL
EXHIBIT
(15
1220 Nineteenth Stmet, N.W.
Suite 400
Washington, DC 20036
A
pages)
005984
Tuhcopier.(202)293-4377
Direct Dial: (202) 466-8260
November
22,
1996
BY FACSIMILE
Busan
n.
Duchek,
Attorney
Law Dspartment
United
Btates
Postal
Sarvic8
475 L'Enfant
Plaza
West,
S.W.
Washington,
D.C. 20260-1137
PAX:
(202)
Dear
Susan:
268-5402
I want to renew my offer,
niede
at last
Tuesday's
hearing
(Tr.
6:2011,
2013),
to provide
the Postal
Service
vith
any additional
information
it desires
regarding
(1) KWA vitness
Bentley's
statements
made during
OCA’s
cross-examination
and (2) hr. Bentley's
computations
underlying
those
statements
and Exhibits
OCAflMA-XE-1
through
OCA/kWAXE-3 (Tr.
6:2008-11,
2039-41).
In addition
to being
available
for recall
at th8 hearings,
Mr.
Bentley
will,
upon request,
provide
the Service
with
all
his
calculations
and vorkpapers.
Mr Bentley
is also available
at any
time,
for formal
or informal
data
in person
or by telephone,
conferences
to answer
any questions
the
Service
has about
his answers
to OCA, the three
cross-examination
exhibits
and his methodology,
*ouroes,
computations
and workpaperr.
Mr. Bentley
vi.11 accept
formal
or formal
vritten
questions
or interrogatories
regarding
these
matters;
he will
respond
promptly
by facsimil8.
This offer
is effective
Commission's
resolution
of
the
immediately
Service's
and does not
notions
to
await
the
Strike.
As you vi11
recall,
at the hearing
I offered
to :provida
you with
documents
which,
for a time,
you thought
would bo sufficient
6: 2011-13).
Even though
you later
reconsidered
(Id.
at
ZOZS(Tr.
I
am
enclosing
copies
of
the
documents
that
Hr.
Bantl8y
had
with
311,
him on the witness
stand,
with
additional
footnotes
to sources
added.
I'm also
enclosing
pages from Docket
No. R94-1 materials
from which
I am sanding
these
materials
to you as a
Mr.
Bentley
derived
numbers.
first
installment.
certain
Please
advise
me if the Service
wants to schedule
any meetings
or
The Service
may send Written
data conferences
vith
Mr. Bentley.
questions
or int8rrogatories
directly
to hr. Bentley,
with
a copy to
me.
(nr.
Bentley's
facsimile
number during
th8 week is 703/281-0677.
except
thrt
this
coming weekend pleas8
send Hr. Bentley
a duplicate
facsimile
at 757/220-3215.)
Cordially,
,~9‘-I.mc,Dufhak.ltr
Z'd
LLEV
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9661-ZZ-L
1
Memorandum ro: Richard Litzcll
From: Rich Bentley
Subject: Oral Cross Examination Documents
Date: November 22,1996
Number of Pages: 4
To follow arc the workpapers that OCA provided as OCA/MMA-XEI, 2 and 3
with some minor corrections. Thesemodifications can be summarized as
follows:
For OCWMMA-XE-1 there were three spelling errors in titles.
For OCA/MhfA-XE-2
the.re acre no changesor corrections
For OCA/MMA-XEJ there were three foomotcs addedIO supply the volume
sources and the formula for making the adjustedPRC attributable costs as well
as corrections TOthe column headingnumbers.
,-
I
I
1
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Comparison of PRC and USPS Atlribulable Costs from TY 1995 in Docket No. RB4-1
AWib&be
USPS R94-1 Test Year
Accrued
Afifibutable
CQSI
AlI ~G:IA
AA COSI Segmenlr
AllCo=IA
A,, c-cl1
A
5
$33 268,462
$52.530.344
$34.193,077
651)9%
~52.592.438
All Cost Segments
352.530.344
s34,193,07i
65.09%
tw530.3.u
Al Co4
S52.592.436
65.69%
$52,530.344
Segmenls
II
41 $34.232,418
II PRC Opirion. Docket No. KM-I. Pppcndix D. p. 4
21 Accrued Cost adjurled #o PRC total
Y 52.530,344 * .6325
4f Accr.wdCostl djmled la USPS bla
51 52,592.438 - .6509
61 COl2.CCl5
51
PWcSnl
Atlribllable-
ml
4
21 $33.225.443
533,226,4c3
OCNMMA-XE-1
6
31
COEI
7
63.25%
$928.695
63.25%
S967.634
6325%
$l.396.C75
USPS Finances For TY 1995 Usina USPS and PRC Cost Mefhodologies
Dock No. MC96-3
($000)
~uialion
c$&ib&ble
Cost Olfferen~
USPS
PRC
AHrib CQsyl
!JrE1
1 Firs! Class Letters
2 Third Class BRR
3 All Other
917,515.829
58.317.013
$9.904.450
4 Grand TOM
833,737.292
cef
a( USPS and PRC Rates
2
II
II
II
Pat
Difference
Attrib w
A&&
(Cal 2 “Cd 1)
$18.045.650 21
$6,591.284 21
S10.043.323 21
s530,021
5274.271
ma.873
s34.680.457
S943,165
Cosl Fc&x
4
(Co13 /943,165)
50.20%
20.06%
14.72%
100.06%
USPS InstWonal CoslApDotionmenl Fm
USPS
-
USPS
A~bCw4.s
5
Rev
6
lnstiwiinal
Co3.fBurden
7
(Co16 - Col 6)
5 FirslCl;rssLeMers
6 Third Class BRR
7 All Other
$17.515,629
$6.317,013
$9,904,450
0 GrandTotal
$33,737,292
II
11
II
S31,766.238 I/ $14,272.409
89.739,013 II $3,422.000
S12.880,790 II 52,976,340
S54.400.041
I/ Docket No. R94-1, USPS-1IA. teproduced as Exhibii %%A-iE
21 Oocket No. R94.1, AppendiwG. Schedule 1
S20,670,740
of Exhitii
MM&T-:
USPS
Insfito(lonal Coaf
monmenlFactor
(ccl 7 I2&70.749)
69.05%
16.55%
14.40%
100.00%
OC&fMMA-E-2
USPS Finances For TY 1995 Using USPS and PRC Cosl Melhodologies al USPS Proposed Rales
(PRC AWiMable Costs Adjusted to ReelectUSPS Volumesat USPS Proposed Rates)
Docket No. R94-1
OCAtMMA-XE-3
OJW
&mouWion of Attributabta CQsl Difference
USPS
Attrii Co&
1
!&e-
PRC
Attrib Cos&Y
2
USPS
Proi Volurno
3
1 First Class Letters
2 Third Class 6RR
3 All Other
$17.515.829 1)
$6,317,013 II
$9.904,450 II
Sl8.045,650 2/
$6591,284 2/
$10.043,323 21
4 Grand Total
f33,737,292
$340680,457
179,047,100 3/
USPS
Rev-
Instttutiinal
-tation
PRC
Proi Volume
4
Adjusled PRC
.&&&Q&
5
91.166641 41 $16.075.296 Y
56.411.919 41 $6.509,637 51
31,113.121 4/ $10.109,494 51
91.016,165 31
57,119,463 3/
30,909,472 3/
178,691,6Lll 4/
$34.694.419 51
of USPS I-
-
USPS
!jn&&&&
8
9
(Co1,‘p,ol
USPS
lnstifutional Cosl
&xMionnent Factor
8)
5 First Class Letters
6 Third Ctass BRR
7 AllOther
$17.515.629 11 $31.769,236 II $14,272,409
$9,739,013 I/ $3.422,000
$0.317.013 II
$9.904.450 11 $12,tlt-I0.790 11 $2,976.340
8 Grand To’@!
r33.737,292
$54:408,041
$20.670,749
II Docket No. R94-1. USPS-11A. reproduced as Exhtbil MM&1E of Exhibil WA-T-1
2/ Docket No. R94-1, Ap+ah& G. Schedule 1
3 Dockei No. R94-1, Exhibit USFS-7X, pa&zs 9. 15 and ?6
41 Docket No. FM-I, Appendix G, Schedule1 and Schedule 2. page 1
51 Cal 2 l (Co13 I Cal 4)
(Co1IO I :,670.749)
69.05%
16.55%
14.40%
100.00%
0 lkrence
Aftrib Cosls
6
(Co15 -Co\ 1
Pat
Anrib1
Factor
7
(Co16/ 057.127)
$559,459
$192,624
$205.044
58.45%
20.13%
21.42%
5957,127
100.00%
/-
Memorandum to: Richard Littell
From: Rich Bentley
Subject: Oral Cross Examimtion Documents
Date: November 22,1996
Number of Pages: 9
To follow arc copies of all of the sourcedocumentsthat I used in the:preparation
of my workpapers. These documentsare referred to in the footnotes that are
provided in OCAMMA-XE- 1,2 and 3.
/-
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005994,
Docket No. R94-1
Appendix D
Accrued
c&t
PRC R94. I Tcrt Year
AmibuLahle
Perunt
&uilxmblc,
w
65C.219
179.926
383
107.737
10,262
54,500
3RI ,28i
124.496
I .!OU.ElO
428.653
1011,949
383
17.W
IO.262
36.020
3R1.28i
P.407
I :036..QS
650.2 19
179,924
38.1
107.779
10.261
54.500
381.287
124.496
l,SOR.849
65.92
60.55
1w.u.l
16.2 1
1w.w
66.09
lw.w
42.90
6X69
65.91
428.653
x0.772
383
17.506
IO.261
34.8G I
381,287
53.407
l,co7.!30
44,89
1oo.w
16.24
lw.w
63.97
IW.00
4?,9U
6!.75
0.W
0.00
0 00
0.00
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21
24
2,
24
27
74
936.226
6 -d
Wd0S:E
9661-ZZ-1
I
to.5 x
95 301.4
FIRS,-CLASS
“AIL
PRlORIrY
YAIL...
EIIPRESS MAIL-...
uAIlGnIwS..
*
733.2
6.3
.3
. .
51.1
4.1
SECOND-CLASS MAIL:
“,MIN
IliE co”Nr”.
.
wrslor
THE COVNIY:
bmXINP*or,l
,U*CIC*TIONs
CLASSRoo”
r”BLIC*TIONs
REC”lAR-Ra,c
W0L..
FEES....................
rOtAL
SECOND-CLASS....
04,.5
.5
,.a
1 319.4
106.6
1 092.7
1.3
.,
4.0
3.1
IO 42O.f
5.9
01.0
160.3
57 119.5
11 014.0
,~ES....................
7OlAL
THIRD-CLASS..
19,. I
385.4
576.4
WCC I AL
FWRlH-CLASS
mrc..,..
l,c.I1ARY
RITE............
FCCS..~.................
,“rAL
FOUR,“-CLASS..
” 5 POSTAL SEWICC.
FRCE MAIL FOA RLIM3
MamICwPEO.~
,NIEP”AIION*l
MAIL...
,OT*L
YAIL....,..
7 594. I
066.3
.
0 525.7
70 159.0
.
2
IS:6
-_
10. f
I
:a
.3
I?9.7
21.6
_.
,77.1
.t
_.
._
.4
540.4
.3
36::
4.1
.41..
I 016.7
948.4
I 975.1
5.0
4.6
9.6
33 0.. 9
59.0
. .
1 366.0
1.6
.3
E1.6
I,.0
.4
AND
57.5
m
IO&“,x
36.4
267.6
70 545.8
2
I::,
loo.0
x
USPS
Al145oP
r IRSI-CLASS
,0-.7x)
FV90
I
---LEllfRS
*No
----(INCLUDING
SlHiLE
.__._-
CAIECOtIV
_ _.
- _-
REVENUE/COST
SEALED PAaCLlS--.
FLLTS B IPCS).--PRESORT
-...-._
HAIL
PROPOSED FuTCL
YllH
111n
.-*--....-.....--.-.c*~Ds..-...--...----..-.
--...--..PR,“A,E....------Pos7ltl.
SIWOLE
-____.
_.._._
TOTAL
F[RSI -CLASS
&MIL
’
_. ._
PaESORr
_..--._
LIf LA1 IONSHIP:
PER PIECE (CENTS):
REVfNU~................,
AI?PlaUr*eLL
cosrs.....,
.REVENuf LESS
cosv..
..,, ATTA*eUrA6LE
PEB POUND (CENlS):
REVENVL.................
,.A1TnIauTAaLE
cos1s......
.RE”flwE
LESS
. . ..~rmIwTmLc
cccl....
36.6
13.9
28.7
12. I
11.0
7.6
21.8
19.2
lE.4
6.7
I4.B
16.6
13.4
‘2.6
9.1
909.7
560.6
349.
I
716.1
302.0
4 20.2
1 514.
414.7
2 679.1
PlECLS(OOOI.,. ,. . . ,, . . .
WE,CH, PER PlECE touwcfs).
wcICHr,Cu6IC
FT. (POUNDS).
YLlCH,
IN POUNOS (0001..
-.
.
CUBlC FELT (000).
3 631.7
3 ,96.3
3 060.6
I 437.3
.6O. 3
477.1
433.4
( 623.3
383.,
r 346
1 364
I69
:
f
13.9
639
571
I 410
(01
13.8
022
106
8
044
13:9 I
,I,
564
360
.6
13.9
3 BOO 034
272 46,
95
30)
RWENUEfCOST
IELAIIONSHIP:
PER PIECE (CLNISI:
..REV6NUE.................
..ArTRIRUlAeLE
COSlS......
.t?LVEWUE LESS
. . ..*IIuIaur*eLf
COST.....
PEA POUND (CENTS):
..RE”ENUE.................
..AlIPIBUlABLE
COSIS......
.“E”LNUE
LESS
. . ..AlIIIBUlA6LC
COST.....
voL”Mf
.,._...
393.4
393.0
.4
84.5
6.7
19.5
15.0
11.0
1,. ,
7.6
3.6
5.9
102.6
47. I
156.9
(Z7.8
127.1
63.2
55.5
31.)
44.5
s1ATls1lcs:
_ . . . . _----11
PLECES tOtJo)-.
. . . ..I..
WEICW PER PIECE (mJNcES).
YEIGHT/CUBIC
Cf.
(POUMS)..
“C,OHT
IN POUM)S (ooo).
cua,c
FEE, (ooo).
EST’. *YEn*oE
HAUL (MILES).
ESIIIIAIED
TON MILES (000).
ES,. CU6,C fl.
MILES (000)
467
3 393
NA
_._
219
2 .o
HA
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