1. A Joint USPS/NALC Agreement for an Expedited Route Evaluation and Adjustment Process Allows Swift Reaction to Unprecedented Volume Loss –Quick, Simple, Less Contentious Process –Data Driven –Jointly Administered Opportunity to evaluate the process –Could possibly continue for 2 years Alternate Route Evaluation ALTERNATE ROUTE EVALUATION & ADJUSTMENT

2. Alternate Evaluation &Adjustment Process Parties appoint Joint NALC/USPS Evaluation Team –NALC member selected by national president –Management member selected by DM Only adjustment process authorized except for Special Inspection process (M-39, 271) May and September 2008 review period –Joint team may mutually agree to select a different period Method intended for all routes in selected units –Management select units for evaluation –Routes adjusted via joint local process on/after 4/1/2008 excluded initially

3. Data to be analyzed –Cased Letters –Cased Flats –Office time including auxiliary time - regular carrier only or competent replacement Office evaluation - the lesser of –Estimated Standard using average volumes for the data analysis period (18/8/70 + 33 or 43 FOT) Additional FOT may be included should team agree to the need on case by case basis –Actual average office time from the data analysis period ALTERNATE ROUTE EVALUATION & ADJUSTMENT Office Time

4. Street evaluation – Average actual street time from the data analysis period If either party believes actual not representative –Compared to base, 3999, carrier consultations –Joint 3999 completed on average volume day to determine most representative street evaluation ALTERNATE ROUTE EVALUATION & ADJUSTMENT Street Time

5. Joint Consultations with each carrier Office adjustments –Office factor based on office time per delivery (FOT subtracted) M-39 141.19 –M-39 243.316.b (5 methods) Street adjustments –Current 3999 to determine street value of territory transferred –COR can be jointly utilized –District team monitor local parties –Jointly revisit adjustments according to M-39 243.6 ALTERNATE ROUTE EVALUATION & ADJUSTMENT Adjustments

6. Agreement Timeline –10/27 to 10/30 Select joint NALC/USPS route evaluation team –10/31 Joint netmeeting for evaluation teams –10/31 to 11/8 Review and evaluate data for units that can implement adjustments before 11/15 Including joint carrier consultations –11/15 to 1/16/09 Review and evaluate remaining units Have all adjustment packages completed –1/5 may continue to implement adjustments

7. Evaluation Process ALTERNATE ROUTE EVALUATION & ADJUSTMENT

9. Next Steps –Identify and select quality people in each District as management evaluator Elite teams already in place should be considered –Conduct preliminary data analysis –Identify and prioritize sites for evaluation Exclude units having implemented adjustments as a result of joint process after April 1, 2008 Identify those units able to evaluate and implement prior to November 15 Units having COR data prep completed –Select District key adjustment team members HR, LR, AMS, IT, Delivery, Processing, Communications, Marketing Based on preliminary analysis determine employee impact, mailer impact, scheme changes, sort plan changes, etc.

10. Roles and Responsibilities Headquarters –Manage process through Delivery Operations & Labor Relations –Track results –Coordinate multi-functional effort –Communication link –Resolve national level disputes Area –Manage Process through Area Coordinator Multi-functional coordinated effort –Oversight of the District Teams Resolve disputes if necessary

11. Roles and Responsibilities District –Selection of Management Team Member(s) NALC team member(s) selected by their national president –Site selection –Extraction of Route Data by Delivery Unit –Ensure Adjustment Packages are implemented –Manage the implementation process (multi-functional effort) –Approval of the Implementation Dates

12. Roles and Responsibilities Joint Evaluation & Adjustment Team –Review and Analyze Data –Determine Route Evaluations for all Routes –Oversee (but do not conduct) Consultations –Review Unit Feedback and make decisions where necessary –Review Adjustment Packages (Approve or Return until they are Final) –Send to the MOPS for Implementation

13. Roles and Responsibilities Local unit (Joint effort) –Conduct Consultations with Carriers –Conduct PS 3999s if Required –Make Delivery Zone Adjustments –Conduct Final Adjustment Consultations –Finalize all Paperwork (1840 Reverse, etc.) –Return the Finalized Package to the District Team

14. New Growth City only offices – no change Rural only offices – no change City offices with HCR (CDS) –New growth assigned to city carrier craft –Except for in-growth on existing HCR City and Rural office –Growth assigned in accordance with existing boundary agreements –Absent agreement, city carrier craft assigned Exception for situations where assignment would create inefficiencies Disputes to exceptions handled by national task force Assignment of City Delivery MOU

15. ® Sequence of Events: 1)Team Members are Selected by USPS/NALC Consider Size of Task (i.e. MPOO/MCSO) 2) Data Extraction and Analysis (MOPS) 3) Site Selection (USPS) 4) Evaluation of Routes (Team) 5) Consultations (Local) 6) Adjustments (Local-then Approved by Team)

16. ® 7) Second Consultations if necessary (Local) 8) Package Finalized (Local - NLT 01/16/09) 9) Implementation (MOPS-AMS/DOIS Update) 10) Delivery Unit Implementation (Local) 11) Adjustment Follow-Up (Normal Procedures)

17. Multi-functional effort MOPS Office Post Adjustment –AMS Edit Books Case Labels Mailer Updates –VMF Movement of Vehicles AVUS Updates –DOIS Administrator Establish Minor Adjustment Base Data Update – Administrator Activities –Area Delivery Programs

18. Multi-functional effort Human Resources/Labor Relations –Prepare for possible Article 12 –Prepare Shared Services for Posting and Bidding process In-Plant Support –Manual scheme update –Sort Plan Updates –Labeling equipment –Prepare for increased back flow Information Technology –Ensure necessary servers are available –Ensure sufficient technical support is available (tier 2) Communications –National Press Releases –Congressional Notification –Local Press Releases Marketing –Communication with Mailers dealing with potential Adjustments

19. Multi-functional effort District Manager –District Site Review –District Team Members Selection –Site Selection District Team –Data Collection Pull DOIS Workhour/Workload Reports Route Level Data Integrity Review –Route Evaluation Conducted Office Evaluation Street Evaluation Perform 3999's when needed (with Local Parties) –Local Level Evaluation Consultation –District Review of Consultation feedback –Make Route Adjustments (Local Parties with Team Support) –Local Level Adjustment Consultation –District Team Review of Adjustment and Consultation Feedback