WASHINGTON -- The Postal Service has moved forward with another initiative to improve its delivery capabilities by awarding Northrop Grumman Systems Corporation an $874,639,000 contract to build a sophisticated system that will sort "flats" -- large envelopes, magazines, newspapers, catalogs and circulars -- in the order in which they are delivered.

Letter carriers today spend a portion of their workday in the "office" manually sorting flat mail, a labor-intensive process. The Flat Sequencing System (FSS) -- designed in collaboration with Postal Service engineers - sorts mail in delivery sequence at a rate of 16,500 pieces an hour, helping letter carriers start delivering mail earlier in the day.

A pre-production FSS will be installed and tested in Dulles, Va., in August, and nationwide deployment of 100 systems will begin in summer, 2008.

Last year, the Postal Service delivered 53.2 billion flats, consisting of 8 percent First-Class mail, 17 percent Periodicals, and 75 percent Standard mail.

An independent federal agency, the U.S. Postal Service visits every address in the nation, 146 million homes and businesses, six days a week. It has 37,000 retail locations and relies on the sale of postage, products and services to pay for operating expenses, not tax dollars. The Postal Service has annual revenues of $73 billion and delivers more than 46 percent of the world's mail volume.