We present and analyze the positions, distances, and radial velocities for over 4000 blue horizontal-branch (BHB) stars in the Milky Way's halo, drawn from SDSS DR8. We search for position-velocity substructure in these data, a signature of the hierarchical assembly of the stellar halo. Using a cumulative "close pair distribution" as a statistic in the four-dimensional space of sky position, distance, and velocity, we quantify the presence of position-velocity substructure at high statistical significance among the BHB stars: pairs of BHB stars that are close in position on the sky tend to have more similar distances and radial velocities compared to a random sampling of these overall distributions. We make analogous mock observations of 11 numerical halo formation simulations, in which the stellar halo is entirely composed of disrupted satellite debris, and find a level of substructure comparable to that seen in the actually observed BHB star sample. This result quantitatively confirms the hierarchical build-up of the stellar halo through a signature in phase (position-velocity) space. In detail, the structure present in the BHB stars is somewhat less prominent than that seen in most simulated halos, quite possibly because BHB stars represent an older sub-population. BHB stars located beyond 20kpc from the Galactic center exhibit stronger substructure than at r_gc_<20kpc.