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6.2 Contract Performance

6.2.1 Postaward Orientation

6.2.1.a General. Effective relationships between the Postal Service and its suppliers are central to the success of any purchase. The relationship should be a partnership, with each party working together to achieve a mutual goal. A key element in establishing the relationship is postaward orientation. This orientation brings all parties together and provides for a clear, mutual understanding of the purchase requirements and objectives. It also provides a means whereby each party may identify and resolve potential problems at the beginning, rather than later in the process when misunderstandings can have a greater impact on successful performance. Therefore, the contracting officer and the purchase team should hold postaward orientations whenever feasible.

6.2.1.b Use. In deciding whether to hold a postaward orientation, the purchase team should consider:

1. The nature and extent of any preaward survey or other discussions with the supplier;

2. The contract type, value, and complexity;

3. The purchasing history of the supplies or services;

4. Requirements for spare parts and related equipment;

5. Urgency of the delivery schedule and relationship of the supplies or services to critical programs; 6.

6. Length of the planned production cycle;

7. Extent of subcontracting;

8. Supplier's past performance and experience with the supplies or services;

9. Safety precautions required for hazardous materials or operations; and

10. Financing arrangements, such as progress payments.

6.2.1.c Scheduling. Postaward orientations should be held promptly after award. The purchase team must prepare an agenda, and afterwards summarize the topics actually covered in a memorandum. Whenever possible, all representatives (for example, inspectors) must attend any orientation session.

6.2.1.d Changes to the Contract. A postaward orientation may not be used to change the contract. Any change resulting from a postaward orientation must be made by contract modification.

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6.2.2 Record Keeping

6.2.2.a General. Contract performance records are kept in the purchasing organization. Maintaining complete records on performance is essential for (1) proper contract administration; and (2) creating and maintaining records of past performance. All actions taken must be documented.

6.2.2.b Organization. Records must be maintained in an official contract file.

6.2.2.c Records in the Possession of Other Postal Employees. Records relating to contract performance may be kept by offices outside the purchasing organization (for example, records on repair and maintenance of equipment under warranty). The contracting officer should alert each such office of the significance of the records to contract administration and request they retain or transfer any records necessary to comply with a and b above.

6.2.3 Contract Monitoring

6.2.3.a Personnel

1. In addition to appointing representatives (see 6.1.1.b) to monitor contract performance, the contracting officer may name one or more representatives with authority to coordinate the activities of other representatives, such as inspectors or reviewers.

2. The contracting officer may authorize one or more representatives to provide technical direction, but the authorization must specifically alert them to the prohibition on ordering changes in the work affecting schedule, price, or quality.

3. Personnel from federal government agencies may be delegated audit, inspection, and testing responsibilities.

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6.2.3.b Using Suppliers to Monitor Performance

1. Facilities Contracts. For contracts covered in 4.3, contracting officers may contract with architects, engineers, construction or real estate management professionals to perform any contract administration task that could be delegated to a Postal Service contracting officer's representative.

2. Other Contracts. Contracting officers may contract with third parties to perform only those contract administration responsibilities related to testing for conformance, acceptance, reviewing supplier submittals, shop drawings, and requests for design approval.

6.2.3.c Review of Supplier Submittals

1. Reviewing supplier submittals such as material lists, shop drawings, catalog cuts, or samples is an important method of enforcing contract requirements, and contract terms requiring submission and approval should be strictly enforced. The purchase team must ensure that supplier submittals are disapproved only for failure to meet a material requirement of the contract. If a supplier submittal indicates that the specifications are inadequate, the contracting officer should use the applicable changes clause to achieve necessary quality. For submittals affecting purchases for Technical Data Packages (TDPs), see 2.3.2.

2. Contracting officers and their representatives must approve, conditionally approve, or disapprove supplier submittals promptly within any time limits set in the contract. Disapprovals and conditional approvals must clearly indicate what the supplier must do to comply with contract requirements.

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6.2.4 Delivery

6.2.4.a Transportation. The purchase team must ensure that supplies purchased by the Postal Service are transported according to:

1. The solicitation provisions prescribed in Appendix A;

2. Chapters 2 and 3 of Handbook AS-701, Material Management; and

3. All policies, procedures, and technical guidance issued by the manager, SM Operations.

6.2.4.b Variation in Quantity. Suppliers are responsible for delivering the quantity specified in the contract within the tolerances allowed (see Clause B-4, Variation in Quantity). Excess quantities totaling no more than $100 in value may be kept without compensating the supplier. Excess quantities worth more than $100 may be returned at the supplier's expense, or kept and paid for at the contract price.

6.2.5 Right to Adequate Assurance of Performance

6.2.5.a General. A contract obligates each party not to impair the other's expectation of receiving the performance due under the contract. When performance concerns arise, the contracting officer may, in writing, demand adequate assurance of due performance. The concerns need not arise from or be directly related to the contract.

6.2.5.b Failure to Provide Adequate Assurance. The contracting officer may treat the contract as defaulted if the purchase team's concerns are not resolved within 30 days of the demand for adequate assurance. Failure to provide adequate assurance is a breach of contract by repudiation. The supplier may retract the repudiation under 2 below unless the contracting officer has already acted on the default.

1. Postal Service Rights. If the supplier repudiates the contract, the contracting officer may:

(a) Await performance for a reasonable time; or

(b) Resort to any remedy provided in these guidelines or the contract, even though the supplier has been notified that the Postal Service will await performance and the contracting officer has urged retraction; and

(c) In either case, suspend the Postal Service's own performance or proceed in accordance with the provisions of the contract's Default clause.

2. Supplier's Retraction of Repudiation

(a) The supplier can retract a repudiation up until the next performance is due, unless the Postal Service has, since the repudiation, changed its position or otherwise indicated that the repudiation is final.

(b) Retraction may be by any method that clearly indicates the supplier intends to perform, but must include any assurance demanded by the contracting officer.

(c) Retraction reinstates the supplier's rights under the contract if the failure to provide assurance is excusable and consideration is made to the Postal Service for any delay caused by the repudiation.

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6.2.6 Bankruptcy

6.2.6.a General. When a supplier declares bankruptcy, the right of the Postal Service to take unilateral action is limited. Contracting officers should monitor the supplier's financial strength to anticipate problems which could arise and act promptly to protect Postal Service interests when notified of a supplier's bankruptcy.

6.2.6.b Procedures. When notified that a supplier is in bankruptcy proceedings, the contracting officer must:

1. Consult with assigned counsel before taking any action regarding the supplier's bankruptcy proceedings.

2. Determine the amount of any claims that the Postal Service may have against the supplier on any contracts which have not been closed out.

3. Take actions necessary to protect the Postal Service's financial interests and safeguard Postal Service property.

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