4 Purchasing
4 Purchasing 119
4.1 Policy 119
4.1.1 General 119
4.1.2 Purchasing Framework 119
4.2 The Purchasing Process 119
4.2.1 Planning 119
4.2.2 Solicitations 120
4.2.2.a General. 120
4.2.2.b Draft Solicitations. 120
4.2.2.c Preparation and Format. 120
4.2.2.d Proposal Preparation Time. 120
4.2.2.e Availability of Solicitations 120
4.2.2.f Preproposal Conference 120
4.2.2.g Amendment of Solicitations 121
4.2.2.h Cancellation of Solicitations. 121
4.2.2.i Disclosure and Use of Information 121
4.2.3 Receipt of Proposals 122
4.2.3.a General. 122
4.2.3.b Modification and Withdrawal. 122
4.2.3.c Late Proposals and Modifications 122
4.2.3.d Failure to Acknowledge Amendments. 123
4.2.4 Oral Presentations 123
4.2.4.a General. 123
4.2.4.b Discussions. 123
4.2.5 Performance Evaluation 123
4.2.5.a General 123
4.2.5.b Roles and Responsibilities 124
4.2.5.c Discussions 125
4.2.5.d Best Value Determinations 126
4.2.6 Contract Award 126
4.2.7 Notification 127
4.2.8 Debriefing 127
4.2.8.a Timing. 127
4.2.8.b Method. 127
4.2.8.c Purpose. 127
4.2.8.d Content. 127
4.3 Commercial Purchasing 128
4.3.1 Policy 128
4.3.2 Applicability 128
4.3.2.a General. 128
4.3.2.b Definition. 128
4.3.2.c Considerations 129
4.3.2.d Dollar Limitations. 129
4.3.2.e Competition 129
4.3.2.f Performance Evaluation Factors. 129
4.3.2.g Contract Types. 130
4.3.2.h Quality Assurance. 130
4.3.2.i Pricing. 130
4.3.2.j Contract Financing. 130
4.3.2.k Technical Data. 130
4.3.2.l Computer Software 130
4.3.2.m Other Customary Commercial Practices. 131
4.3.3 Solicitations 131
4.3.3.a General. 131
4.3.3.b Standing Price Quotations. 131
4.3.3.c Publicizing. 131
4.3.4 Receipt and Evaluation of Proposals and Quotations 131
4.3.4.a Receipt 131
4.3.4.b Evaluation 132
4.3.4.c Discussions. 132
4.3.4.d Price. 132
4.3.5 Contract Format and Contents 132
4.3.5.a General 132
4.3.5.b Form 8203, Order/Solicitation/Offer/Award. 132
4.3.6 Provisions and Clauses 132
4.3.6.a General. 132
4.3.6.b Provision 4-1, Instruction to Offerors - Commercial Items. 133
4.3.6.c Provision 4-3, Offeror Representations and Certifications - Commercial Items. 133
4.3.6.d Clause 4-2, Contract Terms and Conditions - Commercial Items. 133
4.3.6.e Clause 4-3, Contract Terms and Conditions Required to Implement Statutes or
Executive Orders - Commercial Items. 133
4.3.6.f Performance Evaluation Factors. 133
4.3.6.g Discretionary Use of PM Provisions and Clauses. 133
4.3.7 Tailoring Provisions and Clauses 133
4.3.7.a Policy. 133
4.3.7.b Clause 4-2, Contract Terms and Conditions - Commercial Items 134
4.3.8 Exemptions from Law 137
4.3.8.a General. 137
4.3.8.b Applicability 137
4.3.8.c Contracts and Subcontracts 137
4.3.8.d Exemptions 137
4.4 Design and Construction Purchasing 138
4.4.1 General 138
4.4.1.a Policy. 138
4.4.1.b Real Estate and Related Services. 138
4.4.2 Architect-Engineer Services 138
4.4.2.a Policy. 138
4.4.2.b Applicability. 138
4.4.2.c Definitions 138
4.4.2.d Selection Procedures 139
4.4.2.e Discussions 140
4.4.2.f A/E Supplier Performance Evaluation. 140
4.4.2.g Indefinite-Quantity A/E Services Contracts 140
4.4.3 Construction 141
4.4.3.a Purchasing Construction 141
4.4.3.b Indefinite-Quantity Construction Contracts 144
4.4.4 Design-Build Contracting 145
4.4.4.a Applicability. 145
4.4.4.b Definition. 145
4.4.4.c Purchase Method. 145
4.4.4.d Contract Types 145
4.4.4.e Solicitations For Design-Build Contracts. 147
4.4.4.f Requirements for Design-Build Proposals. 147
4.4.4.g Design-Build Supplier Performance Evaluations 147
4.4.5 Construction Management Support Services 147
4.4.5.a Applicability. 147
4.4.5.b Definition. 147
4.4.5.c Purchase Method. 147
4.4.5.d Contract Types. 147
4.4.5.e CMSS Contract as an Alternative to A/E Contract Options. 147
4.4.5.f Solicitations for Construction Management Support Services Contracts. 148
4.4.5.g Selection Processes for Construction Management Support Services Contracts. 148
4.4.5.h Evaluation of Price Proposals. 148
4.4.5.i Contract Award. 148
4.4.5.j Contract Management Support Services Supplier Performance Evaluations. 148
4.4.5.k Environmental Engineering Services. 148
4.5 Mail Transportation Purchasing 148
4.5.1 General 148
4.5.1.a Policy. 148
4.5.1.b Purchasing Method. 148
4.5.3 Contracting Officer's Representative 149
4.5.3.a Designation. 149
4.5.3.b Authority and Limitations 149
4.5.3.c Restrictions. 149
4.5.4 Mailing Lists 149
4.5.4.a Establishing Mailing Lists. 149
4.5.4.b Retention on Lists. 150
4.5.4.c Use of Mailing Lists. 150
4.5.4.d Publicizing. 150
4.5.5 Contracts 150
4.5.5.a Contract Type. 150
4.5.5.b Contract Term. 150
4.5.5.c Use of Contracts 150
4.5.5.d Modes of Transportation. 151
4.5.5.e Alternatives to Contracts. 155
4.5.6 Renewal of Contracts 155
4.5.6.a General. 155
4.5.6.b Characteristics of Renewal Contracts 155
4.5.6.c Renewal Procedures 156
4.5.6.d Restrictions. 156
4.5.6.e Clause. 156
4.5.7 Extension and Short-Term Renewal of Contracts 156
4.5.8 Contract Changes 157
4.5.8.a General 157
4.5.8.b Termination for Convenience 157
4.5.8.c Service Changes 157
4.5.8.d Exceptional Service 159
4.5.8.e Schedule Changes for Highway or Domestic Inland Water Contracts 159
4.5.8.f Emergency Contracts. 160
4.5.8.g Clauses 160
4.5.9 Subcontracting 160
4.5.9.a Highway or Domestic Inland Water Contracts 160
4.5.9.b Other Surface Contracts and Air Contracts. 161
4.5.10 Release of Supplier 161
4.5.11 Service Deficiencies 161
4.5.11.a Damages. 161
4.5.11.b Breach Not Warranting Termination. 162
4.5.11.c Loss or Damage to Mail. 162
4.5.11.d Supplier with Several Contracts. 162
4.5.12 Death or Incompetence of Supplier 162
4.5.12.a Individual 162
4.5.12.b Partnership. 163
4.5.12.c Estate Representatives 163
4.5.13 Eligibility Requirements 163
4.5.13.a Eligibility Requirements for Suppliers. 163
4.5.13.b Service Employees 163
4.5.13.c Screening 164
4.5.13.d Exceptions 164
4.5.13.e Notification of Supplier. 164
4.5.13.f Disclosure of Information. 165
4.5.14 Contract Administration 165
4.5.14.a General. 165
4.5.14.b Unsatisfactory Service. 165
4.5.14.c Major Irregularity. 165
4.6 Special Categories of Purchases 165
4.6.1 General 165
4.6.2 Supplemental Policies and Procedures 165
4.6.3 Professional/Technical and Consultant Services 167
4.6.3.a Policy. 167
4.6.3.b Conflicts of Interest. 167
4.6.3.c Professional and Technical Services 167
4.6.3.d Consultant Services 168
4.6.4 Personal Services Contracts 169
4.6.4.a Definition. 169
4.6.4.b Use. 169
4.6.4.c Contracts. 169
4.6.5 Information Technology 169
4.6.5.a Definitions 169
4.6.5.b Policy 170
4.6.5.c Technological Substitutions and Enhancements 173
4.6.5.d Sources 173
4.6.5.e Solicitation Provisions 174
4.6.5.f Clauses 174
4.6.6 Research and Development 175
4.6.6.a Definitions 175
4.6.6.b General Policy 176
4.6.6.c Prequalification 176
4.6.6.d Solicitations 176
4.6.6.e Contract Type 177
4.6.6.f Limitations on Subcontracting. 178
4.6.6.g Educational Institutions and Nonprofit Organizations 178
4.6.6.h Organizational Conflict of Interest 179
4.6.7 Utility Services 179
4.6.7.a Definitions 179
4.6.7.b Policy 179
4.6.8 Structured Contracts and Controlled Contracts 181
4.6.8.a Definitions and Examples 181
4.6.8.b Policies and Procedures 181
4 Purchasing
4.1 Policy
So that all interested parties (requesting organizations, suppliers, purchase
teams, etc.) may be assured of the effectiveness and integrity of Postal
Service purchases, it is Postal Service policy that a single purchase process
be used to acquire needed goods and services. This process entails the
solicitation of a sufficient number of offers to ensure adequate competition,
the comparative evaluation of proposals, and discussions with the most
qualified suppliers in order to reach the best business arrangement for the
Postal Service and the supplier. Due to the wide variety of goods and
services required by the Postal Service, several commodity-specific
purchases, including high technology, information systems, professional and
consultant services, facility design and construction and mail transportation,
require different approaches to the purchasing process and differing
solicitation provisions and contract clauses.
4.1.2 Purchasing Framework
All Postal Service purchases are accomplished under the common
framework of solicitation, evaluation, discussion, selection and award. This
framework is designed in order to ensure that (1) all parties are treated fairly,
(2) the Postal Service obtains the best value and (3) mutually beneficial
contractual relationships are established. Section 2 describes the process
through which these goals are reached and Sections 3 through 6 describe
variations to the process for various commodity-specific purchases.
4.2 The Purchasing Process
A certain amount of planning is central to the success of any purchase. See
Chapter 2 for information regarding purchase planning,
supplier-selection strategies, contract types, etc.
4.2.2 Solicitations
4.2.2.a General. Purchase teams must ensure that the solicitation clearly states the
needs of the Postal Service and clearly communicates how proposals will be
evaluated. It is particularly important that suppliers are made aware of what
the Postal Service deems important to the purchase. If oral presentations
(see 4.2.4) will be part of the evaluation, suppliers should be made aware of
what will be discussed (including price, if applicable) during the
presentations.
4.2.2.b Draft Solicitations. In order to further ensure the clarity and completeness of
solicitations, purchase teams should consider circulating draft solicitations
within the particular supplier community for review and comment. Purchase
teams may also consider issuing presolicitation notices (see 3.5.3.c).
4.2.2.c Preparation and Format. Solicitations are prepared in accordance with
Appendix A.
4.2.2.d Proposal Preparation Time. Consistent with the objectives of the purchase
(including whether the solicitation will be competed among prequalified
suppliers only), solicitations must allow sufficient time for suppliers to prepare
and submit proposals.
4.2.2.e Availability of Solicitations
1. Enough suppliers must be solicited to ensure adequate competition. In
addition, contracting officers should make a reasonable effort to provide
copies of solicitations to any supplier requesting one. In their role as
business leader of the purchasing process, contracting officers should
fully explain to suppliers the unavailability of solicitations. If the
requirement is being competed among prequalified suppliers, suppliers
not on the prequalification list may be provided a copy of the
solicitation, but they must be explicitly told that the Postal Service plans
to award the resulting contract to a supplier on the prequalification list.
Requests for copies may be denied if, in the judgment of the
contracting officer, copies have already been provided to a sufficient
number of suppliers to ensure adequate competition.
2. When a solicitation or solicitation package is so voluminous that it is
impracticable to reproduce a reasonable number of copies for those
requesting them, a limited number of copies should be made available
for sale; the cost should include the cost of reproduction and postage.
4.2.2.f Preproposal Conference
1. Whenever circumstances suggest that it would add to the success of
the purchase, such as when a solicitation contains complicated
specifications or statements of work, a preproposal conference may be
held to brief suppliers. Notice of the preproposal conference should be
contained in the solicitation. If time allows, suppliers should be allowed
to submit written questions in advance, so that prepared answers may
be distributed at the conference.
2. The entire purchase team should attend the conference. The
contracting officer or a designated representative must conduct the
conference, with the assistance of the purchase team and assigned
counsel, as appropriate.
3. A record of the conference must be furnished to all of the suppliers who
received the solicitation. Because the role of that record is to ensure
that all prospective suppliers fully understand the Postal Service's intent
with respect to the purchase, and not necessarily to provide a verbatim
reconstruction of the conference, the record may be edited for clarity
and brevity and corrected where necessary.
4.2.2.g Amendment of Solicitations
1. Solicitations must be amended when changes such as quantity,
specifications, delivery schedule, date of receipt of proposals, or
changes to clarify or correct solicitation ambiguities or defects must be
made. When solicitations are amended, suppliers must be provided
sufficient time to consider the amendment in the preparation or revision
of their proposals. When it is necessary to give notification of a change
by telephone or some other means, confirmation by written amendment
must follow.
2. When deciding which suppliers are affected by a change, contracting
officers should consider the stage of the purchase:
(a) If proposals are not yet due, the amendment must be sent to all
suppliers who received the solicitation; if the solicitation had been
previously posted, the amendment must be similarly posted.
(b) If the time for receipt of proposals has passed but proposals have
not been evaluated, the amendment must be sent to the suppliers
who provided proposals.
4.2.2.h Cancellation of Solicitations. As the solicitation process is costly both to the
Postal Service and suppliers, solicitations should be canceled for only the
most compelling reasons and cancellation should be made as early in the
process as possible. Written notice of the cancellation must explain the
reason for cancellation, and must be sent to all of the suppliers who received
the solicitation. If the solicitation is canceled before the date for receipt of
proposals, any proposals received must be returned unopened to the
suppliers.
4.2.2.i Disclosure and Use of Information
1. Policy
(a) As business leader of the purchase team, the contracting officer
is granted broad discretion regarding the release of information
during the purchasing process. Generally, it makes good
business sense for potential suppliers to be as informed as
possible during the process. However, contracting officers must
take care that such information is disseminated fairly, and that the
integrity of the process is not compromised.
(b) If, during the purchasing process, the contracting officer
determines that dissemination of information is necessary to
enhance competition or otherwise improve the effectiveness of
the purchase, the information should be released. Depending on
the nature of the information, it may be released as an
amendment to the solicitation or as general information given out
for the purpose of clarification. Again, the contracting officer must
consider the stage of the purchase and the potential for
compromising the integrity of the purchasing process.
2. After Receipt of Proposals
(a) Information concerning the content of proposals or the number or
identity of suppliers may not be disclosed outside the Postal
Service, except when necessary for proposal evaluation, or to
anyone in the Postal Service not having a legitimate interest.
(b) During the preaward period, only the contracting officer, the
contracting officer's supervisor having contracting authority, the
purchase team or the evaluation team (see 4.2.5.b) may transmit
technical or other information and conduct discussions with
suppliers. Information may not be furnished to any supplier if,
alone or together with other information, it may afford that
supplier an advantage over other suppliers. However, general
information that is not prejudicial to other suppliers or to the
integrity of the purchasing process may be furnished upon
request.
(c) Suppliers may place restrictions on the disclosure and use of data
contained in their proposals, in accordance with Provision
A-7, Restriction on Disclosure and Use of Data. The
portions of the proposal that are so restricted (except for
information obtainable from another source without restriction)
must be used only for evaluation and may not be disclosed
outside the Postal Service, except when necessary for proposal
evaluation, without the permission of the offeror.3.
4. Release of Solicitation Mailing Lists. Solicitation mailing lists may be
released when the contracting officer deems a purchase highly
competitive and that competition will not be harmed by the release. The
contracting officer should also consider the potential for subcontracting
opportunities when considering releasing the list.
4.2.3 Receipt of Proposals
4.2.3.a General. Proposals must be marked with the date and time of receipt, and
kept secure until they are provided to the evaluation team.
4.2.3.b Modification and Withdrawal. Proposals may be modified or withdrawn by
written or electronic notice before the specific contract is awarded.
4.2.3.c Late Proposals and Modifications
1. Proposals and modifications of proposals are late if received after the
date and time established in the solicitation for receipt of proposals.
This does not include the normal revisions of proposals made by a
supplier during discussions (see 4.2.5.c).
2. Late proposals and modifications may be considered in accordance
with Provision A-4, Late Submissions and Modifications of
Proposals. It is normally in the interest of the Postal Service to consider
a late proposal if when doing so would not cause a delay in the
evaluation process, or the proposal was late because of mishandling
after receipt, or the proposal offers a significant cost, quality, or
technical benefit. It is not in the interest of the Postal Service to
consider any proposal received so late that its consideration would
jeopardize, or give the appearance of jeopardizing, the integrity of the
purchasing process.
3. When a late proposal or modification is not considered, the supplier
must be given written notification that its proposal or modification was
received late and was not considered.
4. Each late proposal must be retained in the solicitation file with a
statement as to whether it was considered, and the rationale as to why
or why not.
4.2.3.d Failure to Acknowledge Amendments. Generally, it is in the Postal Service's
interest that suppliers be as informed as possible, Therefore, if a supplier fails
to acknowledge a solicitation amendment, of if a proposal contains a
suspected mistake, the contracting officer should question the supplier as to
the matter. Suppliers should be granted the opportunity to address
amendments or correct mistakes if doing so will enhance competition and not
otherwise compromise the integrity of the purchasing process.
4.2.4 Oral Presentations
4.2.4.a General. Oral presentations are a performance evaluation method (see 4.2.5)
used to evaluate a supplier's experience, ability, and proposed method to
perform the work called for in the solicitation. As a general rule, their use can
speed up the evaluation process and provide a better picture of both the
supplier's understanding of the solicitation requirements and its proposed
approach to meeting the Postal Service's needs. During oral presentations
suppliers may address any or all of a solicitation's performance evaluation
factors (see 2.1.7).
4.2.4.b Discussions. Discussions (see 4.2.5.c) are encouraged during oral
presentations in order that the supplier gain a better understanding of the
Postal Service's expectations and the Postal Service gain a better
understanding of the supplier's abilities. The contracting officer, as business
leader of the purchase team, must ensure that all suppliers taking part in oral
presentations are treated fairly and that any proprietary information presented
is protected. Contracting officers must also ensure that any understandings
reached as a result of discussions taking place during oral presentations are
reflected in the final contract.
4.2.5 Performance Evaluation
1. Purpose. Performance evaluation is a two-step process: (1) evaluation
of individual proposals in relation to the solicitation's stated
performance evaluation factors; and (2) comparative evaluation of the
individual proposals in relation to each other in order to judge each
proposal's relative value. Either of these steps may include discussions
with suppliers (see 4.2.5.c). Depending on the quality of the proposals
received, performance evaluation may be an interactive process
through which the Postal Service determines which supplier or
suppliers offers the best value, and most merits contract award.
2. Individual Evaluation. The first step consists of analyzing an individual
proposal's strengths, weaknesses and risks, and documenting
conclusions reached regarding the proposal. This narrative should be
prepared simultaneously with the scoring and, in addition to
documenting the proposal's strengths, weaknesses and risk, must
provide the evaluation team's rationale for a particular supplier's score.
Proposed prices may also be examined and evaluated in order to gain
an understanding of the supplier's approach to the purchase and its
grasp of the resources needed for successful performance. The team
must arrive at a consensus decision for each proposal and should do
so as soon as possible after review and evaluation.
3. Comparative Evaluation. The second step of the process requires the
comparison of the relative value offered by each proposal in relation to
its competitors. This comparison of proposals is extremely important
and must describe the differences between proposals and assess the
value of the differences or the impact that the differences will have on
the Postal Service.
4.2.5.b Roles and Responsibilities
1. Purchase Team. The purchase team is responsible for the overall
direction of the purchase. This includes establishing the purchase plan
and the supplier-selection strategy, and determining which supplier or
suppliers offer the best value to the Postal Service (however, see
4.2.5.d.1). In all of these functions, the team is headed by the
contracting officer.
2. Evaluation Team. The evaluation team is responsible for evaluating and
comparing the relative worth or value of competitive proposals in
accordance with the supplier-selection strategy developed for the
purchase. Selected members of the purchase team (including the
contracting officer, and others, if warranted) make up the evaluation
team. Evaluation teams judge the relative value of a proposal in relation
to the solicitation's performance factors, participate in oral
presentations, and rank proposals as to the value they offer the Postal
Service. Teams may also be established to evaluate a supplier's price
or cost proposal. In these cases, panel members need not be members
of the purchase team. Prices or estimated costs must be evaluated in
accordance with Chapter 5.
3. Contracting Officer. The contracting officer oversees the performance
evaluation process. This includes leading discussions with the suppliers
(see 4.2.5.c), and making reasoned business decisions to ensure the
best interests of the Postal Service, the success of the particular
purchase, and the overall fairness and integrity of the purchase.
1. Definition. Discussions include all communications held with suppliers
during the purchasing process; the term "discussions" is used in this
PM in its common dictionary sense, and not as defined or
circumscribed in previous Postal Service purchasing regulations or
similar regulations of other Federal agencies.
2. Purpose. Discussions may be held in order to (1) allow for the
clarification of matters contained in a proposal which raise questions
regarding acceptability or evaluation score; (2) address suspected
mistakes or questionable assumptions; and (3) obtain the best value to
the Postal Service and establish final contract terms and conditions.
Discussions need not be held with individual suppliers when, after
evaluation and comparison of their proposals, it becomes apparent that
their proposals do not offer the best value to the Postal Service and
could not be improved to do so without extensive and substantial
revision. The contracting officer is responsible for the conduct of
discussions. During the conduct of discussions, contracting officers
must ensure that no leveling or technical transfusion occurs.
3. Use
(a) During the evaluation process, including during oral
presentations, discussions may be held with any supplier in order
to clear up misunderstandings or uncertainties or to gain a better
understanding of the supplier's responses and intent regarding
the solicitation's provisions including its performance factors, and
any aspect of a supplier's proposal including price, in order to
obtain a more informed comparison of the relative value of
individual proposals.
(b) After proposal comparisons have been made, further discussions
may be held to address any outstanding matters. These
discussions should be made with a sufficient number of suppliers
for the purchase team to be confident that it can reasonably
determine which supplier or suppliers offers the best value to
the Postal Service. However, the fact that discussions are held
with one or more offerors does not require that discussions be
held with other offerors if there is no business necessity for
additional discussions. Offerors whose offers are not the subject
of discussions need not be afforded a specific opportunity to
revise their offers.
(c) Suppliers whose offers are the subject of discussion at any stage
must be given sufficient time to revise their proposals in light of
those discussions. The time provided must be reasonable in view
of the complexity and extent of the issues discussed, but the time
provided one supplier need not be the same as that provided
another. However, all suppliers must be treated fairly, and all
information provided the Postal Service during discussions must
be protected.
(d) The final stage of discussions is reaching agreement on the
contract's terms and conditions with the apparently successful
supplier. The goal of this stage is to reach the best business
arrangement for the Postal Service, and during this stage any
remaining issues should be addressed and revised. However, if
the extent of these issues may reasonably be viewed as changing
the rationale for determining the best value to the Postal Service,
the contracting officer must consider reopening discussions with
other suppliers. In no event may changes be made to the Postal
Service's requirements or the supplier's proposal which, if made
before supplier selection, would have affected the basis for that
selection.
4.2.5.d Best Value Determinations
1. Responsibility. After evaluation, comparative analysis and ranking of
the proposals (including price proposals) and, if necessary, discussions
with suppliers, it must be determined which supplier or suppliers offer
the best value to the Postal Service. This determination should be
reached through the consensus of the purchase team; if consensus
cannot be reached, the contracting officer must make the determination
based upon the business and competitive needs of the Postal Service,
as expressed in the solicitation.
2. Process. At the heart of this decision are (1) the trade-off judgment
between price and the value offered in response to the solicitation's
performance evaluation factors, (2) the relative value offered by a
supplier or suppliers in relation to the competition, and (3) whether a
lower cost is worth the lesser technical value (and potentially higher
risk), or whether a higher price is worth the increased
technical/managerial capabilities (and potentially lower risk). These
judgments must be made in accordance with the relative overall
importance of the performance evaluation factors to price.
3. Documentation. The purchase team must clearly understand, explain
and document the rationale for the best value determination.
4.2.6 Contract Award
4.2.6.a Contract award is made by execution of a contract by both parties. For
commercial purchases see 4.3.4.b.
4.2.6.b If a proposed award requires higher-level review and approval or a delegation
of contracting authority, award may not be made until the approval or
delegation has been obtained (see 1.5.3).
4.2.6.c When more than one award results from any single solicitation, separate
award documents must be executed. When an award is made to a supplier
for fewer than all items that may be awarded to that supplier, and additional
items are being withheld for subsequent award, the first award to that
supplier must state that the Postal Service may make subsequent awards on
additional items within the proposal acceptance period, if applicable. When
two or more awards are made to a single supplier under a solicitation, the
original copy of the proposal must be attached to the retained office copy of
the first award, and duplicate copies attached to succeeding awards.
4.2.7 Notification
4.2.7.a Within three days after award, the contracting officer must send all suppliers
that submitted proposals a written notice including:
1. The number of proposals received;
2. The name and address of each supplier receiving an award;
3. The items, quantities, and unit prices of each award, or the total of
estimated cost and fee for cost-reimbursement contracts;
4. If award was made without discussions, a statement to that effect; and
5. A brief rationale relating the award to the selection criteria. For
example:
"The offeror had the highest-rated performance evaluation factors and
the second-lowest rated price. The evaluation scheme provided that the
performance factors were more important than price in the award
decision."
4.2.7.b Contracting officers may not issue notifications that do not disclose the actual
basis of award.
4.2.7.c If numerous multiple awards are made, the notice may state where award
details may be reviewed.
4.2.8 Debriefing
4.2.8.a Timing. An offeror may be debriefed upon written request received by the
contracting officer within three days following the offeror's receipt of notice of
award. When practicable, untimely debriefings requests received beyond that
time may be honored. To the maximum extent practicable, any debriefing
should occur within five days after receipt of the written request.
4.2.8.b Method. Debriefings may be done in person, in writing, by electronic means
or any other method mutually acceptable to the contracting officer and the
supplier.
4.2.8.c Purpose. Debriefings are intended to explain to a supplier how its proposal
was evaluated and to help it prepare for future purchase opportunities.
Contracting officers should fully explain the rationale for contract award, and,
if necessary, use the debriefing as a means of educating suppliers in the way
the Postal Service conducts its purchases. Suppliers may be told their
relative strengths and weaknesses, and, if proposals were ranked, their
ranking. Suppliers may also be told their rating and that of the successful
offeror, however, no point-by-point comparisons with other proposals or
further breakdown of other evaluated scores may be made.
4.2.8.d Content.
1. Information must not be disclosed to any supplier as to another
supplier's:
(a) Trade secrets;
(b) Restricted data or privileged or confidential manufacturing
processes or techniques; or
(c) Business and financial information that is privileged or
confidential, including cost breakdowns, profit, indirect cost rates,
and similar information.
2. The contracting officer or a designated representative must conduct the
debriefing, with the assistance and participation of the purchase team
and assigned counsel, as appropriate.
3. The contracting officer must include a summary of the debriefing in the
solicitation file.
4.3 Commercial Purchasing
Commercial purchasing is the purchase of commercially available goods and
services. It is Postal Service policy to buy commercially available goods and
services whenever practicable.
4.3.2 Applicability
4.3.2.a General. Use the following policies and procedures when purchasing
commercial products or services.
4.3.2.b Definition. Commercial products and services are:
1. Products customarily used by the general public and available in the
commercial marketplace.
2. Products that have evolved from existing commercial products through
advances in technology or performance, even if not yet available in the
commercial marketplace, if the product will be available in the
commercial marketplace in time to satisfy the Postal Service's delivery
requirements.
3. Commercial products with minor modifications of a type customarily
available in the commercial marketplace.
4. Installation, maintenance, repair and training services if purchased in
support of a commercial product under terms and conditions available
to the general public.
5. Other commercial services offered and sold competitively, in the
commercial marketplace, based on established commercial prices for
specific tasks performed under standard commercial terms and
conditions. Facility repair and alteration, including painting (see 4.4) are
such commercial services.
6. Mail transportation services of all modes (see 4.5) may be purchased
as commercial services at the discretion of the contracting officer.
4.3.2.c Considerations
1. When using commercial purchasing procedures, purchase teams must:
(a) Conduct market research to determine whether commercial items
are available to meet the Postal Service's requirements (see
2.1.3).
(b) Encourage suppliers and subcontractors to incorporate
commercial items as components in items supplied to the Postal
Service.
2. There may be instances where a product or services is available in the
commercial market place but not capable of meeting a specific Postal
Service requirement without substantial adaptation or customization. In
these instances, the other purchasing methods described in this
chapter may be used.
4.3.2.d Dollar Limitations. Contracting officers may use commercial purchasing
methods up to the limit of their delegated contracting authority. Other types of
dollar limitations, such as applicable labor provisions, bonding requirements,
publicizing, etc., do apply.
1. Competition must be sought to the extent appropriate for purchases
above the competitive threshold (see 1.7.1.a). Proposals or
quotations must be solicited from a sufficient number of qualified
suppliers to ensure adequate competition.
2. Commercial purchase or prequalification opportunities valued at
$1 million or more must be publicized in accordance with 3.5.3.
3. If suppliers have been prequalified, competition may be restricted solely
to those suppliers (see 3.5.2.b.2).
4. Solicitations may be limited to one supplier if it is determined that only
one source is available, subject to the requirements of 3.5.5.
4.3.2.f Performance Evaluation Factors.
1. Supplier-Specific. The supplier-specific performance evaluation factors
of past performance and supplier capability (see 2.1.7.c) must
always be evaluated when determining which suppliers of commercial
items offer the best value to the Postal Service. Evaluations also must
consider price.
2. Proposal-Specific
(a) Purchase teams may use proposal-specific performance
evaluation factors when purchasing commercial items. When
technical information is necessary for evaluation of offers,
purchase teams should, as part of market research, review
existing product literature generally available in the industry. If
such literature is adequate for purposes of evaluation, it may be
requested in lieu of technical proposals.
(b) Offerors may be allowed to propose more than one product in
response to a solicitation for commercial items. Each product
must be evaluated as a separate offer.
3. Price. Price must be evaluated when purchasing commercial items.
4.3.2.g Contract Types. Generally, firm fixed price contracts or fixed-price with
economic adjustment contracts are used when purchasing commercial items.
Indefinite delivery contracts may be used when the prices are established
based on a firm-fixed price or fixed price with economic price adjustment.
4.3.2.h Quality Assurance. Generally, purchases of commercial items rely on the
supplier's existing quality assurance systems in lieu of Postal Service
inspection and testing unless customary market practices include in-process
inspection. Any in-process inspection by the Postal Service must be
conducted in a manner consistent with commercial practices.
4.3.2.i Pricing. When purchasing commercial items the policies and procedures in
Chapter 5 must be used to establish the reasonableness of price.
4.3.2.j Contract Financing. Customary market practices for some commercial items
may call for the buyer to provide contract financing. For instance, suppliers
may customarily require a deposit prior to the start of contract performance.
In these instances, purchase teams may consider such financing (see
1.7.6).
4.3.2.k Technical Data. When purchasing commercial items, the Postal Service
acquires only the technical data and rights in that data customarily provided
to the public. It will be assumed that the data delivered under a contract for
commercial items was developed exclusively at private expense. When a
contract for commercial items requires the delivery of technical data, the
contracting officer must include the appropriate provisions and clauses
delineating the rights in technical data (see Chapter 8) as an
addendum to Form 8203, Order/Solicitation/Offer/Award (see 4.3.5.b).
4.3.2.l Computer Software
1. Commercial computer software or commercial computer software
documentation is acquired under license customarily provided to the
public or to other Federal agencies to the extent such licenses are
consistent with Federal law and otherwise satisfy the Postal Service
needs. Generally, offerors and suppliers will not be required to:
(a) Furnish technical information related to commercial computer
software or commercial computer software documentation that is
not customarily provided to the public;
(b) Relinquish to, or otherwise provide the Postal Service, rights to
use, modify, reproduce, release, perform, display, or disclose
commercial computer software or commercial computer software
documentation except as mutually agreed to by the parties.
2. With regard to commercial computer software and commercial
computer software documentation, the Postal Service will have only
those rights specified in the license contained in any addendum to
Form 8203.
4.3.2.m Other Customary Commercial Practices. In the commercial marketplace, it is
customary during a given transaction for the buyer and seller to offer each
other differing terms and conditions. The terms and conditions prescribed in
this part seek to balance the interests of both the buyer and the seller, and
are generally appropriate for use in a wide range of purchases. However,
market research may indicate other customary commercial practices that are
appropriate for the purchase of the particular item. If the purchase team
determines such practices are essential to the success of the purchase, and
if such terms and conditions are not otherwise precluded by law or executive
order, they may be incorporated into the solicitation and contract.
4.3.3 Solicitations
4.3.3.a General. Solicitations for proposals or quotations may be done in writing or
orally.
1. Written Solicitations. Because written solicitations provide a clearer
understanding of the requirement, they should be used whenever
practicable. Purchasing teams are strongly encouraged to consider the
use of oral presentations to reduce cycle times and improve
understanding of proposals. Form 8203 is used as the request for
proposal and subsequent contract.
2. Oral Solicitations. An oral solicitation may be used when a written
solicitation would be impracticable, as when processing a written
solicitation would cause a delay detrimental to the Postal Service, or a
standing price quotation is being verified. In these cases, Form 8203 is
used as a purchase order.
4.3.3.b Standing Price Quotations. When it is the practice for suppliers to furnish
standing price quotations on supplies or services required on a recurring
basis, this information may be used instead of issuing a written solicitation for
each purchase. In such cases, the contracting officer must ensure that the
price information is current and that the Postal Service obtains the benefit of
the suppliers' trade discounts.
4.3.3.c Publicizing. See 3.5.3.
4.3.4 Receipt and Evaluation of Proposals and
Quotations
1. Recording. Written and oral proposals or quotations must be clearly
recorded in a format permitting ready comparison of prices and other
details. The record must be placed in the purchase file.
2. Late Proposals and Quotations. Late proposals and quotations in
response to written or oral solicitations may be considered when an
award has not yet been made, if the purchase team determines that
doing so is in the Postal Service's interest.
1. Offers will be evaluated in accordance with the performance evaluation
factors contained in the solicitation. For many commercial items the
supplier-specific performance evaluation factors and price should be
sufficient to determine which supplier is offering the best value to the
Postal Service.
2. When the solicitation adequately describes the item's intended use,
technical ability may be evaluated by how well the products meet the
Postal Service requirements. Technical evaluation generally includes
the examination of matters such as product literature, product samples
(if requested), technical features and warranty provisions. Contracting
officers must ensure that the instructions provided in Provision
4-1, Instructions to Offerors - Commercial Items, and the
performance evaluation factors included in Provision 4-2,
Evaluation - Commercial Items, are in agreement.
4.3.4.c Discussions. During the commercial purchasing process, discussions may be
held as described in 4.2.5.c.
4.3.4.d Price. Before contract award, prices must be deemed fair and reasonable.
4.3.5 Contract Format and Contents
1. Contracts for commercial items must, whenever practicable, include
only those clauses:
(a) Required to implement provisions of law or executive orders
applicable to the purchase of commercial items; or
(b) Determined to be consistent with customary commercial practices
such as those affective inspection, acceptance, and warranty.
2. Notwithstanding prescriptions contained elsewhere in the PM, contracts
for commercial items should contain only the provisions and clauses
prescribed in this part. These provisions and clauses may be revised,
as necessary, to reflect the applicability of statutes and executive
orders. In addition, depending on the particular purchase and the
contract type, other PM clauses and provisions may be added when
appropriate (see 4.3.6.g).
4.3.5.b Form 8203, Order/Solicitation/Offer/Award. When issuing written solicitations,
awarding contracts, and placing orders for commercial items, contracting
officers must use Form 8203, Order/Solicitation/Offer/Award. The form
contains the information necessary for orders, solicitations and contracts for
commercial items.
4.3.6 Provisions and Clauses
4.3.6.a General. Form 8203 contains the following clauses and provisions, and they
must be included (however, see 4.3.7) in all solicitations and contracts for
commercial items.
4.3.6.b Provision 4-1, Instruction to Offerors - Commercial Items. This
provision provides a single set of instructions to use when soliciting offers for
commercial items. It may be incorporated in the solicitation by reference. This
provision also requires past performance information from offerors.
Depending on the particular purchase, this provision may be tailored to
provide additional instructions to offerors (see 4.3.7).
4.3.6.c Provision 4-3, Offeror Representations and Certifications -
Commercial Items. This provision provides a single, consolidated list of
certifications and representations for the purchase of commercial items and is
attached to the solicitation for offerors to complete and return with their offer.
This provision may be tailored in accordance with 4.3.7.
4.3.6.d Clause 4-2, Contract Terms and Conditions - Commercial Items.
This clause includes terms and conditions normally used in commercial
purchasing such as those affecting inspection, acceptance and warranty and
may be incorporated in the solicitation and contract by reference. Depending
on the particular purchase, this clause may be tailored in accordance with
4.3.7.
4.3.6.e Clause 4-3, Contract Terms and Conditions Required to Implement
Statutes or Executive Orders - Commercial Items. This clause incorporates
by reference those clauses required to implement laws or executive orders
applicable to certain Postal Service purchases of commercial items, such as
services covered under the Service Contract Act or repairs and alterations
covered under the Davis-Bacon Act. Depending on the particular purchase,
this clause is added to the solicitation and contract, indicating which of the
additional clauses cited in (b) or (c) of Clause 4-3 apply. This clause
may not be tailored.
4.3.6.f Performance Evaluation Factors. When solicitations contain performance
evaluation factors other than price and the supplier-specific factors, Provision
4-2, Evaluation - Commercial Items, or a similar provision
containing the evaluation factors must be included.
4.3.6.g Discretionary Use of PM Provisions and Clauses. Other PM clauses may be
included in solicitations and contracts for commercial items. For example:
1. When an indefinite-delivery contract will be used, the clauses discussed
in 2.4.6 may be added.
2. When the use of options is in the Postal Service's interests, the
provisions and clauses prescribed in 2.2.8 may be used for this
purpose. If Provision 4-2, Evaluation - Commercial Items, is
used, paragraph (b) provides for the evaluation of options.
4.3.7 Tailoring Provisions and Clauses
4.3.7.a Policy. The provisions and clauses discussed in 4.3.6 are intended to address
customary market practices when purchasing commercial items. However,
because of the broad range of commercial items purchased by the Postal
Service, variations in customary practices across markets, and the relative
volume of Postal Service purchases in a specific market, contracting officers
may, working with their purchase team and within the following limitations,
and after conducting appropriate market research and, if necessary,
consultation with assigned counsel, tailor Provision 4-1, Instructions
to Offerors - Commercial Items, and Clause 4-2, Contract Terms
and Conditions - Commercial Items, to adapt to the market conditions for
each purchase.
4.3.7.b Clause 4-2, Contract Terms and Conditions - Commercial Items
1. Mandatory Terms and Conditions. The following paragraphs of Clause
4-2, Contract Terms and Conditions - Commercial Items,
implement statutory requirements and may not be tailored:
(a) Paragraph b. Assignment.
(b) Paragraph d. Disputes.
2. Paragraph a. Inspection and Acceptance
(a) Paragraph a of Clause 4-2 assumes that the Postal
Service will rely on the supplier's assurances that the commercial
item tendered for acceptance conforms to the contract
requirements. Postal Service inspection of commercial items
does not prejudice any other rights under this paragraph.
Additionally, although the paragraph does not address the issue
of rejection, the Postal Service always has the right to refuse
acceptance of nonconforming items. This paragraph is generally
appropriate when the Postal Service is acquiring noncomplex
commercial items.
(b) Other acceptance procedures may be more appropriate for the
purchase of complex commercial items or commercial items used
in critical applications. In such cases, the contracting officer
includes alternate inspection procedure(s) in an addendum and
ensures that these procedures and post award remedies
adequately protect the Postal Service's interests. The contracting
officer must carefully examine the terms and conditions of any
express warranty and the effect it may have on the Postal
Service's available postaward remedies.
(c) The purchase of commercial items on bases other than "as is"
may also require acceptance procedures different from those
contained in the clause. The contracting officer must consider the
effect such circumstances may have on the acceptance
paragraph as well as other paragraphs of the clause.
3. Termination Paragraphs
(a) General. Clause 4-2 permits the Postal Service to
terminate a contract for commercial items for either convenience
or default. Contracting officers should use 6.9 and 6.10 as
guidance.
(b) Policy. The contracting officer should exercise the Postal
Service's right to terminate a contract for commercial items either
for convenience or for default only when such termination would
be in the best interest of the Postal Service. The contracting
officer should consult with assigned counsel prior to termination
for default.
(c) Termination for Convenience. When the contracting officer
terminates for convenience a contract for commercial items, the
supplier will be paid:
(1) The percentage of the contract price reflecting the
percentage of work performed prior to termination, and
(2) Any charges the supplier can demonstrate directly resulted
from the termination. The supplier may demonstrate such
charges using its standard record keeping systems and is
not required to comply with cost accounting standards or
the contract cost principles in Chapter 5. The
Postal Service does not have any right to audit the
supplier's records due solely to a termination for
convenience.
(d) Termination for Default
(1) Paragraph f, Excusable Delay, requires the supplier to notify
the contracting officer as soon as possible after
commencement of any excusable delay. In most situations,
this requirement should eliminate the need for a termination
notice prior to terminating a contract. The contacting officer
will send a termination notice prior to terminating a contract
for reason other than late delivery.
(2) The Postal Service's rights following a termination for
default will include all the remedies available to any buyer in
the marketplace. The Postal Service's preferred remedy will
be to acquire similar items from another supplier and to
charge the defaulted supplier with any excess
reprocurement costs together with any incidental or
consequential damages incurred because of the
termination.
(3) When a termination for default is appropriate, the
contracting officer will send the supplier a written notification
regarding the termination. As a minimum, this notification
will:
(i) Indicate the contract is terminated for default;
(ii) Specify the reasons for the termination;
(iii) Indicate which remedies the Postal Service intends to
seek and provide a date by which the Postal Service
will inform the supplier of the remedies; and
(iv) State that the notice constitutes the final decision of
the contracting officer and that the supplier has the
right to appeal under Clause B-9, Claims and
Disputes.
(e) Generally, the parties should mutually agree upon the
requirements of the termination proposal. The parties must
balance the Postal Service's needs to obtain sufficient
documentation to support payment against the goal of having a
simple and expeditious settlement.
4. Paragraph o. Warranty
(a) The Postal Service's post award rights are the implied warranty of
merchantability and that of fitness for a particular purpose
contained in Paragraph o, and the remedies contained Paragraph
a, Inspection and Acceptance.
(b) The implied warranty of merchantability provides that an item is
reasonably fit for the ordinary purposes for which such items are
used. The items must be of at least average, fair or medium
grade quality and must be compatible in quality to those that will
pass without objection in the trade or market for items of the
same description.
(c) The implied warranty of fitness for a particular purpose provides
that an item is for use for the particular purpose for which the
Postal Service purchased it. The Postal Service can rely upon an
implied warranty of fitness for particular purpose when
(1) The seller knows the particular purpose for which the Postal
Service intends to use the item; and
(2) The Postal Service relied upon the supplier's skill and
judgment that the item would be appropriate for that
particular purpose.
(d) Contracting officers should consult with assigned counsel prior to
asserting any claim for a breach of an implied warranty.
5. Express Warranties
(a) Contracting officers should take advantage of commercial
warranties to the extent practicable. Solicitations for commercial
items must require offerors to offer the Postal Service at least the
same warranty terms, including offers of extended warranties,
offered to the general public in customary commercial practices.
Solicitations may specify minimum warranty terms, such as
minimum duration, appropriate to the Postal Service's intended
use of the item.
(b) Any express warranty the Postal Service intends to rely on must
meet the needs of the Postal Service. The contracting officer
should analyze any commercial warranty to determine if:
(1) The warranty is adequate to protect the needs of the Postal
Service, e.g., items covered by the warranty and length of
warranty;
(2) The terms allow the Postal Service effective postaward
administration of the warranty to include the identification of
warranted items, procedures for the return of warranted
items to the supplier for repair or replacement, and
collection of product performance information; and
(3) The warranty is cost effective.
(c) In some markets, it may be customary commercial practice for
suppliers to exclude or limit the implied warranties contained in
Clause 4-2 in the provisions of an expressed warranty. In
such cases, the contracting officer will ensure that the express
warranty provides for the repair or replacement of defective items
discovered within a reasonable time after acceptance.
(d) Express warranties must be included in the contract by
addendum.
4.3.8 Exemptions from Law
4.3.8.a General. This part lists provisions of laws that are not applicable to contracts
or subcontracts for the purchase of commercial items. This part also lists
provisions of law that have been amended to eliminate or modify their
applicability to either contracts or subcontracts for the purchase of
commercial items.
1. This part applies to any contract or subcontract for the purchase of
commercial items.
2. Nothing in this part authorizes the waiver of any provision of law with
respect to any subcontract if the prime supplier is reselling or
distributing commercial items of another supplier without adding value.
This limitation is intended to preclude establishment of unusual
contractual arrangements solely for the purpose of Postal Service
sales.
4.3.8.c Contracts and Subcontracts
1. The PM prescription for the provision or clause for each of the laws
listed below has been revised in the appropriate part to reflect its
proper application to prime contracts for the purchase of commercial
items.
2. For subcontracts for the purchase of commercial items or commercial
components, Clause 4-3, Contract Terms and Conditions
Required to Implement Statutes or Executive Orders - Commercial
Items, reflects the clauses required to be included in a subcontract at
any tier.
1. The Walsh-Healey Act (41 U.S.C. 43) does not apply to the purchase of
commercial items; nor do the contingent fee requirements discussed in
1.9.
2. The requirement for a certificate and clause under the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327 et seq.) has been
eliminated for the purchase of commercial items.
3. The following laws are not applicable to subcontracts at any tier for the
purchase of commercial items or components:
(a) Walsh-Healey Act (41 U.S.C. 43);
(b) Service Contract Act of 1965 (41 U.S.C. 351) as amended.
4. The requirement for a certificate and clause under the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327 et seq.) has been
eliminated for subcontracts at any tier for the purchase of commercial
items or components.
4.4 Design and Construction Purchasing
4.4.1.a Policy. Design and construction purchasing is the purchase of
architect/engineer, construction and related services. This section covers the
purchase of:
1. Services related to facilities design;
2. Construction; and
3. Construction management.
4.4.1.b Real Estate and Related Services. See 1.1.2 for information
regarding the purchase of real estate and related services.
4.4.2 Architect-Engineer Services
4.4.2.a Policy. Postal Service policy is to purchase architect-engineer services from
prequalified suppliers based on demonstrated competence and qualification
for the type of services required. Fees are negotiated after selection.
4.4.2.b Applicability. Generally, Architect-Engineer (A/E) services contracts are
awarded following the policies and procedures contained in 4.2. However,
when the provisions of this section conflict with any other provision of this
manual, the provisions of this section will govern.
1. A/E services are professional services requiring the performance or
approval by a registered or licensed architect or engineer associated
with the design or construction of real property, as well as incidental
services that members of those professions may logically or justifiably
perform in relation to construction, alteration, or repair of buildings, site
improvements, roads or other kinds of real property. Such incidental
services include master planning, architectural and engineering studies,
investigations, surveys , reports, design development, drawings
preparation, specification preparation, interior design, space planning,
environmental services, and observation and reporting of the work
performed during construction, alteration, or repair.
2. Environmental A/E services are those environmental services which
require performance or approval by a registered or licensed architect or
engineer. Environmental A/E services should be purchased using the
procedures in this section. Other environmental services such as
continuous monitoring and/or testing for environmental compliance at
postal facilities do not require performance by a registered or licensed
architect or engineer. These services should be purchased under the
procedures contained in 4.6.
4.4.2.d Selection Procedures
1. Publicizing
(a) For each contract for which the fee is expected to exceed
$50,000, a notice of intention to contract for A/E Services must be
published in the Commerce Business Daily. The notice must be
prepared and transmitted in accordance with 3.5.3, and
must solicit submission of Standards Forms (SF) 254, Architect/
Engineer and Related Services Questionnaire and 255,
Architect/Engineer and Related Services Questionnaire for
Specific Project.
(b) For each contract for which the fee is not expected to exceed
$50,000, publicizing may be limited to the area in which the
project will be performed.
2. A/E Selection Team
(a) Contracting officers establish teams to evaluate and select A/E
suppliers. Each selection team must be composed of at least two
members with one member designated as the chairperson. Team
members must be appointed from among professionally qualified
Postal Service personnel who collectively have experience in
architecture, engineering, construction, and purchasing. In some
cases, staff limitations or project-specific considerations may
require that individuals working under contract for the Postal
Service be appointed to the selection team. These individuals
may be appointed only on a case-by-case basis subject to
approval of the contracting officer. Each project file must contain
written certification by each evaluation team member that he or
she has no conflict of interest that may impair their objectivity in
the selection process (see 1.7.7).
(b) Less complex, low dollar A/E projects may be awarded directly
without the formation of a A/E Selection Team. For these projects,
the contracting officer may appoint an individual from the A/E
Selection Team to recommend three or more qualified suppliers
from existing SF 254 and SF 255 information. If the number of
known qualified suppliers is insufficient to provide a competitive
review, then the project may be publicized within the area in
which the project is to be performed.
3. Postal Service Cost Estimate. Before discussions of any proposed
contract or contract modification is initiated, an independent Postal
Service estimate of the cost for the required A/E services must be
developed, based on a detailed analysis of the costs expected to be
generated by the work. Consideration must be given to the estimated
value of the services and to the scope, complexity, and nature of the
project. The independent estimate must be revised as required during
discussions to reflect changes in or clarification of the scope of the work
to be performed. A fee estimate based on the application of percentage
factors to cost estimates for the various segments of the project may be
developed for comparison purposes, but such an estimate must not be
used as a substitute for the independent Postal Service estimate. To
the extent necessary, the cost breakdown figures in the Postal Service
estimate may be revealed during discussions provided that the overall
amount of the Postal Service estimate is not disclosed. Any change in
the Postal Service estimate during or after price discussions must be
specifically but succinctly explained in the record of price discussions.
4. Cost or Pricing Data. The provisions of Chapter 5 relating to
cost analysis, provision of cost or pricing data, and preparation of
discussions memoranda apply to purchases of A/E services. Because
of the procedures used to purchase A/E services and the lack of price
competition, price analysis is normally insufficient.
5. Fees for A/E Services. The contracting officer is responsible for
negotiating a fair and reasonable fee for the services to be performed.
In determining a fair and reasonable fee, the contracting officer should
compare the independent Postal Service estimate with the A/E
supplier's proposal. Also, the contracting officer should consider
previous prices paid for similar services. Additional guidelines are
contained in Handbook RE-14.
1. Discussions will be conducted initially with the A/E supplier given the
highest technical ranking. If a mutually satisfactory contract cannot be
achieved with that supplier, discussions must be terminated.
Discussions will then be initiated with the supplier next in order of
preference. This procedure must be repeated until a mutually
satisfactory contract has been negotiated.
2. In lieu of the discussion procedures described above, the contracting
officer may, at his or her discretion, compete A/E requirements under
the general procedures set out in 4.2. In these instance, award will be
made to the A/E supplier offering the best value to the Postal Service.
4.4.2.f A/E Supplier Performance Evaluation. The project manager responsible for
monitoring the performance of an A/E supplier must complete an objective
written evaluation of the supplier's performance, including any environmental
elements, using Forms 7477-A, A/E's Performance Design Phase Evaluation
and 7477-B, A/E's Performance Construction Phase Evaluation. For further
guidance see Handbook RE-14.
4.4.2.g Indefinite-Quantity A/E Services Contracts
1. Use. The Postal Service requires that a large number of small repair
and alteration, environmental and other projects be performed each
year. Indefinite-quantity (IQC) A/E contracts permit a large number of
projects to be accomplished at one or more facilities through the
issuance of delivery (work) orders against a single contract rather than
through individual solicitations. Each indefinite-quantity contract is
limited to the geographic area that has been described in the
solicitation. Multiple awards may be made if provided for in the
solicitation.
2. Limitations. Limitations regarding contract term, dollar limitations, and
delivery (work) order limits are issued by the VP, P&M, or authorized
designee.
3. Solicitation Preparation. Guidance for indefinite-quantity A/E services
contract preparation is contained in Handbook RE-14.
4. IQC A/E Supplier Performance Evaluation. See 4.4.2.f.
4.4.3 Construction
4.4.3.a Purchasing Construction
1. Applicability. This section applies to the purchase of construction. When
the provisions of this section conflict with any other provision of this
manual, the provisions of this section will govern.
2. Definition. Construction means construction, alteration, repair (including
painting and improvements of all types), environmental work (asbestos
abatement, UST removal/replacement, etc.), and demolition of
buildings, structures, and improvements of all types. The term does not
include other investigative work such as engineering, environmental or
other studies which is not part of the beginning of the construction
process. Normally, construction does not include any construction work
pursuant to a lease and performed by the lessor (see Handbook RE-1,
Realty Acquisitions and Management).
3. Purchase Method
(a) Generally, construction is purchased in accordance with 4.2.
Suppliers should be prequalified (see 3.5.2).
(b) Purchase or prequalification opportunities must be publicized in
accordance with 3.5.3.
(c) Repairs and alterations may be purchased in accordance with
4.3. However, commercial purchasing procedures do not apply to
any new construction or expansion of buildings.
(d) Alterations, repairs, and improvements to be accomplished by a
lessor must be performed in accordance with this section to the
extent practicable, but without reference to any requirement for
publicizing or competition, provided the contracting officer
determines that the price proposed by the lessor for the work
offers the best value to the Postal Service.
(e) The bonding requirements of chapter 7 must be met for
all construction contracts.
4. Contract Types
(a) Generally, contracts for construction should be firm-fixed price
contracts. Such contracts may be:
(1) Lump-sum contracts for the total work or for defined parts of
it;
(2) Unit-price contracts in which a unit price is paid for a
specified quantity of work, such as cubic yards of earth or
concrete or square yards of pavement; or
(3) A combination of both.
(b) However, any contract type discussed in 2.4 may be
used if approved by the contracting officer.
5. Specifications. See 2.3.1.a and Handbook RE-14 for further
guidance.
6. Presolicitation Notices
(a) At the contracting officer's discretion, a presolicitation notice may
be issued for construction projects (see 3.5.3.b). Notices
may be distributed to plan hold rooms, companies on solicitation
mailing lists maintained by the purchasing office, and any other
known interested parties within the Postal Service or members of
the public.
(b) Any presolicitation notice issued must include a statement of the
project's magnitude in terms of physical characteristics and an
estimated price range (for example, 30,000 sq. ft. building with an
estimate cost range of $500,000 to $1,000,000 for the project).
However, in no event may the statement disclose the Postal
Service estimate.
7. Preproposal Conferences and Attendees. See 4.2.2.f and Handbook
RE-14 for guidance. The design A/E must be available to help interpret
plans and specifications.
8. Inspection of Construction Site and Data. Provision must be made for
offerors to inspect the construction site. Also, offerors must be given the
opportunity to examine data available to the Postal Service that may
provide information affecting performance of the work, such as boring
samples, and original boring logs. This information should be
assembled in one place and be made available to all offerors in the
same manner. When feasible, a record should be kept of the identity
and affiliation of all offerors' representatives inspecting the site or
examining the data.
9. Performance Time
(a) In establishing the time for contract completion, the contracting
officer must consider, among other things, the nature and
complexity of the project, the constructions seasons involved, the
availability of equipment, labor and other factors and the
increased cost for an aggressive project schedule.
(b) In any given contract, separate completion periods may be
established for separable items of work. When such periods are
shown, requests for time extensions must be evaluated for each
item, and all affected completion periods must be modified when
appropriate.
10. Liquidated Damages
(a) See 2.2.6. For additional information on calculating the
liquidated damages rate for construction projects see the
guidelines in Handbook RE-14.
(b) When different completion periods for separate parts or stages of
the work are specified in the contract, the clause may be revised
to provide for liquidated damages for each separate part or stage
in which delay will damage the Postal Service.
11. Base and Alternate Prices
(a) Solicitations permitting alternate proposals must require the base
proposal to include all features considered essential to a sound
and adequate building design. Any alternates to be included in
the specifications should represent significant amounts of work in
relation to the base proposal, and they should generally be
structured as "add," or "deduct" alternates.
(b) When accurate cost estimates are not available, a base proposal
may be required for the minimum acceptable project, with add
alternates for desired materials or equipment.
(c) When budget constraints exist, a base proposal may be required
for the plans and specifications as stated, with "deduct" alternates
for desired materials or equipment to be used to bring proposals
back within budget.
(d) Solicitation documents calling for alternates must clearly state
that the Postal Service reserves the right to accept or reject any
and all alternate prices, as may be determined by the contracting
officer to be in the Postal Service's interests.
12. Performance of Work by Supplier. Unless the supplier is required to
perform a significant part of the contract work with its own forces, it may
be difficult to obtain adequate supplier supervision of the work. To
address this problem, each Postal Service construction contract must
contain Clause B-42, Performance of Work by Supplier,
establishing the minimum percentage of the work that the supplier must
perform, consistent with customary or necessary specialty
subcontracting and the complexity and magnitude of the work. The
percentage may be increased for contracts with unusual requirements
(i.e. environmental, mechanical).
13. Solicitations
(a) General. See 4.2.2 and Handbook RE-14.(b)
(c) Distribution. Solicitations may be furnished (with plans and
specifications) without charge to organizations that maintain plan
hold rooms, or other types of organizations, for the benefit of
suppliers, subcontractors, and material suppliers. The extent of
this distribution (geographical or otherwise) may be determined
on a case-by-case basis by the contracting officer.
14. Release of Plan Holders List. See 1.7.4 and ASM 350.
15. Award
(a) A notice of intent to make award must be furnished to the
successful offeror no later than the time set for acceptance in the
solicitation or any extension to which the offeror has agreed. The
notice must advise the supplier of any required bonds and the
date by which the supplier must execute and return such bonds.
(b) When all required bonds have been received, the contracting
officer will make award and issue a notice to proceed. The
contracting officer may issue the notice to proceed at the time of
award or may issue it at the preconstruction conference. The
contracting officer then will send a written notice of the award to
all offerors who submitted a proposal and any other known
interested parties within the Postal Service or members of the
public.
16. Construction Supplier Performance Evaluations. The project manager
responsible for monitoring the performance of a construction supplier
must complete Form 5002, Construction Supplier Performance
Evaluation, of the supplier's performance, including any environmental
elements, for each project. For further guidance see Handbook RE-14.
4.4.3.b Indefinite-Quantity Construction Contracts
1. Use. The Postal Service requires a large number of small repair and
alteration, environmental and other projects be performed each year.
Indefinite-Quantity construction contracts permit a large number of
projects to be accomplished at one or more facilities through the
issuance of delivery (work) orders against a single contract rather than
through individual solicitations.
2. Procedures
(a) A solicitation must be used to request proposals based on a unit
price schedule prepared by the Postal Service. Offerors must be
required to submit a multiplier that will apply equally to all prices
listed in the unit price schedule. The multiplier submitted by the
offeror must not be more than two decimal places (e.g., 1.22 or
0.97).
(b) Each indefinite-quantity contract is limited to a specific
geographic area.
3. Limitations
(a) Limitations regarding contract term, dollar limitations, and delivery
(work) order limits are issued by the VP, P&M, or authorized
designee.
(b) Delivery (work) orders are limited to the geographic area
described in the contract.
(c) No new construction or building expansion work may be ordered
under an Indefinite-Quantity construction contract, except for site
preparation or foundation work for a pre-engineered building
purchased directly from the manufacturer.
(d) The contracting officer may request quotations from an
Indefinite-Quantity construction supplier for work items not
covered by the unit price schedule and order such items, in
addition to ordering covered work. However, not more than 25
percent of the cost of any delivery (work) order may be for such
uncovered work.
4. Solicitation Preparation. Guidance for Indefinite-Quantity construction
contract preparation is contained in Handbook RE-14.
5. Liquidated Damages. See 4.4.3.a.10. If Clause 2-10 is not
included in the basic IQC contract, a contracting officer may not include
liquidated damages in subsequent delivery (work) orders.
6. IQC Construction Supplier Evaluation. See 4.4.3.a.16.
4.4.4 Design-Build Contracting
4.4.4.a Applicability. Generally, design-build contracts are awarded following the
same policies contained in 4.2. However, because these purchases call for a
combination of services, the purchasing process is somewhat unique. When
the provisions of this section conflict with any other provision of this manual,
this section will govern.
4.4.4.b Definition. Under design-build contracting, one entity or supplier performs
both architecture-engineering and construction under one single contract
providing single source responsibility for delivering the project design and
construction. The design-build entity or supplier can assume several
organization structures. Most common are suppliers possessing both design
and construction resources in-house. Others are combinations of a joint
venture between designer and supplier, a constructor-led team with the
designer in a subcontract role, or a designer-led team with the constructor in
a subcontractor role.
4.4.4.c Purchase Method. The policies contained in 4.2 and the procedures listed in
Handbook RE-14 regarding publicizing, solicitations, and contracts apply to
the purchase of design-build services. The prequalification procedures in
3.5.2 should ordinarily be used in connection with design-build
services, regardless of contract type.
4.4.4.d Contract Types
1. Fixed-Price Design-Build Contract. Fixed-price design-build contracts
are suitable for use on small, simple projects with well-defined scopes,
for which design has been developed to at least the 30 percent level
through Standard Plans or otherwise. The fixed-price is comprised of
fixed fees for A/E services (which cover all costs of remaining design
work and A/E construction services, plus associated overhead and
profit) and a fixed-price to complete all construction work (which covers
all construction overhead and profit). The contract is awarded based
upon the procedures covering evaluation of technical and management
and price proposals (see 4.2).
2. Cost-Reimbursable Design-Build Contracts
(a) Cost-reimbursable design-build contracts are suitable for use on
all major projects for which the scope or complexity dictate the
use of design-build construction delivery services.
Cost-reimbursable design-build contracts must be based on a
Guaranteed Maximum Price (GMP) which must be determined
through competition or through discussions. The GMP is
comprised of fixed fees for A/E services (which cover all costs of
remaining design work and A/E services during construction, plus
associated overhead and profit), reimbursable direct construction
costs, and a construction services fee (which covers all
construction overhead and profit). If the supplier's total fees and
actual construction costs together exceed the GMP as adjusted
for changes (if any), the adjusted GMP is the amount paid for
complete performance; if they do not exceed the adjusted GMP,
the Postal Service and the supplier share the savings in
accordance with a contractually established ratio.
(b) Cost-reimbursable design-build contracts with a competitive
Guaranteed Maximum Price (GMP) are suitable for use on
projects for which design has been developed to at least the 30
percent level and a reliable estimate of the maximum cost to
construct the facility can be made. The contract is awarded based
upon the procedures covering evaluation of technical and
management proposals and price proposals (see 4.2).
(c) Cost-reimbursable design-build contracts with a negotiated
Guaranteed Maximum Price (GMP) are suitable for use on all
major projects when factors such as significant ambiguities
concerning the scope of the project, requirements for integration
with fixed mechanization, or new types of projects prevent the
development of a reliable estimate of the maximum cost to
construct the facility. The Postal Service provides the offerors with
design which is less than 30 percent developed (typically only 10
percent developed) along with a Construction Cost Limit (CCL).
The CCL is the Postal Service budget estimate of the total cost to
construct the facility including the offeror's overhead and profit.
These contracts are awarded through the following purchase
process:
(1) Phase I covers the completion of design to the point where
a GMP can be reasonably negotiated and is awarded
based upon the procedures covering evaluation of technical
and management proposals and price proposals.
(2) Phase II covers all remaining design and all construction
work and is awarded based upon negotiation of a CCL
within the GMP.
(3) If a CCL cannot be negotiated within the GMB, the Postal
Service may require the supplier to redesign within the CCL
at no cost to the Postal Service or may withdraw from the
project. If the supplier withdraws, the Postal Service keeps
the design and uses it to contract with a different supplier
using a fixed-price design-build contract or a
cost-reimbursable design-build contract with a competitive
GMP.
3. Fixed-price contracts with economic price adjustment may be used.
See 2.4 and Handbook RE-14 for further guidance.
4. Contracts with performance incentives may be used. See 2.4
and Handbook RE-14 for further guidance.
4.4.4.e Solicitations For Design-Build Contracts. Solicitations/Contracts for
design-build are unique. Guidelines regarding applicable contract clauses
and solicitation provisions are provided in Handbook RE-14.
4.4.4.f Requirements for Design-Build Proposals. In addition to the technical
proposal, offerors must also furnish Standard Form 254, Architect-Engineer
and Related Services Questionnaire, and Standard Form 255,
Architect-Engineer and Related Services Questionnaire for Specific Project.
See Handbook RE-14 for further guidance.
4.4.4.g Design-Build Supplier Performance Evaluations. The project manager
responsible for monitoring the performance of a design-build contract must
complete an objective written evaluation of the supplier's performance
including any environmental elements. See 4.4.2.f.
4.4.5 Construction Management Support Services
4.4.5.a Applicability. Generally, Construction Management Support Services (CMSS)
contracts are awarded following the policies and procedures contained in
.
4.4.5.b Definition. A Construction Management Support Services supplier monitors
the management, coordination, and general direction of the work and
progress of a construction supplier. The CMSS supplier maintains a full-time
staff at the project site during construction. A CMSS supplier may be retained
at any time during either the project planning, design, or construction phase.
During the construction phase the CMSS supplier must maintain a full-time
staff at the project site.
4.4.5.c Purchase Method. The general policies set forth in and other
chapters of the PM and the procedures listed in Handbook RE-14, regarding
publicizing, solicitations, and contracts apply to the procurement of
construction management support services.
4.4.5.d Contract Types. Contracts for construction management support services
may be indefinite-quantity contracts or a single fixed-price contract for a
single project.
1. Indefinite-Quantity Contracts. In order to facilitate the expeditious
assignment of CMSS suppliers to projects where their services are
needed, construction management support services contracts are
generally awarded as indefinite-quantity contracts requiring the CMSS
supplier to provide a range of construction services for multiple
construction contracts over a specified period of time and within a
specified geographic area.
2. Indefinite-Quantity Contract Duration and Cost Limits. Limitations
regarding contract term, dollar limitations, and (delivery) work order
limits are issued by the VP, P&M, or an authorized designee.
4.4.5.e CMSS Contract as an Alternative to A/E Contract Options. The Postal
Service may contract with a CMSS supplier rather than exercising an A/E
construction-management option to perform field duties during construction.
The CMSS supplier may not prepare working drawings. design, or
specifications that will be used for construction services.
4.4.5.f Solicitations for Construction Management Support Services Contracts.
Guidelines regarding applicable contract clauses and solicitation provisions
are provided in the Handbook RE-14 and must be followed.
4.4.5.g Selection Processes for Construction Management Support Services
Contracts. See Handbook RE-14 for guidance on the evaluation and
selection process.
4.4.5.h Evaluation of Price Proposals. The offeror's price proposal is a multiplier
factor that is applied to each work-day category. The multiplier submitted by
the offeror must not be more than two decimal places (e.g., 1.22 or 0.97).
4.4.5.i Contract Award. See Handbook RE-14 for guidance on the contract award
process.
4.4.5.j Contract Management Support Services Supplier Performance Evaluations.
The project manager responsible for monitoring the performance of a CMSS
supplier must complete an objective written evaluation using Form 7477-A,
A/E's Performance Design Phase Evaluation and 7477-B, A/E's Performance
Construction Phase Evaluation, of the supplier's performance, including any
environmental elements, for each project. For further guidance see
Handbook RE-14.
4.4.5.k Environmental Engineering Services. When the Postal Service requires
environmental engineering services such as the design and/or monitoring of
environmental mitigation, abatement, or clean-up measures, an engineering
supplier should be retained using the procedures applicable to procurement
of A/E services (see 4.5.2). In those cases where a supplier is hired to both
design and perform environmental mitigation, abatement, or clean-up
measures, the supplier should be retained using the procedures applicable to
purchase of design-build services (see 4.4.4).
4.5 Mail Transportation Purchasing
4.5.1.a Policy. Mail transportation purchasing is the purchase of mail transportation
and related services. This section addresses the purchase of mail
transportation services authorized in Part V of Title 39, U.S. Code, and those
authorized under applicable provisions of 49 U.S.C. 41904. It also addresses
the purchase of ancillary services directly related to the transportation of mail.
4.5.1.b Purchasing Method. Generally, and depending on the item being purchased,
mail transportation is purchased following the policies and procedures
contained in 4.2 or 4.3. In case of any conflict between this section and
another part of the PM, this section governs.
4.5.2 Administrative Officials. Administrative officials are Postal Service officials
designated by a contracting officer to supervise and administer a supplier's
performance of mail transportation and related services. Officials so
designated do not have the authority to make contract changes as described
in 4.5.3.
4.5.3 Contracting Officer's Representative
4.5.3.a Designation. A contracting officer may designate, by name and position title,
Postal Service employees to serve as contracting officers' representatives
(see 1.5.4 and 6.1.1.b). These individuals are authorized to
take actions related to the award and administration of specified contracts.
Designations must be in writing and must clearly specify the contracts or
types of contracts over which the contracting officer's representative has
delegated authority. Designations remain in effect until:
1. Revoked by the contracting officer or the contracting officers'
successor; or
2. Revoked by the departure or reassignment of the individual designated.
4.5.3.b Authority and Limitations
1. A contracting officer's representative is authorized to:
(a) Review and grant contract adjustments when the annual
compensation paid under the contract will not increase or
decrease by more than ten percent.
(b) Discuss, approve, and sign orders and contract modifications
changing service schedules, provided that the annual
compensation paid under the contract will not increase or
decrease by more than ten percent; and
(c) Review and sign contract modifications having no effect on cost
or price.
2. A contracting officer's representative may not award, agree to, or sign
any contract or, except as authorized in subparagraph 1 above, any
contract modification or termination notice. Only contracting officers
have such authority.
4.5.3.c Restrictions. The following restrictions apply to the designation of contracting
officers' representatives:
1. They must be employed in the Executive and Administrative Schedule
or the Postal Career Executive Service.
2. They may not redelegate their authority. They may, however, assign the
performance of administrative tasks to their subordinates.
4.5.4 Mailing Lists
4.5.4.a Establishing Mailing Lists. It is Postal Service policy to use prequalified
suppliers to the greatest extent practicable (see 3.5.2). If suppliers
have not been prequalified, the contracting officer, working with the purchase
team, must establish a list of potential suppliers for each solicitation, and
must maintain lists of potential suppliers for services solicited on a recurring
basis. Suppliers wishing to be included on the national mailing list may apply
by submitting Form 5436, Mailing List Application - Mail Transportation
Services, or by letter providing the information required by the purchase
team.
4.5.4.b Retention on Lists. Suppliers must be retained on mailing lists for two years
from the date of their application or the date of their most recent response to
a solicitation, whichever is later. Those that have been removed from mailing
lists may be reinstated by filing a new application.
4.5.4.c Use of Mailing Lists. The purchase team, using their knowledge of the
marketplace and depending on the particular purchase, should solicit enough
mailing list suppliers to ensure adequate competition.
4.5.4.d Publicizing. The contracting officer may have an announcement of the
solicitation published in the Journal of Commerce. Announcements of
solicitations may be made available to newspapers, other news media
and trade journals at no cost to the Postal Service. Paid commercial
announcements or advertisements may be used when determined by the
contracting officer to be in the Postal Service's interest. Unless precluded by
urgency, any announcement published must appear at least 30 days before
the date for receipt of proposals.
4.5.5.a Contract Type. See 2.4.
4.5.5.b Contract Term. Except for air and terminal-handling contracts, the term of the
contract must be one of the following:
1. Regular Contract. A fixed-term contract that cannot exceed four years
unless warranted by special conditions or the use of special equipment.
In these cases, the contract may be for a six-year term.
2. Emergency Contract. A contract entered into for the duration of an
emergency under the authority of 39 U.S.C. 5001.
3. Temporary Contract. A short-term contract may not exceed two years,
and that may be terminated by either party without entitlement or
indemnity.
4.5.5.c Use of Contracts
1. Regular contracts should be used whenever possible.
2. Temporary contracts may be used only when (a) the need for the
service is expected to be two years or less, or (b) the need for the
service has been established, but the duration, frequency, or volume of
mail are not certain. Temporary contracts must be replaced with regular
contracts as soon as service requirements are firmly established.
3. Emergency contracts may be entered into only when an emergency
exists, and must terminate when the emergency ceases and the Postal
Service is able to obtain service otherwise pursuant to its contracting
authority. No emergency contract may remain in effect more than six
months without the approval of the manager, National Mail
Transportation Purchasing. Circumstances under which emergency
contracts may be appropriate include the following:
(a) A catastrophic event has interrupted normal transportation
operations.
(b) Strikes or other labor disputes are causing service interruptions.
(c) A mail transportation supplier has been suspended or removed or
a contract has been terminated.
(d) A sole highway supplier has died or become incompetent and the
estate representative will not continue service.
(e) The generation of mail at unanticipated locations or an
unexpected increase in mail volume at regular locations exceeds
the mail hauling capacity of the Postal Service or regular
suppliers.
4.5.5.d Modes of Transportation. Transportation contracts are distinguished by the
mode of transportation service provided. A contract for any mode of service
may require container and additional services such as stevedoring, terminal
handling, and ground drayage between postal facilities and the supplier's
facilities. The modes follow:
1. Air Transportation
(a) Air Taxi. Air taxi contracts call for the transportation of mail by
dedicated aircraft operating between two or more specified
points. In most cases, these contracts also call for the exclusive
use of the entire aircraft capacity for the transportation of mail.
Handbook PO-513, Mail Transportation Handbook, and more
specifically, Handbook PO-509, Air Taxi Contract Administration,
provides guidelines and procedures in the purchase and
administration of air taxi contracts. If any conflict occurs between
the handbooks and the PM, the PM applies.
(b) Air Network. Air transportation network contracts call for the
transportation of mail by air carrier, usually by dedicated aircraft
between points where hub transfers are used.
(c) Air Segment. Air transportation segment contracts call for the
transportation of mail by air carrier between an origin and a
destination specified by the Postal Service.
(d) Air System
(1) Air system contracts call for the transportation of mail from,
to and between any point(s) within the air carrier's existing
transportation system or network. The air carrier's existing
system may be modified from time to time as determined by
the air carrier. An air carrier's transportation system
consists primarily of transportation by aircraft, but may
include road feeder service (RFS) connections. Such
contracts may be awarded either (1) through a competition
in which price is a factor in the selection decision; or (2) on
the basis of a uniform or common rate set by the Postal
Service.
(2) If price is a factor in selecting air system suppliers, the
purchasing procedures contained in 4.2 must be followed.
(3) If set rate contracts are solicited, the purchasing method
used must be authorized by the manager, National Mail
Transportation Purchasing. The method used may deviate
from those in 4.2, so long as those procedures (1) are
reasonably adapted to negotiated, set rate contracting; and
(2) are approved in writing, prior to issuance of a
solicitation, by the manager, National Mail Transportation
Purchasing.
(e) International Surface Airlift. An international surface airlift contract
calls for the international transportation of surface mail by United
States or foreign air carriers operating from designated departure
terminals in the United States, its territories or possessions to
designated terminals in foreign countries. It is Postal Service
policy to give preference to domestic air carriers. If an award is
based on price alone, a foreign proposal adjustment factor of ten
percent will be added to the lowest acceptable foreign proposal
when it is evaluated against domestic proposals. The manager,
National Mail Transportation Purchasing, may specify a more
stringent method of evaluating foreign proposals.
(f) Surface Airlift. A surface airlift contract calls for the airlifting of
surface mail to its destination.
2. Ground Transportation
(a) Highway. Highway transportation is the surface transportation of
mail by means other than bus, rail or water. Service may be
between either two or more designated points (over the road) or
within a local metropolitan area (shuttle service). Highway
transportation contracts may include requirements for the in-route
distribution of mail in specially designed and equipped vehicles,
box delivery, collections and other services similar to those
provided by rural carriers. Under these contracts, another suitable
means of transportation may be authorized when the use of a
motor vehicle would prove impracticable.
(b) Rail Transportation. A rail transportation contract calls for the
transportation of mail in rail carrier supplied or Postal furnished
equipment by freight carriers or their subcontractors. These
contracts may incorporate one or many origin/destination
segments. Handbook PO-513, Mail Transportation Handbook,
provides guidelines and procedures in the purchase and
administration of rail contracts. If any conflict occurs between the
handbook and the PM, the PM applies.
(c) Amtrak Transportation. An Amtrak transportation contract
consists of mail movement from various origins to various
destinations via Amtrak passenger train network. Mail is
transported in either Mail Handling Cars (MHC), baggage cars or
other equipment as specified in the requirements. Handbook
PO-513, Mail Transportation Handbook, provides guidance and
procedures for the purchase and administration of the Amtrak
contract. If any conflict occurs between the handbook and the
PM, the PM applies.
(d) Intermodal Transportation. Intermodal transportation is the
transportation of mail in carrier supplied or Postal furnished
equipment by the use of intermodal carriers or subcontractors.
These Intermodal carriers include rail carriers, highway suppliers,
or third party intermodal companies. Intermodal transportation is
the combination of more than one mode of transportation to move
mail between origin and destination (for example, the use of
highway and rail transportation to complete one movement of
mail from origin entry to destination arrival).
(e) Bus. Bus contracts call for the transportation of mail by passenger
common carriers in passenger-carrying or other motor vehicles
on the routes on which they are permitted to carry passengers.
These contracts may either cover a segment of the particular bus
service or may cover the entire bus system or network.
Exhibit 4.5.5
International Ocean Transportation Schedule of Rates
|
Distance (Nautical Miles)
|
Rate (cents/lb)
|
|
0-499
|
16.0
|
|
500-999
|
16.4
|
|
1,000-1,499
|
16.7
|
|
1,500-1,999
|
17.1
|
|
2,000-2,499
|
17.4
|
|
2,500-2,999
|
17.8
|
|
3,000-3,499
|
18.1
|
|
3,500-3,999
|
18.4
|
|
4,000-4,499
|
18.8
|
|
4,500-4,999
|
19.1
|
|
5,000-5,499
|
19.5
|
|
5,500-5,999
|
19.8
|
|
6,000-6,499
|
20.2
|
|
6,500-6,999
|
20.5
|
|
7,000-7,499
|
20.8
|
|
7,500-7,999
|
21.2
|
|
8,000-8,499
|
21.5
|
|
8,500-8,900
|
21.9
|
|
9,000-9,499
|
22.2
|
|
9,500-9,999
|
22.6
|
|
10,000-10,499
|
22.9
|
|
10,500-10,999
|
23.2
|
|
11,000-11,499
|
23.6
|
|
11,500-11,999
|
23.9
|
|
12,000-12,499
|
24.3
|
|
12,500-12,999
|
24.6
|
|
13,000-13,499
|
25.0
|
|
13,500-13,999
|
25.3
|
|
14,000-14,499
|
25.7
|
|
14,500-14,999
|
26.1
|
3. Water Transportation
(a) Domestic Inland Water. A domestic inland water contract calls for
the transportation of mail in vessels between points within the 48
contiguous states or between points within Alaska, Hawaii, or
United States territories and possessions. Such a contract may
include provisions requiring box delivery, collection and other
services similar to those furnished by highway suppliers or rural
carriers.
(b) Domestic Offshore Water. Domestic offshore water contracts call
for the transportation of mail in vessels between points in the 48
contiguous states and offshore points and points in Alaska,
Hawaii, or United States territories and possessions.
(c) International Ocean. An international water contract is a contract
with United States or foreign-flag carriers for the transportation of
mail by vessel from points in the United States or its territories
and possessions to points in foreign countries.
4. Ground Transportation Network. Ground transportation network
contracts call for the transportation of mail by ground truck operations
and may include ancillary terminal handling or delivery requirements as
determined by the Postal Service.
5. Terminal Handling. Terminal handling contracts call for the sorting,
dispatching, loading, or unloading of mail into and out of transportation
equipment. These services may be performed at the supplier or the
Postal Service terminal handling facility and may or may not be
ancillary in nature to the line-haul services performed by the same or
other suppliers.
6. Leased Trailer. Leased trailer contracts call for the lease of trailers for
transportation of mail within geographical areas designated by the
Postal Service. These contracts may contain provisions for trailer
maintenance and repair service and load restraint systems, and other
related requirements determined to be in the best interest of the Postal
Service.
4.5.5.e Alternatives to Contracts. The following may be used to obtain mail
transportation services:
1. Domestic Air Transportation Services. Transportation of mail between
points within the state of Alaska performed by scheduled air carriers
and paid for at rates of compensation established by the Department of
Transportation in its service mail rate orders (30 U.S.C. 5402(f)).
2. International Ocean Transportation. International ocean transportation
services may be obtained on a per-pound basis by tender. Mail of all
classes and empty mail equipment may be tendered to U.S. and
foreign-flag steamship companies for transportation in accordance with
the scheduled rates at Exhibit 4.5.5, unless the responsible Manager
has negotiated other rates. Mail may be tendered at postal facilities for
transport by the steamship company to the pier, or at the carrier's
facility. The schedule or negotiated rates include any costs incurred for
such transport.
3. International Air Transportation. International air transportation services
other than those for which the Postal Service has contracting authority
under Title 39 U.S.C. 5402(a) and (b) and 49 U.S.C. 1375(e)(5) must
be obtained from carriers with permits and reimbursed pursuant to
Department of Transportation service mail rate orders as long as it is
required by law.
4.5.6 Renewal of Contracts
4.5.6.a General. Competitively awarded regular and temporary mail transportation
contracts may be renewed by the mutual agreement of the Postal Service
and the supplier. Regular or temporary highway and inland water contracts
that have been wholly subcontracted less than six months before their
expiration date (except those subcontracted by an immediate family member
of a deceased or incompetent supplier) may not be renewed. Wholly
subcontracted contracts that have been in effect for greater than six months
are eligible for renewal and may be renewed by mutual agreement between
the Postal Service and the subcontractor, by which the subcontractor
becomes the prime supplier under the renewal contract.
4.5.6.b Characteristics of Renewal Contracts
1. Duration. The renewal term of a temporary contract may not exceed
two years, and the renewal term of a regular contract may not exceed
the greater of four years or the original contract term.
2. Service. The service provided at the beginning of the renewal term
must be the same as that existing at the end of the previous contract
term.
3. Contract Rate. The contract rate at the beginning of the contract
renewal term must be the contract rate in existence at the end of the
previous contract term.
4.5.6.c Renewal Procedures
1. Establishing Requirements. Before entering into discussions for the
renewal of a contract, the purchase team must determine the need to
be met by the renewal contract and a reasonable rate for the service
which will meet that need.
2. Determining Satisfactory Service. Contracts should not be renewed
with suppliers who are currently providing less than satisfactory service.
Faults in service which do not rise to the level of deficiencies and thus
would justify termination for default, may be sufficient to support a
determination not to renew.
3. Negotiating Service and Price. Having determined that a contract is
appropriate for renewal, the contracting officer with the assistance of
the purchase team enters into discussions with the supplier on the
terms of the renewal contract. Before agreeing to the final terms, the
purchase team must determine that renewal offers the best value and
most advantageous alternative to the Postal Service, price and other
factors considered. For the purpose of this determination, "other
factors" may include the benefits of continuity of service and the
potential costs of disruption arising out of resolicitation.
4. Contract Modifications, Renewal, Resolicitation. If agreement is
reached on the renewal terms, the existing contract is modified to
reflect any adjustments in service and rates. If a contract will not be
renewed, or terms for renewal cannot be agreed upon in whole or in
part, any continuing service requirement may be the subject of a new
competitive solicitation.
5. Documentation. The determinations made throughout the renewal
process must be thoroughly documented in the contract renewal file.
4.5.6.d Restrictions. Emergency contracts may not be renewed.
4.5.6.e Clause. Clause B-78, Renewal, must be included in transportation
contracts that may be considered for renewal.
4.5.7 Extension and Short-Term Renewal of Contracts
4.5.7.a When appropriate, contracting officers may issue modifications extending the
term of a contract, as distinct from the renewal of a contract (see 4.6.6).
4.5.7.b The contract term may be extended in increments of up to one year, provided
the extension does not result in a total term of more than two, four, or six
years, whichever is the allowable maximum contract term. The extension
must be made with the consent of the supplier by a supplemental agreement
(see 6.5.1.c), and the need for the extension must be documented in
the contract file.
4.5.7.c Pending full renewal in accordance with 4.5.6, an expiring contract that is
eligible for renewal may be renewed for short terms of up to one year by
mutual agreement of the parties. When the full renewal is approved, the
short-term renewal may be converted into a full-term renewal to cover the full
remaining term of the contract.
4.5.8 Contract Changes
1. Contracting officers working with their purchase team may take action
to discontinue, extend, or curtail contracts; to change and restate
service required; and to increase or decrease frequencies.
2. The purchase team must carefully consider the effect of any proposed
contract change. No change may be authorized that is contingent on or
related to a change in another contract service without the concurrence
of the contracting officer responsible for the other service.
4.5.8.b Termination for Convenience
1. A contract, or any part of a contract, must be terminated if it becomes
unnecessary or if it is to be superseded by some other service. The
supplier must be notified in writing of the termination and is entitled to
the indemnity provided in the contract. If it is more advantageous to
operate than to pay the indemnity, the service should be continued.
2. Discontinuance of service under the contract may, in some instances,
be to the advantage of the supplier. In these instances, if the supplier is
willing to waive the indemnity, the waiver must be included in a contract
modification discontinuing the service. In the case of highway or inland
domestic water routes, the waiver must be included in a supplemental
agreement signed by the supplier.
3. It is the policy of the Postal Service to furnish suppliers as much
advance notice as possible when a contract is to be terminated before
the end of its term. Specific requirements for notice may be stated in
the contract. A supplier may be notified by letter of intent to discontinue
in advance of issuing a formal notice. In the case of highway, inland
domestic water routes or air taxi, the termination must be approved by
the manager, National Mail Transportation Purchasing prior to being
issued.
4.5.8.c Service Changes
1. Highway or Domestic Inland Water Contracts
(a) Types. There are two general types of service changes: minor
service changes and major service changes. They are effected by
contract modification.
(b) Definitions
(1) Minor Service Change
(i) A minor service change is any change that results in a
change in equipment type or termini; an extension; a
curtailment; a change in line of travel; or a permanent
increase in the frequency or number of trips which,
either individually or in combination with previous
changes, does not increase by more than 100 percent
the mileage required at the beginning of the contract
or renewal term.
(ii) An insignificant minor service change is one that
increases the supplier's rate of pay by no more than
$2,500.
(iii) A significant minor service change is one that
increases the supplier's rate of pay by more than
$2,500.
(2) Major Service Change. A major service change is any
service change other than a minor service change.
(c) Effecting Service Changes
(1) Insignificant Minor Service Change. Insignificant minor
service changes resulting in increased compensation to the
supplier may be ordered by the contracting officer as a
unilateral contract modification (see 6.5.1.c.2).
They do not require the supplier's approval. The contracting
officer may authorize an equitable increase in
compensation at the existing rate or at such other rates as
the contracting officer determines to be fair and reasonable.
If the supplier considers the amount of increase inequitable,
the contracting officer must attempt to negotiate a mutually
agreeable increase and incorporate it by contract
modification. If time permits, the contracting officer may
discuss the change and increase in compensation with the
supplier; if an agreement on compensation is reached, the
change may be made by contract modification. If
agreement cannot be reached, the contracting officer may
issue a unilateral contract modification and determine the
amount of increased compensation, subject to Clause
B-9, Claims and Disputes.
(2) Significant Minor Service Change. Significant minor service
changes are made by contract modification, incorporating a
price adjustment, with the agreement of the supplier.
(3) Major Service Change. Major service changes are
discussed with the supplier and effected by contract
modification. The contracting officer must obtain the
approval of the manager, National Mail Transportation
Purchasing before entering into discussions regarding
major service changes. When determining whether or not to
recommend or approve the negotiation of a major service
change, the purchase team must take into consideration
indemnity liability, the supplier's experience in operating a
service of the scope required, past performance, rate, and
any factors that would indicate the proper course of action
to take in the best interests of the Postal Service. When a
major service change is not approved by the manager,
National Mail Transportation Purchasing, the old service
may be terminated and the new service purchased.
2. Other Surface Contracts and Air Contracts. Service changes for
contracts other than those discussed in 4.5.8.c.1 may be made,
consistent with the terms of the contract, provided that these changes
do not:
(a) Alter the original intent of the contract; or
(b) Transform the service into an entirely new service.
4.5.8.d Exceptional Service
1. Exceptional service is additional service to perform scheduled or
backup route operations (such as extra trips, detour miles, and
additional equipment). Exceptional service may be required only when
an unanticipated increase in mail volume or other conditions arise that
require the performance of additional service or equipment.
2. Whenever feasible, contracting officers should hold discussions with
suppliers to establish the rate to be paid for exceptional service before
its performance. When discussions in advance would delay the mail or
otherwise not be feasible, the contracting officer or a designated
representative may order the supplier to perform such service at
pro-rata pay.
3. If no rate of pay for exceptional service has been negotiated in
advance, the supplier may be paid a lump sum reimbursement for the
difference between costs incurred as a direct result of performing
exceptional service and pro-rata payment, provided that such costs are
adequately supported by evidence satisfactory to the contracting officer.
Claims for compensation above pro-rata pay for exceptional service
must be filed in writing with the contracting officer, with full supporting
documentation, no later than 90 days after the performance of the
service.
4. Disputes regarding compensation are handled as provided in Clause
B-9, Claims and Disputes.
4.5.8.e Schedule Changes for Highway or Domestic Inland Water Contracts
1. Improvement of mail service must be the primary consideration in
ordering a schedule change. Schedules may not be changed for the
convenience of suppliers, subcontractors, or drivers unless the change
will in no way be detrimental to the Postal Service. The purchase team
must consider the following before making schedule changes:
(a) Financial effect on the supplier. Reversing a schedule or requiring
an excessive layover might cause sufficient increase in cost of
operation to provide the basis for a request for pay adjustment.
(b) Hardship on suppliers or customers. Arbitrary action should be
avoided and reasonable effort should be made to work out
arrangements satisfactory to suppliers.
(c) Schedule realism. Schedules may not be set that would require
running times in violation of established speed limits.
2. The purchase team must ensure that schedule changes are
coordinated with all those responsible for other affected services.
4.5.8.f Emergency Contracts. The service and rate of compensation under
emergency contracts may not be changed unless specifically authorized in
the contract or by the manager, National Mail Transportation Purchasing.
1. Clause B-71, Termination for Convenience (Transportation),
must be included in all regular and temporary highway and air taxi
contracts.
2. Clause B-72, Termination for Convenience - Emergency
Contracts, must be included in all emergency highway and air taxi
contracts.
3. Clause B-67, Changes (Transportation), must be included in all
highway transportation regular and temporary contracts.
4.5.9 Subcontracting
4.5.9.a Highway or Domestic Inland Water Contracts
1. A subcontract for the transportation of mail is any agreement, other
than an employer-employee agreement, between a party that has
contracted with the Postal Service to transport mail and a third party, in
which the latter agrees to provide all or part of the contract service. An
employer-employee agreement is one under which the employee is
subject to the continuing authority of the mail supplier to supervise and
direct the manner of work performance of the employee. Such an
employer-employee agreement is also characterized by, expressly or
implied, the employer's responsibility to pay compensation directly to
the employee, to withhold taxes and amounts for social security
benefits from the employees' compensation for the work performed
under the agreement. An agreement between a supplier and a third
party for the latter to provide labor for service other than the
transportation of mail is not a subcontract within the meaning of this
section. When an owner-operator, who because of illness or temporary
equipment failure, is required to obtain labor from another in order to
continue performance of the service as required by the contract, the
resultant transaction is not a subcontract within the meaning of this
section.
2. A supplier may, without approval of the contracting officer, subcontract
the whole or part of the contract with one or more owner-operators who
provide and drive their own vehicles, provided that the service is for
irregular mail movements such as plant loads. All other subcontracts,
for either the whole route or any part of it, must be approved by the
purchase team.
3. Subcontracting is an exceptional action and may be approved only
when the supplier offers good and sufficient reasons. The supplier must
request permission to subcontract in writing, giving the purchase team
its reasons for subcontracting, the desired effective date, and the
identity and qualifications of the proposed subcontractor.
4. Approval by the Postal Service and execution by a supplier of a
subcontract does not release the supplier from its contractual
obligations, nor from liability for damages.
5. Whenever the purchase team determines that a supplier has breached
the contract by subletting the whole or part of the contract contrary to
the requirements of this manual, the contracting officer may terminate
the contract for default.
6. Subcontractors must meet the same responsibility and qualification
requirements as the prime supplier.
7. If the whole contract is subcontracted, the subcontract must be for the
full remainder of the contract term. The subcontractor's initial rate of
pay will be the same as the supplier's, unless there is a change in
operations costs resulting from a service change or from the enactment
of a statue or ordinance or the adoption of lawful regulations by any
federal, state, or local agency.
8. When a subcontract is terminated, the prime supplier may be required
to take charge of the route. A subcontract may be terminated at the
subcontractor's request only with the prior approval of the contracting
officer. Such approval may be given only for good cause, and must be
in writing. Subcontracts are automatically terminated by death of the
subcontractor or abandonment of the service by the subcontractor.
9. When a subcontractor fails to meet the terms of a contract, the
contracting officer must notify the prime supplier of the subcontractor
irregularities. The contracting officer may (1) require removal of the
subcontractor for failure to perform, and require the prime supplier to
resume route operations, (2) terminate the prime contract for default.
4.5.9.b Other Surface Contracts and Air Contracts. For other surface and air
contracts whose terms permit subcontracting, the supplier must give the
contracting officer advance notice of its intent to subcontract. The supplier
may enter into a subcontract unless notice of disapproval is received from the
contracting officer within 30 days of the date the notice was given.
4.5.10 Release of Supplier
In the case of highway or domestic inland water contracts, when the
purchase team determines that it is in the best interest of the Postal Service,
a supplier may be released from a contract if unable to perform adequately
due to a disability, or when the supplier's life or the public safety would be
endangered by the supplier's continued performance. Whenever practicable,
a replacement contract should be awarded before the current supplier is
released. The supplier must waive any indemnity as a condition of release.
For other than highway or domestic inland water contracts, a supplier may be
released only as provided in the terms of the contract.
4.5.11 Service Deficiencies
4.5.11.a Damages. The contracting officer may make deductions from the payment
due suppliers for failure to perform contractually required service, and may
assess damages for delinquencies with regard to any contractual
requirements as provided in the terms of the contract. The contracting officer
may also change or remit deductions and damages. Suppliers are also
answerable in damages to the Postal Service for the proper care and
transportation of the mail. Such damages, as determined by the contracting
officer, may be withheld by the Postal Service from compensation otherwise
due the supplier. Suppliers are accountable to the Postal Service for loss or
damage to the mail or any part thereof due to (1) loss, rifling, damage, wrong
delivery, depredation, or other mistreatment of the mail by the supplier or any
of the supplier's officers, agents, or employees, or (2) the failure of the
supplier or any of the supplier's officers, agents, or employees to exercise
due care in the custody, handling, or transportation of the mail.
4.5.11.b Breach Not Warranting Termination. When a supplier has committed a
breach of the contract not sufficiently serious to warrant termination, the
supplier may be assessed damages in an amount determined by the
contracting officer, in accordance with the terms of the contract.
4.5.11.c Loss or Damage to Mail. When a supplier, or supplier's agent or employee,
permits loss or damage to the mail, the contracting officer may withhold from
the supplier's compensation as damages the value of the mail lost or
damaged plus administrative costs of handling the irregularity.
4.5.11.d Supplier with Several Contracts. When a supplier holding several contracts is
subject to a fine or assessment for damages on one contract, the contracting
officer may withhold compensation due under other contracts held by the
supplier until such fines and damages have been recovered.
4.5.12 Death or Incompetence of Supplier
1. The procedures below are to be followed upon the death or legally
adjudged incompetence of an individual contracting in his or her own
name (sole proprietorship), or in the name of a corporation all of whose
stock is substantially owned by the individual (closely-held corporation)
and the supplier is a highway or inland domestic water supplier. These
procedures do not apply when the death or incompetence of an owner
or officer of a corporation does not significantly impair the corporation's
ability to perform the contract service.
2. The contracting officer must act to maintain continuity of service. If
a prime contract is affected, the representative of the estate
(administrator, executor, or immediate family member) must be
contacted to ascertain whether the estate wishes to continue to perform
the service. If a subcontract is affected, the subcontract may be
terminated and the prime supplier is responsible for performance of the
service.
3. The death of a sole proprietor terminates the contract, and the estate
has no obligation to continue to provide the service.
4. The representative of the estate may operate the route with the consent
of the contracting officer. If there is reason to deny consent, the
contracting officer must promptly submit a full written report to the
manager, National Mail Transportation Purchasing for determination.
The contracting officer must document the file with evidence of the
representative's authority to represent and assume control of the
supplier's business.
5. When an individual regains competence during the performance of the
contract by a representative, the individual may apply to the contracting
office for reinstatement as supplier. Any such application must be
approved by the manager, National Mail Transportation Purchasing
before reinstatement.
4.5.12.b Partnership. When the supplier is a partnership, and the death or
incompetence of a member of the partnership dissolves the partnership, the
surviving partner or partners may continue to operate the route. At the
request of the surviving partner or partners, the contracting officer will order a
simple name change to recognize the new contracting entity.
4.5.12.c Estate Representatives
1. When the representative of an estate assumes a route, the contract
rate remains the same. Pending pay adjustment requests are
processed under instructions in effect at the time of adjustment. The
operator of the route is entitled to all benefits of the adjustment.
2. The representative of an estate may subcontract all or part of the route
in accordance with 4.5.9.
3. If a contract expires while being performed by the representative of an
estate, the contract cannot be renewed, unless the representative is the
surviving spouse or child of the deceased, in which case the contract
may be renewed in that individual's name.
4. If the representative of an estate does not want to continue the service,
or if consent is denied for the representative to continue the service, the
contracting officer should purchase emergency service and issue a
solicitation for a new permanent service contract.
5. Procedures for processing payments to deceased or incompetent
supplier are described in Handbook PO-513.
4.5.13 Eligibility Requirements
4.5.13.a Eligibility Requirements for Suppliers. Any individual 21 years of age or older,
any partnership in which at least one partner is 21 years of age or older, and
any corporation in which at least one of the officers is 21 years of age or
older may hold mail transportation contracts. See 1.7.3 for
restrictions concerning contracts with Postal Service employees and
business organizations substantially owned or controlled by Postal Service
employees or their immediate families. Solicitations may establish other
eligibility requirements as needed.
4.5.13.b Service Employees
1. The following persons are ineligible to perform services under a
contract:
(a) Persons on parole or under suspended sentence for commission
of a felony.
(b) Persons with known criminal records that involve convictions for
offenses involving moral turpitude or dishonesty.
(c) Persons who associate with convicted felons.
(d) Persons known to engage in the illegal use, possession, sale, or
transfer of narcotics or other drugs.
(e) Persons who knowingly submit false data or conceal data for the
purpose of gaining employment.
(f) Persons whose traffic records indicate that their driving motor
vehicles would be hazardous (applies only to drivers and
assistants).
(g) Pilots with unsatisfactory aircraft operations safety performance
records.
(h) Persons who through their abusive or disruptive behavior would
pose a danger to fellow workers.
2. Supplier employees engaged as drivers of vehicles with a GVW of
10,001 lbs. or more must be at least 21 years old. All other drivers must
be at least 18 years old.
1. ID Cards. No supplier, subcontractor, or employee of a supplier or
subcontractor may be allowed access to mail matter or postal
operational areas unless he or she displays a valid identification card
issued by the Postal Service.
2. Screening. Except for those categories of persons identified in
paragraph d below, the Postal Service will not issue the identification
cards described above to individuals until they have been screened to
determine their suitability for that access. Forms and procedures for
screening are as set forth in Handbook PO-508 and in any applicable
Management Instruction.
1. Persons employed by suppliers whose own security screening
procedures have been approved by the contracting officer and
reviewed by the Inspector-in-Charge.
2. Persons who are civil service personnel otherwise subject to
investigation under Executive Order 10450.
3. Persons previously screened under another contract with a break in
service of less than one year.
4. Persons hired for service in an emergency of not more than 15 days.
(This does not exempt regular relief or substitute employees or those
repeatedly hired on an emergency basis.)
5. 5. Persons employed to transport plant-load mail, but only if such mail
is not generated with regularly recurring frequency.
4.5.13.e Notification of Supplier. The contracting officer will notify the supplier of the
grounds on which any person has been denied access to the mails under the
procedure set out herein. Any decision as to whether a supplier,
subcontractor, or contract or subcontract employee is to be denied access to
the mail or precluded from operating a vehicle transporting mail must be
made by the contracting officer in accordance with the eligibility requirements
of 4.5.13.a and 4.5.13.b.
4.5.13.f Disclosure of Information. All information obtained or developed in the
screening program must be restricted from disclosure outside the Postal
Service to anyone other than the supplier, subcontractor, or contract or
subcontract employee concerned.
4.5.14 Contract Administration
4.5.14.a General. The purchase team is responsible for monitoring contract
performance in a manner appropriate to ensure that the supplier provides all
services and equipment required under the terms of the contract (see
6.1.1).
4.5.14.b Unsatisfactory Service. The purchase team under the direction of the
contracting officer must take necessary action to correct any problem caused
by unsatisfactory supplier performance. If the remedies and damages
provided in 4.5.11 are insufficient, termination for default should be
considered.
4.5.14.c Major Irregularity. A major irregularity is an action or service deficiency
requiring summary suspension or removal of the supplier in the public
interest (such as subcontracting without approval, or theft, deliberate loss,
damage, or abandonment of the mail or contract operation). When a major
irregularity occurs, the contracting officer may take immediate suspension or
removal action, without prior notice to the supplier. Suspension may be with
or without pay, as provided in the contract.
4.6 Special Categories of Purchases
Certain Postal Service purchases must by nature receive distinctive
treatment, and therefore are purchased under policies and procedures
distinct from those contained in the PM. This section identifies those types of
purchases, and addresses some of them in detail, providing policies and
procedures supplementing those contained in other chapters and sections of
the PM. In turn, the policies and procedures contained in this section may be
supplemented by other such issuances as discussed in 4.6.2.
4.6.2 Supplemental Policies and Procedures
Under delegations issued by the Vice President, Purchasing and Materials,
these policies and procedures are originated and developed by individuals
within the organizations housing the distinct requirement. Exhibit 4.6.2,
Supplemental Policy and Procedure Authority, shows, by requirement
category, the Postal Service policy-originating officials delegated this
authority, subject to the review and approval of the approving official identified
in the exhibit.
Exhibit 4.6.2
Supplemental Policy and Procedural Authority
|
Requirement Category
|
Policy-Originating
Organization
|
Approving Official
|
|
Accounting and Financial Audit
Services
|
Finance
|
VP Purchasing & Materials
|
|
Advertising
|
Marketing & Sales
|
VP Purchasing & Materials
|
|
Appraisal Services
|
Facilities
|
VP Facilities
|
|
Arbitration Services
|
Labor Relations
|
VP Purchasing & Materials
|
|
Architect-Engineer Services
|
Purchasing & Materials
|
VP Purchasing & Materials
|
|
Banking Services
|
Finance
|
VP Finance
|
|
Brokerage Services
|
Facilities
|
VP Facilities
|
|
Construction
|
Purchasing & Materials
|
VP Purchasing & Materials
|
|
Fiscal Services
|
Finance
|
VP Purchasing & Materials
|
|
Fuel
|
Policies, Planning & Diversity
|
VP Purchasing & Materials
|
|
Information Services
|
Information Systems
|
VP Purchasing & Materials
|
|
International Postal Agreements
|
International
|
VP Purchasing & Materials
|
|
Law Enforcement
|
Chief Inspector
|
VP Purchasing & Materials
|
|
Leasing
|
Facilities
|
VP Facilities
|
|
Legal Services
|
General Counsel
|
VP Purchasing & Materials
|
|
Licensing of Non-Postal-Owned
Rights for Postal Use
|
Policies, Planning
& Diversity
|
VP Purchasing & Materials
|
|
Licensing of Postal Rights
|
Marketing & Sales
|
VP Purchasing & Materials
|
|
Literary and Artistic Works
|
Corporate Relations
|
VP Purchasing & Materials
|
|
Mail Transportation Services
|
Purchasing & Materials
|
VP Purchasing & Materials
|
|
Medical Services
|
Employee Relations
|
VP Purchasing & Materials
|
|
Postal Rate Commission
Purchases
|
Postal Rate Commission
|
Postal Rate Commission
|
|
Printing
|
Printing Purchasing
|
VP Purchasing & Materials
|
|
Real Estate and Related
Services
|
Facilities
|
VP Facilities
|
|
Research & Development
|
Engineering
|
VP Purchasing & Materials
|
Revenue-Producing
Contracts
|
Policies, Planning
& Diversity
|
VP Purchasing & Materials
|
|
Stamp Design
|
Customer Service Support
|
VP Purchasing & Materials
|
|
Structured Contracts
|
Policies, Planning
& Diversity
|
VP Purchasing & Materials
|
|
Requirement Category
|
Policy-Originating
Organization
|
Approving Official
|
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Surveying Services
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Facilities
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VP Facilities
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Title Abstracting Services
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Facilities
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VP Facilities
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Title Insurance Purchases
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Facilities
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VP Facilities
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Uniforms
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Labor Relations
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VP Purchasing & Materials
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1. Definitions. Generally, professional services are those performed by
individuals or firms of recognized status, in fields such as accounting,
engineering, law, and the sciences. Technical services are provided by
individuals or firms who are expert in a given field, such as information
technology, training, writing and editing, purchasing, marketing and
demographics, and other such areas. These services may be used to:
(1) provide needed expertise on an individual or group basis; (2) to
supplement the career workforce as required by workload; and (3) to
provide turn-key services in support of postal operations.
2. Licenses. When prequalifying or purchasing professional services for
which individuals are normally required to be licensed (such as medical,
legal, accounting, and architecture), licenses must be required as a
prerequisite to prequalification or contract award. Acceptable licenses
may be limited to those issued by a particular state or entity, but
only when local expertise is necessary to successful performance.
3. Required Clauses. All contracts for professional/technical services
must include the following clauses:
(a) Clause 4-4, Nondisclosure (Professional Services). This clause
may be modified with the approval of the policy-originating official
designated in Exhibit 4.6.2 and assigned counsel.
(b) Clause 4-5, Inspection of Professional Services. This clause
provides for inspection of the supplier's work product and
acceptance of only those products that meet reasonable
professional standards. The clause is to be used in lieu of, and
not in addition to, the standard inspection and acceptance
clauses prescribed in 2.2.
(c) Clause 4-7, Records Ownership. This clause gives the Postal
Service ownership of contract files, including copies of all supplier
work papers. While this clause is mandatory for professional
service contracts, purchase teams have to decide whether to
include it or not in technical service contracts, depending on the
nature of the service.
4. Other Clauses. Depending on the particular purchase, the following
clauses should be included in contracts for professional/technical
services:
(a) Clause 4-6, Invoices (Professional Services). This clause is
included in all non-fixed price contracts for professional/technical
services. The clause requires presentation of invoices showing
who performed the services, the hours and partial hours of
service provided each day, and the services provided each hour
or partial hour. Suppliers may be allowed to set minimum charges
for partial hours or days.
(b) Clause 4-8, Key Personnel. This clause requires use of the key
personnel identified in the supplier's proposal, unless the
purchase team approves substitution, and provides for contract
termination for failure to comply.
(c) Clause 1-1, Privacy Protection, must be included as applicable.
See 1.7.5.
1. Definition. Consultant services are services provided by expert
individuals or firms possessing exceptional qualifications in a
particular technical or professional field. They are used to enhance the
understanding of complex issues and to provide new insights into
alternate solutions to, or recommendations on, business or
decision-making functions of a postal organization. Consultants neither
involve themselves in the day-to-day operations of Postal Service
organizations except for study purposes, nor work under the immediate
direction and control of Postal Service employees. Usually, consultant
service suppliers provide reports or analyses as the deliverable upon
completion of their contractual duties.
2. Use. Consultant services are used to enhance the understanding of
complex issues and to provide new insights into alternate solutions to,
or recommendations on, business or decision-making functions of a
postal organization.
4.6.5 Information Technology
1. Commercial Software. See 4.3.2.l.
2. Computer. Defined in 8.3.1.
3. Computer Software. Defined in 8.3.1.
4. Hardware. Computers and peripheral machines.
5. Information Technology (IT). Encompasses all types and categories of
computer, networking, and telecommunications systems (where voice
and/or data may be transmitted by cable, telephone, or wireless), and
all associated hardware, firmware, software, and services. This
includes emerging technologies such as wireless handheld data
collection devices, information kiosks, transaction machines, electronic
commerce services, distance learning systems, World Wide Web sites,
multimedia, and office equipment such as FAX machines and copiers.
IT also includes information technology and any equipment or
interconnected system or subsystem of equipment that is used in the
creation, conversion, or duplication of data or information. IT does not
include any equipment that contains embedded technology that is used
as an integral part of the product but the principal function of which is
not the acquisition, storage, manipulation, management, movement,
control, display, switching, interchange, transmission, or reception of
data or information. For example, HVAC (heating, ventilation, and air
conditioning) equipment, such as thermostats or temperature control
devices and medical equipment where information technology is
integral to its operation, is not IT.
6. System Life Cost. All costs associated with acquiring, operating, and
maintaining an information system, including conversion, environmental
(such as heating, ventilation, air conditioning), training, and support
service costs from the date the system is acquired until it is no longer
needed for Postal Service use.
7. Information Systems Security. Encompasses a composite of factors
necessary to protect information technology systems and the
information they process to prevent exploitation through interception,
unauthorized electronic access, or related technical intelligence threats,
and to ensure authenticity. This protection results from the application
of security measures that may include cryptosecurity, transmission
security, emission security, and computer security to systems that
generate, store, process, transfer, or communicate information of use to
unauthorized parties. It also includes protection of sensitive material.
8. Undue Burden. A significant difficulty or expense.
1. General. Even small-dollar information technology purchases may
involve questions of system compatibility, expansion potential, and
other complex issues. Information Systems researches, tests, and
evaluates information systems and components to ensure quality and
intersystem communication capability. Therefore, it is the policy of the
Postal Service to acquire information technology in accordance with the
technical standards established by Information Systems and concurred
in by the VP, Purchasing & Materials.
2. Accessibility
(a) Section 508 of the Rehabilitation Act as amended in 1998
requires the Postal Service to ensure that information technology
(IT) purchased by the Postal Service allows employees with
disabilities and individuals with disabilities who are members of
the public to have access to and use of information and data that
is comparable to the access and use of information by employees
and members of the public who do not have disabilities, unless
doing so would impose an undue burden (see below).
(b) Applicability
(1) General. Unless an exception applies, purchases of IT must
meet the applicable accessibility standards at 36 CFR part
1194. Exception determinations are required prior to
contract award, except for indefinite delivery contracts and
the other circumstances enumerated at subparts (3)(a)
through (3)(d) below.
(2) Indefinite Delivery Contracts. Exception determinations are
not required prior to award of indefinite delivery contracts,
except for requirements that are to be satisfied by initial
award. Contracting officers who award indefinite delivery
contracts must indicate to requiring and ordering activities
which IT the supplier indicates as compliant and show
where full details of compliance can be found (e.g.,
supplier's or other exact web site location). Before task or
delivery orders are issued, requiring and ordering activities
must ensure IT meets the applicable accessibility standards
at 36 CFR part 1194, unless an exception applies.
Accordingly, indefinite delivery contracts may include
noncompliant IT items; however, any task or delivery order
issued for noncompliant items must meet an applicable
exception.
(3) The accessibility standards at 36 CFR part 1194 do not
apply to:
(a) Taking delivery for items ordered prior to June 21,
2001.
(b) Within-scope modifications of contracts awarded
before June 21, 2001.
(c) Exercising unilateral options for contracts awarded
before June 21, 2001.
(d) Multiyear contracts awarded before June 21, 2001.
(c) Exceptions
(1) General. The requirements of Section 508 of the
Rehabilitation Act as amended do not apply to IT that -
(a) Is acquired by a supplier incidental to a contract.
(b) Is located in spaces frequented only by service
personnel for maintenance, repair, or occasional
monitoring of equipment.
(c) Is being acquired as IT that is available in the
commercial marketplace, and the IT meets all the
accessibility standards that can be met within time to
meet the Postal Service's delivery requirements.
(d) Would impose an undue burden on the Postal
Service.
(2) Basis. In determining whether compliance with all or part of
the accessibility standards in 36 CFR part 1194 would be an
undue burden, the Postal Service must consider the
difficulty or expense of compliance.
(3) Documentation
(a) Undue Burden. The requiring or ordering activity must
document in writing the basis for an undue burden
decision and provide the documentation to the
contracting officer for inclusion in the contract file.
(b) Commercial Items. When acquiring commercial items,
the requiring or ordering activity must document in
writing, for provision to the contracting officer for
inclusion in the contract file, the extent to which
commercial items fail to meet specific accessibility
standards and a description of the market research
performed to establish the extent of the commercial
IT's noncompliance.
3. Information Systems Guidance
(a) Technical Standards. Information Systems periodically issues
standards, policies, and general guidance by means of
management instructions, handbooks, and technical bulletins, in
order to supplement guidance in terms of updated standards and
policy interpretations. The core technical standards which guide
information technology purchases are contained in Handbook
AS-820, Postal Computing Environment. To ensure compliance
with these standards, Provision 4-7, Postal Computing
Environment and ITK Compliance, must be included in all
information technology solicitations and resultant contracts.
(b) Technical Appraisals. Information Systems conducts market
research and technical appraisals of the information technology
marketplace and potential suppliers. Information Systems
conducts technical appraisals of potential suppliers at various
points during the purchasing process, particularly during the
presolicitation phase. The objective is to proactively ensure
seamless integration into the Postal Service's computing
environment. Companies interested in having their products or
services appraised by Information Systems must submit a
request to that organization. Additionally, contracting officers
should encourage requirements organizations to seek a similar
review by Information Systems of their current and future
requirements. Lastly, prequalification of suppliers should be
considered for all information technology purchases (see
3.5.2).
4. Security Considerations
(a) Systems and Software Security. Handbook AS 805, Information
Systems Security, delineates the types of systems security
relevant to purchases of information technology. Contracting
officers should pay particular attention to this matter during the
purchasing planning phase, and should coordinate their efforts in
this area with the requirements organization.
(b) Contractor Personnel Security. Many technical support services
contracts require contractor personnel to work on Postal Service
premises or to access Postal Service networks or databases
containing highly sensitive corporate information. Therefore,
contracting officers must ensure that contractor personnel are
screened as discussed in Administrative Support Manual (ASM)
272.3. See 1.7.10 for further information regarding
security clearances.
5. Year 2000 Compliance. All contracts for information technology must
include either Clause 1-12, Year 2000 Warranty - Commercial
Items, or Clause 1-13, Year 2000 Warranty - Noncommercial
Items (see 1.7.14).
4.6.5.c Technological Substitutions and Enhancements
1. General. Due to the rapid changes in technology, it may be advisable to
provide for such changes in Postal Service contracts (1) to conform to
commercial market conditions so suppliers are not forced to maintain
continued production of obsolete goods, and (2) to enable internal
customers the flexibility to upgrade their respective infrastructures
along the lines of currently available technology.
2. Substitution of Information Technology Equipment. When it is likely that
market forces will change so rapidly that a supplier may be forced to
maintain production lines of outdated technology in order to meet the
requirements of a Postal Service contract, information technology
contracts should include Clause 4-16, Substitution of
Information Technology Equipment, to ensure that the supplier has the
opportunity to focus its production capabilities on the latest product
offerings; simultaneously the Postal Service benefits by receiving the
latest equivalent products from the supplier at no additional cost.
3. Technology Enhancement. Contracts should include Clause
4-17, Technology Enhancement, when requirements
organizations wish to have the latest technology available. This clause
requires suppliers to propose state-of-the-art products regardless of
whether current offerings are in production or not. The proposed
offerings may or may not be equivalent in price to the offerings under
contract, but the capabilities (such as performance capacity) must meet
or exceed contract requirements. In these cases, the contracting officer,
representing the purchase team, conducts a cost/capability analysis to
ensure that price per unit of capability is consistent with the original
contract's prices. If the offerings far exceed the Postal Service's needs,
the Postal Service may decline to accept the proposal.
1. Postal Service Sources. See 3.3.2.
2. General Services Administration (GSA) Sources
(a) GSA provides multiple-award schedule contracts (MASCs)
annually in three categories: Schedule A for general-purpose
hardware and commercial software, Schedule B for
general-purpose (off-line) peripherals, and Schedule C for
end-user hardware and software. These schedules do not contain
maximum order limitations and are available from:
GSA SCHEDULE DIVISION (KESA)
FEDERAL SUPPLY SERVICE
1941 JEFFERSON DAVIS HIGHWAY
ARLINGTON VA 22202
(b) In addition to MASCs, GSA maintains national requirements
contracts and area contracts. Current schedules for
teleprocessing services may be obtained from:
GSA TELECOMMUNICATIONS PROCUREMENT
DIVISION (KET)
18TH AND F STREETS NW
WASHINGTON DC 20405-0001
3. Commercial Sources. Commercial purchasing methods may be used to
purchase commercially available information technology, if it meets the
requirements of Handbook AS-820. See 4.3.1.n.
4.6.5.e Solicitation Provisions
1. Provision 4-4, Demonstrability, must be included in solicitations
for commercial hardware or software when a system test using Postal
Service test data is required.
2. Provision 4-5, Functional Demonstration, must be included in
solicitations for commercial hardware or software when a functional
demonstration of one or more products is required.
3. Provision 4-6, System Integrity, must be included in contracts
for third-party software installed on all computer systems in the
possession of the Postal Service, with the exception of personal
computers.
4. Provision 4-7, Postal Computing Environment, must be
included in solicitations for commercial hardware or software so as to
ensure that standard solutions emerge from the solicitation to the
greatest degree possible. This provision also requires the identification
of nonstandard solutions by prospective offerors to the contracting
officer.
1. Clause 4-9, Inspection and Acceptance - Systems, must be
included in contracts for computers with a unit price greater than
$50,000. This clause is to be used in lieu of, not in addition to, the
inspection clauses prescribed in 2.2. If a computer contract
covers other supplies or services also, one of the standard inspection
clauses prescribed in 2.2 must be included for the other
supplies or services.
2. Clause 4-10, Liquidated Damages - Industrial Supply or
Service Items Not Ready for Use, filled in appropriately, must be
included in systems contracts when the use of this clause is justified as
prescribed by 2.2.
3. Clause 4-11, Use of Hardware or Software Monitors, must be
included in contracts whenever monitors will be attached to a computer
system.
4. Clause 4-12, Site Preparation, must be included in contracts
whenever the Postal Service must specially prepare a site for
installation of an information system.
5. Clause 4-13, Software License Warranty and Indemnification,
must be included in contracts whenever software is procured by license
from the contractor.
6. Clause 4-14, Software Development Warranty, must be
included in contracts for customized software.
7. Clause 4-15, Warranty Exclusion and Limitation of Damages,
must be included in all contracts for information systems.
8. Clause 4-16, Substitution of Information Technology
Equipment, must be included in solicitations and contracts for
information technology in which the supplier will be afforded the
opportunity to replace the product line(s) being purchased with
equivalent items that are newer technology provided the pricing is equal
to or less than the items being replaced.
9. Clause 4-17, Technology Enhancement, must be included in all
solicitations and contracts which require the supplier to propose newer,
more effective and more economical products on a continuous basis
that the Postal Service may incorporate to keep pace with changing
technological environments.
10. Clause 4-18, Information Technology Accessibility Standards, must be
included in all information technology contracts (see 4.6.5.b.2).
11. Clause 1-1, Privacy Protection, must be included as applicable. See
1.7.5.
4.6.6 Research and Development
1. Applied Research. A study concentrated on limited areas and directed
toward specific practical ends.
2. Basic Research. A systematic, intensive study directed toward fuller
scientific knowledge or understanding and prompted primarily by the
desire to pursue knowledge for its own sake rather than for any
immediate practical application.
3. Research Announcement. A general announcement of the Postal
Service's research interests, including criteria for selecting proposals
and soliciting participation of all offerors capable of satisfying the Postal
Service's needs.
4. Development. Reduction to a useful form - such as a material, device,
system, or method - of the findings and understandings derived from
research. It includes the design and testing of prototypes and new
processes to achieve specific functional requirements and
characteristics.
5. Educational Institution. Any corporation, foundation, trust, or state or
local government entity operated primarily as an institution of higher
learning that offers a course of general studies leading to the granting
of academic degrees.
6. Engineering. The effort to refine the materials, devices, systems,
methods, prototypes, and processes derived from research and
development, in order to apply them to specific uses and technologies.
7. Nonprofit Organization. Any corporation, foundation, trust, or other
entity that is operated for scientific, educational, or medical purposes
and is not organized for profit. No private shareholder or individual may
profit from such a corporation's net earnings.
4.6.6.b General Policy
1. It is the policy of the Postal Service to encourage firms and
entrepreneurs in solving technological problems and advancing postal
technology.
2. When in the interest of the Postal Service, appropriate incentives may
be provided to the industrial community to develop new products or
equipment through its own resources.
3. The use of educational institutions and nonprofit organizations as
contractors is encouraged, when appropriate, to further scientific and
technological advancements that will modernize and streamline postal
operations. University research organizations should be considered a
primary source for basic research; they should also be solicited,
whenever feasible, for applied research requirements.
4. Contracts for research, engineering, and development may be entered
into with individuals under the same general terms and conditions
governing contracting with business organizations. When contracting
with individuals, prices or pay rates must be determined on a
case-by-case basis, taking into account the importance of the contract,
the individual's status and professional reputation, and the prices or
rate paid previously for similar work. Postal Service or federal pay rates
are not an appropriate guide.
4.6.6.c Prequalification
1. Due to the highly specialized nature of research and development,
potential suppliers should always be prequalified before issuing
solicitations (see 3.5.2).
2. In addition to past performance, the following evaluation factors should
be used when evaluating proposals:
(a) Understanding of the statement of work, as shown by the
scientific, technical, or analytical approach proposed;
(b) Competence and experience of proposed professional personnel;
(c) Innovative ideas pertinent to the requirement;
(d) Availability and planned use of facilities;
(e) Willingness to devote resources to the proposed work; and
(f) Proposed management and organizational structure.
1. Types. When the solicitation format prescribed in Appendix A is
not suitable and use of a short form research contract (see 4.6.6.e) is
not authorized, the contracting officer may use individually addressed
letters, circulars, or notices, provided that they contain the terms,
conditions, and other provisions required by this Purchasing Manual.
2. Research Announcements
(a) The Postal Service uses research announcements with peer or
scientific review for the purchase of basic and applied R&D.
Research announcements may be used to fulfill requirements for
scientific study and experimentation directed toward advancing
the state of the art or increasing knowledge or understanding, as
well as R&D focused on a specific system or hardware solution.
(b) Contracting officers may use the research announcement
technique (see 4.6.6.e.2) when meaningful proposals with varying
technical/scientific approaches can be reasonably anticipated. In
addition to the standard information required in a solicitation, the
research announcement, together with any supporting
documents, must describe the Postal Service's research interest,
either for an individual program requirement or for broadly defined
areas of interest covering the full range of requirements. Notice of
availability of the research announcement may be made in
scientific, technical, or engineering periodicals.
1. Indefinite Delivery Contracts. Generally, indefinite delivery contracts
should be used for R&D services (see 2.4.6).
2. Short Form Research Contracts (SFRCs)
(a) Use. The following procedures should be used for procurement of
basic or applied research when a research announcement is
used to publicize the R&D requirement, or a noncompetitive
contract will be awarded.
(b) Solicitation
(1) The contracting officer must solicit sources in accordance
with 4.7.6.d, using a short form research contract format,
which states a research problem and requires offerors to
propose a statement of the work to be done.
(2) The solicitation must require that the statement of work
include a breakdown showing the amount of effort to be
devoted to the contract by each principal investigator and
any associate.
(3) The solicitation must require that proposals describe any
property to be furnished by the Postal Service or acquired
by the contractor for performance of the work. Offerors
must state the estimated or known cost of each item; items
costing less than $1,000 may be grouped by category.
When facilities are to be acquired using contract funds,
offerors must explain why that is necessary. All descriptions
must be sufficiently detailed to enable the contracting officer
to determine whether the property should be furnished by
the Postal Service or whether the contractor should be
authorized to acquire it.
(4) The solicitation must include the following applicable
solicitation provisions (see Appendix A):
(i) Provision A-2, Submission of Proposals.
(ii) Provision A-7, Restriction on Disclosure and
Use of Data.
(iii) Provision A-20, Type of Business
Organization.
(iv) Provision A-21, Parent Company and
Taxpayer Identification Number.
(v) Provision 1-2, Contingent Fee
Representation.
(vi) As applicable:
(vii) Provision 8-2, Representation of Rights in
Data
(viii) Provision 9-2, Certification of Nonsegregated
Facilities
(ix) Provision 9-3, Equal Opportunity Affirmative
Action Program
(x) Provision 9-4, Preaward Equal Opportunity
Compliance Review.
3. Contract Award
(a) When a proposal is acceptable, either as submitted initially or as
revised in writing by the offeror, a contract may be awarded by
written acceptance of the proposal.
(b) When acceptance of an entire proposal is not advantageous to
the Postal Service, the contracting officer may accept parts of the
proposal either by attachment or incorporation by reference.
(c) Options to extend the research effort beyond the initially
proposed program may be included in the contract. The cost and
period of performance for such options must be separately
identified.
(d) If incrementally funded, the contract must specify the total
estimated cost for the full term of the research program, both
funded and unfunded, and the amount of funds currently
obligated. Clause 2-32, Limitation of Funds, must be
included in the contract.
(e) SFRCs awarded to institutions and organizations authorized to
receive advance payments (see Management Instruction
FM-610-96-1, Advance Payments) must be clearly marked
"Advance Payment Authorized."
4.6.6.f Limitations on Subcontracting. R&D contractors are selected for their
scientific and technological expertise. Therefore, they may not subcontract
work without the prior written consent of the contracting officer. In negotiating
the contract, the contracting officer must ascertain any plans to subcontract
any portion of the work.
4.6.6.g Educational Institutions and Nonprofit Organizations
In addition to the cost principles in 5.2.9 and 5.2.10, R&D
contracts with educational institutions and nonprofit organizations are subject,
as a matter of Postal Service policy, to the requirements of OMB Circular No.
A-110, Administrative Requirements.
4.6.6.h Organizational Conflict of Interest
Organizational conflicts of interest (see 1.7.7) can occur when
applied research follows basic research, when development follows applied
research, when production follows R&D, or when a study is followed by
another study of similar scope or emphasis. Contracting officers must take
care to prevent actual or apparent organizational conflicts of interest in these
situations. If it appears that an organizational conflict of interest might arise,
the contracting officer must include Clause 1-8, Organizational
Conflict of Interest, in the solicitation and include it or a negotiated alternative
in the resulting contract.
4.6.7 Utility Services
1. Utility Services. Refers primarily to electricity, gas, water, steam,
sewerage, and regulated telecommunications services available to the
general public and performed by governmental agencies or by private
companies ordinarily subject to regulation. Other services, such as
trash removal, may also be considered utility services when performed
by governmental agencies or by private companies subject to
regulation.
2. Connection Charge. A payment for facilities that are needed in order to
make connection with a point of supply and that are installed and
owned by the utility supplier.
3. Termination Liability. An obligation to pay a portion of the cost of
connecting facilities with a point of supply installed and owned by the
utility supplier, if the Postal Service terminates the contract before its
term expires. The initial amount of the obligation is not more than the
agreed cost of connecting the facility, less net salvage when material
costs are included. This amount decreases under an amortization
formula stated in the contract, until it ultimately reaches zero.
1. Orders Under GSA Contracts. Utility services should be obtained under
available GSA areawide contracts, unless they can be obtained more
efficiently or at a lower cost under Postal Service contract.
2. Postal Service Contracts
(a) Forms
(1) The terms and conditions under which utility suppliers will
agree to furnish services vary from area to area. Flexibility
in the use of contract forms and provisions is therefore
necessary.
(2) If a utility supplier refuses to execute a formal contract with
the Postal Service, the contracting officer may purchase the
utility services in accordance with (c) below, provided that:
(i) A definite refusal is received in writing from a
corporate officer of the supplier; and
(ii) The manager, Policies, Planning, and Diversity, is
given notice and documentation of the refusal,
including the record of discussions.
(3) When a utility supplier refuses to execute a contract, the
services may be obtained by purchase order or by use of
the utility supplier's commercial forms and clauses. When
the utility supplier's commercial forms and clauses are
used, the contracting officer must delete any language
contrary to federal law and Postal Service regulation.
(b) Clauses. The clauses prescribed in this manual must be included
in all Postal Service utility contracts, unless the utility supplier
objects to their inclusion and the procedures outlined in
4.6.7.b.2(a) above are followed.
(c) Applicable Rules and Procedures. When a federal, state, or local
governmental agency has issued regulations or established
procedures affecting cost allowability, pricing, rates, and other
matters, it is Postal Service policy, as a matter of comity rather
than law, to comply with those regulations or procedures, subject
to judicial appeal. When no regulations or procedures of a
regulatory agency are applicable, Postal Service rules and the
general practices of the utilities industry must be followed.
(d) Taxes
(1) Utility contracts do not contain any of the tax clauses
prescribed in 7.3.4, and utility invoices often
identify taxes as separate line items. Postal Service
exemption from such taxes, if any, must be determined on a
case-by-case basis.
(2) Questions on tax charges must be referred to assigned
counsel.
(3) Charges indicated as taxes on utility bills must be paid until
assigned counsel advises that payment is not necessary.
Refunds may be claimed for amounts improperly paid.
(e) Connection Charges
(1) A connection charge may be paid only when reasonable
attempts to negotiate the contract without the charge have
failed.
(2) When some obligation is necessary to secure the required
facilities, a termination liability is ordinarily to be preferred
over a connection charge.
(3) When the supplier's rules and procedures require payment
of an unrefundable fee for connection, in addition to or in
lieu of a connection charge, the contracting officer may pay
the fee.
(f) Applicability of Construction Standards. Ordinarily, the work
performed by a utility in installing connecting facilities is not
considered construction work for purposes of the policies in 9.1.4.
However, such work may be considered construction if the
contract also calls for other construction work, such as installation
of utility distribution liens and equipment within a facility. When
such additional work is required, a construction contract (see 4.4)
should be used.
4.6.8 Structured Contracts and Controlled Contracts
4.6.8.a Definitions and Examples
1. Structured contract and structured contracting. A contract and its
associated solicitation, award, and administration process using special
procedures, solicitation provisions, and clauses, under the authority of
4.6.8.b.
2. Controlled contract and controlled contracting. A contract and its
associated solicitation, award, and administration process for which
authority is restricted and special procedures, forms, solicitation
provisions, and clauses are used, under the authority of 4.6.8.b.
Controlled contracts are used in such areas as law enforcement,
international postal agreements, and revenue production.
4.6.8.b Policies and Procedures
1. Policy-originating officials may, with the approval of the manager,
Policies, Planning, and Diversity, establish structured contract policies
and procedures for any category of contracts under their authority as
described in Exhibit 4.6.2.
2. The manager, Policies, Planning, and Diversity, may designate any
category of contract as controlled.
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