Summary of Changes

Major Policy Changes

The policies contained in this Purchasing Manual (PM) are based on a single, overriding premise: that effective and efficient purchasing can significantly impact the Postal Service's bottom line and competitive position. In order to achieve these goals, our policies now maximize (1) coordination between the contracting officer and the requirements organization and (2) sound business judgment in furthering service to the mailing public. Following are the significant policy changes intended to attain these important goals. A reference to the relevant text is included with each of the changes.

Purchase Teams (throughout; definition at 1.6.2.n) have been established to ensure corporate cohesion in the Postal Service's purchasing efforts. These teams are headed by the contracting officer, and are comprised of the relevant business partners, including the requesting organization, assigned counsel, and other Postal Service representatives as needed. The purchase team provides overall guidance and direction to the purchase, primarily focusing on the business and competitive needs of the Postal Service, but also taking part in purchase planning, best value determinations and supplier discussions.

Best Value (see 1.7.2) has been established as the basis of award for all Postal Service purchases. Best value depends on the item being purchased, and is determined by the comparative analysis of proposals in accordance with the evaluation criteria of the solicitation, and the business judgment of the contracting officer and the purchase team.

Strategic Alliances (see 1.7.11) are addressed in the PM in recognition of their contractual status. However, due to the fact that these contracts are not used to purchase supplies, service, and equipment, the policies and procedures contained in the PM do not apply to strategic alliances.

Contracts with Former PCES Executives or Postal Service Officers, or with entities substantially owned by them, have been prohibited under certain circumstances (see 1.7.13).

Electronic Commerce (see 1.10.1) has been introduced as a means of doing business with suppliers. When fully in place, electronic commerce will cause significant cuts in purchasing lead time and administrative overhead.

Performance Evaluation Factors (see 2.1.7) have replaced what were previously known as evaluation factors. There are two types: proposal-specific factors, which represent the elements of the purchase critical to its success, and supplier-specific factors (past performance and supplier capability) which address aspects central to the supplier being evaluated. Supplier Capability has replaced the concept of supplier responsibility. Capability is defined as the ability to perform the work required during the period specified in the contract. Capability is examined and evaluated as a supplier-specific factor.

Contract Types (see 2.4) have been moved to Chapter 2, Purchase Planning, to emphasize their importance in purchase planning. Various clauses related to contract type have been added or revised (see Appendix B below).

Establishing strong, mutually beneficial Supplier Relations has been established as policy (see 3.1). It is the intent of the Postal Service to foster partnerships with its suppliers and to use the purchasing process to work toward a common goal. Contracting officers have the primary responsibility for managing supplier relations and for ensuring that they are conducted fairly and effectively. As a result of this new focus, companies and individuals with which the Postal Service contracts are now known as "suppliers" (previously termed "contractors" or "vendors") throughout the Purchasing Manual.

Supplier Diversity (see 3.2) has been given more prominence and visibility. The Postal Service has restated its commitment to provide competitive opportunities to small, minority and woman-owned businesses, empowering our contracting officers to manage supplier diversity as a Postal Service business initiative.

Purchasing goods and services primarily from Commercial Suppliers (and using commercial methods to do so; see Commercial Purchasing, below) has also been established as policy. Contracting officers and purchase teams are now strongly encouraged to purchase the Postal Service's goods and services in the same manner as its commercial counterparts and competitors (see 3.5.1).

Prequalification of suppliers has been established as a preferred way of doing business. Whenever appropriate, purchase teams should prequalify suppliers regardless of the commodity being purchased (see 3.5.2).

Publicizing requirements remain at previously established levels. Contracting officers and purchase teams are also encouraged to alert the marketplace of purchase opportunities through media in addition to the Commerce Business Daily or Journal of Commerce (see 3.5.3).

Policy and procedures regarding the acceptance and handling of Unsolicited Proposals (see 3.5.4) have been added to the PM.

Protests (see 3.6) have been revised by adjusting time schedules for consistency with other current government protest provisions, and by establishing the contracting officer's general responsibility for accountability to prospective suppliers. Provision A-15, Protests, has been revised to reflect these changes.

In order to promote increasing uniformity and consistency throughout Postal Service purchasing, a single Purchasing Process (see 4.1 and 4.2) containing polices and procedures common to all purchases has been established. The 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. Within this general framework, there are variations for commodity-specific purchases.

The use of Oral Presentations (see 4.2.4) is encouraged as a performance evaluation method (see 4.2.5) during the purchasing process. Performance Evaluation is a two-step process involving (1) the evaluation of individual proposals and (2) the comparative evaluation of individual proposals to each other. Discussions (see 4.2.5.c), which, as a concept, replaces what were previously termed "clarifications," "discussions," or "negotiations," are used to reach understanding and agreement with suppliers over what is being required and what is being offered, and final contract terms and conditions. Best Value Determinations (see 4.2.5.d) are important steps in the purchase process and involve trade-off judgments made in accordance with the relative importance of the performance evaluation factors and price. Notification of Award (see 4.2.7) and Debriefings (see 4.2.8) have been revised to adjust time schedules and to highlight their importance in the purchasing process.

Commercial Purchasing (see 4.3) replaces simplified purchasing. It is the competitive purchase of commercially available items, and purchase teams are encouraged to use this method whenever practicable. A number of new provisions and clauses have been added for use in commercial purchasing (see Appendices A and B below).

Form 8203, Order/Solicitation/Offer/Award (see 4.3.5.b) is to be used when soliciting and awarding commercial purchases. The form contains new clauses and provisions relevant to commercial purchases.

Design and Construction Purchasing (see 4.4) replaces the policy and procedures contained in Chapter 11 of Publication 41, USPS Procurement Manual. The purchase of facility repairs and alterations is now made using the commercial purchasing method; other types of design and construction purchasing is made under the general framework discussed in 4.2, with variations as noted in this section. A number of new and revised provisions and clauses (see Appendices A and B below) have been added as a result of these changes.

Mail Transportation Purchasing (see 4.5) replaces the policy and procedures contained in Chapter 12 of Publication 41, USPS Procurement Manual. Purchase of mail transportation may now be made using the commercial purchasing method or under the general framework discussed in 4.2, with variations as noted in this section. A number of new and revised provisions and clauses (see Appendices A and B below) have been added as a result of these changes.

Special Purchasing (see 4.6) replaces the policy and procedures contained in Chapter 8 of Publication 41, USPS Procurement Manual. These types of purchases receive distinct treatment and are purchased differently than other commodities. New policy regarding the purchase of Information Technology has been added (see 4.7.5), as have a number of new and revised provisions and clauses related to this area (see Appendices A and B below).

New policy regarding Responsibilities for Price Evaluation (see 5.1.1) states that although the contracting officer has the ultimate authority for pricing decisions, the purchase team as a whole is responsible for this purchasing function.

New policy regarding Responsibilities for Contract Administration (see 6.1.1) similarly establishes policy requiring purchase teams to work to ensure quality performance throughout the life of the contract.

Alternative Dispute Resolution (ADR) policy regarding contract disputes has been added (see 6.8.1). ADR methods may include informal negotiation, mediation by a neutral third party or other methods mutually agreeable to both parties. Clause B-9, Claims and Disputes, has been revised to reflect this new policy and has also been revised to reflect new Contract Disputes Act dollar thresholds.

Termination on Notice (see 6.9.4) has been added. This termination right, which has historically been included in certain specialized contracts for either the Postal Service or for both parties, may now be included in any appropriate Postal Service contract.

Policy regarding Miller Act requirements for Bonds (see 7.1) has been revised to reflect changes in the Act. Irrevocable Letters of Credit and Tripartite Agreements (see 7.1.2.a) have been added as substitutes for performance bonds in construction contracts. A new Provision 7-5, Alternative Payment Protections, has been added to reflect these changes.

Walsh-Healey Public Contracts Act (see 9.5) requirements have been revised as a result of Congressional action. Provision 10-2, Regular Dealer/Manufacturer Representation, has been deleted, and Clause 9-6 (old 10-8), Walsh-Healey Public Contracts Act, has been revised to reflect these changes.

Minor Policy Changes

A number of minor changes can be found throughout the Purchasing Manual. Most of these result from the major changes listed above. Others are clarifications or corrections of previous policies and procedures. All changes were reviewed and approved by the Purchasing Policy Committee.

Appendix A, Solicitations

The following are new and revised provisions contained in the Purchasing Manual. Prescriptions for their use are found in Chapters 1 through 9 or Appendix A. All PM provisions, regardless of whether they have been changed from previous versions or not, are dated January 1997.

Appendix B, Contract Clauses

The following are new and revised contract clauses contained in the Purchasing Manual. Prescriptions for their use are found in Chapters 1 through 9 or Appendix B. All PM clauses, regardless of whether they have been changed from previous versions or not, are dated January 1997.

Appendix E, Rules of Practice Before the Postal Service Board of Contract Appeals

This Appendix has been updated to reflect changes made necessary by the Federal Acquisition Streamlining Act's amendatory changes to the Contract Disputes Act.

Editorial Changes

The new Purchasing Manual is the result of a year-long effort to rewrite Postal Service purchasing policies and procedures and reposition Purchasing and Materials within overall Postal Service business objectives. During this effort, subject and text were completely reorganized. Therefore, the Purchasing Manual now has nine chapters (the Procurement Manual had twelve) and six Appendices. Much previous Procurement Manual text was deleted, while new text was added regarding new topics. Lastly, under the Postal Service directives system, the Purchasing Manual is now a Manual rather than a Publication. As the first issuance in this category, it is designated Issue 1.