Summary of Changes
The restructuring of Purchasing and Materials into Supply Management has
resulted in numerous changes in organization names (i.e., Purchasing and
Materials is now called Supply Management) and managerial titles and
authorities. These changes are reflected throughout Purchasing Manual
(PM) Issue 3, and are identified by change bars as are all other changes.
Chapter 1 Authority, Responsibility and Policy
1.1.2.b Supply Management Policy Committee. The Supply Management
Policy Committee (SMPC) replaces the Purchasing Policy Committee.
SMPC membership has changed to reflect the SM organization.
1.4.1.b.4 Required Approvals has been revised to state that the Vice
President (VP), Supply Management's (SM) approval of a proposed contract
award or modification serves as the delegation of authority required by PM
1.4.2.d Actions Exceeding a Contracting Officer's Delegated Authority.
1.4.2.c Delegations of Authority has been revised to state that, unless
specifically limited in his or her letter of delegation, a contracting officer may
award a contract regardless of commodity group.
1.4.4.a.2, Appointment Authority has been revised to state that contracting
officer appointment officials must keep a record of all letters of delegation,
certificates of appointment, and documentation concerning a contracting
officer's education, experience and training related to the individual CO's level.
1.4.4.b.3, Qualifications has been revised in a number of areas to (1)
specify that a certification as a certified purchase manager from the Institute
of Supply Management meets the certification requirement for level I
contracting officer; (2) to establish new training requirements.
Chapter 2 Purchase Planning
2.1.3.b.2 Responsibilities (Purchase Planning) has been revised to state
that the purchase team has the responsibility to maintain and apply the cost
and pricing models in order to optimize the total cost of ownership, and in
2.1.3.b.3, transportation planning matters have been added as areas in which
materials professionals may offer expertise.
2.1.5.b Elements (Individual Purchase Plans) has been revised to add two
elements (subparagraphs 7 and 21) that a purchase plan should include.
2.1.6.c.4 Reviews and Approvals (Noncompetitive Purchase Method)
has been revised as was discussed in Postal Bulletin 22074 (4/18/02).
2.1.7.b.3 Developing Strategies (Supplier Selection Strategy) has been
revised to state that purchase teams should take care to ensure that
solicitations do not include unnecessary minimum standards, mandatory
feature call outs or other inappropriate limitations on supplier selection.
2.2.1.c Clauses (Quality Requirements) This paragraph has been revised
to discuss the use of new Clauses 2-1, Inspection and Acceptance and 2-2,
Quality Management System. These clauses replace previous Clauses 2-1,
Inspection and Acceptance - Supplies, 2-2, Quality Assurance I -Supplies,
2-3, Quality Assurance II - Supplies, 2-24, Inspection and Acceptance -
Supplies - Nonfixed Price, 2-48, Inspection and Acceptance - Services, and
2-49, Quality Assurance - Services, all of which have been deleted.
2.2.5.f F.O.B. Points (Delivery and Acceptance). Subparagraph 1 has been
revised to state that solicitations should require offerors to include both f.o.b.
origin and destination prices for transportation analysis and that such
analysis is available from field material management specialists and
Headquarters. Subparagraph 3 has been revised to add shipment base
points to the areas that may be specified as f.o.b. destination.
2.2.10.c Sharing Savings (Value Engineering). This paragraph has been
revised to change the sharing scheme to one that is based on a negotiated
arrangement contained in the contract. Paragraph 2.2.10.e Evaluation has
been revised to for clarity, and Clause 2-22, Value Engineering, has been
revised to reflect these changes.
2.2.11 Price Reduction. This new section states that when they plan to award
strategically-sourced or long-term contracts, purchase teams must consider the
inclusion of new Clauses 2-48, Most Favored Customer Pricing and 2-49,
Cost/Price Reduction. The new clauses are included in Appendix B.
2.2.12 Investment Recovery. This new section states that an effective and
efficient investment recovery plan can further the Postal Service's supply
chain management goals, and directs purchase teams to include new
Provision 2-8, Investment Recovery, in solicitations when it is determined that
investment recovery will play a significant role in the overall success of the
purchase. The new provision is included in Appendix A.
2.4.4.h Provision (Cost-Reimbursement Contracts). This new paragraph
requires purchase teams to include new Provision 2-9, Accounting System
Guidelines - Cost Type Contracts, in all solicitations for cost-type contracts
the estimated value of which is $100,000 or more. The provision requires
pre-award review and approval of the potential supplier's cost accounting
system by the Postal Service's Inspector General or representative, and
delineates the elements required in such accounting systems. The new
provision is included in Appendix A.
Chapter 3, Supplier Relations
3.3.3.b Procurement Lists (Workshops for People who are Blind or
Severely Disabled) has been revised to state that additions and deletions to
the Procurement List are published in the Federal Register as they occur.
3.4.5 Department of Veterans Affairs has been revised to provide the
proper name of this department.
3.7 Debarment, Suspension and Ineligibility. This subchapter has been
revised extensively. Some of the highlights of the revision are:
3.7.1.a Definitions contains a new set of relevant definitions.
3.7.1.c Treatment of Suppliers on the Postal Service and GSA List has
been rewritten and now states that suppliers proposed for debarment are
treated the same as those which are debarred or suspended and excluded
from receiving contracts unless other treatment is approved by the Vice
President, Supply Management. In addition, the VP, SM, may direct the
termination for default of any contracts with a supplier which has been
debarred, suspended or made ineligible.
3.7.1.d Causes for Debarment has been rewritten to add to the causes for
which a supplier may be debarred, and to state that the existence for several
of the causes for debarment will be established by a preponderance of the
evidence.
3.7.1.e Mitigating Factors is a new section, and contain a series of factors
the VP, SM, should consider when deciding whether debarment is warranted.
3.7.1.f Period of Debarment has been revised in paragraph 2., to state that
the VP, SM, may refer requests for removal from debarment or a reduction of
the period of debarment to the Judicial Officer for a hearing and findings of
fact which the VP will then consider.
3.7.1.g Procedural Requirements for Debarment has been revised to state
that debarment decisions are made based on the preponderance of the
evidence, and that, if there are questions regarding material facts, that the
VP, SM, may (1) seek additional information or (2) request the Judicial Officer
to hold fact-finding hearings on the matter. The VP, SM, may reject findings
when they are deemed arbitrary or capricious or clearly erroneous.
3.7.1.m Solicitation Provision is a new section that requires that offerors
complete a new paragraph e of Provision 4-3, Representations and
Certifications, when the contract value is expected to exceed $100,000.
Chapter 4, Purchasing
4.2.2.e Solicitation Provisions. This paragraph has been revised to state
(1) that when a purchase team decides to modify, supplement or add to
Provision 4-1, Standard Solicitation Provisions, or paragraphs b. and c. of
Provision 4-2, Evaluation, counsel need not be consulted if a provision
already contained in Appendix A, Solicitations, will replace similar subject
matter in Provision 4-1 or b. and c. of Provision 4-2, and (2) that counsel
should be consulted when the evaluation scheme to be used in Provision 4-2
is unusual, particularly complex, or there are other circumstances under
which such consultation is advisable. Similar changes are reflected in A.2.1,
Solicitation Contents in Appendix A, Solicitations.
4.2.5.d.3 Documentation (Best Value Determinations) has been revised to
state that this documentation should include the extent and result of any
discussions with the supplier awarded the contract and any other offerors.
4.2.7.a Clause 4-1 General Terms and Conditions has been revised to
state that replacing subject matter contained in this clause with the text of a
PM clause addressing the same subject matter does not require consultation
with counsel. Similar changes are reflected in B.2.1 in Appendix B, Contract
Clauses.
4.2.7.b Clause 4-2 Contract Terms and Conditions Required to
Implement Policies, Statutes, or Executive Orders has been revised to
state (1) that neither this clause nor any of the clauses added by reference
may be modified unless a deviation has been reviewed and approved by an
individual at a higher level than the contracting officer who holds deviation
approval authority and (2) that any changes to paragraph b of this clause
(Examination of Records) must be reviewed by assigned counsel and the
Office of the Inspector General before a related deviation request is
submitted.
4.2.7.d Modifying Clauses has been revised to agree with the revision to
4.2.7.a and 4.2.7.b, above.
4.5.5.a.6 Definitions (Information Technology) has been revised to provide
a new definition of this term.
4.5.5.b.6 Security Considerations (Information Technology) has been
revised to state that purchase teams ensure that specifications or statements
of work for IT purchases address the security aspects of the Business Impact
Assessment (BIA),
Chapter 5 Contract Pricing
5.2.12.d Educational Institutions has been revised to reference the new
Office of Management and Budget Circular (OMB Circular A-21) that
establishes the indirect cost rates for cost-reimbursement contracts with
educational institutions and to provide a new source for the Directory of
Federal Contract Audit Offices.
Chapter 6, Contract Administration
6.1.2.a.7 Contracting Officer Responsibilities (Contract Administration
Functions) has been revised to state that, when appropriate, the contracting
officer is responsible for including in the contract file the business reason for
a particular action.
Chapter 7, Bonds, Insurance and Taxes
7.1.8.g.1 Contract Modifications (Execution of Bonds) has been revised
to state that, when a contract modification increases the contract price, the
supplier and the surety must execute a consent of surety and increase the
penal amount, and submit it to the contracting officer.
Chapter 9, Labor Policies
9.4.5.l Liquidated Damages has been revised to state that, under certain
circumstances, when the VP, SM, finds that an assessment of liquidated
damages is incorrect, the VP may adjust the damages, or release the
supplier, lessor or subcontractor from liability when the amount of damages is
$500 or less.
9.7.2.e Contracts with a Religious Corporation, Association, or
Educational Institution or Society (Exempt Contracts) is a new paragraph
that states that, when contracting with these types of organizations, it is not a
violation of Section 202 of Executive Order 11246 to employ individuals of a
certain religion to perform work connected with the carrying-on of such an
entity. Previous paragraphs 9.7.2.e and 9.7.2.f are renumbered as 9.7.2.f
and 9.7.2.g.
9.10 Veterans has been revised as a result of the passage of the Veterans'
Employment Opportunities Act and the Secretary of Labor's related
implementing regulations. Clause 9-14 Affirmative Action for Special
Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible
Veterans has been similarly revised.
Appendix A, Solicitations
A.2.1 Solicitation Contents has been revised along the lines of discussed in
4.2.2.e, above.
Provision 2-8 Investment Recovery is a new provision and has been added
as discussed in 2.2.12 above.
Provision 2-9 Accounting System Guidelines - Cost Type Contracts is a
new provision that has been added as discussed in 2.4.4.h above.
Provision 4-1 Standard Solicitation Provisions paragraph b., Period for
Acceptance of Offers, has been deleted.
Provision 4-3 Representations and Certifications has been revised to
include a new paragraph e (Certification Regarding Debarment, Proposed
Debarment, and Other Matters) as discussed in 3.7 above.
Appendix B, Contract Clauses
B.2.1 Clause 4-1 General Terms and Conditions has been revised along
the lines discussed in 4.2.7.d, above.
B.2.2 Clause 4-2 Contract Terms and Conditions Required to Implement
Policies, Statutes, or Executive Orders has been revised along the lines
discussed in 4.2.7.a and d, above.
Clauses 2-1 Inspection and Acceptance and 2-2 Quality Management
System. As discussed in 2.2.1.c, above, this clause and Clause 2-2 replace
previous Clauses 2-1, 2-2, 2-3, 2-24, 2-48 and 2-49.
Clause 2-9 Definition of Delivery Terms and Supplier's Responsibilities
has been revised for clarity.
Clause 2-22 Value Engineering Incentive has been revised along the lines
of 2.2.10.c above.
Clauses 2-48 Most Favored Customer Pricing and 2-49, Cost/Price
Reduction are two new clauses as discussed in 2.2.11 above.
Clause 3-2 Participation of Small, Minority and Woman-owned
Businesses has been revised in b.(1) by stating that showing the amount of
money paid to subcontractors during the reporting period is one of the
methods by which suppliers report subcontracting activity.
Clause 4-1 General Terms and Conditions has been revised by adding
new c.1.(e) which states that the delivery or performance schedule is one of
the contractual elements the contracting officer may change under the
Changes paragraph of this clause. Paragraph m. has also been revised to
state that the debarment, suspension, or ineligibility of a supplier, its partners,
officers, or principal owners may constitute an act of default under the
contract, and that act will not be subject to notice and cure pursuant to any
termination of default provision of the contract.
Clause 4-2 Contract terms and Conditions Required to Implement
Policies, Statutes, or Executive Orders. Paragraph b., Examination of
Records, has been revised. In addition, no changes may be made to this
paragraph before (1) consultation with assigned counsel and the Office of the
Inspector General and (2) a deviation has been reviewed and approved by a
higher level than the contracting officer who holds deviation approval
authority.
Clause 4-5 Inspection of Professional Services has been revised by
deleting the final sentence.
Clause 4-14 Software Development Warranty has been revised for clarity.
Clause 7-5 Errors and Omissions has been revised for clarity.
Clause 8-1 Patent Rights has been revised by removing the reference to
Form 7398, Report of Inventions and Subcontracts (this form is obsolete) and
by stating that the reports required under this clause must be in a form
acceptable to the contracting officer.
Clause 9-14 Affirmative Action for Special Disabled Veterans, Veterans
of the Vietnam Era, and Other Eligible Veterans has been revised to reflect
the changes discussed in 9.10 above.
Appendices D Rules of Practice in Proceedings Relative to Debarment
and Suspension from Contracting and E, Rules of Practice Before the
Postal Service Board of Contract Appeals
These appendices have been revised as was discussed in Postal Bulletin
22072 (3/21/02).
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