2-44 Consideration and Use of Specific Clauses

2-44.1 Most Favored Customer Pricing

The Most Favored Customer Pricing (MFCP) clause is applicable to contracts involving the purchase of commercially available goods and does not apply to the purchase of services. Contracting officers should consider inclusion of Provision 2-10: Most Favored Customer Sales Reporting and Clause 2-48: Most Favored Customer Pricing in solicitations and contracts for the purchase of commercially available goods having a period of performance exceeding one year. Provision and clause usage should be considered under multi-year contracts where there is a potential for achieving price reductions based on wide Postal Service adoption or anticipation of high volume quantity requirements for the items within the Schedule. When using this clause contracting officers are advised to consult with assigned legal counsel prior to contract award. Use of this clause requires advance planning and contract administration activities to ensure compliance with the clause. The contract administration activities should be taken into consideration when considering clause usage.

The contracting officer and the supplier are required to conduct certain activities during the life of the contract under the MFCP clause. Those activities include the following:

• If applicable to fewer than all items under the contract, the contracting officer must specify within the Schedule all items to which the MFCP clause will apply. The MFCP clause is evaluated by item individually and not in the aggregate.
• The supplier will be required to report annually on the status of its contractual compliance with the MFCP clause. The supplier is required to prepare and provide a comparative report, based on its annual sales volume, of Postal Service and other customer purchase and pricing data, in a format acceptable to the contracting officer. The report shall be submitted annually for a 12-month period of performance measured from the date of contract award. The annual reports are due within thirty (30) days from the end of the reporting period. The final report is due within thirty (30) days of completion of the period of performance.
• In most circumstances it is sufficient for the supplier to report only the Postal Service purchased unit price and volume compared to, at least, the next lowest and next higher priced customer, including their applicable price and volume purchased.
• The supplier will notify the contracting officer of any price reductions due to the Postal Service based on the terms and conditions of the MFCP clause.
• The contracting officer will review and analyze the annual report’s pricing data.
• The contracting officer will accept and process any price reductions and rebates resulting from Clause 2-48: Most Favored Customer Pricing.