8-2.3 Surface Transportation

8-2.3.1 Contract Types

Information relevant to contract type is available in Section 2-18, Select Contract Type.

8- Types and Terms of Contracts

There are three types of surface contracts with respect to term of contract: (1) regular contracts; (2) temporary contracts; and (3) emergency contracts as referenced within Chapter 5 of the Postal Operations Manual.

8- Regular Contracts

Regular surface contracts shall be for periods not in excess of 4 years, unless the Postal Service determines a longer period would be advisable or appropriate. However, due to Service Contract Act considerations, when the Purchase/SCM Team plans to award a surface contract with a base term of more than 5 years, the team must seek and receive an exemption from the Department of Labor’s Wage and Hour Division.

8- Temporary Contracts

Temporary highway transportation contract is a short-term contract other than an emergency contract. It may not exceed 2 years and may be terminated by either party without entitlement or indemnity. A one-time renewal term is allowed, not to exceed 2 years.

8- Emergency Contracts

An emergency contract may be entered into only when an emergency exists, and must terminate when the emergency ceases and the Postal Service is able to otherwise obtain service. No emergency contract may remain in effect more than 6 months without the approval of the next-higher level of contracting authority. Emergency highway transportation contracts are entered into to meet unusual needs when an emergency occurs that interrupts normal transportation services, such as a catastrophic event, strikes or labor disputes, death of a contractor, suspension or removal of a contractor, or generation of unexpected mail volume. Emergency contracts may not be renewed.

8-2.3.2 Purchase Plans

Purchase plans as required in the Supplying Principles and Practices, Sections 2-1, Develop Purchase Plans, and 2-41 Obtain Select Reviews and Approvals are not required when the purchase is of motor vehicles types of mail transportation services.

8-2.3.3 Administrative Officials

The administrative official is a Postal Service official designated by the manager, Distribution Networks (for transportation routes) or the District manager (for CDS routes) to monitor and administer the performance of mail transportation and related services by suppliers. Each contract names the responsible administrative official.

Administrative officials are not authorized to award, agree to, amend, terminate, or otherwise change the provisions of the contract. Administrative officials are responsible for ensuring supplier compliance with the operational requirements of highway contract routes and administering functions related to performance of that service. Specifically, administrative officials are responsible for the following:

8-2.3.4 Labor Considerations

Surface transportation contracts may be subject to a labor process as set forth in labor agreements between the Postal Service and the various unions. Awards, including renewals, should be made in accordance with these labor agreements. However, there are some exceptions to this process, which may include contracts awarded on a temporary or emergency basis. Such decisions require coordination between the client, Labor Relations, Supply Management, and potentially assigned counsel, and the Strategic Initiatives Action Group (SIAG).

8-2.3.5 Death or Incompetence of Supplier

As a general rule, if the supplier is an individual or an unincorporated sole proprietor, the contract automatically terminates in the event of the supplier’s death. Upon receiving notice of the supplier’s death, the contracting officer must immediately act to maintain continuity of service and provide for required performance through an appropriate sourcing method. The contracting officer shall select the sourcing method that is in the best interests of the Postal Service and shall document the reasons for the selection in the contract file. The decedent supplier’s estate has no automatic right or obligation to continue to provide the service.

If the contract is being performed in the name of a corporation or a limited liability company (L.L.C.), even if it has a single individual as its principal officer or controlling member, the contract does not automatically terminate when that individual dies. If contract performance is impaired following the death of an officer or member, consult assigned counsel to discuss next steps.

Finally, contact assigned counsel for guidance when dealing with a supplier or officer who has been adjudicated incompetent.

8-2.3.6 Contract Renewals

8- General

Competitively awarded surface transportation contracts may be renewed by the mutual agreement of the Postal Service and the supplier. Clause B-78, Renewal, should be included in contracts that may be considered for renewal in accordance with 39 U.S.C 5005(b).

8- Term

The renewal term of a contract is determined by the Purchase/SCM Team and should be based on operational requirements, market conditions, and any other relevant business factors.

8- Considerations

Having determined that a contract is appropriate for renewal, the contracting officer with the assistance of the Purchase/SCM Team enters into discussions with the supplier on the terms of the renewal contract. Before agreeing to the final terms, the Purchase/SCM 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 a resolicitation.

If agreement is reached on the renewal terms, a renewal contract is entered into, and it should reflect any adjustments in service, terms and conditions, and rates. The determinations made throughout the renewal process must be documented in the contract renewal file.

8-2.3.7 Clauses and Provisions

The following Clauses and Provisions should be used in all highway transportation contracts.