7-4.2 Initial Disagreement Resolution

Disagreement resolution is an important aspect of supplier relationship management. It is in the interest of the Postal Service and suppliers to resolve potential disagreements by mutual agreement at the CO or another appropriate management level. This process, which replaces the bid protest process, emphasizes business partners resolving disagreements. Therefore, all disagreements with the Postal Service by persons or organizations (“suppliers”) arising in connection with the purchasing process must be lodged with the CO for resolution (claims that arise under the CDA, that involve the non-renewal of transportation contracts or concerning debarment, suspension, or ineligibility do not use this process). Disagreements may arise at any point during the pre-contract-award and contract-award phases of the purchasing process, such as over the terms of a solicitation, or arising from a supplier’s objections to the evaluation of its offer, to some element of the qualifications of a successful offeror or the evaluation of a successful offeror’s proposal.

If a disagreement arises between the CO and supplier during the pre-contract-award and contract-award phases, the supplier must lodge the disagreement with the responsible CO no later than 10 calendar days from the date the disagreement arose. For instance; if a disagreement arises from a notification-of-award letter sent to a supplier, the supplier has 10 calendar days from the date that it receives the notification letter to lodge a disagreement with the CO. If a debriefing gives rise to a disagreement, the supplier has 10 calendar days after the debriefing to lodge the disagreement with the CO. A disagreement must be lodged with the CO in writing and can be initiated by facsimile, e-mail, hand delivery or U.S. mail.

If a supplier lodges a disagreement within the required 10 calendar day time frame, the supplier, the CO and the CO’s management have 10 calendar days from the date the disagreement is lodged to resolve the disagreement. During the 10 calendar days that the parties are attempting to resolve the disagreement, the parties may not consult with the SDR Official about issues pertaining to the disagreement or any matter that might jeopardize the SDR Official’s objectivity should the disagreement be elevated to the SDR Official.

The parties must consider the use of Alternative Dispute Resolution (ADR). If ADR is used, both the CO and the supplier must agree to its use. Various types of ADR methods are available, including negotiation and mediation, however, arbitration may not be used without approval from the VP, SM.

Negotiation is the most common form of dispute resolution and occurs when the parties or management attempt to resolve the disagreement. Mediation happens when a neutral third party assists in the negotiation. Mediation helps the parties communicate, understand each other, and resolve differences. If the use of ADR is agreed upon, the 10 calendar day limitation is suspended; if the parties cannot reach an agreement under ADR, the supplier has 10 calendar days to lodge its disagreement with the SDR Official. For more information about ADR, you should consult your legal counsel.

The disagreement resolution process should be business-like and not adversarial. Legal counsel may be engaged as necessary.

During the initial disagreement, the CO must seek to resolve the issues raised in the disagreement. The CO should also inform and/or engage management in the resolution effort. Lastly, COs and management should consider a range of business options to resolve the matter, including, denial of the disagreement; overturning a contract award; reopening the purchasing process; or the amendment of the solicitation.

During the disagreement resolution, the CO must ensure the involvement of management. The extent of that involvement will depend upon the particulars of the disagreement. Regardless of the outcome of the disagreement-resolution effort, the CO must promptly document the disagreement and the resolution efforts taken in response to it in the contract file. The CO must draft a letter to the supplier that describes his or her decision and the rationale for that decision. A copy of the decision must be sent to his or her manager. The decision letter must contain the supplier’s appeal rights. The CO must issue his or her decision letter by the tenth calendar day after receipt of the disagreement.

Flowchart #1

Initial Disagreement Resolution CFR 601.107

Initial Disagreement Resolution CFR 601.107