7-7.1 Federal Laws Applicable to the Postal Service

Congress afforded the Postal Service broad powers of operation in the marketplace, excluding it from most Federal laws and regulations concerning contracts, property, works, officers, employees, budgets, and funding; as well as the establishment, adjudication, and judicial review of administrative procedures and determinations. Most important, the Postal Service is not subject to the FAR, which is the primary regulation governing all Federal executive agencies in their purchasing of goods and services with appropriated funds. Please see Clauses and Provisions for a complete list of clauses and provisions applicable to the Postal Service.

There are a number of laws governing purchasing and material management at the Postal Service. Some of those laws are mandated in 39 CFR either as enacted or since amended, and others are applied to the Postal Service by its own terms. SM must comply with those requirements in all activities.

The followings laws are applicable to the Postal Service:

• Service Contract Act of 1965 (P.L. 89—286, 41 U.S.C. 6701 et seq.).
• Davis-Bacon Act (40 U.S.C. 3141 et seq.).
• The Copeland Anti-Kickback Act (18 U.S.C. 874 and 40 U.S.C. 3145).
• Randolph-Sheppard Act (20 U.S.C. 107 et seq., made applicable by 39 U.S.C. 410(b)(3)).
• Miller Act (40 U.S.C. 3131 et seq.).
• Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 et seq.).
• Prohibition on Convict Labor (under 39 U.S.C. 2201).
• Walsh-Healey Public Contracts Act (41 U.S.C. 6501 et seq., made applicable by 39 U.S.C. 410(b)(s)).
• Freedom of Information Act (5 U.S.C. 552).
• Fair Labor Standards Act (29 U.S.C. 201—219).
• The Privacy Act of 1974 (5 U.S.C. 552a).
• Architectural Barriers Act (42 U.S.C. 4151 et seq., made applicable by 39 U.S.C. 410(b)(8)).
• Administrative Dispute Resolution Act of 1996 (ADRA) 5 U.S.C. 4151 et seq.
• Rehabilitation Act of 1973 (29 U.S.C. 702 et seq.), including Section 508.
• The Javits-Wagner-O’Day Act (41 U.S.C. 8501–8506).
• Vietnam Era Veterans Readjustment Assistance Act of 1972 (38 U.S.C. 4212).
• Contract Disputes Act (41 U.S.C. 7101–7109).
• Prompt Payment Act of 1974, as amended (31 U.S.C. 3901 et seq.).
• Postal Accountability and Enhancement Act.

7-7.1.1 Service Contract Act (Public Law 89-286, 41 U.S.C. 6701 et seq.)

7-7.1.1.1 Applicability

7-7.1.1.1.a The Service Contract Act (“the Act”) applies to any contract whose principal purpose is to provide services to be performed by service employees. Many types of services are covered by the Act, which attempts to cover contract workers who do not fall under the Davis-Bacon Act for construction and the Walsh-Healey Public Contracts Act for supplies. The Department of Labor’s regulations implementing the Act are contained in 29 CFR 4, Subpart C, and 29 CFR 4 110 therein describes what contracts are covered by the Act. The Act applies only to contracts “the principal purpose of which is to furnish services,” so if services are only incidental to the performance of a contract, the Act does not apply.

7-7.1.1.1.b The Act applies generally to all service employees on a covered contract entered into by the supplier who, on or after the date of award, are engaged in working on or in connection with the contract, either in performing the specific services called for by its terms or in performing other duties necessary to the performance of the contract. The Act does not cover persons employed in a bona fide executive, administrative, or professional capacity as those terms are defined in 29 CFR Part 541.

7-7.1.1.1.c The Act also applies to subcontracts under covered contracts, and suppliers must include the Act’s provisions in subcontracts for services. Except where indicated, in this part the terms “contract” and “supplier” include “subcontracts” and “subcontractors,” respectively.

7-7.1.1.2 Exemptions

7-7.1.1.2.a Statutory Exemptions

The statutory exemptions in section 7 of the Act are as follows:

1. Any contract of the United States or District of Columbia for construction, alteration, and/or repair, including painting and decorating of public buildings or public works;
2. Any work required to be done in accordance with the provisions of the Walsh-Healey Public Contracts Act (49 Stat. 2036);
3. Any contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line, or oil or gas pipeline where published tariff rates are in effect;
4. Any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934;
5. Any contract for public utility services, including electric light and power, water, steam, and gas;
6. Any employment contract providing for direct services to a Federal agency by an individual or individuals;
7. Any contract with the Post Office Department, (now the U.S. Postal Service) the principal purpose of which is the operation of postal contract stations.

7-7.1.1.2.b Secretary of Labor Exemptions

The following types of contracts have also been exempted from all the provisions of the Act, pursuant to section 4(b) of the Act, by the Secretary of Labor for reasons found to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business:

1. Contracts entered into by the United States with common carriers for the carriage of mail by rail, air (except air star routes), bus, and ocean vessel, where such carriage is performed on regularly scheduled runs of the trains, airplanes, buses, and vessels over regularly established routes and accounts for an insubstantial portion of the revenue therefrom;
2. Any contract entered into by the U.S. Postal Service with an individual owner-operator for mail service where it is not contemplated at the time the contract is made that such owner-operator will hire any service employee to perform the services under the contract except for short periods of vacation time or for unexpected contingencies or emergency situations such as illness, or accident; and
3. Contracts for the carriage of freight or personnel subject to rates covered by section 10721 of the Interstate Commerce Act.

7-7.1.1.2.c Exemption for the Maintenance, Calibration, or Repair of Certain Equipment

7-7.1.1.2.c(1) General

By exemptions published at 29 CFR 4.123(e)(1)(A)-(C), the Secretary of Labor has also exempted from the Act contracts and subcontracts in which the primary purpose is to furnish maintenance, calibration, or repair of the following types of equipment, if the conditions set out below are met:

• Automated data processing equipment and office information/word processing systems
• Scientific equipment and medical apparatus or equipment if the application of micro-electric circuitry or other technology of at least similar sophistication is an essential element
• Office/business machines not otherwise exempt if such service are performed by the manufacturer or supplier of the equipment.

7-7.1.1.2.c(2) Conditions

The above exemption applies if all of the following conditions are met for a contract or subcontract:

• The items to be serviced are commercially available, used regularly outside the government, and are normally sold or traded by the supplier to the public in substantial quantities.
• The services are furnished by the supplier or its subcontractor at prices which are, or are based on, established catalog or market prices for the maintenance, calibration, and/or repair of such commercial items. “An established catalog price” is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or supplier, is either published or otherwise available for inspection by customers, and states prices at which sales are currently or were last made to a significant number of buyers constituting the general public. An “established market price” is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or supplier.
• The supplier or subcontractor utilizes the same compensation (wages and fringe benefits) plan for all service employees performing work under the contract as it uses for those employees and equivalent employees servicing the same equipment for commercial customers. The supplier or subcontractor certifies to these conditions. Certification by the supplier as to its compliance also constitutes its certification as to compliance by its subcontractor if it subcontracts out the exempt services. The certification must be included in the proposal or its subcontract proposal, using Provision 9-4: Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts – Certification. If the contracting officer or supplier has reason to doubt the validity of the certification, clauses implementing the Act must be included in the contract or subcontract.

7-7.1.1.2.c(3) Determination and Contract Award

The contracting officer must determine the applicability of the exemption to the contract and that all of the above conditions and certifications are met before contract award. If the contracting officer finds otherwise, he or she must identify the deficiency to the supplier. Unless the supplier provides a revised offer either (1) acknowledging the applicability of the Act or (2) demonstrating to the contracting officer’s satisfaction its ability to meet all of the above conditions for an exemption, the supplier’s offer will not be considered for award. If the supplier does not provide the certification required in the conditions above, the contract will be subject to the Act, and the contracting officer will ensure compliance with the Act.

7-7.1.1.2.c(4) Department of Labor (DOL) Determination

After contract award, if DOL determines that any of the above conditions have not been met, it will deem the exemption inapplicable and the contract will become subject to the Act, effective on the date of the DOL’s determination. In such a case, the contracting officer must include Clause 9-10 or Clause 9-11 in the contract and any applicable wage determinations issued by the DOL within thirty days of the DOL notification. If DOL determines that any of the above conditions have not been met with regard to a subcontract, the exemption will not apply and the supplier may be responsible for ensuring that the subcontractor complies with the Act, effective as of the date of contract award.

7-7.1.1.2.d Other Conditionally Exempted Contracts

7-7.1.1.2.d(1) General

By exemptions published at 29 C.F.R 4.123(e)(2)(i)(A) – (H), the Secretary of Labor has also exempted from the Act contracts for the following services if the conditions below are met:

• Automobile or other vehicle (e.g., aircraft) maintenance services (other than contracts or subcontracts to operate a Government motor pool or similar facility).
• Financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services).
• Hotel/motel services for conferences, including lodging and/or meals, which are part of the contract for the conference (which must not include ongoing contracts for lodging on an as needed basis).
• Maintenance, calibration, and repair, and/or installation (where the installation is not subject to the Davis-Bacon Act) services for all types of equipment where the services are obtained from the manufacturer or supplier of the equipment under a contract awarded noncompetitively.
• Transportation by common carrier of persons by air, motor vehicle, rail, or marine vessel on regularly scheduled or via standard commercial services (not including charter services).
• Real estate services, including real property appraisal services, related to Federal agencies or disposing of real property owned by the Federal government.
• Relocation services, including services of real estate brokers and appraisers to assist Federal employees or military personnel in buying and selling homes (which do not include actual moving or storage of household goods and related services).

7-7.1.1.2.d(2) Conditions

The exemptions above apply if all of the following are met for a contract or subcontract:

• The services under the prime contract are commercial, i.e., they are offered and sold regularly to non-governmental customers, and are by provided by the supplier (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations.
• The prime contract or subcontract will be selected for award on the basis of multiple factors where price is equal to or less important than the combination of non-cost factors, or the supplier or subcontractor will be awarded on a noncompetitive basis.
• The prime contract or subcontract services are furnished at prices that are, or are based on, established catalog or market prices. An established price is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the supplier or subcontractor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last made to a significant number of buyers constituting the general public. An established market price is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent from the manufacturer or supplier.
• Each service employee who will perform service under the contract or subcontract will spend only a small portion of his or her time (a monthly average of less than twenty percent of the available hours on an annualized basis, or less than twenty percent of available hours during the contract period if the contract period is less than a month) servicing the contract or subcontract.
• The supplier uses the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract or subcontract as the supplier uses for these employees and equivalent employees servicing commercial customers.
• The contracting officer (or supplier with respect to a subcontract) determines in advance, based on the nature of the contract requirements and knowledge of the practices of likely offerors, that all or nearly all offerors will meet the conditions above. Where the services are already being performed under contract, the contracting officer or supplier will consider the practices of the existing supplier or subcontractor in making a determination regarding whether the conditions above have been met. If, after receipt of proposals, the contracting officer finds that he or she did not correctly determine that all or nearly all of the offerors would meet the requirements above, the Act will apply to the purchase, even if the successful offeror has certified to these conditions. The supplier or subcontractor certifies to these conditions. Certification by the supplier as to its compliance also constitutes its certification as to compliance by its subcontractor if it subcontracts out the exempt services. The certification must be included in the proposal or its subcontract proposal, using Provision 9-4: Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts – Certification. If the contracting officer or supplier has reason to doubt the validity of the certification, clauses implementing the Act must be included in the contract or subcontract.

7-7.1.1.2.d(3) DOL Determination

After contract award, if DOL determines that any of the above conditions have not been met, it will deem the exemption inapplicable and the contract will become subject to the Act, effective on the date of the DOL determination. In such a case, the contracting officer must include Clause 9-10 or Clause 9-11 in the contract and any applicable wage determinations issued by DOL within thirty days of the DOL notification. If DOL determines that any of the above conditions have not been met with regard to a subcontract, the exemption will not apply and the supplier may be responsible for ensuring that the subcontractor complies with the Act, effective as of the date of contract award.

7-7.1.1.2.e Nonexempt Contracts

The exemptions listed above do not apply to solicitations and contracts that are:

• Awarded under the Javits-Wagner-O’Day Act.
• For the operation of a government facility or portion thereof (but may be applicable to subcontracts for services under such a contract).
• Subject to section 4(c) of the Act, having to do with successor contractors’ obligations to pay service employees not less than the wages and fringe benefits and prospective increases in wages and fringe benefits provided for in a collective-bargaining agreement as a result of arm’s-length negotiations, to which service employees would have been entitled if they were employed under the predecessor contract.

7-7.1.1.3 Price Adjustments

7-7.1.1.3.a General

For all multiyear service contracts and service contracts with renewals or options, except when the DOL wage determination has not changed, new wage determinations must be incorporated into the contract as follows:

• At least every two years following the contract award.
• When exercising an option or renewal.
• When there is a significant change in labor requirements resulting in new labor classifications.

7-7.1.1.3.b Clause 9-12: Fair Labor Standards Act and Service Contract Act – Price Adjustments

Multiyear service contracts and service contracts with renewals or options must include Clause 9-12: Fair Labor Standards Act and Service Contract Act — Price Adjustment, specifying the procedures for price adjustments when an increase or decrease in a wage determination is applied to the contract. In accordance with Clause 9-12, suppliers may not include in their offered price any contingency to cover possible future increases in wage rates. In the event of a change in a wage determination, the supplier and contracting officer will engage in negotiations as to whether and to what extent the parties will absorb the costs of the adjustment.

7-7.1.1.3.c Wage Determinations

The contracting officer will obtain a new wage determination from DOL prior to the events listed in 7-7.1.1.3.a. The contracting officer must notify the supplier of the new wage rate thirty days prior to its effective date. The supplier will then have thirty days from the effective date, or any extension of that time allowed by the contracting officer pursuant to that clause, to make a request for price adjustment. In instances where a price adjustment is considered appropriate, if the contracting officer and the supplier do not reach an agreement within thirty days of the request, the contracting officer should issue a unilateral change order in the amount considered to be a fair and equitable adjustment. The supplier may then either accept the amount, or the supplier may file a claim under Clause B-9: Claims and Disputes.

7-7.1.1.3.d Price Negotiations

Price adjustment negotiations should be handled on a case-by-case basis. In such negotiations, the contracting officer should consider whether the supplier has attained new efficiencies allowing it to absorb additional wage costs, whether it is possible to decrease hours or consolidate scheduling, changed market conditions, the complexity of the type of service being purchased, and other factors affecting the supplier’s ability to absorb all or any portion of the adjustment costs.

7-7.1.1.4 Provisions and Clauses

7-7.1.1.4.a Provision for Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts

Provision 9-4: Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts – Certification must be included in all solicitations for contracts which the contracting officer has determined are likely to be exempted from the Act. (See 7-7.1.1.2.c & 7-7.1.1.2.d).

7-7.1.1.4.b Contracts Over $2,500

Clause 9-10: Service Contract Act must be included in every contract for services covered by the Act that is over $2,500 or is modified to exceed $2,500. This includes indefinite-delivery contracts and ordering agreements when orders are expected to aggregate more than $2,500. The clause is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders when checked off by the contracting officer.

7-7.1.1.4.c Contracts of $2,500 or Less

Every contract of $2,500 or less for services covered by the Act must include Clause 9-11: Service Contract Act — Short Form. The clause is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders when checked off by the contracting officer.

7-7.1.1.4.d Multiyear Service Contracts and Service Contracts with Renewals or Options

Multiyear service contracts and service contracts with options or renewals that include Clause 9-10: Service Contract Act or Clause 9-11: Service Contract Act — Short Form, must also include Clause 9-12: Fair Labor Standards Act and Service Contract Act — Price Adjustment. These clauses are incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders when checked off by the contracting officer.

7-7.1.1.4.e Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts

If exemption conditions are met, contracts for maintenance, calibration, or repair of certain equipment, and other conditionally exempted contracts in 7-7.1.1.2 must include Clause 9-15: Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment and Other Conditionally Exempted Contracts – Requirements. If exemption conditions are not met, contracts must include either Clause 9-10: Service Contract Act or Clause 9-11: Service Contract Act — Short Form as applicable. These clauses are incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders, when checked off by the contracting officer.

7-7.1.1.5 Minimum Wage Determinations

7-7.1.1.5.a Wage determinations may be obtained by submitting an e98, the electronic version of Standard Form 98 Notice of Intention to Make a Service Contract, from http://www.dol.gov/whd/contracts/sca/sf98/index.asp, describing the proposed contract and the occupations expected to be employed on the contract. DOL will respond with the wage determinations. Alternatively, wage determinations may be obtained from the following website: www.wdol.gov.

7-7.1.1.5.b If more than five service employees will be involved in performing work covered by the Act, the contract may not be awarded without a DOL wage determination. The contracting officer must obtain a wage determination prior to any request for proposals, commencement of negotiations, exercise of an option or renewal, and on each biennial anniversary date of a multi-year contract valued at more than $2,500.

7-7.1.1.5.c If the place of performance is unknown when the solicitation is issued, a wage determination need not be included in the original solicitation. Instead, when proposals are received, the contracting officer must obtain a wage determination for each location where the contract might be performed, as indicated by potential suppliers. The wage determination that applies to the successful potential supplier must be included in the contract. If DOL finds this impracticable, it may issue a composite wage determination.

7-7.1.1.5.d If circumstances require that a contract be awarded before a wage determination is obtained, the contract must include Clause 9-10: Service Contract Act and provide for equitable adjustment of the contract terms when the wage determination is incorporated, effective from the date of issuance unless another effective date is specified in the determination. The e98, if not already submitted, must be submitted promptly and explain the need for immediate award.

7-7.1.1.5.e The contracting officer must submit a revised e98 to find out whether a wage determination is still current when a solicitation or negotiation has been delayed for more than sixty days from the anticipated date of award. Any wage determination received in response must replace the earlier wage determination.

7-7.1.1.5.f If the contract will be for substantially the same services as are being furnished at the same location by an incumbent supplier whose contract the proposed contract will succeed and the wages and fringe benefits of the service employees are determined by a collective bargaining agreement, the contracting officer must reference the union and the collective bargaining agreement on the e98. The contracting officer will receive an e-mail giving instructions to submit a copy of each collective bargaining agreement along with any related documents specifying wages and fringe benefits that will apply to the contract. If the contracting officer believes that the collective bargaining agreement was not the result of “arm‘s-length” negotiations, a statement of the facts leading the contracting officer to that conclusion must accompany the agreement, and the DOL Wage and Hour Division must be advised if the wages and fringe benefits vary substantially from those for similar services.

7-7.1.1.5.g Any revision of a wage determination received less than ten days before proposals are due is not effective unless there is enough time to notify potential suppliers. If the contract action involves noncompetitive procedures or the exercise of an option or renewal, any revision of a wage determination received after award is not effective if performance begins within thirty days after award; otherwise, any revision received at least ten days before performance begins is effective.

7-7.1.1.5.h The DOL Wage and Hour Division may require that a wage determination be applied to a contract retroactively, if the contract is subject to the Act and more than five service employees are involved in performing the work. If the contracting officer questions the applicability of the Act to the contract, the contracting officer must forward the matter for resolution to assigned counsel. If it is determined that the Act is not applicable to the contract, the contracting officer must advise DOL of the basis for this determination. No further action is needed unless the Secretary of Labor disagrees and issues a final determination that the contract is in fact subject to the Act. In that case, the contracting officer must incorporate the applicable wage determination and attempt to negotiate an equitable price adjustment.

7-7.1.1.5.i If a wage determination does not contain all the classifications and rates requested in the e98, those classifications for which no determinations were received must be deleted from the attachment to the solicitation incorporating the wage determination. When omitted classifications or classifications not previously contemplated are found necessary after award, they, along with the appropriate wage determination, must be incorporated into the contract following the procedures in Clause 9-10: Service Contract Act.

7-7.1.1.6 Award

The following requirements apply to contract awards under the Act:

• DOL Poster - At the time of award, the contracting officer must furnish the supplier with WH Publication 1313, a DOL combination letter and poster explaining the Service Contract Act.
• Inquiries concerning the Service Contract Act - Suppliers or their employees with questions about the applicability of the Act must be referred to the DOL’s Wage and Hour Division’s toll-free help line:

866-4USWAGE (1-866-487-9243)
TTY: 1-877-889-5627
Monday-Friday 8 a.m. to 8 p.m. Eastern Time

General questions about the Act may also be directed to any regional office of the Employment Standards Administration, Wage and Hour Division of the Department of Labor.

7-7.1.1.7 Withholding Contract Payments and Contract Termination

A violation of Clause 9-10: Service Contract Act or Clause 9-11: Service Contract Act — Short Form makes the responsible party liable for the sum of any deductions, rebates, refunds, or underpayments due to employees. At the written request of a district director (or above), as much of the accrued payment due on the contract (or any other contract between the supplier and the Postal Service that has not been assigned) must be withheld as is necessary to pay the employees. Withheld sums must be kept in an escrow fund. Any compensation that the Postal Service or the DOL Wage and Hour Division determine to be due must be paid directly from the withheld payments.

If the withheld payments are insufficient to reimburse the underpaid employees, this fact must be reported to the General Accounting Office (for possible setoff), the Wage and Hour Division of the Department of Labor, and the Department of Justice. The United States may bring an action to recover the remaining amount. Any sums recovered must be held in the escrow fund and paid, on order of the Secretary of Labor, directly to the underpaid employees.

Any violation of Clause 9-10: Service Contract Act or Clause 9-11: Service Contract Act — Short Form may be cause for termination of the supplier‘s right to continue the work. If the contract is terminated, the Postal Service may enter into other contracts or arrangements to complete the work, charging any additional costs to the terminated supplier.

The Comptroller General is responsible for including the names of people or firms in violation of the Act in the GSA’s System for Award Management (SAM) http://www.sam.gov. Unless the Secretary of Labor recommends otherwise, Postal Service contracts may not be awarded to any violator on the list (or to any firm, corporation, partnership, or association in which such violator has a substantial interest) for three years from the date the list was published.

7-7.1.1.8 Enforcement

The Secretary of Labor administers and enforces the Act.

7-7.1.2 Davis-Bacon Act (40 U.S.C. 3141 et seq.)

The Davis-Bacon Act requires that construction contracts over $2,000 contain a provision setting the minimum wages to be paid to all classes of laborers and mechanics working on the work site. Minimum wage rates are determined by the Secretary of Labor on the basis of prevailing wage rates. Further guidance concerning the Davis-Bacon Act is provided in Handbook P2, Design and Construction Purchasing Practice.

7-7.1.3 The Copeland Anti-Kickback Act (18 U.S.C. 874 and 40 U.S.C. 3145)

The Copeland Anti-Kickback Act applies to any contract over $2,000 subject to the Davis-Bacon Act. The Copeland Act makes it unlawful to force laborers or mechanics to give up any part of their compensation except for permissible deductions such as taxes and union dues.

7-7.1.4 Randolph-Sheppard Act (20 U.S.C. 107 et seq.)

This act allows for the operation of food service and vending facilities by the blind on Federal properties to expand the economic opportunities of the blind, and for other purposes. Postal facilities are to include space for vending facilities operated by or on behalf of the blind.

7-7.1.4.1 Requirements

Blind suppliers licensed under the provisions of the Randolph-Sheppard Act or by a state licensing agency must be given priority for the operation of food vending services in Postal Service facilities. See Handbook EL-602, Food Service Operations, (http://about.usps.com/handbooks/el602.pdf) for additional details.

7-7.1.5 Miller Act (40 U.S.C. 3131 et seq.)

7-7.1.5.1 Applicability

The Miller Act required contract surety bonds on Federal construction. See 7-3.1, Bonds, for general information on types of bonds, and 7-3.1.7, Performance and Payment Bonds for Construction Contracts, for information regarding Miller Act bond requirements.

7-7.1.5.2 Requirements

The Miller Act provides that before a contract that exceeds $100,000 in amount for the construction, alteration, or repair of any building or public work of the United States is awarded to any person, that person shall furnish the United States with the following:

• A performance bond in an amount that the CO regards as adequate for the protection of the United States. The bond amount is normally 100 percent of the contract price.
• A separate payment bond for the protection of suppliers of labor and materials. The amount of the payment bond shall be equal to the total amount payable by the terms of the contract unless the CO awarding the contract makes a written determination supported by specific findings that a payment bond in that amount is impractical, in which case the amount of the payment bond shall be set by the CO. In no case shall the amount of the payment bond be less than the amount of the performance bond.

7-7.1.6 Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 et seq.)

7-7.1.6.1 Requirements

The Contract Work Hours and Safety Standards Act requires that certain contracts contain a clause specifying that no laborer or mechanic doing any work under the contract may be required or permitted to work more than 40 hours in any workweek unless paid at least one and one-half times the basic rate of pay for all overtime hours. A violation makes the supplier liable for liquidated damages. Lease agreements, being subject to Reorganization Plan No. 14 of 1950 under 39 U.S.C. 410(d), are subject to the safety standards of the Contract Work Hours and Safety Standards Act, in addition to the overtime pay requirements.

7-7.1.6.2 Exemptions

The Secretary of Labor is responsible for enforcement of the Work Hours and Safety Standards Act and may permit variations and exemptions from the Work Hours and Safety Standards Act’s requirements when necessary in the public interest or to prevent injustice or undue hardship (29 CFR 5.14).

7-7.1.6.3 Clauses

Clause 9-2: Contract Work Hours and Safety Standards Act — Overtime Compensation is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders and must be checked off by COs for all contracts, lease agreements, and ordering agreements that may involve the employment of laborers or mechanics, except:

• Construction contracts and lease agreements involving alterations or improvements of $2,000 or less, and other contracts and lease agreements of $2,500 or less;
• Indefinite-delivery contracts and ordering agreements, if the total amount of all orders placed for 1 year after the effective date will not exceed the above limits involving construction contracts and lease agreements involving alterations or improvements;
• Contracts for supplies usually purchased in the open market or requiring labor merely incidental to the sale;
• Contracts for work subject solely to the Walsh-Healey Public Contracts Act;
• Contracts for transportation by land, air, or water; and
• Any other contracts exempt under regulations of the Secretary of Labor (see 29 CFR 5.15).

7-7.1.7 Prohibition on Convict Labor (39 U.S.C. 2201)

7-7.1.7.1 Requirements

Under 39 U.S.C. 2201, the Postal Service may not contract for supplies to be manufactured by convict labor, except for purchase from Federal Prison Industries, Inc. The Postal Service may purchase supplies from firms employing persons on parole or probation under the conditions set forth in Executive Order (EO) 11755, December 29, 1973, as amended, which the Postal Service has elected to follow.

7-7.1.7.2 Clauses

Except for purchases from Federal Prison Industries, Inc., all contracts involving the employment of labor must contain Clause 9-1: Convict Labor. Clause 9-1: Convict Labor is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders.

7-7.1.7.3 Federal Prison Industries, Inc.

The Postal Service uses Federal Prison Industries, Inc. (UNICOR) as a source of supply for:

• Mailbag requirements exceeding the capacity of the MES; and
• May obtain other products and services available from Federal Prison Industries.

Price and delivery terms must be reasonable compared with those available in the commercial marketplace (as determined by market research or other means not involving obtaining competitive proposals).

7-7.1.7.4 Ordering

Supplies and services available from Federal Prison Industries are listed in its Schedule of Products brochure. This brochure and individual product and service catalogs (which provide detailed ordering instructions) are available at Federal Prison Industries’ Web site (www.unicor.gov) and are available from:

UNICOR CORPORATE DIVISION
FEDERAL PRISON INDUSTRIES INC
320 FIRST STREET NW
WASHINGTON DC 20534-0001

7-7.1.8 Walsh-Healey Public Contracts Act (41 U.S.C. 6501 et seq.)

7-7.1.8.1 Applicability

The Walsh-Healey Public Contracts Act applies to indefinite-delivery contracts and ordering agreements if the aggregate amount of all orders is expected to exceed $10,000 during the year following award. Indefinite-delivery contracts and ordering agreements not initially subject to the Walsh–Healey Public Contracts Act become subject to the Walsh-Healey Public Contracts Act if orders will exceed $10,000 during any year after the first year. Applicability must therefore be determined annually until the contracts or agreements become subject to the Act.

If a contract for $10,000 or less is modified to exceed $10,000, the Walsh–Healey Public Contracts Act applies. If a contract that exceeds $10,000 is modified to $10,000 or less, the work performed after the modification is subject to the Walsh-Healey Public Contracts Act if both parties agreed to the modification.

7-7.1.8.2 Exemptions

The following purchases are exempt from the Walsh-Healey Public Contracts Act:

• Noncompetitive purchases, when delaying the purchase would seriously harm the Postal Service.
• Perishables, including dairy, livestock, and nursery products.
• Purchases of agricultural or farm products processed for first sale by the original producers.
• Commercially available items.

When a contract subject to the Walsh-Healey Public Contracts Act is awarded, the CO, under the regulations or instructions issued by the Secretary of Labor, must:

• Give the supplier a Department of Labor combination letter and poster (WH Publication 1313) explaining the Walsh-Healey Public Contracts Act; and
• Report any violation of the representations or stipulations required by the Walsh-Healey Public Contracts Act to the Secretary of Labor through the Inspection Service.

The Secretary of Labor may allow exceptions to the requirement that the representations and stipulations of the Walsh-Healey Public Contracts Act be included in contracts. The CO must submit requests for exceptions to the Administrator, Wage and Hour Division, Department of Labor, through the manager, SM Infrastructure.

7-7.1.8.3 Requirements

The Walsh-Healey Public Contracts Act requires that certain contracts for the manufacture or furnishing of supplies must incorporate the Walsh-Healey Public Contracts Act requirements by reference. No CO, supplier, or subcontractor may purchase quantities amounting to less than $10,000 to avoid compliance with the Walsh-Healey Public Contracts Act.

7-7.1.8.4 Clauses

All contracts subject to the Walsh-Healey Public Contracts Act must include Clause 9-6: Walsh-Healey Public Contracts Act, which is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders, and must be checked off by the CO, as appropriate.

7-7.1.9 Freedom of Information Act (5 U.S.C. 552)

The Freedom of Information Act (FOIA) provides the public with a right of access to records (hard-copy and electronic) that are maintained by Federal agencies, including the Postal Service. The FOIA contains exemptions that authorize the withholding of certain information. Postal Service regulations implementing the FOIA are located in 39 CFR 265. For procedures that implement FOIA, consult Handbook AS-353, Guide to Privacy and the Freedom of Information Act. For Postal Service Supplying Practices pertaining to FOIA, refer to the Section 7-14, Privacy Considerations. For additional information, visit www.usps.com/foia.

7-7.1.10 Fair Labor Standards Act (29 U.S.C. 201—219)

The Fair Labor Standards Act provides for minimum wages and maximum work hours, and it appoints the Wage and Hour Division of the Department of Labor to interpret and enforce the Fair Labor Standards Act (including investigating and inspecting general suppliers). The Fair Labor Standards Act applies to all employees (with some exceptions) engaged in interstate or foreign commerce, the production of supplies for such commerce, or any closely related process or occupation essential to such production. It also prohibits oppressive child labor.

Suppliers or their employees who inquire concerning the applicability or interpretation of the Fair Labor Standards Act must be advised that rulings fall under the jurisdiction of the Department of Labor and must be referred to the Regional Administrator, Wage and Hour Division, Department of Labor.

7-7.1.11 The Privacy Act of 1974 (5 U.S.C. 552a)

The Privacy Act provides privacy protections for personal information maintained by Federal agencies. The Privacy Act provides privacy protections for personal information that agencies maintain in a “system of records,” which includes files, databases, or programs from which personal information is retrieved by name or other identifier. Postal Service regulations regarding the Privacy Act are located in 39 CFR 266 and 39 CFR 268. Handbook AS-353, Guide to Privacy and the Freedom of Information Act, describes procedures relating to the Privacy Act, a full description of Privacy Act protections, as well as the Postal Service systems of records.

7-7.1.11.1 Requirements

When an agency maintains a system of records, it must publish a notice that describes the system in the Federal Register. The notice must document how the agency manages personal information within the system. This includes how information is collected, used, disclosed, stored, and discarded. It also includes how individuals can exercise their rights to obtain access to and amend their personal information that is maintained in the system. The Privacy Act further requires that the Postal Service provide an appropriate privacy notice to individuals when they are asked to provide information about themselves.

7-7.1.11.2 Penalties

The Privacy Act provides criminal penalties, in the form of fines, for any officer or employee who:

• Willfully maintains a system of records that contains information about an individual without giving appropriate notice in the Federal Register; or
• Knowing that disclosure is prohibited, willfully discloses information about an individual in any manner to any person or agency not entitled to receive it.

The Privacy Act also provides criminal penalties, in the form of fines, for any person who knowingly and willfully requests or obtains under false pretenses any record about another individual.

7-7.1.12 Architectural Barriers Act (42 U.S.C. 4151 et seq.)

The Architectural Barriers Act requires that Postal Service buildings (both owned and leased) are accessible to individuals with disabilities. The Architectural Barriers Act impacts the cost of constructing or leasing buildings. Accessibility requirements of the Americans with Disabilities Act, applicable to private structures, have less stringent standards and put the burden on lessor, as opposed to the lessee.

7-7.1.13 Administrative Dispute Resolution Act of 1996 (ADRA)
(5 U.S.C. 571 et seq.)

The Administrative Dispute Resolution Act (ADRA) constitutes a mandate to all Federal agencies to provide ADR services. It requires the Postal Service to have policies that address the use of ADR techniques and to appoint a dispute resolution specialist. For Postal Service practices concerning ADR, consult Sections 2-37, Hold Discussions, and 2-38, Negotiate with Suppliers, as well as Section 7-4, Supplier Disagreement Resolution.

7-7.1.13.1 Applicability

ADRA requires the Postal Service to examine the use of ADR in connection with:

• Formal and informal adjudications.
• Rulemakings.
• Enforcement actions.
• Issuing and revoking licenses or permits.
• Contract administration.
• Litigation brought by or against the Postal Service.
• Other Postal Service actions.

7-7.1.13.2 Requirements

For the purpose of the statute, alternative means of dispute resolution include conciliation, mediation, facilitation, fact finding, minitrials, and the use of an SDR Official.

ADRA:

• Provides that the Postal Service, once having agreed to binding arbitration, may not vacate or “opt out” of arbitral decisions with which it does not agree.
• Exempts certain confidential communications between a party to a dispute and a neutral party, which were made during ADR proceedings, from disclosure under the FOIA.

7-7.1.14 Rehabilitation Act of 1973 (29 U.S.C. 702 et seq.)

The Rehabilitation Act of 1973 prohibits discrimination on the basis of disability in programs conducted by Federal agencies, in programs receiving Federal financial assistance, in Federal employment, and in the employment practices of Federal contractors. Section 508 of the Act establishes specific requirements for information and communication technology developed, maintained, procured, or used by the Federal government to ensure that it is accessible to people with disabilities, including employees and customers.

7-7.1.14.1 Applicability

With the exceptions outlined below, every contract for goods or services (including construction and transportation services) having a value of more than $10,000 must include Clause 9-13: Equal Opportunity for Workers with Disabilities, which is incorporated by reference in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders, and must be checked off by the contracting officer when applicable.

7-7.1.14.2 Requirements

The Postal Service complies with the Rehabilitation Act of 1973, as amended (29 U.S.C. 793), EO 11758 of January 15, 1974, and the implementing regulations of the Secretary of Labor (41 CFR 60—741). The requirements of Clause 9-13: Equal Opportunity for Workers with Disabilities does not apply to any agency, instrumentality, or subdivision of the state or local government that does not participate in work under the contract.

7-7.1.14.3 Waiver

The VP, SM, may request that the Director, Office of Federal Contracts Compliance Programs (OFCCP), Department of Labor, waive the application of any provisions of Clause 9-13: Equal Opportunity for Workers with Disabilities to a specific contract or group of contracts under 41 C.F.R. § 60-741.4(b)(1). The contracting officer must submit a justification for any waiver request to the VP, SM.

7-7.1.14.4 Section 508

Section 508 of the Rehabilitation Act (29 U.S.C. 794d) is a law that requires Federal agencies and the Postal Service to develop, procure, maintain, and use information and communication technology (ICT) that is accessible to persons with disabilities. The law requires that ICT equipment and systems comply with standards written by the Architectural and Transportation Barriers Compliance Board (Access Board). The Access Board published revised standards on January 18, 2017, in the Federal Register, which are codified at 36 CFR part 1194.

ICT includes technology such as web pages, software applications, computers, self-contained kiosks, copiers, multimedia, and telecommunications systems. These standards are intended to make these technology products more accessible to individuals with disabilities. Clause 4-18: Information and Communication Technology Accessibility must be included in all ICT contracts. See Section 8-4, Information Technology, for additional information on ICT contracts.

7-7.1.14.5 Department of Labor Notices

Under Clause 9-13: Equal Opportunity for Workers with Disabilities the CO must provide the supplier with Department of Labor notices that state the supplier’s obligations and individuals’ rights under Section 503 of the Rehabilitation Act of 1973. Posters that include the required notices are available at https://www.dol.gov/ofccp/regs/compliance/posters/ofccpost.htm.

7-7.1.14.6 Complaints

The CO must refer any employee of a supplier with a complaint concerning the Rehabilitation Act to the Department of Labor Office of Federal Contract Compliance Programs (OFCCP) in accordance with the Department of Labor notices.

7-7.1.14.7 Department of Labor Sanctions

When the Postal Service is notified that the Department of Labor has imposed sanctions on a supplier (such as withholding progress payments, terminating or suspending the contract, or debarring the supplier) for violation of Clause 9-13: Equal Opportunity for Workers with Disabilities, the contracting officer must put the sanctions into effect as soon as possible.

7-7.1.15 The Javits-Wagner-O’Day Act (41 U.S.C. 8501–8506)

The Javits-Wagner-O’Day Act requires that the Postal Service and other Federal agencies purchase certain supplies and services from qualified workshops that employ people who are blind or severely disabled. The Committee for Purchase from People Who Are Blind or Severely Disabled determines which supplies and services must be purchased and their price. Additional information on the applicability of the Javits-Wagner-O’Day Act can be found in Section 2-13, Purchase From Mandatory Sources.

7-7.1.16 Vietnam Era Veterans Readjustment Assistance Act of 1974 (38 U.S.C. 4212)

7-7.1.16.1 General

The following addresses the policies and procedures for implementing the:

• The Vietnam Era Veterans Readjustment Assistance Act of 1974 (38 U.S.C.4211 and 4212) (the Act).
• The Veterans Employment Opportunities Act of 1998, Public Law 105-339.
• The Jobs for Veterans’ Act of 2002, Public Law 107-288.
• Executive Order 11701, January 24, 1973 (3 CFR 1971– 975.
• The regulations of the Secretary of Labor (41 CFR 60-300 and 61-300).

The Vietnam Era Veterans Readjustment Assistance Act of 1974, EO 11701 of January 24, 1973, the Veterans Employment Opportunities Act of 1998, and the implementing regulations of the Secretary of Labor (41 CFR 60—300 and 61-300) require suppliers to take affirmative action to employ, and advance in employment, qualified special disabled veterans, veterans of the Vietnam era, and other eligible veterans without discrimination based on their disability or veterans’ status, and to list all employment openings with appropriate local employment services.

7-7.1.16.2 Applicability

Solicitations for contracts for goods or services (including utility, construction, and transportation services) or for the use of real or personal property (including lease arrangements) valued at $150,000 or more must include Provision 9-5: Compliance with Veterans’ Employment Reporting Requirements. Provision 9-5 is by-referenced in Provision 4-1: Standard Solicitation Provisions, and must be checked-off by the contracting officer as applicable.

All contracts for goods or services (including utility, construction, and transportation services) or for the use of real or personal property (including lease arrangements) valued at $150,000 or more must include Clauses 9-14: Equal Opportunity for Veterans, and 9-16: Employer Reports on Employment of Protected Veterans. Clauses 9-14 and 9-16 are by-referenced in Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders, and, must be checked off by the contracting officer as applicable.

No contracting officer, supplier, or subcontractor may purchase quantities of goods or services in less-than-normal quantities to avoid application of these clauses. VETS-4212 reports are only required to be filed if a company’s locations are physically located within the U.S. and its territories. Companies are not required to report on locations outside of the U.S. and its territories.

7-7.1.16.3 Contract Requirements

Provision 9-5 requires suppliers to represent that, if it is subject to the reporting requirements of 38 U.S.C. 4212(d), it has reported.

Clause 9-14 requires suppliers to abide by the requirements of the equal opportunity clause found in 41 CFR 60-300.5(a) which prohibits discrimination against qualified protected veterans and requires affirmative action by the supplier to employ and advance in employment qualified protected veterans. Clause 9-14 also requires suppliers to include the clause in subcontracts valued at $150,000 or more unless exempted by rules, regulations or orders of the Secretary of Labor. Clause 9-16 requires the supplier to report, at least annually, on employment activity with the categories of veterans described above. Suppliers must report the activity by completing Form VETS-4212 Federal Contractor Veterans’ Employment Report (VETS-4212 Report) between August 1 and September 30 of each year in which they have a government or Postal Service contract. Provision 9-5 serves as a representation by the supplier that, if it has any contracts subject to the reporting requirements of 38 U.S.C. 4212(d), it has submitted the required VETS report.

Contracts may not be awarded to suppliers that have not submitted an annual Form VETS-4212, Federal Contractor Veterans’ Employment Report, if the supplier was subject to the reporting requirements in the previous reporting period. Contracting officers should document the contract file, based on the supplier’s reporting status from the previous period through one of the methods below.

• For suppliers who were not in a reporting status:

Document the reason that the supplier was not required to report within the previous period (e.g., the supplier is new to “government” contracting).

• For suppliers who were in a reporting status:

Query the Department of Labor’s VETS--4212 Database via the Internet at www.dol.gov/vets/vets4212-validations.zip, and print a screen shot to show the supplier is listed; or,

• Request the supplier provide a copy of their “email confirmation of receipt notification” received from the Department of Labor, and place in the contract file; or,
• Contact the VETS-4212 Customer Support Center via telephone at (866) 237-0275 or send an email to VETS4212-customersupport@dol.gov, and document with a memorandum to the file or the email response received.

7-7.1.16.4 Request for Exemptions

The contracting officer must submit a detailed justification for any proposed exemption to the VP, SM, for submission through channels to the PMG and the director, Office of Federal Contract Compliance Programs (OFCCP).

7-7.1.16.5 Department of Labor Notices

The contracting officer must furnish the supplier appropriate notices for posting when such notices are prescribed by the director, OFCCP at the Department of Labor’s Employment Standards Administration. (See https://www.dol.gov/ofccp/regs/compliance/posters/ofccpost.htm.)

7-7.1.16.6 Complaints and Noncompliance

The contracting officer must forward any complaint or knowledge of noncompliance concerning the laws contained in this section through channels to the VP, SM to be passed along to the Deputy Assistant Secretary of Labor. No investigation or attempt to resolve the complaint or noncompliance may be made without specific instructions from the Department of Labor.

7-7.1.16.7 Department of Labor Sanctions

When the Postal Service is notified that the Department of Labor has imposed sanctions on a supplier for violation of Clause 9-14: Equal Opportunity for VEVRAA Protected Veterans, the contracting officer should put the sanctions into effect as soon as possible.

7-7.1.17 Contract Disputes Act (41 U.S.C. 7101–7109)

7-7.1.17.1 Requirements

The CDA creates a comprehensive system for resolving disputes between a supplier and SM at the Postal Service relating to the performance of most purchase contracts. The trigger point for this system is the CO’s decision. The claims of both the supplier and the Postal Service must be the subject of a CO’s decision. The supplier may appeal such a decision to the appropriate agency board of contract appeals; such boards are specifically authorized by the CDA. Alternatively, the supplier, in lieu of appealing a CO’s decision to a board of contract appeals, may file suit on its claim in the United States Court of Federal Claims (CFC). In both forums, the claim is heard de novo. If the supplier or the Postal Service (with the approval of the Attorney General) wishes, either may appeal a decision of a board of contract appeals or the CFC to the United States Court of Appeals for the Federal Circuit (CAFC). Additional information regarding the required wording of contracting
officer final decisions and CDA procedures can be found in
39 CFR sections 601.109 – 601.112, and regulations governing
proceedings under the CDA before the Postal Service Board of
Contract Appeals can be found at 39 CFR Part 955.

7-7.1.17.2 Applicability

The CDA applies to nearly all contracts with the Postal Service, express or implied, executed on or after March 1, 1979, for:

• The purchase of goods, other than real property;
• The purchase of services;
• The purchase of construction, alteration, repair, or maintenance of real property; or
• The disposal of personal property.

7-7.1.18 Prompt Payment Act, As Amended (39 U.S.C. 3901 et seq.)

The Postal Service will pay interest on late payments and unearned prompt payment discounts in accordance with the Prompt Payment Act, 31 U.S.C. 3901 et seq., as amended by the Prompt Payment Act Amendments of 1988, P.L. 100—496, in accordance with Clause 4-1: General Terms and Conditions, paragraph i., or Clause B-22: Interest.

7-7.1.19 Clauses and Provisions

Clause 4-2: Contract Terms and Conditions Required to Implement Policies, Statutes or Executive Orders.

Clause 9-1: Convict Labor.

Clause 9-2: Contract Work Hours and Safety Standards Act — Overtime Compensation.

Clause 9-6: Walsh-Healey Public Contracts Act.

Clause 9-10: Service Contract Act.

Clause 9-11: Service Contract Act — Short Form.

Clause 9-12: Fair Labor Standards Act and Service Contract Act — Price Adjustment.

Clause 9-13: Equal Opportunity for Workers with Disabilities.

Clause 9-14: Equal Opportunity for VEVRAA Protected Veterans.

Clause 9-16: Employer Reports on Employment of Protected Veterans.

Provision 4-1: Standard Solicitation Provisions

Provision 9-5: Compliance with Veterans’ Employment Reporting Requirements