7-9.6 Considerations About Special Tooling and Test Equipment

The purchase/SCM team may decide to provide Postal Service special tooling and test equipment to suppliers for use in contract work, if doing so will not disrupt programs of equal or higher priority, or it is in the Postal Service’s best interests. Contracts authorizing the furnishing of special tooling or test equipment must contain:

• A complete description of the tooling or equipment.
• The terms and conditions of shipment.
• The terms covering the cost of adaptation and installation.

In competitive purchases when Postal Service special tooling or test equipment is not available, suppliers ordinarily provide and retain title to special tooling and test equipment required for contract performance. Competition usually results in fair charges for amortizing the costs of such tooling and equipment. In noncompetitive situations, the Postal Service should obtain the special tooling or test equipment, or the rights to it, because it may facilitate future competition.

When special tooling or equipment is provided by the supplier, the purchase/SCM team must determine whether to purchase the tooling or equipment, or rights to it, by considering:

• Future needs for the items (including in-house use).
• The estimated residual value of the items.
• The added administrative burden of reporting, record-keeping, preparation, handling, transportation, and storage.
• The feasibility and probable cost of making the items available to other offerors in future purchases.
• The amount, if any, offered by the supplier for the right to keep the items.
• The effect on future competition and prices.

When there is a possibility of future purchases of the same item and the purchase/SCM team has decided not to obtain rights or title, the solicitation must indicate current estimates of the future requirements, in the interest of reducing amortization charges. Suppliers must be cautioned that these are only estimates and not a guarantee to purchase future quantities.

When the Postal Service will furnish property that is valued at or above $10,000, the CO will include one of the following clauses in the contract:

• Clause 2-11: Postal Service Property — Fixed-Price, when a fixed-price contract will be awarded and the total value of Postal Service property is $50,000 or more. If the contract provides for reimbursement of costs for certain materials, the clause with its alternate paragraph c will be used.
• Clause 2-12: Postal Service Property — Short Form, when a fixed-price, time-and-materials, or labor-hour contract will be awarded and the total value of Postal Service property is less than $50,000.
• Clause 2-13: Postal Service Property — Non-Fixed-Price, when a cost-reimbursement, time-and-materials, or labor-hour contract will be awarded with Postal Service property valued at $50,000 or more. If the contract is for basic or applied research at a nonprofit institution of higher education or nonprofit organization whose primary purpose is to conduct scientific research, the clause with its alternate paragraph c. will be used.
• Clause 2-14: Postal Service Property Furnished “As Is”, when Postal Service property will be furnished “as is”.
• Clause 2-11: Postal Service Property — Fixed-Price, or Clause 2-16: Special Test Equipment, must be included in solicitations for fixed-price contracts when the rights or title to special tooling or test equipment will be required but cannot be identified as a specific line item. Rights or title to special tooling or test equipment in a cost-reimbursement contract are obtained using Clause 2-13: Postal Service Property — Non-Fixed-Price.