Supplying Principles and Practices > Contract Clauses > Clause B-1 Definitions (March 2006) > Clause 1-1 Privacy Protection (July 2007)

Clause 1-1 Privacy Protection (July 2007)

In addition to other provisions of this contract, the supplier agrees to the following:

a. Privacy Act. If the supplier operates a system of records on behalf of the Postal Service, the Privacy Act (5 U.S.C. 522a) and Postal Service regulations at 39 CFR Parts 266-267 apply to those records. The supplier is considered to operate a system of records if it manages records (including collecting, revising, or disseminating records) from which information is retrieved by the name of an individual or by some number, symbol, or other identifier assigned to the individual. The supplier agrees to comply with the Act and the Postal Service regulations in designing, developing, and operating the system of records, including ensuring that records are current and accurate for their intended use, and incorporating adequate safeguards to prevent misuse or improper disclosure of personal information. Violations of the Act may subject the violator to criminal penalties.

b. Customer or Employee Information. If the supplier has access to Postal Service customer or employee information, including address information, whether collected online or offline by the Postal Service or by a supplier acting on its behalf, the supplier must comply with the following:

(1) General. With regard to the Postal Service customer information to which it has access pursuant to this contract, the supplier has that access as an agent of the Postal Service and must adhere to its postal privacy policy at www.usps.com/common/docs/privpol.htm.

(2) Use, Ownership, and Nondisclosure. The supplier may use Postal Service customer or employee information solely for purposes of this contract, and may not collect or use such information for non-Postal Service marketing, promotion, or any other purpose without the prior written approval of the contracting officer. The supplier must restrict access to such information to those employees who need the information to perform work under this contract, and must ensure that each such employee (including subcontractors' employees) sign a nondisclosure agreement, in a form suitable to the contracting officer, prior to being granted access to the information. The Postal Service retains sole ownership and rights to its customer or employee information. Unless the contract states otherwise, upon completion of the contract the supplier must turn over all Postal Service customer or employee information in its possession to the Postal Service, and must certify that no Postal Service customer or employee information has been retained unless otherwise authorized in writing by the contracting officer.

(3) Security Plan. When applicable, and unless waived in writing by the contracting officer, the supplier must work with the Postal Service to develop and implement a security plan that addresses the protection of customer or employee information. The plan will be incorporated into the contract and followed by the supplier, and must, at a minimum, address notification to the Postal Service of any security breach. If the contract does not include a security plan at the time of contract award, it must be added within 60 days after contract award.

(4) Breach Notification. If there is a breach of any nature in the security of Postal Service data, including customer or employee data, the supplier must follow the breach notification requirements included in the security plan discussed in (3) above. The supplier will be required to follow Postal Service policies regarding breach notification to customers and/or employees.

(5) Legal Demands for Information. If a legal demand is made for Postal Service customer or employee information (such as by subpoena), the supplier must immediately notify the contracting officer and the nearest office of the Postal Inspection Service. After notification, the Postal Service will determine whether and to what extent to comply with the legal demand. Should the Postal Service agree to or unsuccessfully resist a legal demand, the supplier may, with the written permission of the contracting officer, release the information specifically demanded.

c. Online Assistance. If the supplier assists in the design, development, or operation of a Postal Service customer Web site, or if it designs or places an ad banner, button, or link on a Postal Service Web site or any Web site on the Postal Service's behalf, the supplier must comply with the limitations in subparagraph b(1) above relating to ad banners, buttons, or links, and the use of cookies, web beacons, or other web analysis tools. Exceptions to these limitations require the prior written approval of the contracting officer and the Postal Service's Chief Privacy Officer.

d. Marketing E-Mail. If the supplier assists the Postal Service in conducting a marketing e-mail campaign, the supplier does so as an agent of the Postal Service and must adhere to the Postal Service policies set out in Postal Service Management Instruction AS-350-2004-4, Marketing E-mail. Suppliers wishing to conduct marketing email campaigns to postal employees must first obtain the prior written approval of the contracting officer.

e. Audits. The Postal Service may audit the supplier's compliance with the requirements of this clause, including through the use of online compliance software.

f. Indemnification. The supplier will indemnify the Postal Service against all liability (including costs and fees) for damages arising out of violations of this clause.

g. Flow-down. The supplier will flow this clause down to subcontractors that would be covered by any portion of this clause if they were the supplier.

Clause 1-2 Advance Payments (March 2006)

a. Requirements for Payments. Upon supplier submission of properly certified invoices or vouchers and contracting officer approval, advance payments will be made under this contract. The supplier will apply terms similar to those of this clause to any advance payments to subcontractors.

b. Use of Funds. The supplier may pay only for properly allocable, allowable, and reasonable costs incurred. Determinations of whether costs are properly allocable, allowable, and reasonable will be in accordance with generally accepted accounting principles, subject to the Conduct Price/Cost Analysis topic of the Evaluate Proposals task of Process Step 2: Evaluate Sources, of the Postal Service Supplying Practices in effect on the date of this contract.

c. Repayment to the Postal Service. At any time, the supplier may repay all or part of the funds advanced by the Postal Service. When requested in writing to do so by the administering office, the supplier must repay to the Postal Service any part of unliquidated advance payments considered by the administering office to exceed the supplier's current requirements or an amount calculated in accordance with paragraph d below.

d. Maximum Payment. When the sum of all unliquidated advance payments exceeds 80 percent of the contract price, the Postal Service will withhold further payments. On contract completion or termination, the Postal Service will deduct from the amount due the supplier all interest charges payable. If previous payments to the supplier exceed the amount due, the excess amount must be paid to the Postal Service on demand. For purposes of this paragraph d, the contract price is the contract price stated at time of award, less any subsequent price reductions under the contract, plus any price increases resulting from any terms of the contract. Any payments withheld under this paragraph will be applied to reduce the unliquidated advance payments. If full liquidation has been made, payments under the contract will resume.

e. Interest

(1) The supplier must pay interest to the Postal Service on the daily balance of unliquidated advance payments at the daily rate specified in subparagraph e.3 below. Interest will be computed at the end of each calendar month for the actual number of days involved. For the purpose of computing interest:

(a) Advance payments will be considered as increasing the unliquidated balance as of the date of the advance payment check;

(b) Repayment of the supplier's check will be considered as decreasing the unliquidated balance as of the date on which the check is received by the Postal Service authority designated by the contracting officer; and

(c) Liquidations by deductions from Postal Service payments to the supplier will be considered as decreasing the unliquidated balance as of the date of the check for the reduced payment.

(2) Interest charges resulting from the monthly computation will be deducted from payments, other than advance payments, due the supplier. If the accrued interest exceeds the payment due, any excess interest will be carried forward and deducted from subsequent payments. Interest carried forward will not be compounded. Interest on advance payments will cease to accrue upon satisfactory completion or termination of the contract for the convenience of the Postal Service. The Postal Service will charge interest on advance payments to subcontractors in the manner described above.

(3) If interest is required under the contract, it will be paid at the rate determined in accordance with the Interest clause of this contract.

(4) If the full amount of interest charged under this paragraph e has not been paid by deduction or otherwise upon completion or termination of this contract, the supplier must pay the remaining interest to the Postal Service on demand.

f. Lien on Property under Contract

(1) All advance payments under this contract, together with interest charges, must be secured, when made, by a lien in favor of the Postal Service, paramount to all other liens, on the supplies or other things covered by the contract and on all material and other property acquired for or allocated to its performance, except to the extent that the Postal Service already has valid title to the supplies, materials, or other property as against the supplier's other creditors.

(2) The supplier will prepare any documents necessary to perfect liens on such property required in any jurisdiction in which any such property is kept. The documents must be approved by the contracting officer and, upon approval, filed with appropriate jurisdictions. The supplier must pay any fees required for filing.

(3) The supplier must identify, by marking or segregation, all property subject to a lien in favor of the Postal Service by virtue of this contract so as to indicate that it is subject to a lien and has been acquired for or allocated to performing the contract. If, for any reason, the property is not identified by marking or segregation, the Postal Service will have a lien to the extent of the Postal Service's interest under the contract on any mass of property with which the supplies, materials, or other property are commingled. The supplier must maintain adequate accounting control over the property on its books and records.

(4) If, under any termination clause in this contract, the contracting officer authorizes the supplier to sell or retain termination inventory, the approval constitutes a release of the Postal Service's lien to the extent that:

(a) The termination inventory is sold or retained; and

(b) The sale proceeds or retention credits are applied to reduce any outstanding advance payments.

(5) If the supplier delivers to a third party any property on which the Postal Service has a lien, the supplier must notify the third party of the lien and obtain a receipt in duplicate acknowledging the existence of the lien. The supplier must give the contracting officer one copy of the receipt.

g. Insurance. The supplier warrants that it maintains with responsible insurance carriers:

(1) Insurance on plant and equipment against fire and other hazards, to the extent that similar properties are usually insured by others operating plants and properties of similar character in the same general locality;

(2) Adequate insurance against liability on account of damage to persons or property; and

(3) Adequate insurance under all applicable workers' compensation laws. The supplier agrees that, until work under this contract has been completed and all advance payments made under the contract have been liquidated, it will maintain this insurance; maintain adequate insurance on all materials, parts, assemblies, subassemblies, supplies, equipment, and other property acquired for or allocable to this contract and subject to the Postal Service lien under paragraph f above; and furnish any certificate with respect to its insurance that the contracting officer may require.

h. Default

(1) By written notice to the supplier, the Postal Service may withhold further payments on this contract in the event of:

(a) Termination for default;

(b) A finding by the contracting officer that the supplier will be unable to perform or has failed to:

(i) Observe any conditions of the advance payment terms;

(ii) Comply with any material term of the contract;

(iii) Make progress or maintain a financial condition adequate for performance of the contract;

(iv) Limit inventory allocated to the contract to reasonable requirements; or

(v) Avoid delinquency in payment of taxes or of the costs of performing this contract in the ordinary course of business.

(c) The appointment of a trustee, receiver, or liquidator for any substantial part of the supplier's property, or the institution of proceedings by or against the supplier for bankruptcy, reorganization, arrangement, or liquidation.

(2) If any of the events described in subparagraph h.1 above continues for 30 days after the notice to the supplier, the Postal Service may take any of the following actions:

(a) Charge interest, in the manner prescribed in paragraph e above, on outstanding advance payments during the period of the event.

(b) Demand immediate repayment by the supplier of the unliquidated balance of advance payments.

(c) Take possession of and sell any property on which the Postal Service has a lien under the contract and, after deducting any expenses incident to the sale, apply the proceeds to reduce the unliquidated balance of advance payments or other claims against the supplier.

(3) The actions described in this clause are in addition to any other rights of the Postal Service.

i. Prohibition Against Assignment. Notwithstanding any other terms of this contract, the supplier may not assign it, any interest in it, or any claim under it to any party.

j. Information and Access to Records. The supplier must furnish to the administering office (1) monthly (or at other intervals as required) signed or certified balance sheets and profit and loss statements in the form prescribed by the contracting officer; and (2) if requested, other information concerning the operation of the supplier's business. The supplier must provide authorized Postal Service representatives proper facilities for inspecting the supplier's books, records, and accounts.

k. Other Security. If the contracting officer considers the security inadequate, the supplier must furnish additional security satisfactory to the contracting officer to the extent it is available.

l. Representations and Warranties

(1) The balance sheet, the profit and loss statement, and any other supporting financial statements furnished the contracting officer fairly reflect the supplier's financial condition at the date shown or during the period covered, and there has been no subsequent materially adverse change;

(2) No litigation or proceedings are presently pending or threatened against the supplier, except as shown in the statements;

(3) The supplier has disclosed all contingent liabilities in the statements;

(4) None of the terms in this clause conflict with the authority under which the supplier is doing business or with the provision of any existing indenture, assignment, or agreement of the supplier;

(5) The supplier has the power to enter into this contract and to accept advance payments, and has taken all necessary action to authorize their acceptance under the terms of the contract;

(6) The supplier's assets are not subject to any lien or encumbrance except for current taxes not delinquent or as shown in the statements;

(7) All information furnished in connection with each request for advance payments is true and correct; and

(8) These representations and warranties are continuing and are considered to have been repeated by the submission of each invoice for advance payment.

m. Notice. The supplier must notify the contracting officer in writing within 30 days of any material change in anything represented or warranted in paragraph 1 above.

n. Covenants. While any advance payments made under this contract remain outstanding, the supplier, without the prior written consent of the contracting officer, may not:

(1) Mortgage, pledge, or otherwise encumber or allow to be encumbered any of the supplier's assets now owned or subsequently acquired, or permit any preexisting mortgages, liens, or other encumbrances to remain on or attach to any assets allocated to performing this contract with respect to which the Postal Service has a lien under the contract;

(2) Sell, assign, transfer, or otherwise dispose of accounts receivable, notes, or claims for amounts due or to become due;

(3) Sell, convey, or lease any substantial part of its assets;

(4) Make any advance or loan or incur any liability as guarantor, surety, or accommodation endorser for any party;

(5) Permit a writ of attachment or any similar process to be issued against its property without getting a release or bonding the property within 30 days after the entry of the writ of attachment or other process;

(6) Pay any remuneration to its directors, officers, or key employees at rates higher than provided in existing agreements;

(7) Change substantially its management, ownership, or control;

(8) Merge or consolidate with any other firm or corporation, change the type business, or engage in any transaction outside the ordinary course of the supplier's business as presently conducted;

(9) Deposit any of its funds except in a bank or trust company insured by the Federal Deposit Insurance Corporation;

(10) Create or incur indebtedness for advances (other than those to be made under the terms of this contract) or borrowings; or

(11) Permit its net current assets, computed in accordance with generally accepted accounting principles, to become less than 80 percent of the assets shown in the last quarterly financial statement issued before contract award.

Clause 1-3 Progress Payments (March 2006)

Progress payments will be made to the supplier when requested as work progresses, but not more often than monthly, in amounts approved by the contracting officer, upon the following terms and conditions:

a. Computation of Amounts

(1) No progress payments may exceed 80 percent of the amount of the supplier's total costs, plus the amount of progress payments that have been paid to supplier's subcontractors and other divisions.

(2) The supplier's total costs must be reasonable, allocable to this contract, and consistent with sound and generally accepted accounting principles and practices. These costs may not include:

(a) Any incurred by subcontractors or suppliers;

(b) Any payments or amounts payable to subcontractors or suppliers, except for completed work (including partial deliveries) to which the supplier has acquired title and except for amounts paid under cost-reimbursement or time-and-materials subcontracts for work to which the supplier has acquired title; or

(c) Costs ordinarily capitalized and subject to depreciation or amortization, except for the properly depreciated or amortized portion of such costs.

(3) The aggregate amount of progress payments made must not exceed 80 percent of the total contract price.

(4) If at any time a progress payment or the unliquidated progress payments exceed the amount permitted by this paragraph a, the supplier must pay the excess to the Postal Service upon demand.

b. Liquidation. Except as provided in the Termination for Convenience clause, all progress payments must be liquidated by deducting from any payment under this contract, other than advance or progress, the amount of unliquidated progress payments, or 80 percent of the gross amount invoiced, whichever is less. Repayment to the Postal Service required by a retroactive price reduction will be made after calculating liquidations and payments on past invoices at the reduced prices and adjusting the unliquidated progress payments accordingly.

c. Reduction or Suspension. The contracting officer may reduce or suspend progress payments, or liquidate them at a rate higher than the percentage stated in paragraph b above, or both, whenever the contracting officer finds, upon substantial evidence, that the supplier:

(1) Has failed to comply with any material requirement of this contract;

(2) Has so failed to make progress, or is in such unsatisfactory financial condition, as to endanger performance of this contract;

(3) Has allocated inventory to this contract substantially exceeding reasonable requirements;

(4) Is delinquent in payment of the costs of performance of this contract in the ordinary course of business; or

(5) Has so failed to make progress that the unliquidated progress payments exceed the fair value of the work accomplished on the undelivered portion of this contract.

d. Title

(1) Immediately upon the date of this contract, title to all parts; materials; inventories; work in process; special tooling; nondurable (i.e., noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment, and other similar manufacturing aids; and drawings and technical data (to the extent that their delivery is required by other provisions of this contract), previously acquired or produced by the supplier and allocated or properly chargeable to this contract under sound and generally accepted accounting principles and practices, will be vested in the Postal Service. Title to all similar property afterwards acquired or produced by the supplier and allocated or properly chargeable to this contract as aforesaid will be vested in the Postal Service upon said acquisition, production, or allocation.

(2) Notwithstanding that title to property is in the Postal Service through the operation of this clause, the handling and disposition of such property will be determined by the applicable provisions of this contract (e.g., paragraph h of this Progress Payments clause, and any termination clause included in the contract). Current production scrap may be sold by the supplier without approval of the contracting officer; in this case, the proceeds must be credited against the costs of contract performance. With the consent of the contracting officer, and on terms approved by the supplier, the supplier may acquire or dispose of property to which title is vested in the Postal Service under this clause, and, in that event, the costs allocable to the property so transferred from this contract must be eliminated from the costs of contract performance and the supplier must repay to the Postal Service (by cash or credit memorandum) an amount equal to the unliquidated progress payments allocable to the property so transferred.

(3) Upon completion of performance of all the obligations of the supplier under this contract, including liquidation of all progress payments under this clause, title to all property (or the proceeds thereof) not delivered to, and accepted by, the Postal Service under this contract, or not incorporated in supplies delivered and accepted and to which title has been vested in the Postal Service under this clause, will be vested in the supplier. The provisions of this contract referring to or defining liability for Postal Service-furnished property do not apply to property to which the Postal Service acquires title solely by virtue of this clause.

e. Risk of Loss. Except to the extent that the Postal Service otherwise expressly assumes the risk of loss of property, title to which is vested in the Postal Service by this clause, in the event of the loss, theft, or destruction of or damage to any such property before its delivery to, and acceptance by, the Postal Service, the supplier must bear the risk of loss and must repay the Postal Service an amount equal to the unliquidated progress payments on the basis of costs allocable to such lost, stolen, destroyed, or damaged property.

f. Control of Costs and Property. The supplier must maintain an accounting system and controls adequate for the proper administration of this clause.

g. Reports - Access to Records. The supplier must:

(1) Furnish promptly such relevant reports, certificates, financial statements, and other information as may be reasonably requested by the contracting officer; and

(2) Give the Postal Service reasonable opportunity to examine and verify the supplier's books, records, and accounts.

h. Special Provisions Regarding Default. If this contract is terminated for default:

(1) The supplier must, upon demand, pay the Postal Service the amount of unliquidated progress payments; and

(2) With respect to all property for which the Postal Service elects not to require delivery, title will be vested in the supplier upon full liquidation of progress payments, and the Postal Service will not be liable for payment.

i. Reservation of Rights. The rights and remedies of the Postal Service provided in this clause are not exclusive and are in addition to any other rights and remedies provided by law or under this contract. No payment, or vesting of title under this clause, will excuse the supplier from obligations under this contract or constitute a waiver of any of the rights and remedies of the parties under this contract. No delay or failure of the Postal Service in exercising any right, power, or privilege under this clause will affect any such right, power, or privilege; nor will any single or partial exercise thereof preclude or impair any further exercise thereof or the exercise of any other right, power, or privilege of the Postal Service.

j. Progress Payments to Subcontractors

(1) Progress payments may include reimbursements for unliquidated progress payments paid by the supplier to subcontractors or other divisions under provisions which conform to subparagraph j.2 following.

(2) Provisions regarding progress payments must:

(a) Be substantially similar to and as favorable to the Postal Service as is this Progress Payments clause, no more favorable to the subcontractor or the other division than this clause is to the supplier, and on a basis of not more than 80 percent of total costs; and

(b) Make all rights of the subcontractor with respect to all property to which the Postal Service has title under the subcontract subordinate to the rights of the Postal Service to require delivery of such property to it in the event of default by the supplier under this contract or in the event of the bankruptcy or insolvency of the subcontractor.

(3) The Postal Service agrees that any proceeds received by it from property to which it has acquired title by virtue of such provisions in any subcontract must be applied to reduce the amount of unliquidated progress payments made by the Postal Service to the supplier under this contract. In the event that the supplier fully liquidates such progress payments made by the Postal Service to the supplier hereunder and there are unliquidated progress payments to any subcontractors, the supplier must be subrogated to all the Postal Service rights by virtue of such provisions in the subcontract or subcontracts involved as if all such rights had been thereupon assigned and transferred to the supplier.

k. Requests. Supplier's requests for progress payments under this clause must be submitted on Form 7305, Supplier's Request for Progress Payment.

Clause 1-4 (Reserved) (March 2006)

Clause 1-5 Gratuities or Gifts (March 2006)

a. The Postal Service may terminate this contract for default if, after notice and a hearing, the Postal Service Board of Contract Appeals determines that the supplier or the supplier's agent or other representative:

(1) Offered or gave a gratuity or gift (as defined in 5 CFR 2635) to an officer or employee of the Postal Service; and

(2) Intended by the gratuity or gift to obtain a contract or favorable treatment under a contract.

b. The rights and remedies of the Postal Service provided in this clause are in addition to any other rights and remedies provided by law or under this contract.

Clause 1-6 Contingent Fees (March 2006)

a. The supplier warrants that no person or selling agency has been employed or retained to solicit or obtain this contract for a commission, percentage, brokerage, or contingent fee, except bona fide employees or bona fide, established commercial or selling agencies employed by the supplier for the purpose of obtaining business.

b. For breach or violation of this warranty, the Postal Service has the right to annul this contract without liability or to deduct from the contract price or otherwise recover the full amount of the commission, percentage, brokerage fee, or contingent fee.

Clause 1-7 Organizational Conflicts of Interest (March 2006)

a. Warranty Against Existing Conflicts of Interest. The supplier warrants and represents that, to the best of its knowledge and belief, it does not presently have organizational conflicts of interest that would diminish its capacity to provide impartial, technically sound, objective research assistance or advice, or would result in a biased work product, or might result in an unfair competitive advantage, except for advantages flowing from the normal benefits of performing this agreement.

b. Restrictions on Contracting. The supplier agrees that during the term of this agreement, any extensions thereto, and for a period of 2 years thereafter, neither the supplier nor its affiliates will perform any of the following:

(1) Compete for any Postal Service contract for production of any product for which the supplier prepared any work statement or specifications or conducted any studies or performed any task under this agreement.

(2) Contract (as the provider of a component or the provider of research or consulting services) with any offeror competing for any Postal Service contract for production of any product for which the supplier prepared any work statements or specifications or conducted any studies or performed any task under this agreement.

(3) Contract (as the provider of a component or the provider of research or consulting services) with the offeror which wins award of a Postal Service contract for production of any product for which the supplier prepared any work statement or specifications or conducted any studies or performed any task under this agreement.

c. Possible Future Conflicts of Interest. The supplier agrees that, if after award of this agreement, it discovers any organizational conflict of interest that would diminish its capacity to provide impartial, technically sound, objective research assistance or advice, or would result in a biased work product, or might result in an unfair competitive advantage, except advantages flowing from the normal benefits of performing this agreement, the supplier will make an immediate and full disclosure in writing to the contracting officer, including a description of the action the supplier has taken or proposes to take to avoid, eliminate, or neutralize this conflict of interest.

d. Nondisclosure of Confidential Material

(1) The supplier recognizes that, in performing this agreement, it may receive confidential information. To the extent that and for as long as the information is confidential, the supplier agrees to take the steps necessary to prevent its disclosure to any third party without the prior written consent of the contracting officer.

(2) The supplier agrees to indoctrinate its personnel who will have access to confidential information as to the confidential nature of the information, and the relationship under which the supplier has possession of this information.

(3) The supplier agrees to limit access to the confidential information obtained, generated, or derived, and to limit participation in the performance of orders under this agreement to those employees whose services are necessary for performing them.

e. Postal Service Remedy. If the supplier breaches or violates any of the warranties, covenants, restrictions, disclosures or nondisclosures set forth under this clause, the Postal Service may terminate this agreement, in addition to any other remedy it may have for damages or injunctive relief.

Clause 1-8 (Reserved) (March 2006)

Clause 1-9 Preference for Domestic Supplies (March 2006)

a. Proposals offering other than domestic end products or (subject to the eligibility thresholds set out in Figure 2.14 of the Evaluate Foreign and Domestic Proposals Topic of the Evaluate Proposals task of Process Step 2: Evaluate Sources of the Postal Service Supplying Practices) end products mined, produced, or manufactured in (i) a country that has entered into the World Trade Organization Government Procurement Agreement (WTO GPA) or (ii) a country that has entered into a Free Trade Agreement (FTA) with the United States covering government purchases, will be evaluated in one of two ways against proposals of relatively equal value offering domestic end products or eligible WTO GPA or FTA country end products. This evaluation will depend on whether contract award will be based on price or on evaluation factors other than price. When an award will be based on price, a six percent differential is applied to the proposed price of the non-qualifying end product, and this adjusted price is used by the Proposal Evaluation Team and the Contracting Officer in the course of evaluation. If proposal evaluation factors will have a significant weight in proposal evaluation, domestic and WTO GPA or FTA end products will receive a preference in the case of closely-ranked proposals, but no price differential will be applied. For the purposes of this clause:

(1) End products means: Articles, materials, and supplies to be acquired under this contract for Postal Service use;

(2) Components means: Articles, materials, supply incorporated directly into an end product or construction material) of foreign origin of the same class or kind as those that the Postal Service determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic; and

(3) Domestic-source end product means: An un-manufactured end product mined or produced in the United States; or an end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50% of the cost of all its components. Components (i.e., articles, materials, supply incorporated directly into an end product or construction material) of foreign origin of the same class or kind as those that the Postal Service determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic.

(4) End products from a designated WTO GPA or FTA country means: Articles, materials, and supplies that are wholly the growth, product, or manufacture of producers in (i) countries that have entered into World Trade Organization Government Procurement Agreement (WTO GPA) or (ii) a country that has entered into a Free Trade Agreement (FTA) with the United States covering government purchasing; or in the case of articles that consist in whole or in part of materials from another country, have been substantially transformed in a WTO GPA or FTA country into new and different articles of commerce with names, characters, or uses distinct from that of the article or articles from which they were transformed.

(5) Cost of components means: For components purchased by the Supplier, the purchase cost, including transportation costs to the place of incorporation into the end product or construction material (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or for components manufactured by the Supplier, all costs associated with the manufacture of the component, including transportation costs as described above, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product. When a request for proposals (RFP) specifies that an award will be made on a group of line items, a domestic proposal means a proposal where the proposed price of the domestic end products exceeds fifty percent of the total proposed price of the group.

(b) This domestic preferences does not apply to products set out in the list of non-available products in the Evaluate Foreign and Domestic Proposals Topic of the Evaluate Proposals task of Process Step 2: Evaluate Sources of the Postal Service Supplying Practices or to purchases as to which the Vice President, Supply Management (VP, SM), has determined that the application of a domestic preference would be inconsistent with the interest of the Postal Service.

Clause 1-10 Preference for Domestic Construction Materials
(March 2006)

a. Preference will be given to domestic construction materials in accordance with the Evaluate Foreign and Domestic Proposals topic of the Evaluate Proposals task of Process Step 2: Evaluate Sources, of the Postal Service Supplying Practices. For the purposes of this clause:

(1) Components. Those articles, materials, and supplies incorporated directly into construction materials;

(2) Construction materials. Articles, materials, and supplies brought to the construction site for incorporation into the building or work; and

(3) Domestic construction material. This is (a) an unmanufactured construction material mined or produced in the United States, or (b) a construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those determined to be unavailable in the Evaluate Foreign and Domestic Proposals topic of the Evaluate Proposals task of Process Step 2: Evaluate Sources, of the Postal Service Supplying Practices will be treated as domestic.

(4) Foreign construction material. A construction material other than a domestic construction material.

b. The contractor agrees that only domestic construction material will be used by the contractor, subcontractors, materialmen, and suppliers in the performance of this contract, except for foreign construction materials, if any, listed in this contract.

Clause 1-11 Prohibition Against Contracting with Former Officers or PCES Executives (March 2006)

During the performance of this contract, former Postal officers or Postal Career Executive Service (PCES) executives are prohibited from employment by the contractor as key personnel, experts or consultants, if such individuals, within 1 year after their retirement from the Postal Service, would be performing substantially the same duties as they performed during their career with the Postal Service.

Clause 1-12 Clause 1-12 Use of Former Postal Service Employees
(March 2006)

During the term of this contract, the supplier must identify any former Postal Service employees it proposes to be engaged, directly or indirectly, in contract performance. Such individuals may not commence performance without the contracting officer's prior approval. If the contracting officer does not provide such approval, the supplier must replace the proposed individual former employee with another individual equally qualified to provide the services called for in the contract.