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Supplying Principles and Practices > USPS Supplying Practices General Practices > Supplier Disagreement Resolution
Supplier Disagreement Resolution
To more effectively manage supplier relationships, the Postal Service has
established a two-tiered supplier disagreement resolution process. It is the
policy of the Postal Service and in the interest of suppliers to resolve supplier
business disagreements at the Contracting Officer/management level. In
order to expeditiously resolve disagreements that are not resolved at the
Contracting Officer or appropriate management level, to reduce litigation
expenses, inconvenience, and other costs for all parties, and to facilitate
successful business relationships with Postal Service suppliers, the supplier
community, and other persons, the Postal Service's supplier disagreement
resolution process has been established as the sole and exclusive means to
resolve disagreements, and a Supplier Disagreement Resolution Official
(SDR Official) has been appointed to oversee the process. While the SDR
Official's decisions are final, they may be appealed to a federal court, but only
on the grounds that the decision was procured by fraud or other criminal
misconduct, or was obtained in violation of the regulations. Title 39 Code of
Federal Regulations (CFR) 601 located at
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=4ad8e08c01596bf834a8ffdf62220f2a&rgn=div5&view=text&node=39:1.0.1.8.45&idno=39 defines
supplier business disagreements, establishes the applicable time frames in
which they may be lodged and resolved, and provides the relevant regulatory
information. In the event of a conflict between this practice and the
regulations in 39 CFR 601, the regulations take precedence.
The SDR Official is appointed by the Vice President, Supply Management,
and provides a means for the Postal Service's supplier community to lodge
disagreements concerning the Postal Service's purchasing. Business
disagreements ("disagreements") are all disputes, protests, claims, or
demands that arise between potential suppliers and the Postal Service during
the pre-contract-award and the contract-award phases of the purchasing
process. However, the following are not categorized as disagreements and
are not subject to this process: (i) disputes that arise pursuant to a contract
under the Contract Disputes Act under section 601.109, (ii) matters
concerning debarment, suspension, or ineligibility under section 601.113 or
(iii) disputes that arise out of the non-renewal of transportation contracts
containing other provisions for the review of such decisions. The SDR Official
will review and resolve disagreements in accordance with 39 CFR 601 to
ensure that the Postal Service purchases products and services that
represent best value.
Disagreement resolution is an important aspect of supplier relationship
management. It is in the interest of the Postal Service and suppliers to
resolve potential disagreements by mutual agreement at the Contracting
Officer or another appropriate management level. This process, which
replaces the bid protest process, emphasizes business partners resolving
disagreements. Therefore, all disagreements with the Postal Service by
persons or organizations ("suppliers") arising in connection with the
purchasing process must be lodged with the Contracting Officer for resolution
(claims that arise under the Contract Disputes Act, that involve the
non-renewal of transportation contracts or concerning debarment,
suspension, or ineligibility do not use this process). Disagreements may arise
at any point during the pre-contract-award and contract-award phases of the
purchasing process, such as over the terms of a solicitation, or arising from a
supplier's objections to the evaluation of its offer, to some element of the
qualifications of a successful offeror or the evaluation of a successful offeror's
proposal.
If a disagreement arises between the Contracting Officer and supplier during
the pre-contract-award and contract-award phases, the supplier must lodge
the disagreement with the responsible Contracting Officer no later than ten
(10) calendar days from the date the disagreement arose. For instance, if a
disagreement arises from a notification-of-award letter sent to a supplier, the
supplier has ten (10) calendar days from the date that it receives the
notification letter to lodge a disagreement with the Contracting Officer. If a
debriefing gives rise to a disagreement, the supplier has ten (10) calendar
days after the debriefing to lodge the disagreement with the Contracting
Officer. A disagreement must be lodged with the Contracting Officer in writing
and can be initiated by facsimile, e-mail, hand delivery or U.S. Mail.
If a supplier lodges a disagreement within the required ten (10) calendar day
time frame, the supplier, the Contracting Officer and the Contracting Officer's
management have ten (10) calendar days from the date the disagreement is
lodged to resolve the disagreement. During the ten (10) calendar days that
the parties are attempting to resolve the disagreement, the parties may not
consult with the SDR Official about issues pertaining to the disagreement or
any matter that might jeopardize the SDR Official's objectivity should the
disagreement be elevated to the SDR Official.
The parties must consider the use of Alternative Dispute Resolution (ADR). If
ADR is used, both the Contracting Officer and the supplier must agree to its
use. Various types of ADR methods are available, including negotiation and
mediation, however, arbitration may not be used without approval from the
VP, SM.
Negotiation is the most common form of dispute resolution and occurs when
the parties or management attempt to resolve the disagreement. Mediation
happens when a neutral third party assists in the negotiation. Mediation helps
the parties communicate, understand each other, and resolve differences. If
the use of ADR is agreed upon, the ten (10) calendar day limitation is
suspended; if the parties cannot reach an agreement under ADR, the
supplier has ten (10) calendar days to lodge its disagreement with the SDR
Official. For more information about ADR, you should consult your legal
counsel.
The disagreement resolution process should be business-like and not
adversarial. Legal counsel may be engaged as necessary.
During the initial disagreement the Contracting Officer must seek to resolve
the issues raised in the disagreement. The Contracting Officer should also
inform and/or engage management in the resolution effort. Lastly, contracting
officers and management should consider a range of business options to
resolve the matter, including, denial of the disagreement; overturning a
contract award; reopening the purchasing process; or the amendment of the
solicitation.
During the disagreement resolution, the Contracting Officer must ensure the
involvement of management. The extent of that involvement will depend upon
the particulars of the disagreement. Regardless of the outcome of the
disagreement-resolution effort, the Contracting Officer must promptly
document the disagreement and the resolution efforts taken in response to it
in the contract file. The Contracting Officer must draft a letter to the supplier
that describes his or her decision and the rationale for that decision. A copy
of the decision must be sent to his or her manager. The decision letter must
contain the supplier's appeal rights. The Contracting Officer must issue his or
her decision letter by the tenth calendar day after receipt of the
disagreement.
FLOW CHART #1
If a disagreement is not resolved with the Contracting Officer during the initial
resolution period, the supplier may then lodge the disagreement in writing by
U.S. mail, e-mail, or fax with the SDR Official for final resolution. The
disagreement must be lodged with the SDR Official within twenty (20)
calendar days after the time it was lodged with the Contracting Officer as
required by CFR 601.107. The SDR Official has exclusive authority to issue a
final and binding decision, as established in 39 CFR 601.108.
When lodging a disagreement with the SDR Official, the supplier must state
the factual circumstances relating to the matter, the remedy sought, and the
basis for the disagreement. The SDR Official may grant an extension of time
to the supplier and interested parties to lodge a disagreement or to provide
supporting information when warranted. Any request for an extension must
set forth the reasons for the request, be made in writing, and be delivered to
the SDR Official on or before the time to lodge a disagreement lapses. The
address of the SDR Official is:
ATTN: SDR OFFICIAL
UNITED STATES POSTAL SERVICE HEADQUARTERS
ROOM 4130
475 L'ENFANT PLAZA, S.W.
WASHINGTON, DC 20260-4130
FAX NUMBER (202) 268-6234
The supplier may also lodge a disagreement with the SDR Official by e-mail
at SDROfficial@usps.gov.
When the SDR Official receives the disagreement, the Contracting Officer is
promptly provided a copy of the disagreement and instructed to send a letter
to all interested parties (i.e., actual or prospective offerors whose direct
economic interests would be affected by the award of, or failure to award, the
contract) with copies to the SDR Official. The Contracting Officer's letter must
briefly recite each issue raised and refer the recipients to the relevant
regulations in 39 CFR 601.108.
The responsible Contracting Officer must forward a copy of the contract file to
the SDR Official. The contract file must include the following information:
• Requisition and Statement of Work/Specifications
• Source List
• Solicitation Document
• All Proposals Received
• Proposal Evaluation Document(s), including Best-Value Determination
• Award Document
• Award Notification
• Whether a Debriefing was requested, if so, the date it was given
• All Pre-Award Correspondence (Letters, E-mails, Memorandum for
Record)
• If ADR was used, the date the parties failed to achieve resolution
• Copy of the Final Decision Letter responding to the Disagreement
• Any Other Information Relevant to the Disagreement
The SDR Official will consider the disagreement, the Contracting Officer's
contract file, and any response by other interested parties and Postal Service
officials. The SDR Official may also request meetings, individually or jointly,
with the supplier, interested parties, or Postal Service officials to obtain
additional materials, information, or advice. The supplier lodging the
disagreement, other interested parties, or Postal Service officials must
provide all relevant non-privileged materials and other information requested
by the SDR Official. If the information being submitted to the SDR Official is
confidential and privileged, the supplier, interested parties, or Postal Service
officials must indicate that the information is confidential and privileged. If a
submission contains trade secrets or other confidential information, it should
be accompanied by a copy of the submission from which the confidential
matter has been redacted. The SDR Official will determine whether any
redactions are appropriate and will be responsible for determining the
treatment of any redacted materials. Failure of any party to provide promptly
the requested information may be taken into account by the SDR Official in
the decision. As stated in 39 CFR 601, it is the SDR Official's goal and intent
to resolve disagreements within approximately 30 calendar days from the
date on which the disagreement was lodged. The time to make a decision
may be shortened or lengthened by the SDR Official, depending on the
complexity of the issues, the timeliness of the receipt of requested
information and other relevant considerations.
In his or her consideration and resolution of disagreements, the SDR
Official's decision will be guided by the regulations in 39 CFR 601, whether
the Postal Service received best value, and all applicable public laws enacted
by Congress.
The decision of the SDR Official will be final and binding on the person or
organization lodging the disagreement, other interested parties, and the
Postal Service. However, any of these parties may appeal the decision to a
Federal court with jurisdiction over such claims. The decisions may be
appealed only on the grounds that the decision was procured by fraud or
other criminal misconduct or that the decision was obtained in violation of the
regulations in 39 CFR 601 or applicable public laws enacted by Congress.
FLOW CHART #2
SDR Official's role in Contract Dispute Act (CDA) claims. When a
supplier lodges a disagreement during contract performance and certifies the
disagreement as a claim, the claim is resolved by methods pursuant to the
Contract Disputes Act (CDA) under 39 CFR 601.109. During contract
performance and before the supplier certifies the disagreement as a claim
under CDA, the SDR Official may serve as a mediator in ADR between the
Contracting Officer and the supplier. The SDR Official serves as a mediator
before the disagreement is certified as a CDA claim only upon the agreement
by both the Contracting Officer and supplier. As a mediator, the SDR Official
assists in facilitating disagreement resolution, but does not issue a final
decision. The Contracting Officer, in this instance, issues the final decision.
Conflict of interest. If the SDR Official issued a final decision or acted as a
mediator in a matter(s) that is being contested pursuant to 39 CFR 601.106,
the SDR Official must recuse himself or herself from being the final decision
maker under 39 CFR 601.108. The SDR Official will refer the matter to the
Alternate SDR Official, who will review the disagreement and make the final
decision.
Disagreements received before contract award. While a disagreement is
pending, an award will not be made unless compelling circumstances so
require. The Contracting Officer must document the contract file that an
award is being made while a disagreement is being resolved, the reasons
why the contract is being awarded, and document the approval of the
relevant portfolio manager.
The SDR Official's decisions will be published internally on the Postal "Blue"
page under Supply Management Infrastructure and published externally at
www.usps.com.
Hold Discussions topic, Evaluate Proposals task, Process Step 2: Evaluate
Sources
Negotiate with Suppliers topic, Perform Preaward Activities task, Process
Step 2: Evaluate Sources
Award Contract and Notify Suppliers topic, Make Final Decision task, Process
Step 3: Select Suppliers
Title 39 Code of Federal Regulations 601 et. seq.
Contract Disputes Act of 1978
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