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A return is the actual giving back by the Postal Service to the Supplier of a previously accepted product. Returns are very common when the delivered product has defects; does not conform to contract specifications; or has been improperly ordered, received, or accepted. The legal guidelines for returns are typically contained within, and outlined by, the terms and conditions of the contract and any warranty clauses. All returns require proper authorization from the Contracting Officer or the issuing activity and the use of applicable forms (e.g., Request for Return Authorization from the current Repair Parts Bulletin). Some returns, such as those to the Material Distribution Center (MDC), Mail Transportation Equipment Service Center (MTESC), the office suppliers' catalog on eBuy, etc., do not directly involve the Contracting Officer.

Defects, Nonconformance, and Warranty

Defects and nonconformant characteristics are detected during an inspection, which is conducted during the Receipt and Inspection topic of the Complete Delivery task of Process Step 4: Deliver and Receive Requirements. The Client is responsible for notifying the Contracting Officer and Supplier of items that have failed inspection. The Supplier is expected to deliver goods and services that are free of defects and fit for their predetermined purpose, in accordance with Clause 4-1: General Terms and Conditions and Clause 2-1: Inspection and Acceptance and/or with Clause B-5: Certificate of Conformance.

For defective items (as opposed to nondefective items that have been lost or damaged) covered by a warranty (e.g., paragraph o of Clause 4-1: General Terms and Conditions, or Clause 2-8: Warranty), every attempt should be made to resolve all complaints, as informally as possible, through an appropriate Supplier representative. Damaged goods should be processed in accordance with the guidance found in the Acceptance topic of the Complete Delivery task of Process Step 4: Deliver and Receive Requirements.

Although the Postal Service should not compromise its position, the Contracting Officer should discuss defects and nonconformance with the Supplier because elimination of potential misunderstandings is in the best interest of both the Postal Service and the Supplier. When resolutions cannot be informally reached, complaints will be addressed in the Supplier Disagreement Resolution topic of the General Practices. If the defective items adversely effect Postal Service operations during this resolution process, the Postal Service may obtain acceptable products from another source and include the costs as part of the negotiations.

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A warranty requires the Supplier to repair or replace defects in materials or workmanship for a certain period of time after acceptance of the work by the Postal Service during the Complete Delivery task of Process Step 4: Deliver and Receive Requirements. A warranty reflects risks that the Supplier and subcontractors can identify and analyze, based on experienced warranty or callback costs. The Client will contact the Contracting Officer for further guidance if the Supplier refuses to correct or fails to replace a defective item or an aspect of the service under the warranty. The contract will lay out the terms of the warranty.

Paragraph o: warranty of Clause 4-1: General Terms and Conditions states that the supplier warrants and supplies that items delivered are merchantable and fit for the use described in the contract. Clause 2-8: Warranty, which may be used in lieu of paragraph o of Clause 4-1, signifies that the Supplier legally warrants, for the period specified, that all supplies furnished under the awarded contract, including packaging and markings, will be free from defects in material or workmanship and will conform to the specifications and all other requirements of the contract. Within the time specified in the schedule, the Contracting Officer must give written notice to the Supplier of any breach of warranty and must do either of the following:

Require the prompt correction or replacement of any defective or nonconforming supplies

Retain them, reducing the contract price by an amount equitable under the circumstances

Inappropriate and Erroneous Deliveries

In accordance with the warranty language in the contract, if there is no receiving document with the (original) shipment, the designated receiving personnel must make an effort to ensure that the shipment is:

Forwarded to the intended consignee

Returned to the consignor, the person or organization that directs or arranges for a shipment (the consignor may or may not be the shipper)

The documents and actions associated with shipment, receipt, and acceptance of deliveries are respectively explained in further detail in the Shipping, Receipt and Inspection, and Acceptance topics of the Complete Delivery task of Process Step 4: Deliver and Receive Requirements.

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Return Actions

Return actions are influenced by:

Supplier responsibilities



Simple returns

Internal returns



Supplier Responsibilities

In accordance with Clause 2-8: Warranty, if the Supplier fails or refuses to correct or replace defective or nonconforming supplies, the Contracting Officer may correct or replace them with similar supplies and charge to the Supplier any cost to the Postal Service. In addition, the Contracting Officer may dispose of the nonconforming supplies, with reimbursement from the Supplier. Coordination with the Supplier must be documented prior to taking these actions.

Depending on the terms and conditions of the contract or the language of the delivery order, the Supplier may also be financially responsible for compensating the Postal Service for lost time if defective/nonconforming supplies adversely affected the project or caused delays. In such cases, the Purchase/SCM Team must ensure that any claims, unliquidated damages, or other complaints are documented.


Products eligible for correction are either not fit for their particular purpose or have a defect that inhibits functionality. A product that needs to be corrected will be returned to the Supplier, who is responsible for making all changes and repairs necessary to achieving the performance outlined in the awarded contract. When return for correction is required off-site or is covered by warranty, the Supplier is responsible for all costs of transportation and for risk of loss in transit. When the cost of physical return makes it impracticable to return an item for correction, the contract should also provide that the Postal Service may correct, or require the Supplier to correct, the item in its current physical location, at the Supplier's expense.

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A product that is not fit for its particular purpose or that has a defect that inhibits functionality and cannot be corrected must be replaced. A product that needs to be replaced will be returned to the Supplier, who is responsible for substituting for the item another item that meets the contractual requirements and is void of all defects. When return for replacement is required, the Supplier is responsible for all costs of transportation and for risk of loss in transit. When the cost of physical return makes it impractical to return an item for replacement, the Supplier will be responsible for removing the item from its current physical location, with Postal Service concurrence, and for disposing of the item at the Supplier's expense.

Simple Returns

A simple return is the actual return of a product to the Supplier when the product does not mandate corrections or replacement. Items that are shipped without a receiving document or mistakenly delivered or accepted (such as wrong items or wrong quantity) are eligible for simple returns. Suppliers are responsible for delivering the items explicitly established in the awarded contract. The receiving activity or Client should contact the Contracting Officer or the National Materials Customer Service for return authorization and instructions. Where a contract is involved, the Contracting Officer should be informed of the error and resolution. This information will be used by the Contracting Officer in supplier performance evaluations.

In accordance with Clause B-4: Variation in Quantity, the Supplier is responsible for delivering each item quantity within any allowable variations. If the Supplier delivers, and the Postal Service receives, quantities of any item in excess of the quantity called for (after considering any allowable variation in quantity), these excess quantities will be treated as being delivered for the Supplier's convenience. Quantities in excess of $100 will, at the option of the Postal Service, either be returned at the Supplier's expense or retained and paid for at the contract unit price. The Postal Service may retain excess quantities up to $100 in value without compensating the Supplier for them, and the Supplier waives all right, title, or interests in them. Items with a cumulative value of $100 are, therefore, "excepted" or "exempted" from returns.

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Reparable Parts and Internal Return Procedures

Various equipment and supply items across Postal Service commodities are stocked internally and ordered directly through the Material Distribution Center (MDC), the Critical Parts Center (CPC), the Express and Priority Mail Supply Center (E&PMSC), Mail Equipment Shops (MES), and elsewhere.

Overhauling or repairing defective parts is often the most effective way of meeting Client needs. Items with defective parts that must be overhauled and repaired are designated during the integrated logistics support planning process in the Develop Logistics Support Strategy topic of the Decide on Make vs. Buy task of Process Step 1: Identify Needs. These items are addressed in different ways (e.g., local activity repair [on-site at the same facility], central depot repair [sending the item off-site to the Central Repair Facility in Topeka, Kansas, or to the Indianapolis Repair Facility in Indianapolis, Indiana], or supplier repair [directed shipment to the original manufacturer or other commercial source]). Specific procedures regarding managing repairables and the ways they are addressed are outlined in Handbook MS-63, Maintenance Operations Support, and in current Repair Part Bulletins.

All Postal Service facilities ordering parts, supplies, or equipment from the MDC may request authorization to return excess items that are new, properly marked, and properly packaged. Returned supplies must be of the current edition date and bulk pack quantity. Postal Service facilities that later obtain authorization for returns will not generate credits for items that were initially procured with capital funds. Authorized capitalized returns will be accepted at zero credit and averaged into wholesale inventory.

Items ordered or shipped in error from one of these or other central supply sources (e.g., General Services Administration [GSA] or Defense Logistics Agency [DLA]) will follow the procedures and instructions for returning supplies to these organizations found in Publication 247, Supply and Equipment Catalog and in Handbook AS-701, Material Management.

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Electronic Return Program (ERP)

Items that are returned must be packed to ensure adequate protection during transit. Items are returned to the designated facility (MDC or Repair) using the mail system or Transportation Management Service Provider (TMSP) and must include an Electronic Return Program (ERP) return label, a computer-generated tag that eliminates the manual recording of information at field sites, which is available on the Postal Service's intranet (at the depot repair operations site) at http://crf.usps.gov/asp/ofc_entry_tab.asp.

The ERP must also be used to obtain and print the appropriate address labels used for the return of reparable items to destinations (ship-to address). The ERP generates addresses other than the Topeka MDC that reduce handling and transportation costs by eliminating the Topeka MDC as an intermediary destination. Addresses may vary on occasion for a given item, resulting from the available amount of stock on hand and need to repair the item. Procedures are in place to ensure that these items are processed correctly at the receiving point, proper credits are given, and one-for-one returns are generated, when appropriate.


The various return procedures associated with most materials are not applicable to the following:

Cost transfers within district boundaries (these are considered as local decisions)

Individual transactions with a cumulative value of $100 or less (to avoid the high cost of processing)


All defects, nonconforming supplies, and instances of noncompliance with the warranty language of the contract must be reported and properly documented (in the contract file) by the Contracting Officer. When the Supplier has been qualified on the basis of quality management systems and defects subsequently become apparent, the Purchase/SCM Team should require review of the Supplier's quality assurance documentation or processes. When discrepancies are apparent, this information should be taken under consideration for the Decide to Renew a Contract or Exercise Options topic of the Manage Delivery and Contract Performance task of Process Step 5: Measure and Manage Supply. Discrepancies should also be addressed during lessons learned discussions with the Supplier described in the Share Lessons Learned topic of the Manage Delivery and Contract Performance task of Process Step 5: Measure and Manage Supply.

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Other Topics Considered

Shipping topic, Complete Delivery task, Process Step 4: Deliver and Receive Requirements

Receipt and Inspection topic, Complete Delivery task, Process Step 4: Deliver and Receive Requirements

Acceptance topic, Complete Delivery task, Process Step 4: Deliver and Receive Requirements

Supplier Disagreement Resolution topic, General Practices

Clauses & Provisions

Clause 2-1: Inspection and Acceptance

Clause 2-8: Warranty

Clause B-4: Variation in Quantity

Clause B-5: Certificate of Conformance

Clause 4-1: General Terms and Conditions

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