There are two general types of service changes — minor service changes and major service changes. They are affected by contract modification.
A minor service change is any change that results in a change in equipment type or termini; an extension; a curtailment; a change in line of travel; or a permanent increase in the frequency or number of trips which, either individually or in combination with previous changes, does not increase by more than 100 percent the mileage required at the beginning of the contract or renewal term. An insignificant minor service change is one that increases the supplier’s rate of pay by no more than $2,500. A significant minor service change is one that increases the supplier’s rate of pay by more than $2,500.
A major service change is any service change other than a minor service change.
Insignificant Minor Service Change — Insignificant minor service changes resulting in increased compensation to the supplier may be ordered by the CO as a unilateral contract modification. They do not require the supplier’s approval. The CO may authorize an equitable increase in compensation at the existing rate or at such other rates as the CO determines to be fair and reasonable. If the supplier considers the amount of increase inequitable, the CO must attempt to negotiate a mutually agreeable increase and incorporate it by contract modification. If time permits, the CO may discuss the change and increase in compensation with the supplier; if an agreement on compensation is reached, the change may be made by contract modification. If agreement cannot be reached, the CO may issue a unilateral contract modification and determine the amount of increased compensation, subject to Clause B-9: Claims and Disputes.
Significant Minor Service Change — Significant minor service changes are made by contract modification, incorporating a price adjustment, with the agreement of the supplier.
Major Service Change — Major service changes are discussed with the supplier and effected by contract modification. The CO must obtain the approval of the manager, Transportation Portfolio, before entering into discussions regarding major service changes. When determining whether or not to recommend or approve the negotiation of a major service change, the purchase/SCM team must take into consideration indemnity liability, the supplier’s experience in operating a service of the scope required, past performance, rate, and any factors that would indicate the proper course of action to take in the best interests of the Postal Service. When a major service change is not approved by the manager, Transportation Portfolio, the old service may be terminated and the new service purchased.
Other Surface Contracts and Air Contracts — Service changes for contracts other than those discussed in above may be made, consistent with the terms of the contract, provided that these changes do not:
Exceptional service is additional service to perform scheduled or backup route operations (such as extra trips, detour miles, and additional equipment). Exceptional service may be required only when an unanticipated increase in mail volume or other conditions arise that require the performance of additional service or equipment. Whenever feasible, COs should hold discussions or negotiations with suppliers to establish the rate to be paid for exceptional service before its performance. When discussions or negotiations in advance would delay the mail or otherwise not be feasible, the CO or a designated representative may order the supplier to perform such service at pro-rata pay.
If no rate of pay for exceptional service has been negotiated in advance, the supplier may be paid a lump sum reimbursement for the difference between costs incurred as a direct result of performing exceptional service and pro-rata payment, provided that such costs are adequately supported by evidence satisfactory to the CO. Claims for compensation above pro-rata pay for exceptional service must be filed in writing with the CO, with full supporting documentation, no later than 90 days after the performance of the service.
Disputes regarding compensation are handled as provided in Clause B-9: Claims and Disputes.
Improvement of mail service must be the primary consideration in ordering a schedule change. Schedules may not be changed for the convenience of suppliers, subcontractors, or drivers unless the change will in no way be detrimental to the Postal Service. The purchase/SCM team must consider the following before making schedule changes:
- Financial effect on the supplier — Reversing a schedule or requiring an excessive layover might cause sufficient increase in cost of operation to provide the basis for a request for pay adjustment.
- Hardship on suppliers or customers — Arbitrary action should be avoided and reasonable effort should be made to work out arrangements satisfactory to suppliers.
- Schedule realism — Schedules may not be set that would require running times in violation of established speed limits.
The purchase/SCM team must ensure that schedule changes are coordinated with all those responsible for other affected services.
The service and rate of compensation under emergency contracts may not be changed unless specifically authorized in the contract or by the manager, Transportation Portfolio.
It is essential to be aware of the following clauses:
