Effective immediately, part 4.4.9, Subcontracting, of the
Interim Internal Purchasing Guidelines is revised to clarify
procedures regarding the subcontracting of highway or domestic inland water contracts.
Interim Internal Purchasing Guidelines (IIPG)
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4 Purchasing
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4.4 Mail Transportation Purchasing
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4.4.9 Subcontracting
4.4.9.a Highway or Domestic Inland Water Contracts
[Revise 4.4.9.a to read as follows:]
1. For the purpose of this section, a subcontract is any
agreement, other than an employer-employee agreement or a temporary agreement for labor by an
owner-operator as described below, between a party
that has contracted with the Postal Service to transport mail and a third party, in which the third party
agrees to provide all or part of the contract service or
goods or services that support performance of the
prime contract. An employer-employee agreement is
one under which the employee is subject to the continuing authority of the mail transportation supplier to
supervise and direct the manner of work performance of the employee. Such an employer-
employee agreement is also characterized by,
expressly or implied, the employer's responsibility to
pay compensation directly to the employee and to
withhold taxes and amounts for social security benefits from the employee's compensation for the work
performed under the agreement. If an owner-
operator, because of illness or temporary equipment
failure, is required to obtain labor from another in order to continue performance of the service as required by the contract, that transaction is not a
subcontract within the meaning of this section.
2. Section 3.2.3, Subcontracting with Small, Minority,
and Woman-owned Businesses, is applicable to subcontracts under this section.
3. All subcontracts that require the subcontractor to
handle, deliver, or otherwise to have access to the
mail must be approved by the contracting officer, except that a supplier may, without approval of the contracting officer, subcontract the whole or part of a
contract or irregular mail movements such as plant
loads with one or more owner-operators who provide
and drive their own vehicles.
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4. Execution by a supplier of a subcontract for the performance of contract service and its approval by the
Postal Service does not release the supplier from its
contractual obligations, nor from liability for
damages.
5. Whenever the purchase team determines that a supplier has breached the contract by subcontracting the
whole or part of the contract contrary to the requirements of these guidelines, the contracting officer may
terminate the contract for default.
6. Subcontractors performing contract service must
meet the same capability and qualification requirements as the prime supplier.
7. If a whole contract is subcontracted, the subcontract
must be for the full remainder of the contract term.
The subcontractor's initial rate of pay must be the
same as the supplier's, unless there is a change in
operations costs resulting from a service change or
from the enactment of a statute or ordinance or the
adoption of lawful regulations by any federal, state, or
local agency.
8. When a subcontract is terminated, the prime supplier
may be required to take charge of the route. A subcontract to provide contract service may be terminated at the subcontractor's request only with the
prior approval of the contracting officer, which will be
given only for good cause. Subcontracts for contract
service are automatically terminated by death of the
subcontractor or abandonment of the service by the
subcontractor.
9. When a subcontractor performing contract service
fails to comply with the terms of a contract, the contracting officer notifies the prime supplier of the subcontractor's irregularities. The contracting officer may
require removal of the subcontractor for failure to
perform and that the prime supplier resume route operations, or exercise any other remedies provided by
the contracts with the prime supplier.
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—SCM Strategies,
Supply Management, 1-19-06
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