Postal Service Contracting

A new Congress heard testimony from a new Postmaster General and a panel of postal industry leaders on the state of the Postal Service at a hearing held on March 2, 2011.  Postmaster General Patrick R. Donahoe made his first Congressional appearance as head of the Postal Service when he testified at these hearings, ominously entitled: “Pushing the Envelope:  The Looming Crisis at USPS.”

The major developments that impacted Postal Service contracting in 2010, and trends for 2011, are explored in this one-hour webinar now available on the Husch Blackwell LLP website. Topics include:  USPS financial condition; impact of USPS Office of Inspector General investigations, newly issued procedures and policies for noncompetitive procurements; changes to the USPS Supplying Principles …

The Postal Service recently issued a revised version of its purchasing policy manual, called the Supplying Principles and Practices (SPP).  The changes adopt recommendations made by the USPS Office of Inspector General (OIG) in two high-level reviews conducted in 2010. The revisions add new procedures and requirements applicable to noncompetitive procurements, and establish an internal Competition Advocate.  For more details, read on.

Driving down supply chain costs will remain a key focus for the Postal Service’s Supply Management group, according to the newly released Supply Management Three-Year Strategic Plan 2010 – 2012 [pdf].  The group set ambitious goals for the next three years, including an annual “SCM impact” of at least 6 percent of total spend and improvement in “operational efficiency” by 15 percent.  Perhaps most intriguing to suppliers is the group’s assessment of its Strengths, Weaknesses, Opportunities, and Threats over the next three years.  Read on to see those details.  

Postal Service contractors frequently employ their own language.  For example, to a postal contractor, a “highway contract” is not a contract to build a road but rather a contract to transport mail on a road. A new example of this postal-only language is something called a “disagreement.”  This is the word used to describe what the rest of the government contract world would call a “protest.”  The Postal Service’s internal bid protest (“disagreement”) procedures have been around now for several years, but have recently been revised, so this would be a good time to review them. 

Is a contractor entitled to be paid for performing additional work if that work can be accomplished within the contract’s delivery schedule?  The answer is a resounding yes.  There is no such thing as non-compensable “extra time” under a Postal Service HCR contract.  While some officials may believe a contractor is not entitled to additional pay for service changes that do not extend the delivery schedule, this is a dangerous misunderstanding of HCR contracts, as established by a recent case decided by the U.S. Court of Federal Claims.

Fascinating details about how top Postal Service officials make decisions and interact with each another are contained in a June 21, 2010 report by USPS Office of Inspector General (OIG). The OIG report examines 11 allegations made against Robert Bernstock, the former President of Mailing and Shipping Services. The allegations ranged from serious (steering sole source contracts to former colleagues) to trivial (using his official position to obtain a restaurant reservation). The OIG terminated its 12-month investigation when Bernstock’s employment contract ended in June 2010 and the Department of Justice declined to bring potential criminal violations against him.