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Transportation companies again dominate this year’s Top 150 U.S. Postal Service Suppliers list. All told, USPS spent nearly $16 billion on purchases in FY 2018, about $900 million more than last year.  Not surprisingly for an agency charged with moving the mail, six of the top ten contractors provide transportation services or equipment.

The Top 150 list has been compiled annually since 1999 by David Hendel, a partner in the firm’s Technology, Manufacturing, and Transportation group and leader of the firm’s Postal Contracting team.  The list is compiled from data received in response to Freedom of Information Act requests.

The Postal Service spent $15.9 billion on all outside purchases in FY 2018, of which $9.8 billion went to the agency’s Top 150 suppliers. The Top 150 received $540 million more than last year’s Top 150 group, and $1.5 billion more than those in FY 2016.

The top 10 largest suppliers earned $4.2 billion, which is one quarter of the Postal Service’s total spend and $700 million more than last year’s Top 10.  They also collected $3 billion more than the next ten largest suppliers.

The U.S. Postal Service spends about $3 billion per year to move the mail by truck and does so under a special type of contract called a Highway Contract Route (HCR) contract. These contracts have unique contract clauses, and even their own lingo. For example, an HCR “amendment” is what the rest of the government contracting world would call a contract “modification.”

One of the biggest differences between HCR contracts and other government contracts is the Changes clause. Under an HCR contract, the contracting officer has limited ability to direct unilateral changes. The CO may only issue a unilateral change, called a “minor service change,” if the price impact would be $5,000 or less. Under a Contract Delivery Service (CDS) contract – a subset of HCR contracts for mailbox deliveries – unilateral changes must be $2,500 or less. Even for these changes, a contractor who disagrees with the CO’s determination may file a claim for additional compensation.

In addition to these monetary thresholds, unilateral changes are further restricted to certain types of changes. The only unilateral changes a CO can direct are an extension, a curtailment, a change in line of travel, a revision of route, and an increase or decrease in frequency of service or number of trips. The CO has no authority to unilaterally direct any other change, even if the price impact would be $5,000 or less. For example, the contracting officer may not unilaterally direct a contractor to change equipment or buy new equipment.

Every Postal Service contractor should know the answer to certain fundamental questions: What procurement rules apply to the Postal Service and how do they differ from other agencies? What contract provisions are most likely to cause problems during performance? How do I identify and respond to changes and changed conditions? What recourse do I have when disputes arise?

That’s why our firm is presenting a full-day seminar on “Postal Service Contracting: What Every Contractor Should Know,” at the Westin Tysons Corner hotel on Thursday, November 6, 2014.

We start with the basics

We start with a primer on the creation, structure, and current management of the Postal Service. We provide vital background and statistical information that all postal contractors should know. We explore the pressing issues confronting the Postal Service today, its plans for the future, and how these issues will impact contractors. We conclude the session by setting out the 23 most important “culture pointers” encountered in the unique Postal Service contracting environment.

A double whammy has hit the U.S. Postal Service. At the close of business on August 1, 2012, the Postal Service failed to make a $5.5 billion payment owed the U.S. Treasury. And on September 30, 2012, the Postal Service defaulted on another $5.6 billion payment. Will this $11.1 billion default impact postal contractors?  No it won’t, according to the agency. But it certainly won’t help those who are doing business with the Postal Service.

Personal use of an undeliverable coupon by a mail delivery contractor violated postal regulations but did not justify the default termination of her contract.  The particular post office had allowed others in the office to use such undeliverable items, though that local practice violated postal regulations.  Although the Postal Service Board of Contract of Contract Appeals (PSBCA) decided the case in the contractor’s favor, one judge dissented and believed the termination was justifiable.  See Laura K. McNew, PSBCA No. 6286, April 23, 2012.

Husch Blackwell’s Postal Service Contracting practice group today released its list of the top 10 U.S. Postal Service suppliers for fiscal year 2011. For the ninth straight year FedEx claimed the No. 1 spot. Another air carrier, Kalitta Air, Inc., which transports military mail bound for Iraq and Afghanistan, claimed the second spot. The list is compiled by David P. Hendel, a partner in the firm who has served clients’ postal contracting needs for 30 years. 

Postal Service contracting highlights in 2011, and a look ahead to 2012, will be the focus of a complimentary webinar presented by Husch Blackwell on Tuesday, February 7, 2012 at 1 p.m. EST.

Postal contractors continue to be impacted by USPS cost-cutting efforts, reductions in requirements, and a renewed emphasis on obtaining competition. These pressures, …

New mandates on how evaluation criteria must be stated in Postal Service solicitations are required by the recently revised USPS Supplying Principles and Practices (SPP) manual. The SPP revisions were issued on December 12, 2011. The full text of the new SPP is available by clicking here. In addition to these changes, the Postal Service has introduced a new “Simplified Purchasing” method. Simplified Purchasing will be more streamlined than the traditional method, will commonly use oral solicitations, and may be used on procurements valued at up to $1 million. 

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 …