1 Authority, Responsibility and Policy

Transcription

1 Authority, Responsibility and Policy Authority, Responsibility and Policy 1.1 Authority and Responsibility Background 1. The United States Postal Service was established by the Postal Reorganization Act (PRA), Public Law (codified at Title 39 of the United States Code) as an independent establishment within the executive branch whose purpose it is to bind the nation through the personal, educational, literary, and business correspondence of the American people. The Postal Service operates from its own revenues in providing its public service. Since it was established, it has faced rapidly increasing competition from both technology and businesses targeting market niches within the postal product line. Consequently, the Postal Service s ability to provide efficient, economical service is driven by market forces. 2. The Postal Service acquires property and services in accordance with the PRA and all other applicable laws enacted by Congress. The Postal Service has promulgated regulations governing the acquisition of goods and services at 39 C.F.R Part 601. The public should reference both the PRA and the regulations for guidance regarding the Postal Service s purchasing regulations. These Interim Internal Purchasing Guidelines are not binding regulations of the Postal Service. The public should be guided by and may rely on the regulations of the Postal Service at 39 CFR Part 601 and by the terms of specific solicitations/requests for proposals rather than these Guidelines, which are intended for internal use only to assist the Postal Service in obtaining best value and efficiently conducting its supply chain functions. These Interim Internal Purchasing Guidelines are advisory and illustrative of approaches that may generally be used by Postal Service employees, but are intended to provide for flexibility and discretion in their application to specific business situations. These Interim Internal Purchasing Guidelines, therefore, create no rights, substantive or procedural, enforceable against the Postal Service. May 19,

2 1.1.2 Interim Internal Purchasing Guidelines 3. These Guidelines are intended to provide Postal Service purchase teams with general directions and flexible guidance when purchasing goods and services. They are interim because the Postal Service is currently developing a set of Business Principles and Practices focused on the supply chain management business philosophy that will replace these guidelines in the near future. These guidelines apply to all purchasing activities except those unique to real estate and related services (see a.1) Responsibility for These Guidelines a b c Vice President, Supply Management. The Vice President (VP), Supply Management (SM), is responsible for these guidelines. In addition, the VP has delegated related authority as follows: 1. Responsibility for guidelines unique to the acquisition, lease, and disposal of real estate and to services related to those transactions has been delegated to the Vice President, Facilities (see r for a definition of real estate and related services). 2. Responsibility for supplemental guidelines with respect to the requirement categories listed in Exhibit 4.5.2, Supplemental Policy and Procedural Authority, has been delegated to the positions described in that exhibit. Supply Chain Management Advisory Committee. The Supply Chain Management Advisory Committee (SCMAC) advises the VP, SM on the Postal Service s strategic direction and how best SM can further the Postal Service s business and competitive objectives. The members of the SCMAC are: 1. The VP, SM (Chair) 2. The VP and Chief Technology Officer 3. The VP, Engineering 4. The VP, Facilities 5. The VP, Network Operations Management, and 6. The Deputy General Counsel. Supply Chain Management Principles and Practices Committee. The Supply Chain Management Principles and Practices Committee (SMCPPC) oversees the development of these guidelines. In addition, the SMPPC reviews and evaluates proposed changes to these guidelines for the VP, SM and the SCMAC. The SMPPC meets at least annually. The members of the SMCPPC are: 1. The manager, Supply Management Infrastructure (the Chair). 2. The senior counsel, Contract Protests and Policies. 3. The manager, Facilities Portfolio. 4. The manager, Mail Equipment Portfolio. 5. The manager, Services Portfolio. 6. The manager, Supplies Portfolio. 2 May 19, 2005

3 Authority, Responsibility and Policy b d 7. The manager, Transportation Portfolio. 8. The manager, Supply Chain Management Strategies. 9. The manager, Supply Management Operations. Representatives of the Chief Technology Office, and the Vice Presidents, Engineering, Facilities, and Network Operations Management. Supply Management Infrastructure. The staff of Supply Management Infrastructure, SM, assists the SCMPPC in its deliberations. 1.2 Publication and Changes Publication a Issuance. These guidelines are issued and maintained by the VP, SM, and are published and available to users on the World Wide Web at Changes a b Proposed Changes. Individuals interested in proposing changes to these guidelines may do so by sending the proposed change to the manager, Supply Management Infrastructure. Proposed changes should address the following areas (supporting documentation should be included as necessary): 1. The text (chapter, part, etc.) in which the change is sought. 2. The proposed wording. 3. The rationale for the change. 4. Potential effects of the change in terms of cost and personnel. 5. Other documents or directives which will be affected by the proposed change. 6. Any other relevant information. Issuance. Changes to these guidelines are made to the online version when approved by the VP, SM. 1.3 Deviations General a b Conformance with these guidelines promotes consistency and integrity throughout Postal Service purchasing. There are circumstances, however, when departures are necessary or desirable. Deviations from the mandatory requirements of these guidelines may be authorized in such circumstances. The following are examples of deviations requiring authorization: 1. Omitting or modifying a provision or clause required by these guidelines, supplementing a required provision or clause with another May 19,

4 1.3.1.c Interim Internal Purchasing Guidelines c which modifies its substance or intent, or using a provision or clause that differs from a required clause covering the same subject. However, using provisions or clauses included in these guidelines to replace selected text contained in Provisions 4-1, Standard Solicitation Provisions, and 4-2, Evaluation, and Clause 4-1, General Terms and Conditions, does not constitute a deviation and does not require authorization (see also e and d). 2. Using a clause that is inconsistent with the substance or intent of a clause covering the same subject, or inconsistent with the discussion of the subject, even when the clause is not required to be used verbatim. 3. Any procedure, method, or practice which is inconsistent with the these guidelines, and any variance from the guidelines limitations on the use of clauses, procedures or types of contracts. The following are not deviations from these guidelines: 1. Clauses drafted specifically to meet unique requirements when not inconsistent with the substance or intent of a clause covering the same subject. 2. Procedures or instructions that are (a) developed to meet specific operational needs or the needs of specialized commodity areas and (b) approved by the VP, SM. 3. Interim procedures or instructions to (a) test new purchasing techniques or methods, or (b) promote Postal Service efficiency Authorization of Deviations a b Request for Authorization. Deviations must be authorized in advance of their use. Contracting officers must forward a request through organizational levels to an individual authorized deviation approval authority (see b). Each request must include: 1. Identification of the guideline from which deviation is sought. 2. A full description of the deviation and the period of time and circumstances under which it will be used. 3. An explanation of why the deviation is necessary or desirable. 4. Copies of any documents involved, such as forms, clauses, memoranda of negotiations, or correspondence. Approval 1. The VP, SM, may approve any request for deviation regarding a single purchase or series of purchases. 2. Deviations concerning a single purchase may be approved regardless of commodity group (supplies, services and equipment, design and construction and related services, and mail transportation and related services) by any of the following: (a) The manager, Facilities Portfolio. (b) The manager, Mail Equipment Portfolio. (c) The manager, Supply Management Operations. 4 May 19, 2005

5 Authority, Responsibility and Policy b c (d) The manager, Services Portfolio. (e) The manager, Supplies Portfolio. (f) The manager, Supply Chain Management Strategies. (g) The manager, Supply Management Infrastructure. (h) The manager, Transportation Portfolio. 3. Deviations concerning a single purchase of facility design, construction and related services may be approved by the manager, Major Facilities Purchasing (this authority may be redelegated). 4. Deviations concerning a single purchase of mail transportation may be approved by the manager, National Mail Transportation Purchasing (this authority may be redelegated). Records. Approval officials must keep copies of all deviation approvals. 1.4 Purchasing Authority Vice President, Supply Management a b General. The VP, SM, has unlimited contracting authority. This authority includes the authority to award and administer contracts and to carry out all related responsibilities. Contracting Authority 1. General. The VP, SM, has delegated contracting authority, including redelegation authority, throughout Postal Service purchasing organizations. An individual contracting officer s contracting and related authorities are enumerated in his or her letter of delegation (see 1.4.2). 2. Special Purchases. The VP, SM, has delegated contracting authority for certain special requirements to other Postal Service officials. Some of these delegations are set out in Exhibit 4.5.2, Supplemental Policy and Procedural Authority. 3. Local Buying Authority. In the Administrative Support Manual (ASM) the VP, SM, has delegated local buying authority to various positions throughout the Postal Service. Exhibit 1.4.1b, Local Buying Authorities, shows these delegations by position. Local buying authority is defined in i. 4. Required Approvals. If a proposed contract award or modification will exceed $10 million, the VP, SM must give prior written approval to the individual purchase plan and the proposed contract award or modification (however, see c.4 regarding noncompetitive purchases). The VP s written approval of the proposed contract award or modification serves as the delegation of authority required by d if the proposed award or modification exceeds the contracting officer s delegated authority. See b for information regarding prior VP approval of certain contract termination actions. May 19,

6 1.4.2 Interim Internal Purchasing Guidelines Exhibit b Local Buying Authorities Amount Position Commodity $10,000 Officers/Vice Presidents at Headquarters Supplies, Services Capital Equipment $10,000 Vice Presidents Area Operations Supplies, Services Capital Equipment $10,000 Plant Managers, P&D Supplies, Services Capital Equipment $10,000 District Managers Customer Services Supplies, Services Capital Equipment $10,000 PCES Postmasters Supplies and Services $10,000 Inspectors in Charge Supplies and Services $2,000 Postmasters CAGs A J, Vehicle Managers Supplies and Services $1,000 Postmasters CAGs K&L Supplies and Services Contracting Officers a b c d General Responsibilities. Contracting officers have the authority to enter into, administer, and terminate contracts and to make related decisions. They are responsible for ensuring the performance of all actions necessary for efficient and effective purchasing, ensuring compliance with the terms of contracts, and with protecting the interests of the Postal Service in all of its contractual relationships. Operating under these guidelines (and, when necessary, seeking and gaining approval for deviations to them), contracting officers have wide latitude to exercise sound business judgment based on the competitive and business needs of the Postal Service. In meeting these responsibilities, contracting officers are expected to consult and confer with their internal business partners and purchase teams (see n for a definition of purchase teams). Lastly, contracting officers are also responsible for managing supplier relationships by overseeing the integrity and effectiveness of the purchasing process, ensuring that all suppliers are treated in a business-like and objective manner, and maintaining effective communications with suppliers during contract performance. Funding Availability. Contracting officers must ensure that sufficient funding is available before taking a contractual action (such as a purchase, modification or termination) requiring additional funds. Delegations of Authority. Contracting authority is delegated to named individuals, rather than to positions, based on the individual s education, experience and training. Only individuals with this delegated authority may contractually bind the Postal Service. See Management Instruction AS , Unauthorized Contractual Commitments. Information on the limits of contracting officers authority must be readily available to the public and to Postal Service personnel. Unless specifically limited in their letters of delegation, Postal Service contracting officers may award contracts regardless of commodity group (supplies, services and equipment, design and construction and related services, and mail transportation and related services). Actions Exceeding a Contracting Officer s Delegated Authority. A contracting officer may take a contractual action (a purchase, modification, or termination) exceeding his or her authority after receiving a written delegation of authority from a contracting officer delegated and authorized to redelegate 6 May 19, 2005

7 Authority, Responsibility and Policy b the required authority. The delegation must be placed in the contract file. When determining the appropriate redelegation authority, contracting officers must consider the anticipated total dollar value of the action Contracting Officers Representatives A contracting officer may delegate certain responsibilities to individuals to act on behalf of the contracting officer. These individuals are referred to as contracting officers representatives (see also 4.4.3, b, and Management Instruction PM , Contracting Officer s Representative Program) Appointment and Selection a b Appointment Authority 1. Contracting officers are appointed by the VP, SM, and by individuals delegated that authority by the VP. Appointees to the position of contracting officer levels I through IV must be career employees in good standing, and must meet the qualifications for the particular level (see b.3). 2. Contracting officers must be appointed by letter and on Form 7378, Certificate of Appointment. The letter must state any limitations on the contracting officer s authority. Appointing officials must keep a record of all letters of delegation and certificates of appointment, and documentation concerning the contracting officer s education, experience and training related to the individual s CO level. Selection 1. General. Appointing officials must ensure that contracting officers are fully qualified by education, experience and training to solicit, negotiate, award, and administer contracts on behalf of the Postal Service. 2. Contracting Officer Levels. Generally, contracting authorities are grouped by contracting officer level. There are four general levels of contracting officer: (a) Level I contracting officers. Generally, these contracting officers are delegated up to $100,000 of contracting authority, and up to the maximum limit for orders placed against indefinite delivery contracts and ordering agreements. (b) Level II contracting officers. Generally, these contracting officers are delegated up to $1 million of contracting authority, and up to the maximum limit for orders placed against indefinite delivery contracts and ordering agreements. (c) Level III contracting officers. Generally, these contracting officers are delegated up to $10 million of contracting authority, and up to the maximum limit for orders placed against indefinite delivery contracts and ordering agreements. (d) Level IV contracting officers. Level IV contracting officers are delegated unlimited contracting authority. May 19,

8 1.4.4.b Interim Internal Purchasing Guidelines 3. Qualifications. Appointment to a particular contracting officer level requires progressively more exacting qualifications. However, all individuals nominated to be contracting officers, with the exception of those individuals nominated and holding a certification described in (a) below must have baccalaureate degrees. The individual nominated must have earned at least 24 semester hours in subjects related to purchasing, such as accounting, business finance, commercial (business) law, economics, quantitative analysis, marketing, contracting or purchasing, organization, or management. The required 24 semester hours may have been earned during the individual s pursuit of a baccalaureate degree, or at any other time. In addition, the following qualifications apply to contracting officers appointed by the VP, SM: (a) Contracting Officer Level I: (1) Experience: One year of experience performing substantive purchasing tasks. (2) Education: The following professional certifications may serve as a substitute for the baccalaureate degree for level I contracting officers: (i) Certified Professional Contract Manager from the National Contract Management Association. (ii) Certified Purchasing Manager from the Institute of Supply Management. (iii) Certified Public Purchasing Officer from the National Institute of Governmental Purchasing. (3) Training: Satisfactory completion of 32 hours of formal training in each of the following subjects: (i) Fundamentals of Supply Management. (ii) Contracting Methods and Principles. If the contracting officer will be delegated purchasing authority for design and construction purchases, the following Postal Service training course is also required: (iii) Introduction to Facilities R&A Contracting (this course is available at the Postal Service s Center for Leadership Development). Note: The formal training may be obtained through an accredited college or university, a federally sponsored program, a nationally recognized training organization, or a supply management-related professional association or organization. (b) Contracting Officer Level II: (1) Experience: Three years of current, progressively complex and responsible experience in performing competitive and noncompetitive purchasing (not including simplified purchasing). Generally, this experience must have been gained in intermediate level contracting positions. 8 May 19, 2005

9 Authority, Responsibility and Policy b (2) Training: In addition to the training requirement of b.3.(a).(3), satisfactory completion of 32 hours of formal training in each of the following subjects: (i) Negotiation Strategies. (ii) Total Cost of Ownership/Cost and Price Analysis. (iii) Contract Management/Administration. (iv) Project Management. (v) Contract Law. If the contracting officer will be delegated purchasing authority for design and construction purchases, the following Postal Service training course is also required: (vi) Contract Administration, Pricing, and Claims (this course is available at the Postal Service s Center for Leadership Development). Note: The formal training may be obtained through an accredited college or university, a federally sponsored program, a nationally recognized training organization, or a supply management-related professional association or organization. (c) Contracting Officer Level III: (1) Experience: Five years of current, progressively complex and responsible experience in soliciting, negotiating, awarding, and administering competitive and noncompetitive purchasing actions. Ordinarily, this experience must have been in higher-level purchasing positions. (2) Training: In addition to the training requirement of b.3.(a).(3) and b.3.(b).(2), satisfactory completion of 32 hours of formal training in Purchasing/Supply Management Advanced Strategic Issues. Note: The formal training may be obtained through an accredited college or university, a federally sponsored program, a nationally recognized training organization, or a supply management-related professional association or organization. (d) Contracting Officer Level IV. The holders of the following positions are Level IV contracting officers: (1) Manager, Facilities Portfolio. (2) Manager, Mail Equipment Portfolio. (3) Manager, SM Operations. (4) Manager, Services Portfolio. (5) Manager, Supplies Portfolio. (6) Manger, Supply Chain Management Strategies. (7) Manager, Supply Management Infrastructure. (8) Manager, Transportation Portfolio. May 19,

10 1.4.5 Interim Internal Purchasing Guidelines Waivers and Interim Appointments a b Waivers. Waivers to the qualification requirements may be requested for individuals who, due to their extraordinary experience or extraordinary circumstances, should be granted contracting officer authority. Requests must be submitted through organizational levels to the VP, SM. Interim Appointments. Ordinarily, individuals will not be appointed as contracting officers if they do not meet the relevant qualification criteria. However, when necessary, appointing officials may grant an interim appointment to an individual who has not yet completed necessary training or education. No interim appointment may exceed one year, and no interim appointment may be granted to an individual more than once if the individual fails to complete the required training or education Continuing Professionalism All contracting officer appointments, regardless of level, must be reviewed annually by the appointing official in order to ascertain that the contracting officer has maintained professional proficiency and otherwise remains qualified. Therefore, contracting officers must: 1. Attend 21 hours of formal purchasing training covering such areas as new requirements, techniques, or policies and procedures brought about by changes in statutes, regulations, business research, or evaluations of postal purchasing practices. 2. Maintain their professionalism through (a) attendance at seminars, conferences, meetings, or other professional activities and (b) performing coursework in contracting and purchasing commensurate with their CO level and responsibilities. The appointing official will determine whether a particular CO s efforts in these areas meet the professional development requirements. 3. Sustain and expand their knowledge of the purchasing field through reading professional literature Termination Termination of a contracting officer appointment may be made by an appointing authority or by the VP, SM. Terminations may be made for reasons such as reassignment, termination of employment, or unsatisfactory performance. The termination must indicate the effective date of termination. Termination of employment automatically terminates a contracting officer s appointment. Terminations may not be made retroactively. 1.5 Meaning of Words and Terms General The words and terms defined in this section have the meanings given in this section whenever they are used in these guidelines, unless the context 10 May 19, 2005

11 Authority, Responsibility and Policy l clearly indicates a different meaning or a different definition is given for a particular section, part, solicitation provision or contract clause. Definitions are in alphabetical order Definitions a b c d e f g h i j k l Agreement. A set of pre-established terms and conditions negotiated between the Postal Service and a supplier which only becomes a contract when an order is placed and accepted by the supplier. A contract is always an agreement; but an agreement is not always a contract. Assigned Counsel. The person or persons assigned by the General Counsel to provide legal advice to a VP or contracting officer. Change Order. A written order signed by the contracting officer directing the supplier to make changes that the Changes clause (see paragraph c of Clause 4-1) authorizes the contracting officer to make without the specific consent of the supplier. Contract. Any understanding that can be legally enforced, formed by two or more parties who promise to perform or to refrain from performing some act. For purposes of this manual, a contract exists when there is a bilateral agreement, a unilateral order (such as a purchase order) by the Postal Service that becomes effective upon performance by the other party, or a binding order under an agreement that did not in itself bind the parties. Contract Modification. A written alteration in the specifications, delivery point, rate of delivery, contract period, price, quantity or other provisions of an existing contract whether made unilaterally under a provision in the contract or bilaterally by mutual parties to the contract. It includes such bilateral actions as supplemental agreements, and such unilateral actions as change orders, administrative changes, notice of termination, and exercise of options. Contracting Officer. A person who has direct purchasing authority or has been delegated purchasing authority (see 1.4). The term includes an authorized representative of a contracting officer acting within the limits of the authority delegated by the contracting officer. Days. This means calendar days unless working days are specified. Includes. This means includes but is not limited to. Local Buying Authority. The authority to locally buy and pay for day-to-day operational needs. Local buying authority may not be used for certain commodities; see ASM 72 for more information regarding local buying authority. May. This is permissive. May not and no [person or thing] may mean that the act described is prohibited. Must. This is imperative. Performance Evaluation Factors. A standard by which the worth of a proposal is judged, included in solicitations so that prospective offerors will be aware of the elements of value that will help determine which proposals offers the best May 19,

12 1.5.2.m Interim Internal Purchasing Guidelines value to the Postal Service. There are two types of factors: proposal-specific and supplier-specific m n o p q r s t u v w x Proposal. An offer that, if accepted, creates a contract. A proposal may be made in response to a solicitation, or may be unsolicited. Purchase Team. A group of Postal Service internal business partners with an interest in a specific purchase or series of purchases. In addition to other responsibilities, the contracting officer serves as the business leader of the purchase team, and directs and oversees the purchase team s efforts from purchase planning to contract closeout. Purchasing. All activities related to the purchase of supplies, services, equipment, design and construction and related services, and mail transportation, including planning, solicitation, source selection, contract award, and contract administration. It does not include activities related to the determination of requirements. Purchasing Office. An organizational element responsible for the purchase of supplies, services and equipment, facility design and construction and related services, or mail transportation. Quotation. A response to a request for quotation; it is informational in character, and, unlike a proposal, it is not an offer that can be accepted by the Postal Service to form a binding contract. Real Estate and Related Services. The term real estate includes the acquisition of real property (including improvements on real property), and any interests in real property, by easement, license, sale, lease, or exchange; the disposal of real property (including improvements on real property); and any interests in real property, by easement, license, sale, lease, exchange; and the development and redevelopment of real property under lease agreements, including acquisition, disposal, or development and redevelopment by contract or agreement with government entities at any level. Related services includes professional services, planning efforts, studies, and the like, in support of the acquisition, disposal, development and redevelopment of real estate (as defined above) including design/engineer, environmental, geo-technical, brokerage, legal, relocation, title, and similar services (other than services in connection with Postal Service-financed construction. Services. The performance of identifiable tasks. Should. This means desirable but not required. Supplemental Agreement. A contract modification that is mutually agreed to by the parties. Supplies. Property and rights or interest in property of any kind except real property. Vice President. When not otherwise specified, means the Vice President of Supply Management. Will. This signifies intent or obligation. 12 May 19, 2005

13 Authority, Responsibility and Policy c 1.6 General Policies Business Objectives and Practices The primary goal of Postal Service purchasing is to support the Postal Service s business and competitive objectives. To meet this mandate, purchase teams, headed by the contracting officer, determine the most effective business practices for a given purchase. These business practices include such matters as whether a purchase should be made competitively or noncompetitively and whether suppliers should be prequalified. In making these determinations, purchase teams must consider the potential ramifications on other important business objectives, such as supplier diversity, supplier relations, and the Postal Service s obligation to be business-like in, and accountable for, its actions Best Value The Postal Service awards its contracts to the suppliers offering the best value to the Postal Service. What constitutes the best value will depend on the goods or services being purchased. When a purchase is made competitively, best value is determined by the comparative analysis of the value contained in a proposal, taking into consideration such matters as the Postal Service s business objectives, suppliers past performance and capability, price and total cost of ownership, quality and risk (see, generally, 2.1.9). Ordinarily, a best value determination is made by the purchase team, subject to applicable review and approval Competition a b c Generally, purchases valued at more than $10,000 should be made on the basis of adequate competition, although, in some cases, purchase teams may decide during purchase planning that the most effective business practice is to make the purchase noncompetitively (see 2.1.6). Adequate competition means the solicitation of a sufficient number of qualified suppliers to ensure that the required quality and quantity of goods and services is obtained when needed and that the price is fair and reasonable. Contracting officers, working with the purchase team, must determine that adequate competition has been obtained when competition is used. In making that determination, contracting officers must take into account both the Postal Service s business objectives and its commitment to identifying new suppliers and providing opportunities for them to join the Postal Service s supplier base. Competition among prequalified suppliers is sufficient to meet the adequate competition standard. May 19,

14 1.6.4 Interim Internal Purchasing Guidelines Contracts with Postal Service Employees and Their Immediate Families a b c Except as provided in b and c below, contracts may not be awarded to Postal Service employees, their immediate families, or business organizations substantially owned or controlled by Postal Service employees or their immediate families. Postal Service employees means all postal officers and employees, whether in full-time, part-time, career or noncareer positions, including specifically persons in temporary positions such as postmaster replacements and rural carrier reliefs. Immediate family means spouse, minor child or children, and individuals related to an employee by blood who are residents of the employee s household. The prohibition against contracting with Postal Service employees and their immediate families may be waived (all waivers must be in writing), by the contracting officer for: 1. New real estate leases of interior space of 3,000 square feet or less. 2. Renewals of existing highway contract routes with immediate family members of a postal employee, subject to review and concurrence by the Associate Ethical Conduct Officer. 3. Cleaning service contracts with immediate family members of nonsupervisory employees. 4. The licensing of a patented invention that is the sole property of the employee. This prohibition does not apply to the lease of an individual employee s vehicle in connection with his or her employment, and renewals and extensions of leases of interior space of 3,000 square feet or less. When to do so is in the best interests of the Postal Service, contracting officers may renew or extend existing leases of over 3,000 square feet from Postal Service employees or their immediate families, or business organizations substantially owned or controlled by them, with the concurrence of the Associate Ethical Conduct Officer (see 39 CFR ) Release and Exchange of Information a b General. The Postal Service makes records, data, and information available to the public to the maximum extent consistent with the Postal Service s interest, the privacy rights of customers, employees, and other individuals, ownership of rights in the data requested (see Chapter 8), and the need to protect Postal Service and other confidential business information (including information relating to the Postal Service s commercial operations) from disclosure. Release. Records properly identified and requested by any member of the public must be made available, to the extent not exempt from disclosure, in accordance with Handbook AS-353, Guide to Privacy and the Freedom of Information Act, and implementing regulations in 39 CFR May 19, 2005

15 Authority, Responsibility and Policy c c Exchange. Subject to any restrictions on disclosure, the Postal Service exchanges information with other government agencies regarding the performance of suppliers Privacy Protection a b General. When required by b below, contracts direct suppliers and subcontractors to comply with Postal Service requirements protecting the privacy of customer, employee, and other individual s information, as well as postal information and records. These requirements include the Privacy Act of 1974 (5 USC 552a), implementing regulations at 39 CFR , and the privacy policy at Clause 1-1, Privacy Protection. Clause 1-1, Privacy Protection, must be included in: 1. Contracts in which a supplier or subcontractor operates a Privacy Act system of records on the Postal Service s behalf; 2. Contracts in which a supplier or subcontractor will have access to any Postal Service customer information, including address information; 3. Contracts in which a supplier or subcontractor assists the Postal Service in establishing or administering a customer Web site, or places links or ad banners on a Postal Service Web site or any Web site on the Postal Service s behalf; and 4. Contracts in which a supplier or subcontractor assists the Postal Service to conduct a marketing campaign Advance Payments and Progress Payments a b c General. Usually, the Postal Service pays for supplies and services after delivery or performance. However, for some purchases, sources may be unavailable or competition too limited without the availability of advance payments or progress payments. Advance Payments. Approval to make advance payments must be obtained as required by Management Instruction FM , Advance Payments. Progress Payments 1. If the dollar value of a prospective contract is within the contracting officer s delegated contracting authority, he or she may approve the use of progress payments for the particular contract. For contracts over $1,000,000 (excluding construction, architect/engineer and construction management contracts), progress payments must also be approved by the VP, Finance. 2. Before approving progress payments, the contracting officer must make a written determination establishing that: (a) Progress payments are in the Postal Service s best interests. (b) The supplier s accounting system and controls are adequate for proper administration of progress payments, or their adequacy will be ascertained before contract award. May 19,

16 1.6.7.d Interim Internal Purchasing Guidelines d e (c) Monthly progress reports will be obtained from the supplier, showing progress of the work as related to progress payments made. Clauses. Any contract providing for advance payments must include Clause 1-2, Advance Payments. Any contract, other than a construction contract, providing for progress payments must include Clause 1-3, Progress Payments. (For construction contracts, see Clause B-48, Payment (Construction).) Partial Payment. See b regarding partial payments to suppliers Conflicts of Interest a Organizational Conflicts of Interest 1. An organizational conflict of interest exists when the nature of the work to be performed under a contract may give an offeror an unfair competitive advantage, or when an offeror has other interests that may impair its objectivity or ability to perform satisfactorily. Such conflicts are not limited to any particular type of purchase, but are more likely to occur in contracts involving: (a) Professional services (see 4.5.3). (b) Consultant services (see 4.5.3). (c) Performance of or assistance in technical evaluations. (d) Projects that are procured in separate phases, such as design and then construction or research and development and then production. 2. As part of purchasing planning (see 2.1) contracting officers, with the assistance of the purchase team, must attempt to identify potential conflicts of interest so that they may be avoided or mitigated. When a potential conflict is foreseen, the contracting officer should consult with assigned counsel and obtain the assistance of appropriate technical specialists to mitigate or avoid conflict. Such mitigation actions may include, but are not limited to, the development of solicitation provisions restricting competition to offerors not subject to a conflict of interest, or a contract clause limiting the supplier s eligibility for future contracts or subcontracts or other actions to mitigate or avoid an apparent conflict such as the adoption of measures to ensure as even a competition as possible, as may be in the interest of the Postal Service and the offerors. Any limit on future contracts must be for a reasonable period sufficient to avoid unfair competitive advantage or potential bias. See, for example, Clause 1-7, Organizational Conflict of Interest. 3. If it does not become apparent until proposals are received that participation by a particular offeror could lead to a conflict of interest and unfair competition, the offeror may be disqualified and its proposal rejected, or the contracting officer may take such other actions as deemed necessary in the interest of the Postal Service and the offerors to avoid or mitigate the situation, acting in the interest of the Postal 16 May 19, 2005

17 Authority, Responsibility and Policy c b Service, and in consultation with assigned counsel and appropriate technical specialists to ensure a fair competition. 4. If the contracting officer determines to mitigate a situation that could lead to a conflict or which appears to constitute a conflict of interest, such determination should be reduced to a written analysis of the course of action chosen. Such analysis should include a consideration of benefits and detriments to the Postal Service and the offerors and may consider information provided by offerors in response to the solicitation or obtained during negotiations. 5. The provisions of this section may be waived as to any procedure or rule by determining that its application in a particular situation would not be in the Postal Service s interest. Any such waiver should be in writing by the contracting officer and processed in accordance with 1.3. Participation by Members of Congress. The participation of members of Congress in contracts or agreements made on behalf of the United States (including the United States Postal Service) is prohibited by 41 USC. section Standards of Conduct Postal Service employees are held to the highest standard of conduct in the performance of their duties, and must conduct themselves so as to avoid even the appearance of any impropriety. All employees must adhere to the Standards of Ethical Conduct for Employees of the Executive Branch, 5 CFR Gratuities or Gifts a b c Postal Service employees, with limited exceptions, are prohibited from accepting gratuities or gifts from suppliers or persons seeking postal contracts or other business under detailed rules prescribed in 5 CFR Clause 1-5, Gratuities or Gifts, which is incorporated by reference in Clause 4-2, Terms and Conditions Required to Implement Policies, Statutes, or Executive Orders, provides for termination of the contract for default upon a finding by the Postal Service Board of Contract Appeals that a supplier, or the supplier s agent or representative, offered or gave a gratuity or gift to a Postal Service employee to obtain a contract or favorable treatment under a contract. Information or allegations concerning unlawful gratuities or gifts must promptly be referred to the Office of the Inspector General (OIG). If the OIG finds evidence that an unlawful gratuity or gift was offered or given, the contracting officer must determine whether debarment is appropriate (see d), in addition to actions taken under a specific contract. May 19,

18 Interim Internal Purchasing Guidelines Supplier Clearances a b ASM requires that all individuals performing services pursuant to Postal Service purchases (other than mail transportation contracts, see 4.4) who have access to occupied Postal Service facilities, and/or Postal Service information and resources, including Postal Service computer systems, must obtain clearance before being provided that access. In accordance with that regulation, the contracting officer and the purchase team determine, with the concurrence of the Inspection Service, when a clearance requirement exists. Include Provision 1-1, Supplier Clearance Requirements, in any service contract, other than a mail transportation contract, for which a supplier clearance requirement exists Strategic Alliances Strategic alliances are contractual agreements used to promote marketing initiatives that benefit the Postal Service, enhancing postal business performance through increased revenues, reduced costs, or improved customer satisfaction. They result in partnerships that combine the core strengths, competitive advantages, or needs of the Postal Service with the attributes of other companies for mutual market advantage. Strategic alliances are not purchasing contracts, and may not be used to replace or supplement the purchasing methods prescribed in these guidelines, which do not apply to strategic alliances. Handbook F-66D, Other Investment-Related Policies and Procedures, contains further guidance on strategic alliances Domestic Preference a b General. The Postal Service gives preference to domestic-source products and materials when purchasing supplies and services. With respect to individual purchases or purchase categories, the Postmaster General may adopt more stringent standards for domestic manufacture when in the best interests of the Postal Service. Supplies 1. Applicability. These procedures apply to all purchases of supplies or services that involve the furnishing of supplies. Deviations may be authorized by the VP, Supply Management. 2. Definitions (a) End products. Articles, materials and supplies to be purchased for Postal Service use. (b) Components. Articles, materials and supplies directly incorporated in end products. (c) Domestic-source end products. An unmanufactured end product mined or produced in the United States or an end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all of its components. The cost of components includes transportation costs to the place of 18 May 19, 2005

19 Authority, Responsibility and Policy b (d) (e) (f) incorporation into the end product and, in the case of components of foreign origin, duty (whether or not a duty-free entry certificate is issued). For purchases in excess of $25,000, Canadian end products are treated as domestic source end products. The articles and materials listed in d are considered to have been mined, produced, or manufactured in the United States, regardless of their source in fact. Foreign end product. An end product other than a domestic-source end product. Domestic proposal. A proposed price for a domestic-source end product, including transportation to destination. Foreign proposal. A proposed price for a foreign end product, including transportation to destination and duty (whether or not a duty-free entry certificate is issued). (g) Canadian end product. An article that is wholly the growth, product, or manufacture of Canada or, in the case of an article consisting in whole or in part of materials from another country, has been substantially transformed in Canada into a new and different article of commerce distinct from that from which it was transformed. For purposes of calculating the value of the end product, it includes the value of services (except transportation services) incidental to the article, provided that the value of the incidental services does not exceed the value of the article itself. 3. Requirement. Only domestic-source end products may be purchased, except when the VP, Supply Management, determines that: (a) The articles, materials or supplies are of a class or kind not mined, produced or manufactured in the United States in sufficient and reasonable available commercial quantities of satisfactory quality (see d); or (b) Purchases of domestic-source end products would be inconsistent with the interest of the Postal Service, or that its cost would be unreasonable, as when the price comparison procedures described in b.5 result in the purchase of a foreign end product. 4. Proposal Evaluation (a) If performance evaluation factors will have a significant weight in proposal evaluation, domestic-source end products receive a preference in the case of closely ranked proposals, but no price comparison should be made. (b) If award is to be based solely on price, each foreign price proposal must be adjusted for purposes of evaluation by adding to the foreign proposal (inclusive of duty) a factor of six percent of that proposal. If a tie results between a foreign proposal and a domestic proposal, the domestic proposal must be selected for award. When more than one line item is involved, the six percent evaluation factor is applied on an item-by-item basis, except that May 19,

20 c Interim Internal Purchasing Guidelines the factor may be applied to any group of items that the solicitation specifies will be awarded as a group. 5. Solicitation Provision. Provision 1-2, Domestic Source Certificate Supplies, is incorporated by reference in Provision 4-3, Representations and Certifications, and must be checked-off by contracting officers when the solicitation calls for the purchase of supplies. 6. Clause. Clause , Preference for Domestic Supplies, is incorporated by reference in Clause 4-2, Terms and Conditions Required to Implement Policies, Statutes, or Executive Orders, and must be checked-off by contracting officers when the contract calls for the purchase of supplies c Construction Materials 1. Applicability. The procedures in this part apply to all construction contracts. Deviations may be authorized by the VP, Supply Management. 2. Definitions (a) Components. Articles, materials, and supplies incorporated directly into construction materials. (b) Construction materials. Articles, materials, and supplies brought to the construction site for incorporation into the building or work. (c) Domestic construction material. This means (1) an unmanufactured construction material mined or produced in the United States, or (2) a construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. The cost of each component includes transportation costs to the place of incorporation into the construction material and any applicable duty (whether or not a duty-free entry certificate is issued). Components of foreign origin of the same class or kind as those listed in d are treated as domestic. (d) Foreign construction material. A construction material other than a domestic construction material. 3. Requirement. Only domestic construction materials may be used in construction, except: (a) When the contracting officer determines that use of a particular domestic construction material would be impracticable, or that its cost would be unreasonable, under guidelines established by the VP, Supply Management, in the relevant handbook; or (b) When the VP, SM, determines that a construction material is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of satisfactory quality (see d). 4. Solicitation Provision. Provision 1-3, Domestic Source Certificate Construction Materials, is incorporated by reference in Provision 4-3, 20 May 19, 2005