USPS Contracting Changes

Mar 2, 2016 | Articles

By John Sheehy; President, NSRMCA

Postal suppliers who have been around for a few years know that the changes occurring around the Postal Service has definitely increased the number of service change requests.  The stability the industry once enjoyed has been replaced by a much more fluid system.  The suppliers and the Contracting offices have all struggled to keep pace with the direction of the USPS.

In any changing climate, adaptation is one of the hardest things to control and perfect.  As participants in this process, everyone (suppliers and USPS) has had to relearn how to work together.  Many of the processes have changed or have been adjusted.  In many instances suppliers were not accustomed nor equipped to handle the multitude of changes being requested.  Contracting offices were severely understaffed causing delays in negotiations, renewals and payments.  To say the climate has been tense is probably understating the magnitude of the situation.

The association and the leaders of the USPS have challenged each other to work closer together.  Decisions have been made to educate each other, understand the goals and challenges that need to be addressed.  The environment that has been created over the last few years is a healthy cooperative one.  The business partnerships that are developing will serve the industry well moving forward.

A discussion of changes cannot be fully developed unless an understanding for “what” and “how” is addressed.  Most of the industry understands the common acronyms used.  SCR for example means “Service Change Request”.  Most are familiar with this term, but do we understand what it means.  An SCR is a process wherein the Contracting Office notifies the supplier that a change in the service is requested.  The change might include a schedule change, stop changes, addition or subtraction of work being done, equipment modifications etc.  In this situation the contracting office and the supplier are required to come to a mutual agreement for the service and the future payments.  (Dave Hendel has written and presented on this topic many times) What is important to understand is that this request has to come from the Contracting Office.

Unfortunately the Contracting Office does not make the changes that the supplier is being asked to do; that comes to them from operations or networks.  There is confusion of who needs the changes, who orders them and who is ultimately responsible for changing the contract.  This is what has caused the industry many of its heartaches recently.

Getting to the point, as suppliers we need to understand the process.  Recently a new acronym was introduced that may help all of us understand how to deal with all the requests and how to insure they are being executed correctly; UCC (Unauthorized Contractual Commitment).  There is a distinct difference in an SCR and a UCC and understanding the difference can make all the difference working together with your CO and local offices.

Many of the Suppliers work very closely with the local offices, which in most cases this a great thing and keeps the mail moving effectively.  However, if a local office or someone from networks asked you to change the service you provide on your contract and it is not a temporary change (backed up by a 5397 form for exceptional service) then you are most likely in a UCC situation.  The contracting office cannot deal with a UCC because in many cases they do not know the UCC exists, and the opportunity for a mutual agreement did not take place.  The supplier now is at risk of not being paid for this additional work, and the USPS may not get the financial benefit of reduced work.

So what should the supplier do when this happens?  The contracting officer is the only person that can change your contract.  Understanding this will greatly improve your chances for a successful mutually agreed future contract and a continued good relationship with your local offices.  If a supplier is asked to change the work being done going forward by someone other than their contracting officer, the supplier should inform the requester (in a businesslike respectful manner) “I am happy to provide the service as soon as I get permission from my contracting officer.”  Then the supplier should contact the contracting officer preferably by email, noting the contract number in the subject line, outline the change that has been requested, estimate the potential cost differential caused by the change and the timing of the start of the service requested.  This will provide you and the contracting officer a written trail of the transaction.  The contracting office will respond to your email as soon as possible with a yes or a no.  Only after the supplier gets the nod from the CO should they start the service.  Once the service is started, the SCR should follow then negotiations for a mutually agreed change should take place.  Of course negotiating the change before operations is the best and least risky scenario for both the supplier and USPS.


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