Exhibit 10.4

 

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT     1. CONTRACT ID CODE    

  PAGE OF  

1        2

2. AMENDMENT/MODIFICATION NO.

031

 

  3. EFFECTIVE DATE   12/01/2014   4. REQUISITION/PURCHASE REQ. NO.  

5. PROJECT NO.

(If applicable)

6. ISSUED BY                         CODE   5ASNET  
7. ADMINISTERED BY (IF OTHER THAN ITEM 6)     CODE       5ASNET  

 

ALAINA EARL

Air Transportation CMC

United States Postal Service

475 L’Enfant Plaza SW

Room 1P 650

Washington DC 20260-0650

(202) 268-6580

 

 

 

Air Transportation CMC

Air Transportation CMC

United States Postal Service

475 L’Enfant Plaza SW, Room 1P650

Washington DC 20260-0650

8. NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State, and Zip Code)

FEDERAL EXPRESS CORPORATION

3610 HACKS CROSS ROAD

MEMPHIS TN 38125-8800

    (x)   

9A. AMENDMENT OF SOLICITATION NO.

 

      

9B. DATED (SEE ITEM 11)

 

 

 

   x

 

  

10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX

      

10B. DATED (SEE ITEM 13)

 

04/23/2013

 

SUPPLIER CODE:    000389122   FACILITY CODE         

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

 

¨                ¨  is extended,         ¨  is not extended.

 

Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing items 8 and 15, and returning                     copies of
the amendment; (b) By acknowledging receipt of this amendment on each copy of
the offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment number. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior to
the opening hour and date specified.

 

12. ACCOUNTING AND APPROPRIATION DATA     (If Required)

See Schedule

  

 

NET DECREASE: [*]

 

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE
CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

 

 

    (x)         A.     THIS CHANGE BY CLAUSE IS ISSUED PURSUANT TO: (Specify
Clause) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN
ITEM 10A.    

x

 

     

Monthly Fuel Adjustment

 

    ¨     B.    

THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE
CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH
IN ITEM 14.

 

    ¨     C.    

THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF: THE
CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

 

    x     D.    

OTHER (such as no cost change/cancellation, termination, etc.) (Specify type of
modification and authority): THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE
CONTRACT ORDER NO. IN ITEM 10A.

By Mutual Agreement of the Contracting Parties

 

   

 

E. IMPORTANT:     Contractor ¨ is not, x is required to sign this document and
return          1           copies to the issuing office.

 

 

 

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)

In accordance with contract ACN-13-FX and the “Fuel Adjustment” section, the
following Line Haul Rate (fuel) for the Day Network as set out in Attachment 10
is modified for performance during the period of December 1, 2014 to January 4,
2015 (Operating Period 15) as follows:

 

From:

[*] per cubic foot

 

To:

[*] per cubic foot

 

Continued…

 

 

Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.

 

 

15A. NAME AND TITLE OF SIGNER (Type or print)

 

Paul J. Herron, Vice President

 

 

16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)

 

    Brian Mckain

 

   

15B. CONTRACTOR/OFFEROR

 

    /s/ PAUL J. HERRON

(Signature of person authorized to sign)

 

15C. DATE SIGNED

 

02/13/2015

 

16B. CONTRACT AUTHORITY

 

    /s/ BRIAN MCKAIN

(Signature of Contracting Officer)

 

16C. DATE SIGNED

 

02/19/15

   

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONTINUATION SHEET

  REQUISITION NO.                       

PAGE OF

2        2

CONTRACT/ORDER NO.

ACN-13-FX/031

 

AWARD/ EFFECTIVE DATE  

12/01/2014

  MASTER/AGENCY CONTRACT NO.   SOLICITATION NO.  

SOLICITATION ISSUE DATE

ITEM NO   SCHEDULE OF SUPPLIES / SERVICES   QUANTITY  

    UNIT    

  UNIT PRICE  

AMOUNT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

00001

 

 

 

This is a decrease of [*].

 

[*]

 

This modification also incorporates the language from Modification 30 into the
contract document as shown in the attached. A summary of these changes are as
follows:

 

Page 9: “Aviation Supplier Planned Accommodation – Day Network”

 

Page 22: “Reduction of Payment”

 

Page 28: “Payment Processing – Day Network – Per Cube”

 

Page 34: “Clause B-1: Definitions (March 2006) (Tailored)”

 

An additional language change from Modification 30 is the removal of the
following sentence from Line 1262 of the contract language:

 

“The invoiced cubic feet for ad hoc trucks will be calculated by dividing the
Handling Unit’s Postal Service assigned rounded weight by the applicable
contract density.”

 

Sub Rept Req’d: Y Carrier Code: FX Route Termini

S: Various Route Termini End: Various Payment

Terms: SEE CONTRACT

Delivery: 12/01/2014

Discount Terms:

 

See Schedule

 

Accounting Info:

BFN: 670167

FOB: Destination

Period of Performance: 12/01/2014 to 09/30/2020

 

Change Item 00001 to read as follows:

 

Day Network

Account Number: 53503

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[*]

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

United States Postal Service

AIR CARGO NETWORK

Contract ACN-13-FX

Awarded By:

Air Transportation CMC

Transportation Portfolio

Supply Management

475 L’Enfant Plaza SW

Room 1P 650

Washington, DC 20260-0650

April 23, 2013

Modification 1 Issued May 28, 2013

Modification 2 Issued June 24, 2013

Modification 3 Issued September 24, 2013

Modification 7 Issued October 22, 2013

Modification 11 Issued January 6, 2014

Modification 12 February 3, 2014

Modification 13 March 3, 2014

Modification 14 March 31, 2014

Modification 15 April 28, 2014

Modification 16 May 27, 2014

Modification 17, May 11, 2014

Modification 18, June 18, 2014

Modification 19, June 27, 2014

Modification 21, June 27, 2014

Modification 22, June 30, 2014

--------------------------------------------------------------------------------

Air Cargo Network

Contract ACN-13-FX

Table of Contents

 

Modification 23, July 28, 2014

Modification 24, September 1, 2014

Modification 25, September 29, 2014

Modification 26, September 29, 2014

Modification 28, October 27, 2014

Modification 30, January 5, 2015

Modification 31, January 13, 2015

--------------------------------------------------------------------------------

Air Cargo Network

Contract ACN-13-FX

Table of Contents

 

Table of Contents

 

Part 1: Statement of Work

     6   

Purpose and Scope

     6   

Scale

     6   

Services Provided

     6   

Service Points

     7   

Management Plan

     7   

Frequency

     8   

Mail Assignment and Transport - Day Network

     8   

Mail Assignment and Transport - Night Network

     8   

Local Agreements

     8   

Postal Service Performs Terminal Handling Service (THS) Operation - Day Network

     8   

Aviation Supplier Planned Accommodation - Day Network

     9   

Aviation Supplier Planned Accommodation - Night Network

     10   

Delivery - Day Network

     10   

Delivery - Night Network

     10   

Saturday Delivery - Day Network

     10   

Specific Delivery Instructions

     10   

Boarding Priority - Day Network

     10   

Boarding Priority - Night Network

     11   

Repossession of Mail by the Postal Service

     11   

Treatment of Exceptional Types of Mail

     11   

Perishable Mail and Live Mail

     13   

Registered Mail

     13   

Offshore Capacity Requirement - Day Network

     13   

Volume Commitment - General Information

     14   

Volume Commitment - Contract Volume Minimum - Day Network

     14   

Operating Period Volume Minimum - Day Network

     14   

Operating Period Volume Minimum - Night Network

     14   

Volume Commitment - Holiday - Day Network

     15   

Volume Commitment - Holiday - Night Network

     15   

Operating Periods

     16   

Ordering Process - Non-Peak - Day Network

     16   

Ordering Process - Non-Peak - Night Network

     16   

Ordering Process - Peak - Day Network

     17   

Ordering Process - Peak - Night Network

     17   

Electronic Data Interchange (EDI)

     18   

Operational Condition Reports

     18   

Dimensional Weight Reports

     19   

Scanning and Data Transmission

     19   

Performance Requirements and Measurement

     20   

Reduction of Payment

     21   

Performance Management

     22   

Sustainability

     22   

Security

     23   

Postal Service Employees Allowed Access

     23   

Personnel Screening

     23   

Payment Procedures

     27   

Rates and Payment General

     27   

Payment Processing - Day Network - Per Cube

     28   

Payment Processing - Night Network - Per Pound

     31   

Reconciliation Process

     31   

--------------------------------------------------------------------------------

Air Cargo Network

Contract ACN-13-FX

Table of Contents

 

Part 3: Contract Clauses

     33   

Clause B-1:

 

Definitions (March 2006) (Tailored)

     33   

Clause B-3:

 

Contract Type (March 2006) (Tailored)

     36   

Clause B-9:

 

Claims and Disputes (March 2006) (Tailored)

     36   

Clause B-10:

 

Pricing of Adjustments (March 2006) (Tailored)

     37   

Clause B-15:

 

Notice of Delay (March 2006) (Tailored)

     37   

Clause B-22:

 

Interest (March 2006) (Tailored)

     38   

Clause B-25:

 

Advertising of Contract Awards (March 2006)

     38   

Clause B-30:

 

Permits and Responsibilities (March 2006) (Tailored)

     38   

Clause B-39:

 

Indemnification (March 2006) (Tailored)

     38   

Clause B-45:

 

Other Contracts (March 2006) (Tailored)

     38   

Clause B-65:

 

Adjustments to Compensation (March 2006) (Tailored)

     38   

Clause B-69:

 

Events of Default (March 2006) (Tailored)

     40   

Clause B-75:

 

Accountability of the Aviation Supplier (Non-Highway) (March 2006) (Tailored)

     40   

Clause B-77:

 

Protection of the Mail (Non-Highway) (March 2006) (Tailored)

     41   

Clause B-80:

 

Laws and Regulations Applicable (March 2006) (Tailored)

     42   

Clause B-81:

 

Information or Access by Third Parties (March 2006) (Tailored)

     42   

Clause B-82:

 

Access by Officials (March 2006) (Tailored)

     42   

Clause 1-1:

 

Privacy Protection (July 2007)

     43   

Clause 1-5:

 

Gratuities or Gifts (March 2006)

     44   

Clause 1-6:

 

Contingent Fees (March 2006)

     44   

Clause 1-11:

 

Prohibition Against Contracting with Former Officers or PCES Executives (March
2006) (Tailored)

     45   

Clause 1-12:

 

Use of Former Postal Service Employees (March 2006) (Tailored)

     45   

Clause 2-11:

 

Postal Service Property - Fixed-Price (March 2006) (Tailored)

     45   

Clause 2-22:

 

Value Engineering Incentive (March 2006)

     47   

Clause 3-1:

 

Small, Minority, and Woman-owned Business Subcontracting Requirements (March
2006)

     50   

Clause 3-2:

 

Participation of Small, Minority, and Woman-owned Businesses (March 2006)

     51   

Clause 4-1:

 

General Terms and Conditions (July 2007) (Tailored)

     51   

Clause 4-2:

 

Contract Terms and Conditions Required to Implement Policies, Statutes, or
Executive Orders (July 2009) (Tailored)

     55   

Clause 4-7:

 

Records Ownership (March 2006)

     56   

Clause 6-1:

 

Contracting Officer’s Representative (March 2006)

     56   

Clause 9-1:

 

Convict Labor (March 2006)

     56   

Clause 9-2:

 

Contract Work Hours and Safety Standards Act - Overtime Compensation (March
2006)

     57   

Clause 9-7:

 

Equal Opportunity (March 2006) (Tailored)

     57   

Clause 9-9:

 

Equal Opportunity Preaward Compliance of Subcontracts (March 2006) (Tailored)

     58   

Clause 9-10:

 

Service Contract Act (March 2006)

     58   

Clause 9-12:

 

Fair Labor Standards Act and Service Contract Act - Price Adjustment (February
2010)

     65   

Clause 9-13:

 

Affirmative Action for Workers with Disabilities (March 2006) (Tailored)

     66   

Clause 9-14:

 

Equal Opportunity for Disabled Veterans, Recently Separated Veterans, Other
Protected Veterans, and Armed Forces Service Medal Veterans (February 2010)
(Tailored)

     67   

Contract Term

     69   

Renewal Process

     69   

Amendments or Modifications

     69   

Assignment

     69   

Bankruptcy

     70   

--------------------------------------------------------------------------------

Air Cargo Network

Contract ACN-13-FX

Table of Contents

 

Confidentiality

     70   

Entire Agreement

     70   

Force Majeure

     71   

Frequency Adjustment

     71   

Notices

     72   

Severability

     72   

Third Party Governmental Delays

     73   

Waiver of Breach

     73   

Part 4 - List of Attachments and Forms

     74   

Attachment 1

  

Postal Service Operating Periods, dated June 27, 2014

     73   

Attachment 2

  

Air Stops & Projected Volumes, dated January 8, 2013

     75   

Attachment 3

  

Operating Plan, Day Network, dated June 27, 2014

     76   

Attachment 4

  

Operating Plan, Night Network, dated June 27, 2014

     83   

Attachment 5

  

Reserved

  

Attachment 6

  

Postal Furnished Property, April 16, 2013

     91   

Attachment 7

  

Electronic Data Interchange Service Requirements, dated September 1, 2012

     92   

Attachment 8

  

Investigative / Security Protocol and Guidelines, dated July 2012

     93   

Attachment 9

  

Wage Determination, dated October 31, 2012

     97   

Attachment 10

  

Pricing, dated January 13, 2015

     99   

Attachment 11

  

Perishable Mail and Lives, June 27, 2014

     102   

Attachment 12

  

Reserved

  

Attachment 13

  

Service Contract Act Wage Determinations, dated June 24, 2014

     104   

Attachment 14

  

Contract Density, dated June 27, 2014

     124   

Attachment 15

  

Average Weight Process, dated June 27, 2014

     126   

Attachment 16

  

Re-labeling Process, dated June 27, 2014

     127   

Attachment 17

  

Handling Unit Types, dated June 27, 2014

     129   

 

Forms

  

DOT Form F 5800.1

   Hazardous Materials Incident Report

I-9 Form

   Employment Eligibility Verification

PS Form 2025

   Contract Personnel Questionnaire

PS Form 8203

   Order / Solicitation / Offer / Award

US Treasury Form 941

   Quarterly Federal Tax Return

--------------------------------------------------------------------------------

Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

  1    Part 1: Statement of Work   2      3      4    Purpose and Scope   5   
The United States Postal Service is seeking to purchase air transportation and
ancillary services for   6    mail to and from destinations within the
contiguous forty-eight (48) states as well as non-contiguous   7    areas to
include Alaska, Hawaii, and Puerto Rico. This statement of work (SOW) provides
for the   8    transportation of mail on any flight in the aviation supplier’s
air transportation network. It also provides   9    for services associated with
the transportation of mail by the aviation supplier. The air carrier’s 10   
network or transportation system may include its own flights, flights of its
approved subcontractors, 11    flights that may be dedicated to Postal
operations, and Road Feeder Service. 12    13    14    Scale 15    The volume of
mail (expressed in pounds and cubic feet) transported as contracted under this
air 16    cargo network contract may increase or decrease significantly over the
term of the contract consistent 17    with the needs of the Postal Service. 18
   19    20    Services Provided 21    The aviation supplier shall provide
sufficient resources to efficiently and effectively take possession, 22    sort
(if necessary), transport, scan, load, and deliver all mail to the designated
destination Service 23    Points specified by the Postal Service in Attachment
2: Air Stops & Projected Volumes, Attachment 3: 24    Operating Plan, Day
Network, and Attachment 4: Operating Plan, Night Network. 25    26    The
aviation supplier will present scan data for these events electronically to the
Postal Service. See 27    Attachment 7: Electronic Data Interchange Service
Requirements. 28    29    [*] 30    31    32    33    34    35    The aviation
supplier will be expected to (this list is not all inclusive): 36   

a.      Coordinate and oversee its own operations; supervise and protect its own
employees.

37   

b.      Ensure that the necessary facility support and administrative functions
are performed.

38   

c.      Monitor performance.

39   

d.      Provide feedback to the Postal Service.

40   

e.      Ensure the integrity of data entry.

41   

f.       Coordinate the exchange of information.

42   

g.      Provide notification of changes or anticipated changes in services
provided (including

43   

         subcontractors) to the Postal Service.

44   

h.      Scan material Handling Units.

45   

i.       Assist in unloading or loading Unit Load Devices (ULDs) to or from
surface transportation.

46   

j.       Provide the correct type and quantity of equipment necessary to support
the service

47   

         requirements of this contract.

48   

k.      Process mail for dispatch from the aviation supplier’s facility to the
Postal Service facility.

49   

l.       Close-out, receive, and dispatch all surface vehicles.

50   

m.     Handle overflow volumes per Postal Service general directions.

51   

n.      Cooperate with all aviation suppliers in the transportation service
chain.

52   

o.      Enter data timely and accurately.

53   

p.      Prepare required reports.

54   

q.      Perform verification of security seals on surface transportation.

55   

r.       Ensure the security of all mail.

 56   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

Page 6 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

57    58    Service Points 59    Service Points are the locations where tender
and / or delivery takes place. The locations and tender 60    and delivery
specifications are listed in Attachment 3: Operating Plan, Day Network, and
Attachment 61    4: Operating Plan, Night Network. 62    63    The Day Network
will service approximately eighty (80) origin and destination Service Points. 64
   65    The Night Network will service approximately one hundred forty-five
(145) origin and destination 66    Service Points 67    68    69    Management
Plan 70    The aviation supplier shall develop and maintain a current Management
Plan for dealing with normal 71    daily operations as well as unscheduled and
unexpected events affecting the expeditious operation of 72    the facility,
including aviation and surface service failure and delays. The Management Plan
must also 73    address the key personnel involved on a day to day basis. 74   
75    Updates to this plan shall be submitted to the Contracting Officer within
ten (10) days of any changes 76    to the plan. The aviation supplier shall
review and verify, at least annually, that its management plan 77    is current.
78    79    The aviation supplier must train its employees to a level of
familiarity that ensures a contingency plan 80    can be exercised without
delay. The following items must be addressed by the Management Plan; the 81   
list is not all inclusive. 82    83   

a.      Late arriving aircraft and trucks

84   

•    Ability to conduct two operations – Originating and Destinating

85    86   

b.      Early arriving aircraft and trucks

87   

c.      Mail arriving out of normal sequence

88   

d.      Trucks not on-site for dispatch

89   

e.      Inclement weather during operations

90   

•    Snow issues

91   

•    Ice storms

92   

•    Airport closures

93    94   

f.       Protection of the mail during inclement weather

95   

g.      Labor actions

96   

h.      Inadequate staffing

97   

i.       An inability to complete all loading in time to meet tender

98   

j.       Overflow mail

99   

k.      Damaged and / or non air worthy containers

100   

l.       Damaged surface containers

101   

m.     Damaged or non-labeled mail

102   

n.      Plan and schedule changes

103   

o.      Loose load mail

104   

p.      Hazardous Material (HAZMAT)-acceptable and non-acceptable pieces

105   

q.      Handling and staging of live animals

106   

r.       Running out of supplies such as placards, bypass tape, etc.

107   

s.      Power losses – Describe in detail all steps to be taken in the event of
power loss to

108   

         include specific actions for back up power at the Terminal Handling
Service (THS) location

109   

         such as generators and other systems.

110   

t.       Natural disasters

111   

u.      Equipment breakdowns

112   

v.      Airport closings

113   

w.     Air Traffic Control (ATC) impact mitigation plan

 

Page 7 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

114    115    116    Frequency 117    The initial frequency of service for the
Day Network (Priority Mail / First Class network) is based on six 118    (6)
days of Postal Service delivery and shall be Tuesday through Sunday (X1).1 This
will provide for 119    approximately 307 (308 in a leap year) operating days
annually. This excludes the widely observed 120    holidays as listed in the
sections titled, Volume Commitment – Holiday – Day Network and Volume 121   
Commitment – Holiday – Night Network. 122    123    The initial frequency of
service for the Night Network (Express Mail network) is based on five (5) days
124    of Postal Service delivery and shall be Monday through Friday (X67).2
This will provide for 125    approximately 254 (255 in a leap year) operating
days annually. This excludes the widely observed 126    holidays as listed in
the sections titled, Volume Commitment – Holiday – Day Network and Volume 127   
Commitment – Holiday – Night Network. 128    129    130    Mail Assignment and
Transport - Day Network 131    The aviation supplier shall provide flight
schedules at least thirty (30) days in advance of the Operating 132    Period.
The Postal Service will create dispatch routing instructions based on the
aviation supplier’s 133    flight schedule and subsequently shown on the Postal
Service Dispatch and Routing (D&R) Tag. 134    135    The Postal Service agrees
to provide up to seventy-five (75%) percent of the total volume assigned to 136
   the outbound flights to the aviation supplier one (1) hour before the
scheduled ‘All Mail Due Aviation 137    Supplier’ column as listed in Attachment
3: Operating Plan, Day Network. The Postal Service agrees 138    to provide the
remaining twenty-five (25%) percent by the ‘All Mail Due Aviation Supplier’
column listed 139    in Attachment 3: Operating Plan, Day Network. 140    141   
142    Mail Assignment and Transport - Night Network 143    The Postal Service
agrees to provide up to seventy-five (75%) percent of the total volume assigned
to 144    the outbound flights to the aviation supplier thirty (30) minutes
before the scheduled ‘All Mail Due 145    Aviation Supplier’ column as listed in
Attachment 4: Operating Plan, Night Network. The Postal 146    Service agrees to
provide the remaining twenty-five (25%) percent by the ‘All Mail Due Aviation
147    Supplier’ column listed in Attachment 4: Operating Plan, Night Network.
148    149    150    Local Agreements 151    No Local Agreement (any informal
agreement or working arrangement made between representatives 152    of the
aviation supplier, the Postal Service, or their agents who lack authority to
bind either company) 153    shall be binding, obligate the Postal Service or the
aviation supplier, or otherwise give rise to any claim 154    under this
contract. 155    156    157    Postal Service Performs Terminal Handling Service
(THS) Operation - Day 158    Network 159    Mail will be tendered to the
aviation supplier in accordance with the Operating Plan provided by the 160   
aviation supplier. The aviation supplier’s Operating Plan will be provided
thirty (30) days before the 161    start up of the Operating Period. The
aviation supplier’s Operating Plan will specify the following 162   
information: 163    164   

Specific Type of Airline ULD per origin / destination

165   

Destination of Airline ULD – Direct (bypass)

  

 

1    X1 refers to the day of the week that service will not be performed. The
days of the week are numbered consecutively from 1 through 7 beginning with
Monday (1). “X1” means that service will operate each day of the week except
Monday.

2    X67 refers to the days of the week that service will not be performed.
“X67” means that service will operate each day of the week except Saturday and
Sunday.

 

Page 8 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

166   

Destination of Airline ULD – Mixed (to be sorted at hub)

167    168    The Operating Plan will be mutually agreed upon prior to
implementation. 169    170    The aviation supplier will transport, scan, and
deliver the ULDs to the specific Service Points listed in 171    Attachment 3:
Operating Plan, Day Network. The Postal Service or its representative will build
the 172    ULDs in conformance with the aviation supplier’s Operating Plan. 173
   174    The aviation supplier will perform the following activities including,
but not limited to: 175    176   

a.      Sorting and scanning mail at an aviation supplier hub, as necessary,
which also may include

177   

         re-wrap and reapplication of Distribution & Routing (D&R) Tags to mail
requiring such

178   

         treatment, and dispatch on service responsive transportation

179    180   

b.       In the unlikely event that mail tendered to the aviation supplier is in
excess (overflow) of what

181   

may be transported, the aviation supplier shall:

182   

i.       Secure the mail.

183   

ii.      Scan all Handling Units and record the number of pieces, weight, and
destination of

184   

         all overflow Handling Units.

185   

iii.     Immediately notify the local Postal official after becoming aware of an
overflow

186   

         situation. The Postal official will direct the aviation supplier to
either hold the mail for

187   

         the next outbound flight or return it to the designated Postal
facility.

188   

iv.     Prepare all overflow mail for delivery to the local designated Postal
facility within

189   

         twenty (20) minutes of receipt of Postal direction.

190   

v.      Provide a written report of the overflow to the local Postal official
with a copy to the

191   

         COR.

192    193    When transporting mail in carts, containers, or other vehicles,
the mail must be securely enclosed to 194    protect it from loss, depredation,
and damage. The aviation supplier will stage mail in a secure area 195    while
in its possession. The aviation supplier is not allowed to transport mail in the
cabs of its vehicles 196    except for mail containing live animals. 197    198
   199    Aviation Supplier Planned Accommodation - Day Network 200    The
aviation supplier will guarantee space to accommodate up to 105% of the Planned
Capacity from 201    each origin daily. All mail accepted by the aviation
supplier is subject to the service commitments set 202    forth in this
contract. 203    204    FedEx will accept mail from Origin air stops as
identified in Attachment 3 Operating Plan - Day 205    Network in excess of 105%
of Planned Capacity on a space available basis. 206    207    If the Postal
Service tenders mail to the aviation supplier after the ‘All Mail Due Aviation
Supplier’ 208    column as shown in Attachment 3: Operating Plan, Day Network,
the aviation supplier has the right to 209    refuse that volume. 210    211   
Mail accepted after the agreed upon ‘All Mail Due Aviation Supplier’ column in
Attachment 3: 212    Operating Plan, Day Network, shall be subject to the same
service commitments as mail tendered at 213    or before the ‘All Mail Due
Aviation Supplier’ column. 214    215   

 

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216    217    Aviation Supplier Planned Accommodation - Night Network 218    The
aviation supplier will guarantee space to accommodate up to 120% of the Planned
Capacity from 219    each origin daily. All mail accepted by the aviation
supplier is subject to the service commitments set 220    forth in this
contract. 221    222    If the Postal Service tenders mail in excess of 120% of
the Planned Capacity for that Service Point, 223    the aviation supplier may
refuse to transport the excess tender. If the volume is accepted, the same 224
   service requirements apply. 225    226    If the Postal Service tenders mail
to the aviation supplier after the ‘All Mail Due Aviation Supplier’ 227   
column as shown in Attachment 4: Operating Plan, Night Network, the aviation
supplier has the right to 228    refuse that volume. 229    230    Mail accepted
after the agreed upon ‘All Mail Due Aviation Supplier’ column in Attachment 4:
231    Operating Plan, Night Network, shall be subject to the same service
commitments as mail tendered at 232    or before the ‘All Mail Due Aviation
Supplier’ column. 233    234    235    Delivery - Day Network 236    The
aviation supplier will deliver mail to a destination Service Point by the
scheduled ‘Latest Delivery 237    Time to Postal Service’ column in Attachment
3: Operating Plan, Day Network. 238    239    240    Delivery - Night Network
241    The aviation supplier will deliver mail to a Service Point by the
scheduled ‘Latest Delivery Time to 242    Postal Service’ column in Attachment
4: Operating Plan, Night Network, on or before the scheduled 243    delivery day
(D+1) on Attachment 4: Operating Plan, Night Network. “D+1” is defined as the
day 244    following acceptance by the aviation supplier. 245    246    At
destination, the aviation supplier is required to unload the mail from the ULDs
received, scan, and 247    deliver the mail to the Postal Service. 248    249   
250    Saturday Delivery - Day Network 251    See Attachment 3: Operating Plan,
Day Network, for details on Saturday delivery. 252    253    254    Specific
Delivery Instructions 255    The aviation supplier shall: 256   

a.      Assist in loading and dispatching all outbound surface vehicles, as
required

257    258   

b.      Must develop a cooperative line of communication with the Postal Service
to ensure the timely

259   

         delivery and dispatch of mail. All efforts shall be made to provide an
efficient and effective

260   

         delivery to the Postal Service.

261    262    263    Boarding Priority - Day Network 264    The aviation
supplier must board accepted mail using the following mail boarding preference
order: 265   

a.      Registered (Con-Con) Mail

266    267   

b.      Lives

268    269   

c.      Perishables

270    271   

d.      HAZMAT, regardless of mail class

 

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272    273   

e.      Domestic Priority and Express Mail

274    275   

f.       First-Class Mail

276    277   

g.      All Other Mail

278    279    The Manager, Air Transportation Operations, or a Postal Service
designee, will determine if the Postal 280    Service should repossess any mail
without exercising rights as described in the section titled 281    Repossession
of Mail by the Postal Service. 282    283    284    Boarding Priority - Night
Network 285    The aviation supplier must board accepted mail using the
following mail boarding preference order: 286   

a.      Express Mail

287   

b.      All other classes of mail

288    289    290    Repossession of Mail by the Postal Service 291    The
Postal Service may, at any time, require the aviation supplier to return to the
local Postal Service 292    representative or agent at a Service Point, any or
all of the mail in its possession at that location or the 293    Postal Service
may take possession of such mail from the aviation supplier. 294    295    296
   Treatment of Exceptional Types of Mail 297   

1.      Tagging of Hazardous Material

298   

The aviation supplier may carry mailable HAZMAT, subject to applicable law,
rules and

299   

regulations, including, without limitation:

300    301   

a.      ORM-D Air

302   

“ORM-D” stands for “Other Regulated Material-Class D.” ORM-D is a term developed
by

303   

the Department of Transportation (DOT) that signifies the hazard class
associated with a

304   

consumer commodity. Most hazardous materials accepted by the Postal Service for

305   

mailing are classified as ORM-D. A package marked ORM-D meets the standards for

306   

surface transportation only. “ORM-D-Air” signifies that the item meets the
requirements

307   

for air and surface transportation.

308    309   

The Postal Service currently accepts limited quantity alternative marking
options (square

310   

on point) for ORM-D and ORM-D-Air and plans to adopt mandatory effective dates
as

311   

identified by the Department of Transportation. There are no intended changes to

312   

quantity limits, package weights, or documentation requirements for these
mailable

313   

materials.

314    315   

b.       Division Class 6.2

316   

Division Class 6.2 materials are not permitted in international mail or domestic
mail,

317   

except when they are intended for medical or veterinary use, research, or
laboratory

318   

certification related to the public health. These materials are permitted only
when they are

319   

properly prepared for mailing to withstand shocks, pressure changes, and other
conditions

320   

related to ordinary handling in transit.

321    322   

c.       Division Class 9

323   

Division Class 9 items are miscellaneous hazardous materials or substance
articles that

324   

present a hazard during transportation but do not meet the definition of any
other hazard

325   

class. Examples of miscellaneous hazardous materials (not all of which are
mailable)

326   

include solid dry ice, elevated temperature substances, environmentally
hazardous

327   

substances, life-saving appliances, and asbestos.

328   

 

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329   

d.      Hazardous and Dangerous Goods

330   

The aviation supplier will accept all Dangerous Goods as defined in the Domestic
Mail

331   

Manual, section 601.10. All Dangerous Goods will be tendered on the Night
Network.

332   

The Postal Service will be in compliance with the current International Air
Transport

333   

Association (IATA) allowed variations as listed for the aviation supplier. The
Postal

334   

Service will tender all Dangerous Goods at least two hours prior to the tender
time shown

335   

in Attachment 4: Operating Plan, Night Network. The Postal Service shall not
tender any

336   

used sharps. Any future changes to Hazardous and Dangerous Goods requirements
will

337   

be reviewed and must be acceptable to the aviation supplier prior to
implementation of the

338   

changes.

339    340   

e.       All other hazardous material that is packaged and distributed in a
quantity and form

341   

intended or suitable for retail sale and designed for consumption by individuals
for their

342   

personal care or household use purposes; reference

343   

http://pe.usps.gov/text/dmm300/601.htm#wp1065003.

344    345   

2.      Assignment of Hazardous Materials

346   

a.      The tender of all hazardous materials will be performed a minimum of two
(2) hours prior

347   

         to the final tender time of the intended flight.

348    349   

b.      The desired flight assignment of HAZMAT is to non-stop or direct
flights.

350    351   

c.      No surcharge is offered for the transportation of HAZMAT mail.

352    353   

d.      A copy of the manifest and the assigned item MUST be handed to an
aviation supplier

354   

         representative a minimum of two (2) hours prior to the closeout time of
the intended flight.

355   

         The aviation supplier representative will be responsible for ensuring
that the information

356   

         on the postal manifest which includes the number of pieces, weight, and
appropriate

357   

         shipper’s certification detail is incorporated onto the aircraft load
manifest and pilot

358   

         notification paperwork as outlined in CFR 49, Part 175, Carriage by
Aircraft.

359    360   

e.      Aviation supplier Refusal to Accept Hazardous Materials: If the aviation
supplier refuses

361   

         to accept a properly prepared HAZMAT item, it shall document the
reasons leading to the

362   

         refusal. Documentation will include:

363   

i.       Name and address of mailer and air carrier;

364   

ii.      The type and amount of hazardous material; and

365   

iii.     The reason for refusal.

366    367   

f.       HAZMAT Spills, Releases, Incidents, and Emergencies

368   

i.       While in the possession of the aviation supplier, but not on board an
aircraft:

369   

Hazardous Material items which are damaged must not be boarded on the

370   

aircraft. HAZMAT incidents which occur following the tender but prior to

371   

boarding of the aircraft, or after unloading from an aircraft and before
delivery

372   

to the Postal Service, causing injury, illness, significant property damage, or

373   

disruption in operations will require the aviation supplier to enter the
required

374   

information into the Mail Piece Incident Reporting Tool (MIRT), a Postal

375   

Service intranet tool for the collection of information on leaking and other
non-

376   

mailable items.

377    378   

ii.      While on board an aircraft:

379   

Any incident which occurs while on board an aircraft will require the aviation

380   

supplier to complete a Department of Transportation (DOT) Form F 5800.1

381   

(01-2004), Hazardous Materials Incident Report. A copy of this form must be

382   

sent to the COR within twenty-four (24) hours of the incident with all

383   

information available. The incident type is not limited to hazardous material

384   

and may include hazardous cargo spills which come in contact with the mail.

385   

 

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386    387    Perishable Mail and Live Mail 388    The aviation supplier will be
required to transport as mail perishable items which the Postal Service 389   
has accepted as mailable under Domestic Mail Manual (DMM) 601, sub section 9.0,
including live 390    animals as discussed at DMM 601 subsection 9.3. The Postal
Service will notify the aviation supplier 391    a minimum of two (2) hours
prior to the ‘All Mail Due Aviation Supplier’ time as listed in Attachment 3:
392    Operating Plan, Day Network, and Attachment 4: Operating Plan, Night
Network, of the intended flight 393    of known perishable mail, including live
animals. 394    395    Attachment 11: Perishable Mail and Lives, details the
requirements for preparation and tender of 396    perishable mail and live
animal shipments. 397    398    399    Registered Mail 400    The aviation
supplier will accept Registered Mail provided in Con-Cons for the Day Network
only. 401    402    Registered Mail Con-Cons will be a part of the Planned
Capacity and will be tendered in accordance 403    with Attachment 3: Operating
Plan, Day Network. 404    405    Upon request, the aviation supplier shall
furnish the Postal Service the following information 406    concerning
Registered Mail: 407   

•    Aircraft number,

408   

•    Aircraft compartment location,

409   

•    Actual flight departure time, and

410   

•    Any accident or irregularity which occurs to a flight containing Registered
Mail.

411    412    Registered Mail Handling Units will have a D&R Tag affixed
indicating the final destination air stop. 413    This Handling Unit shall
remain intact and shall not be opened by the aviation supplier. The desired 414
   routing for Registered Mail shipments will be to non-stop or direct flights
only. 415    416    The aviation supplier shall advise the U.S. Postal
Inspection Service, local Postal Service 417    representatives, and will send
an email message to the COR of any Registered Mail that does not 418    make its
planned dispatch for disposition instructions. 419    420    421    Offshore
Capacity Requirement - Day Network 422    The aviation supplier will make
available at least the following daily volumes into and out of the 423   
following locations. 424    425   

Cube Based:

426   

[*] cube (Originating) and [*] cube Destinating Anchorage (ANC)

427   

[*] cube (Originating) and [*] cube Destinating Honolulu (HNL)

428   

[*] cube (Originating) and [*] cube Destinating San Juan (SJU)

429    430    The Postal Service may increase this capacity as needed through
the planning process through the 431    mutual agreement of the parties. 432   
433    In the event that destinating offshore volumes exceed the volumes listed
in “Offshore Capacity 434    Requirement - Day Network” at the Aviation
Supplier’s Memphis hub, the excess volume will receive a 435    scan in Memphis
that qualifies as a Delivery Scan. This scan will fulfill the requirement that
the 436    aviation supplier obtain a destination Delivery Scan under Payment
Procedures. The time of the scan 437    will also be used to measure performance
under Performance Requirements and Measurement and in 438    the assessment of
reductions under Reduction of Payment. 439    440    All destinating offshore
volume will move to the offshore destination as part of the Aviation Supplier’s
441    services under this contract, on a first-in, first-out basis. The
Aviation Supplier is still responsible for

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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442    performing a Delivery Scan when the volume is tendered to the Postal
Service at the offshore 443    destination. 444    445    446    Volume
Commitment - General Information 447    The Day Network operating week is
defined as Tuesday through Sunday inclusive (X1). 448    449    The Night
Network operating week is defined as Monday through Friday inclusive (X67). 450
   451    The Postal Service is not obligated to request consistent capacity by
day of the week. Requests for 452    capacity are detailed in the Ordering
Process sections. 453    454    The following constitute the only minimum volume
guarantees under this contract: 455   

•       Contract Volume Minimum of [*] cubic feet on the Day Network.

456   

•       The Contract Volume Minimum may be reduced in accordance with Clause
4-1:

457   

General Terms and Conditions, paragraph m, and Frequency Adjustment found in

458   

Part 3: Contract Clauses.

459    460   

[*]

461    462    463    464    465   

•       90% of Planned Capacity for the Night Network for each Operating Period

466    467    Any monies due as a result of the Postal Service not meeting its
Contract Volume Minimum or its 468    Operating Period Volume Minimum as
measured and calculated at the end of each Operating Period 469    will be
included as part of the Operating Period’s reconciliation process. 470    471   
On operating days where volume for lanes with Planned Capacity is withdrawn,
withheld, or not 472    transported under the Repossession of Mail by the Postal
Service or Force Majeure sections, that 473    volume will not be included in
calculating the Operating Period Volume Minimum. The Contract 474    Volume
Minimum will be reduced for the Operating Period by the amount of that volume.
475    476    477    Volume Commitment - Contract Volume Minimum - Day Network
478    A minimum of [*] cubic feet per operational day, averaged across six (6)
days per week, and measured 479    across each Operating Period, will constitute
the Contract Volume Minimum guaranteed to be paid by 480    the Postal Service.
481    482    483    Operating Period Volume Minimum - Day Network 484    [*]
485    486    487    488    489    490    491    492    493    494    495   
Operating Period Volume Minimum - Night Network 496    [*] 497   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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Contract ACN-13-FX

Part 1: Statement of Work

 

498    [*] 499    500    501    502    503    504    505    506    Volume
Commitment - Holiday - Day Network 507    Each holiday will be addressed
separately between the parties during the Ordering Process. The 508    holidays
are: 509   

•    New Year’s Day (widely observed)

510   

•    Martin Luther King Day

511   

•    Presidents’ Day

512   

•    Memorial Day (widely observed)

513   

•    Independence Day (widely observed)

514   

•    Labor Day (widely observed)

515   

•    Columbus Day

516   

•    Veterans Day

517   

•    Thanksgiving (widely observed)

518   

•    Christmas (widely observed)

519    520    For purposes of Contract Volume Minimum and Operating Period
Volume Minimum calculations, the 521    following days will not be included: 522
  

•    Widely observed holidays

523   

•    The day following the widely observed holidays that occur on a Monday

524   

•    Non-widely observed holidays that occur on a Monday

525    526    For purposes of Contract Volume Minimum and Operating Period
Volume Minimum calculations, the 527    following days will be included at a 50%
volume level: 528   

•    The day following widely observed holidays not occurring on a Monday

529   

•    Non-widely observed holidays not occurring on a Monday

530   

•    The day after a non-widely observed holiday

531    532    533    Volume Commitment - Holiday - Night Network 534    Each
holiday will be addressed separately between the parties during the Ordering
Process. The 535    holidays are: 536   

•    New Year’s Day (widely observed)

537   

•    Martin Luther King Day

538   

•    Presidents’ Day

539   

•    Memorial Day (widely observed)

540   

•    Independence Day (widely observed)

541   

•    Labor Day (widely observed)

542   

•    Columbus Day

543   

•    Veterans’ Day

544   

•    Thanksgiving (widely observed)

545   

•    Christmas (widely observed)

546    547    The widely observed holidays will not be included in the Operating
Period Volume Minimum 548    calculation. 549    550    The non-widely observed
holidays will be included at a 50% volume level in the Operating Period 551   
Volume Minimum calculation. 552   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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Part 1: Statement of Work

 

553    554    Operating Periods 555    The Operating Periods are incorporated as
Attachment 1: Postal Service Operating Periods. No 556    Operating Period will
exceed five weeks. The Peak Operating Periods are designated in Attachment 557
   1: Postal Service Operating Periods. 558    559    560    Ordering Process -
Non-Peak - Day Network 561    The Postal Service will provide the aviation
supplier mail volumes in accordance with the identified 562    schedule
specified below. The forecasting structure will specify each origin /
destination lane pair 563    including cubic feet by day of week for the pairs.
The Postal Service will request capacity based on 564    specific plans for a
Tuesday / Wednesday plan, a Thursday / Friday plan, a Saturday plan, and a 565
   Sunday plan. 566    567    [*] 568    569    570    571    572    573    574
   575    576    577    578    579    580    581    582    583    Over the
course of the Ordering Process for two (2) Operating Periods, the Postal Service
may reduce 584    volume down to the Contract Volume Minimum. 585    586    The
request for capacity shall be presented to the aviation supplier in a mutually
agreed upon 587    electronic origin / destination format. 588    589    Bypass
containers will be allocated in lanes where the requested capacity is greater
than one hundred 590    and ten (110) percent of the cubic capacity of the ULD
configuration for the aircraft planned for the 591    Service Point provided
there is sufficient space to flow the Bypass container from the origin to the
final 592    destination on the scheduled flights. To facilitate this process,
the Postal Service and the aviation 593    supplier will jointly agree upon both
Bypass and Mixed containers to be built at all origins during the 594   
Ordering Process. 595    596    597    Ordering Process - Non-Peak - Night
Network 598    The Postal Service will provide the aviation supplier mail
volumes in accordance with the identified 599    schedule specified below. The
forecasting structure will specify each origin / destination lane pair 600   
including weight. 601    602    [*] 603    604    605    606    607    608   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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609    [*] 610    611    612    The request for capacity shall be presented to
the aviation supplier in a mutually agreed upon 613    electronic origin /
destination format. 614    615    616    Ordering Process - Peak - Day Network
617    The Peak Operating Period will consist of four or five individual weeks,
measured and planned as 618    independent of each other. One of the five weeks
of the Peak Operating Period will include the week 619    of Christmas. As such,
the requested volume capacity will include the Christmas week. The 620   
forecasting structure will specify each origin / destination lane pair including
weight or cubic feet by 621    day of week for the pairs. The Postal Service
will request capacity based on specific plans for a 622    Tuesday / Wednesday
plan, a Thursday / Friday plan, a Saturday plan and a Sunday plan. 623    624   
The aviation supplier will make available at least [*] cubic feet of capacity
per week for the Peak 625    Operating Period for the Day Network. As a general
planning guideline, the historical volume 626    transported per day during the
Peak Operating Period ranges between [*] to [*] cubic feet. The Peak 627   
season tab included in Attachment 2: Air Stops & Projected Volumes provides the
historic mail volume 628    in pounds by mail class by week during the Peak
Operating Period. These volumes are provided for 629    initial planning
purposes and do not constitute a guarantee of volume for the Peak Ordering
Period. 630    631    For the Peak Operating Period, the Postal Service will
provide the aviation supplier a request for 632    capacity by lane, expressed
in cubic feet, one hundred fifty (150) days prior to the beginning of the 633   
Peak Operating Period. The request for capacity shall be presented to the
aviation supplier in a 634    mutually agreed upon electronic origin /
destination format. The aviation supplier will reply to the 635    request by
providing the Postal Service with its response expressed in cubic feet one
hundred twenty 636    (120) days prior to the start of the Peak Operating
Period. The Postal Service will communicate its 637    acceptance of the
aviation supplier’s response ninety (90) days prior to the commencement of the
638    Peak Operating Period. The Postal Service acceptance establishes the
Planned Capacity for the 639    Peak Operating Period. 640    641    The
Operating Period Minimum Volume for Peak will be [*] of the Planned Capacity.
642    643    The aviation supplier will guarantee space to accommodate up to
105% of the Planned Capacity from 644    each origin daily. 645    646    647   
Ordering Process - Peak - Night Network 648    The Peak Operating Period will
consist four or five individual weeks, measured and planned as 649   
independent of each other. One of the five weeks of the Peak Operating Period
will include the week 650    of Christmas. As such, the requested volume
capacity will include the Christmas week. The 651    forecasting structure will
specify each origin / destination lane pair including weight. 652    653    For
the Peak Operating Period, the Postal Service will provide the aviation supplier
a request for 654    capacity by lane, expressed in pounds, one hundred fifty
(150) days prior to the beginning of the Peak 655    Operating Period. The
request for capacity shall be presented to the aviation supplier in a mutually
656    agreed upon electronic origin / destination format. The aviation supplier
will reply to the request by 657    providing the Postal Service with its
response expressed in pounds one hundred twenty (120) days 658    prior to the
start of the Peak Operating Period. The Postal Service will communicate its
acceptance of 659    the aviation supplier’s response ninety (90) days prior to
the commencement of the Peak Operating 660    Period. The Postal Service
acceptance establishes the Planned Capacity for the Peak Operating 661   
Period. 662    663    664    The Operating Period Minimum Volume for Peak will
be [*] of the Planned Capacity.

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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665    666    The aviation supplier will guarantee space to accommodate up to
120% of the Planned Capacity from 667    each origin daily. 668    669    670   
Electronic Data Interchange (EDI) 671    The aviation supplier will provide
status and operational data as specified in Attachment 7: Electronic 672    Data
Interchange Service Requirements. The aviation supplier will use the EDI methods
specified in 673    the attachment to transmit and receive volume, and
appropriate scans from its system to the Postal 674    Service system. 675   
676    677    Operational Condition Reports 678    The aviation supplier shall
submit reports of hub and Service Point operating conditions on a daily 679   
basis for the Day Network and the Night Network. 680    681    Some examples of
these daily reports (more may be required) are: service performance reports, 682
   operations reports for departures / arrivals late due to mechanical issues,
operations reports for 683    departures / arrivals late due to weather and
other issues, sort mail volume, mis-sent mail volume, 684    surface truck
utilization, etc. The format of the report and the items reported will be
mutually agreed 685    upon by the COR and the aviation supplier. 686    687   
In addition to these daily reports, the aviation supplier will coordinate with
and advise the COR of any 688    contingency plans to move mail delayed in
transit, as soon as practical. 689    690    The table below lists the reports
required initially. 691   

 

Report Type

  

Name

  

Frequency

Operational Planning    [*]    Prior to Operating Period Operational Planning   
[*]    Prior to Operating Period Operational Planning    [*]    Prior to
Operating Period Operational Planning    [*]    Prior to Operating Period
Operational Planning    [*]    Prior to Operating Period Operational Planning   
[*]    Monthly Operational Reports    [*]    Tuesday through Sunday Operational
Reports    [*]    Monday through Friday Operational Reports    [*]    Tuesday
through Sunday Operational Reports    [*]    Monday through Friday Operational
Reports    [*]    Tuesday / Wednesday / Thursday / Saturday Operational Reports
   [*]    Monday through Thursday Operational Reports    [*]    Tuesday through
Sunday Operational Reports    [*]    Tuesday / Wednesday / Thursday / Saturday
Operational Reports    [*]    Tuesday through Sunday

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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Part 1: Statement of Work

 

Operational Reports    [*]    Tuesday through Sunday Operational Reports    [*]
   Monday through Friday Operational Reports    [*]    Monday through Friday
Operational Reports    [*]    Daily Operational Reports    [*]    Tuesday
through Sunday Operational Reports    [*]    Monday through Friday Operational
Reports    [*]    Tuesday through Sunday Operational Reports    [*]    Tuesday
through Sunday Operational Reports    [*]    Tuesday through Sunday

 

692    693    694    Dimensional Weight Reports 695    The aviation supplier
will provide a weekly report electronically for the Day Network of the
dimensional 696    weights [*]. This report will provide the following
information for each Outside Piece’s Handling Unit 697    D&R tag: 698   

•    Time of each Handling Unit through the sort

699   

•    The length of each Handling Unit

700   

•    The width of each Handling Unit

701   

•    The height of each Handling Unit

702   

•    The D&R tag of each Handling Unit

703    704    A sample of the report is below: 705    706   

Sorter’, ‘Time Stamp’,‘Length’,‘Width’,‘Height’,‘D&R Tag’

707   

‘AS002’,‘10170703012011’,‘1863’,‘1663’,‘1005’,‘1GBNP673BF’

708   

‘AS002’,‘10172003012011’,‘2413’,‘1107’,‘0460’,‘1ICK9H2YF/’

709   

‘AS002’,‘10172703012011’,‘3425’,‘1911’,‘0968’,‘15HPP8W7D6’

710   

‘AS002’,‘10175003012011’,‘1864’,‘1200’,‘1149’,‘1FZFOM73BX’

711   

‘AS002’,‘10175103012011’,‘2404’,‘1153’,‘0460’,‘17MKSORVBQ’

712    713    714    Scanning and Data Transmission 715    All scanning data
required to be presented to the Postal Service shall be in an electronic format
716    acceptable to the Postal Service, containing all required data elements,
and reported within two (2) 717    hours after the occurrence of a reportable
event. Available data will be transmitted in EDI message 718    format at
fifteen (15) minute intervals. 719    720    Scanning will be used to measure
performance and serve as the basis for payment for both the Day 721    Network
and the Night Network. 722    723    Technical aspects of Electronic Data
Interchange and the types of messaging events are discussed in 724    Attachment
7: Electronic Data Interchange Service Requirements. 725   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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Part 1: Statement of Work

 

726    The aviation supplier will be responsible for providing technology
compatible with Postal Service 727    systems for purposes of sending and
receiving scanning data. 728    729    The aviation supplier will be responsible
for performing the following scans of D&R Tags and ULD 730    identification
tags. 731   

a.      Possession or Load Scan of all Handling Units and ULDs at origin Service
Points, including

732   

         Outside Handling Units

733    734   

b.      Load Scan that associates the ULD to an aircraft

735    736   

c.      [*]

737    738    739   

d.      [*]

740    741    742    743    744    745    746    747    748    749    750    751
   752    753    754    755    756    757    758    759    760    761    762   
763    764    765    766    767    768    769    770    771    772   

e.      [*]

773    774    775   

f.       Delivery Scan of each Handling Unit and ULD at the specified delivery
Service Point.

776    777    778    Performance Requirements and Measurement 779    Mail
delivery performance will be measured against the contract requirements based
upon transmitted 780    scan data. 781    782    Delivery performance
requirements are:

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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783    784   

         Day Network: [*]%

785    786   

         Night Network: [*]%

787    788   

         Peak Operating Period: [*]% for the Day and Night Networks

789    790    Delivery performance will be measured across an Operating Period
on a lane-by-lane basis, using 791    actual scan delivery time versus Required
Delivery Time (RDT), as outlined in Attachment 3: 792    Operating Plan, Day
Network, and Attachment 4: Operating Plan, Night Network. 793    794    Delivery
performance will be measured using the following methodology: 795    796   

a.      The Postal Service will scan all Handling Units at origin.

797   

b.      The Postal Service will nest all Handling Units into ULDs at origin.

798   

c.      The Postal Service will tender the nested ULDs to the aviation supplier
at origin.

799   

d.      The aviation supplier will scan the ULDs with a Possession Scan at
origin.

800   

e.      The aviation supplier will scan all Handling Units processed through the
sort at the hub.

801   

f.       The aviation supplier will nest all Handling Units to ULDs departing
from the hub.

802   

g.      The aviation supplier will scan the ULDs as delivered to the Postal
Service upon arrival at

803   

         destination.

804   

h.      The Postal Service will break the ULDs and scan / de-nest all Handling
Units.

805    806    Delivery performance will be measured for all ULDs and Handling
Units receiving at least a Delivery 807    Scan by the aviation supplier. 808   
809    The Postal Service will provide data to the aviation supplier via
electronic files. The electronic file will 810    show the nested date and time
into the ULD, the possession time and date from the aviation supplier, 811   
the delivery time and date from the aviation supplier, and the de-nested break
time and date from the 812    Postal Service. Additionally, the files will show
the weights of each Handling Unit. 813    814    Delivery performance on a lane
level basis will be calculated as follows: 815    816    817    Total on-time
Handling Units, by lane, for the Operating Period, receiving a Delivery Scan 818
   819    Divided by 820    821    Total Handling Units, by lane, for the
Operating Period, receiving a Delivery Scan 822    823    824    Reduction of
Payment 825    If the calculated delivery performance is less than the delivery
performance requirement, the late D&R 826    tags will be ordered
chronologically by the RDT. The percentage of D&R tags corresponding to the 827
   difference between [*]% and the delivery performance requirement (i.e., [*]%
Day Network), [*]% 828    (Night Network) or [*]% (Peak Operating Period)) will
not be assessed a reduction in payment. The 829    remaining late D&R tags will
be assessed a reduction in payment as follows: 830    831   

a.      All Handling Units delivered up to thirty (30) minutes late will be
subject to a [*]% reduction of

832   

         the Transportation Payment.

833    834   

b.      All Handling Units delivered from thirty-one (31) minutes up to one (1)
hour to late will be

835   

         subject to a [*]% reduction of the Transportation Payment.

836    837   

c.      All Handling Units delivered 1 hour and one minute late or later will be
subject to a [*]%

838   

         reduction of the Transportation Payment.

839   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

Page 21 of 130

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Contract ACN-13-FX

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840    The reduction in payment will be based on a conversion of the weight of
the late Handling Units to 841    cubic feet by the applicable contract density
and will be applied at the base or the tier in which the late 842    delivery
occurred. 843    844    Handling Units that represent the amount of mail that
FedEx accepts in excess of 105% of the 845    Operating Period’s Planned
Capacity by Operating Day will not be assessed a reduction of payment 846   
under Part 1: Statement of Work Reduction of Payment or be taken into account
under Part 1: 847    Statement of Work Performance Requirements and Measurement.
848    849   

a.      Handling Units in excess of 105% of the Operating Period’s Planned
Capacity will be identified

850   

         by determining the actual volume, in cubic feet (weight of the Handling
Units divided by the

851   

         contract density for the applicable Operating Period), delivered each
day to each destination

852   

         that is in excess of 105% of the Planned Capacity for the relevant
destination.

853    854   

b.      In each instance, “volume in excess of 105%” will be the latest volume
to arrive as evidenced

855   

         by the delivery scans.

856    857    858    Performance Management 859    The aviation supplier and the
Postal Service will meet once a quarter (at a minimum) to discuss items 860   
such as the following: 861    862   

a.      Cost Control

863   

b.      Holiday Operations and Planning

864   

c.      Aviation Supplier Performance

865   

d.      Peak Season Planning

866   

e.      Quality

867   

f.       Ramp Operations

868   

g.      Reconciliation of Irregularities

869   

h.      Security

870   

i.       Technology Issues

871   

j.       Tender and Delivery Hygiene

872   

k.      Volume Planning

873   

l.       Other Pertinent Topics

874    875    876    Sustainability 877    The aviation supplier must provide
following sustainability metrics at the times specified below: 878    879   

a.      All greenhouse gas emission estimates that are attributed to the
transport of Postal Service

880   

         mail products via air and (if applicable) ground transport by the
aviation supplier.

881   

i.       Emissions in a standard unit – CO2e

882   

ii.      Total weight of Postal Service products contributing to the emissions
in the Calendar

883   

         Year.

884   

iii.    Total air miles travelled to transport the Postal Service products per
Calendar Year.

885   

iv.     High level summary describing methodology which could include the basis
for the

886   

         Postal Service emissions allocation such as space, cost, weight, number
of packages

887   

         or other methods used to derive numbers. For example, estimates based
on gallons

888   

         used, flight characteristics, or both.

889   

v.      Assurance letter of independent verification of Scope 1, 2, and 3 data.

890   

•    Scope 1: Emissions arising from when the aviation supplier burns fuel in
its

891   

aircraft or its owned buildings

892   

•    Scope 2: Emissions from purchased electricity or steam.

893   

•    Scope 3: Emissions arising from activities over which the aviation supplier

894   

has less control.

895   

 

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Contract ACN-13-FX

Part 1: Statement of Work

 

896   

b.      Fiscal Year (October through September) and Calendar Year (January
through December)

897   

         greenhouse gas emissions data to be received by the Postal Service no
later than three (3)

898   

         months after the close of the fiscal and calendar year.

899    900    The aviation supplier will convene a meeting with the Postal
Service no later thirty (30) days after 901    contract award to discuss high
level greenhouse gas emissions estimation methodologies and network 902   
boundaries. 903    904    The aviation supplier will hold quarterly meetings
with the Postal Service to discuss reporting 905    methodology developments,
boundaries and notification of estimation methodology or boundary 906   
changes. 907    908    909    Security 910    See Attachment 8: Investigative /
Security Protocol and Guidelines. 911    912    913    Postal Service Employees
Allowed Access 914    The aviation supplier shall allow escorted Postal
officials showing proper credentials access to all 915    buildings, field
areas, ground equipment being used to sort, stage, or transport mail under this
contract 916    or under any subcontract services performed under this contract.
Government regulations (e.g., 917    Transportation Security Administration)
will supersede this section. 918    919    The aviation supplier will allow
unescorted access to Postal Service employees stationed on the 920    aviation
supplier’s premises pending compliance with all required processes. Photography
or 921    videotaping will not be permitted except as outlined in the security
protocols. 922    923    924    Personnel Screening 925    In general, the
Postal Service accepts air carrier security program requirements set forth by
the 926    Transportation Security Administration (TSA). In addition to these,
the Postal Service also mandates 927    additional requirements. 928    929   
The Postal Service is aware that the aviation supplier must implement its human
resources programs 930    in accordance with certain state laws and that in that
respect there may be certain deviations to the 931    literal application of
some of the Postal Service requirements set forth herein. 932    933    In the
event the aviation supplier establishes that a state law prohibits it from
requesting from its 934    employees or prospective employees any or all of the
information requested in responses to questions 935    21a through 21e of PS
Form 2025, Contract Personnel Questionnaire, as required by 1.c below, or 936   
from certifying, as the result of a criminal records check, to any of the items
requested under 1.b, 937    Criminal History, below, the aviation supplier shall
be relieved of its contractual obligation to require 938    employees or
prospective employees to respond to the portions of those questions requesting
the 939    prohibited information or to provide that information as part of its
criminal records check. In these 940    situations, the Postal Service Security
Investigations Service Center (SISC) shall conduct the required 941    criminal
checks as outlined in 1.b. below. 942    943    To establish the existence and
the extent of the prohibitory effect of any such state law referenced 944   
above, the aviation supplier shall provide to the SISC documentary evidence
(including a copy of the 945    state law) demonstrating the stated prohibition.
The Postal Service’s concurrence about the 946    prohibitory nature of a state
law shall not be unreasonably withheld. 947    948    The Contracting Officer
may, in consultation with the aviation supplier and the U.S. Postal Inspection
949    Service, grant other appropriate deviations or implement alternate
processes to the standard U.S. 950    Postal Inspection Service requirements by
letter. 951    952    Applicability

 

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Part 1: Statement of Work

 

953    Individuals providing services to the Postal Service under this contract
(including aviation suppliers, 954    employees of aviation suppliers, and
subcontractors and their employees at all levels), hereinafter, 955   
“individuals,” who have been hired after the effective date of this contract and
whose duties will or 956    likely may involve handing the mail must obtain a
security clearance from the Postal Service, as 957    provided herein. Access to
the mail as defined by 3.a below is permitted as soon as the security 958   
clearance package has been submitted to the SISC in Memphis. 959    960    If
the aviation supplier commences a new operation (internally or with an aviation
supplier) for the 961    purpose of processing Postal volume, the employees
hired since the effective date of this contract will 962    be subject to
Personnel Screening. 963    964    Access to the mail is permitted as soon as
the security clearance package has been submitted to the 965    SISC in Memphis.
If the aviation supplier has ground handling services performed at air stops by
966    another aviation supplier (subcontractor), and if, to the best knowledge
of the prime aviation supplier, 967    that subcontractor is in compliance with
the provisions of this clause, the prime aviation supplier may 968    certify
that fact to the Contracting Officer in writing, and thereby be relieved of the
primary 969    responsibility for personnel screening. Prime aviation suppliers
are in all cases responsible for 970    meeting these screening requirements for
all persons having access to the mail who are their direct 971    employees. For
example, if ABC, Inc. is an aviation supplier, and it performs ground handling
services 972    at one or more air stops for CDE, Inc., CDE must certify in
writing that: 973    974   

I certify that at the following air stops ground handling services are being
performed by ABC,

975   

and that to the best of my knowledge, ABC is an aviation supplier of air
transportation services

976   

under contract number    . A listing of airports served by ABC is attached
hereto as follows.

977    978    Aviation suppliers must have clauses in their contracts with
subcontractors requiring adherence to the 979    Postal Service screening
procedures contained in this contract. 980    981   

1.      Requirements: The aviation supplier, when employing individuals who will
or are likely to

982   

handle the mail in the performance of their duties under this contract, must
provide the

983   

following documentation as early as possible to the Security Investigations
Services Center

984   

(SISC), 225 N. Humphreys Blvd., 4th floor, Memphis, Tennessee, 38161-0001 for
those

985   

individual aviation supplier employees who will or are likely to handle the mail
in the

986   

performance of their duties. (Form can be obtained by calling the SISC at (901)
747-7712 or

987   

by email at Meg@uspis.gov.)

988   

The items listed in sub-sections 1 through 4 and a through c below must be
completed prior to

989   

the employee being granted permission to handle mail. For purposes of this
requirement, the

990   

term “completed” means that all tasks have been done, and the required
submissions to the

991   

SISC in Memphis have been made.

992    993   

1.      Completed PS Form 2181-C. This form must be dated within 90 days of
receipt by

994   

the SISC.

995    996   

2.      PS Form 2025. Each item on the PS Form 2025 must be addressed.
Applicants

997   

must provide their complete residential address, including city, state, and
ZIP+4. The

998   

form must be signed and dated by the applicant within 90 days of receipt by the
SISC.

999    1000   

3.      The aviation supplier must obtain and provide to the SISC two original
fingerprint

1001   

cards (FD-258) for each applicant. The signature of the applicant and the
individual

1002   

taking the prints must be on each FD-258. In lieu of submitting fingerprint
cards, a

1003   

FBI rap sheet may be submitted, provided it is dated within 90 days of receipt
by the

1004   

SISC. The Postal Inspection Service will provide additional fingerprint cards
for

1005   

aviation supplier use. These additional forms may be obtained by calling the

1006   

Memphis office at (901) 747-7712 or via email at Meg@uspis.gov

 

 

1007

   1008   

4.      Certification and Transmittal Cover Sheet documenting Criminal History
records check

1009   

as required by subsection (b) below. The Certification and Transmittal cover
sheet

 

Page 24 of 130

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Part 1: Statement of Work

 

1010   

must include the administrative officer’s name, telephone number, facility name,
email

1011   

address and mailing address.

1012    1013   

The aviation supplier is required to maintain all certifications required in
sections a., b., and c

1014   

for the length of the contract.

1015    1016   

a.      Drug Screening: The aviation supplier must certify that individuals
providing service

1017   

under this contract have passed a screening test for those substances identified
by the

1018   

Substance Abuse and Mental Health Services Administration (SAMHSA) as the five
(5)

1019   

most abused substances which are cocaine, marijuana, amphetamine /

1020   

methamphetamine, opiates, and phencyclidine (PCP). The tests must be performed
by a

1021   

SAMHSA approved certified laboratory. The drug test must meet the cut-off levels

1022   

established by SAMHSA. All drug screening tests must be completed within ninety
(90)

1023   

days prior to having access to the mail since drug tests older than ninety (90)
days are

1024   

invalid and must be redone. The prime aviation suppliers and all subcontractors
must

1025   

maintain the name of the institution conducting the test and a document
indicating if the

1026   

employee passed or tested positive.

1027    1028   

b.      Criminal History: The aviation supplier must certify, based upon a
criminal records

1029   

check (a state records check) of each employee through local agencies (state,
county, or

1030   

city) where the applicant has resided and worked for the past five (5) years
(this may

1031   

require multiple checks for applicants who live in one location and work in
another

1032   

location, or for applicants who have moved within that time period), that each
individual:

1033    1034   

i.       Has not been convicted of a felony criminal violation in the past five
(5) years;

1035    1036   

ii.      Has not been convicted of serious criminal charges (e.g. murder, rape,
robbery,

1037   

burglary, physical assaults, weapons violations, or drug charges [felony or

1038   

misdemeanor]);

1039    1040   

iii.    Does not have any pending felony or serious criminal charges; and

1041    1042   

iv.     Is not on parole for or probation for any felony or serious criminal
charges.

1043    1044   

This will be documented on the Certification and Transmittal Cover Sheet. This
form is

1045   

provided under Personnel Security Administrative Instructions, and may be
reproduced by

1046   

the aviation supplier.

1047    1048   

c.      Citizenship: Certification of U.S. citizenship must be documented on PS
Form 2025,

1049   

Contract Personnel Questionnaire, or legal work status authorizing the
individual to work

1050   

in the United States is required. (I-9 Form, Employment Eligibility
Verification, is to be

1051   

used for non-citizens).

1052    1053   

2.      Processing:

1054   

a.      The Postal Service agrees to use reasonable efforts to insure that
security clearance

1055   

decisions are issued within thirty (30) days after the aviation supplier submits
the required

1056   

documents and information to the SISC. The Postal Service, however, cannot
guarantee

1057   

that processing will be complete within thirty (30) days due to circumstances
beyond its

1058   

control.

1059    1060   

b.      For each individual employed by the aviation supplier or any
subcontractor, the aviation

1061   

supplier will submit to the SISC:

1062   

•    Full name

1063   

•    Social security number

1064   

•    Drug screening data (1.a)

1065   

•    Criminal history certifications (1.b)

1066   

•    Both sets of fingerprints (1.c)

 

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Air Cargo Network

Contract ACN-13-FX

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1067   

•    Citizenship certifications (1.d)

1068    1069   

Upon receipt of the required documentation, the SISC will submit the fingerprint
cards

1070   

(1.c) to the Federal Bureau of Investigation, and perform a search of the
National Crime

1071   

Information Center (NCIC) Wants and Warrants and Inspection Service databases at
its

1072   

cost.

1073    1074   

c.      In cases where an individual business entity is predominant at a given
airport, the

1075   

Contracting Officer in consultation with the Inspection Service may approve the
receipt of

1076   

screening documents from that entity.

1077    1078   

d.      The aviation supplier shall maintain supporting documentation for the
drug screening

1079   

(1.a), criminal history inquiries (1.b), and citizenship verifications (1.d)
subject to review by

1080   

the Postal Service, for the life of this contract in accordance with its
internal procedures,

1081   

advising the Inspection Service SISC on the Certification and Transmittal Cover
Sheet.

1082    1083   

At the employee’s local station, aviation suppliers are only required to
maintain a copy of

1084   

the Certification and Transmittal Cover Sheet. The Certification and Transmittal
Cover

1085   

Sheet is provided under Personnel Security Administrative Instructions and may
be

1086   

reproduced by the aviation supplier, as needed.

1087    1088   

Aviation suppliers currently maintaining security screening files under existing
Postal

1089   

Service contracts shall continue to maintain those files.

1090    1091   

Submit all forms and certifications to:

1092    1093   

Memphis SISC

1094   

Security Investigations Service Center

1095   

225 North Humphreys Boulevard

1096   

Fourth Floor, South

1097   

Memphis, TN 38161-0008

1098    1099   

The Postal Service intends to make its best efforts to position itself to
eliminate the

1100   

requirement for its set of FD-258 forms, and other submissions to be determined,
through

1101   

cooperation with the Federal Aviation Administration, Transportation Security

1102   

Administration, and other agencies or associations to share relevant information
for its

1103   

regulatory purposes.

1104    1105   

3.      Access to the Mail – Screening Requirements:

1106   

“Access to the mail” refers to individuals who scan, transport, sort, load, and
unload mail to

1107   

and from ground equipment and to and from the aircraft. This includes employees
handling

1108   

sealed ULDs. This includes individuals who have direct supervisory duties in
directing the

1109   

transporting, sorting, loading, and unloading of mail to and from ground
equipment and

1110   

aircraft. Individuals providing services to the Postal Service under this
contract (including

1111   

aviation suppliers, employees of aviation suppliers, and subcontractors and
their employees at

1112   

any tier), hereinafter, “individuals,” who have access to the mail, must obtain
a security

1113   

clearance from the Postal Service before such access to the mail is granted.

1114    1115   

4.      Denial:

1116   

Persons who meet the following criteria are not permitted to have access to the
mail under this

1117   

contract:

1118    1119   

a.      An aviation supplier, subcontractor, or employee of an aviation supplier
or subcontractor

1120   

who has not received a security screening in accordance with the criteria listed
above

1121   

under Personnel Screening.

1122   

 

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Contract ACN-13-FX

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1123   

b.      An aviation supplier, subcontractor, or employee of an aviation supplier
or subcontractor

1124   

who has been convicted of, or is on probation or parole for, or under suspended
sentence

1125   

for assault, theft, or weapons charges or for the illegal use, possession, sale,
or transfer of

1126   

controlled substances during the past five (5) years.

1127    1128   

c.      An aviation supplier, subcontractor, or employee of an aviation supplier
or subcontractor

1129   

who has been convicted of any criminal felony violation during the past five (5)
years, who

1130   

is on parole, probation, or suspended sentence for commission of a criminal
felony during

1131   

the past five (5) years.

1132    1133   

d.      An aviation supplier, subcontractor, or employee of an aviation supplier
or subcontractor

1134   

who has ever been convicted of theft of mail or other Postal offense.

1135    1136   

e.      An aviation supplier, subcontractor, or employee of an aviation supplier
or subcontractor

1137   

who has an active warrant or is on probation or is on parole.

1138    1139   

f.       An aviation supplier, subcontractor, or employee of an aviation
supplier or subcontractor

1140   

who has any pending felony or serious criminal charges.

1141    1142   

g.      Any other circumstance that in the determination of the Postal Service
makes the

1143   

individual unfit to provide services under this contract.

1144    1145   

In the event an employee is disqualified under the above criteria, the aviation
supplier has the

1146   

responsibility to insure that the employee’s duties no longer involve handling
mail.

1147    1148   

5.      Appeal Process:

1149   

An individual may appeal a decision to deny access made by the Postal Inspection
Service

1150   

SISC by sending a letter to the Inspector In Charge, Security and Crime
Prevention,

1151   

Washington, DC, within three (3) weeks of the date of the denial letter. An
individual may not

1152   

handle the mail during the appeal process. The letter must contain the following
information:

1153    1154   

a.      A statement that reconsideration of the decision is requested and the
basis on which it is

1155   

sought.

1156    1157   

b.      Additional information on the appellant’s behalf.

1158    1159   

c.      A copy of the denial letter.

1160    1161   

6.      Training: The Postal Service may, but is not required to, provide
orientation / training for

1162   

aviation suppliers during the term of this contract to clarify security
clearance requirements,

1163   

processes, and procedures necessary to fully implement this program.

1164    1165    1166    Payment Procedures 1167    1168    Rates and Payment
General 1169    The aviation supplier will be compensated based upon properly
scanned ULDs and Handling Units. 1170    The payment for each ULD and Handling
Unit will be based on the network (i.e., Day or Night) to 1171    which the mail
is assigned by the Postal Service. This process will allow for automated
payment. 1172    1173    [*] 1174    1175    1176    1177    1178    Scan
Requirements 1179    All scan requirements listed below are specified in the
Scanning and Data Transmission section.

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

Page 27 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

1180    1181    Night Turn Scan Requirements 1182   

a.      Possession Scan of all ULDs and Handling Units at the origin

1183    1184   

b.      Delivery Scan of all ULDs and Handling Units delivered at destination

1185    1186    Day Turn Scan Requirements 1187   

a.      The aviation supplier will conduct a Possession Scan of all ULDs and
Handling Units at the

1188   

origin.

1189    1190   

b.      The aviation supplier will conduct a Nest Scan associating the Handling
Unit with a ULD at the

1191   

hub.

1192    1193   

c.      The aviation supplier will conduct a Delivery Scan of all ULDs and
Handling Units delivered at

1194   

destination.

1195    1196    The Hub Sort Scans will be paid in accordance with the pricing
listed in Attachment 10: Pricing for 1197    Handling Units sorted at the hub on
the Day Network for which scans are provided. Hub Sort Scans 1198    will not be
paid for Handling Units assigned to a Bypass ULD or for the Night Network. 1199
   1200    [*] 1201    1202    1203    1204    1205    1206    The base and tier
pricing from Attachment 10: Pricing will be applied to the volume measured in
each 1207    Operating Period as follows. Volume within the base will be paid at
the Base Rate. The portion of 1208    volume exceeding the base volume and
falling within the Tier 1 volume will be paid at the Tier 1 rate. 1209    A
similar incremental process will be applied to volume that falls within
subsequent tiers. 1210    1211    Payments will be made by Electronic Funds
Transfer (EFT). 1212    1213    [*] 1214    1215    1216    1217    The aviation
supplier will bill additional charges not covered within the automated payments
system on 1218    a weekly basis. For correct and sufficient invoices received
by noon Wednesday of a given week, the 1219    Postal Service will process them
so as to generate a payment by Wednesday, three (3) weeks 1220    following the
receipt of the invoice through the EFT process. 1221    1222    1223    Payment
Processing - Day Network - Per Cube 1224    1225    Invoicing 1226    All
invoices for the transportation of Handling Units or ULDs under this contract
will be paid by the 1227    cubic foot and payment will be based on completing
the required scans. 1228    1229    Mail Tendered in ULDs 1230    The Line Haul
rate for each ULD will be comprised of two components: Non-Fuel Line Haul and
Fuel 1231    Line Haul. The Non-Fuel Line Haul rate will include all of the
transportation and handling associated 1232    with a ULD. Hub Sort Scanning
rates are separate from the Non-Fuel Line Haul rate. 1233    1234    ULD cubic
feet will be paid at the agreed cubic feet size for each ULD type described in
Attachment 1235    10: Pricing. 1236   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

Page 28 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

1237    The cubic feet paid will be based on the Postal assigned ULD type. If
the Postal ULD type is missing, 1238    the aviation supplier’s ULD type will be
used for invoicing. Any discrepancies between the types of 1239    ULD processed
will be resolved during the Reconciliation Process. 1240    1241    The
transportation payment for mixed ULDs will be based on the applicable cubic feet
of the 1242    originating ULD. These transportation payments will be reduced
for Handling Units not receiving a 1243    Delivery Scan by converting the
weight of the Handling Units without a Delivery Scan at the correct 1244   
destination to cubic feet by the applicable contract density. 1245    1246   
The transportation payment for bypass ULDs will be based on the applicable cubic
feet of the 1247    originating ULD. These transportation payments will not be
made for Bypass ULDs without a Delivery 1248    Scan at the correct destination.
1249    1250    Recognizing operational inefficiencies filling the last ULD at
every location, the Postal Service will 1251    incorporate within the daily
invoice a daily credit of [*] cubic feet for each origin air stop per day. The
1252    rate used will be the applicable base or tier cubic foot rate used at
the beginning of the invoice day. 1253    1254    Mail Tendered from Surface
Trucks 1255    If mail is tendered to the aviation supplier from a defined truck
location as identified in Attachments 3 1256    and 4 at contract award, the
invoiced cubic feet will be calculated by dividing the Handling Unit’s 1257   
Postal Service assigned rounded weight by the applicable contract density. 1258
   1259    1260    Mail Tendered from Ad Hoc Trucks into the Aviation Supplier
Hub 1261    The aviation supplier will accept ad hoc trucks from the Postal
Service at the proposed hub locations. 1262    The Postal Service will
incorporate ad hoc truck payments in the weekly electronic payment. 1263    1264
   FedEx will accept up to a total of fifteen (15) Ad Hoc Trucks per day on the
Day Network at the 1265    Memphis Hub. 1266    1267   

a.      All ad hoc trucks must arrive at the Memphis Hub before 10:00 a.m. local
time and must be

1268   

coordinated with FedEx in advance. Required Delivery Time (RDT) will be
established in

1269   

accordance with Attachment 3, Operating Plan, Day Network contingent on the ad
hoc trucks

1270   

arriving at the Memphis Hub before 10:00 a.m. local time. Late arriving trucks
(after 10:00

1271   

a.m. local time) will be assigned an RDT based on arrival on the next
operational day. All

1272   

RDT’s will be adjusted to reflect the first FedEx operational scan at the
Memphis Hub.

1273    1274   

b.      Initial Payment for ad hoc trucks will be made in the amount of 3,000
cubic feet per truck on

1275   

an Operating Period basis, no later than 30 days after the last day of each
Operating Period.

1276   

Final payment for ad hoc trucks will be adjusted, if applicable, for any
reductions of payment

1277   

under Part 1: Statement of Work Reduction of Payment and will also be adjusted,
if applicable,

1278   

based upon the Day Turn Scan Requirements under contract section Payment
Procedures,

1279   

Rates and Payment General (with the exception that the volumes moving via ad hoc
trucks

1280   

will not require a Possession Scan). Any adjustments described here, if
applicable, will be

1281   

made through the reconciliation process.

1282    1283    Aviation Supplier Surface Transportation – Not Included in the
Transportation Payment 1284    The aviation supplier will include a separate
rate per mile for Highway Transportation in Attachment 1285    10: Pricing which
will be applied when the Postal Service requires the aviation supplier to
operate 1286    unplanned surface transportation of mail. 1287    1288    Hub
Sort Scan Charge 1289    The Postal Service will pay a Hub Sort Scan charge for
mail sorted and scanned at a hub per Handling 1290    Unit (i.e., D&R Tag) as
shown in Attachment 10: Pricing. This rate will not be subject to an increase
1291    for the full term of the contract. 1292   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

Page 29 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

1293    Handling Units sorted at a hub must receive a Hub Sort Scan for payment
purposes. The Postal 1294    Service will not pay a Hub Sort Scan charge for
sorts not supported by EDI scan information. The 1295    pieces scanned into a
tendered Bypass container are not eligible to receive Hub Sort Scan charges.
1296    1297    Re-Labeling Charge 1298    The Postal Service will pay an
additional charge to the aviation supplier for re-labeling Postal Service 1299
   Handling Units at the hub for which the D&R tag is missing or becomes
illegible. The Postal Service 1300    will also provide all equipment necessary
to perform this function. The re-labeling charge per Handling 1301    Unit is
shown in Attachment 10: Pricing. 1302    1303    This rate will not be subject
to an increase for the full term of the contract. 1304    1305    Payment to the
aviation supplier for the transport of re-labeled Handling Units will be based
upon data 1306    received from the Hub Scan plus (combined and matched with)
the Delivery Scan for the Handling 1307    Unit. An average weight per Handling
Unit will be established based upon the previous month’s data 1308    for
average weight per Handling Unit, and for Handling Units that are not properly
scanned due to 1309    conditions beyond the aviation supplier’s control. 1310
   1311    The average weight process is detailed in Attachment 15, Average
Weights. 1312    1313    The equipment to be supplied by the Postal Service for
this function will be listed in Attachment 6: 1314    Postal Furnished Property,
and will be covered by Clause 2-22, Postal Service Property. Attachment 1315   
6: Postal Furnished Property will be created upon successful installation of the
equipment. Upon 1316    reasonable advance notice to the aviation supplier, the
Postal Service shall be permitted to perform 1317    maintenance on any of the
equipment located in an aviation supplier’s facility listed in Attachment 6:
1318    Postal Service Furnished Property. 1319    1320    The Re-Labeling
Process is described in Attachment 16, Re-labeling / Type M Matching Process.
1321    1322    Fuel Adjustment 1323    There will be a monthly fuel adjustment
to the Fuel Line Haul rate. Each “month” is defined in 1324    Attachment 1:
Postal Service Operating Periods. The adjustment will become effective on the
first 1325    operating day of each operating period after contract
commencement. The adjustment may be 1326    upward or downward. 1327    1328   
The adjustment will be based on the U.S. Gulf Coast (USGC) prices for
Kerosene-type jet fuel 1329    reported by the U.S. Department of Energy for the
month that is two (2) months prior to the 1330    adjustment. The adjustment
will be calculated and applied monthly. 1331    1332    For example, assume the
Fuel Line Haul rate is $0.10. If the June 20XX USGC price for Kerosene- 1333   
type jet fuel is $2.68 per gallon and the July 20XX price is $3.00 per gallon,
then the adjustment for 1334    September XX would be calculated as follows:
1335    1336   

($3.00 / $2.68) = 1.12

1337   

1.12 x $0.10 = $0.11

1338    1339    The new Fuel Line Haul rate would be $0.11 per cubic foot. 1340
   1341    In August 20XX, if the USGC price is $2.70 per gallon, the
calculation for the October 20XX rate would 1342    be: 1343    1344   

($2.70 / $3.00) = 0.90

1345   

0.90 X $0.11 = $0.10 per cubic foot

1346    1347    This calculation will be rounded after the decimal to four
digits. 1348   

 

Page 30 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

1349    The proposal pricing should be based on the August 2012 U.S. Gulf Coast
Kerosene-type jet fuel 1350    reported by the U.S. Department of Energy ($3.156
per gallon). 1351    1352    Fuel will be adjusted for October 2013 based on the
August 2013 U.S. Gulf Coast Kerosene-type jet 1353    fuel reported by the U.S.
Department of Energy. 1354    1355    1356    Payment Processing - Night Network
- Per Pound 1357    1358    Invoicing 1359    All Handling Units tendered to the
aviation supplier for the Night Network will be paid by the pound and 1360   
payment will be based on required scanning. The weight will be derived from the
assigned rounded 1361    weight of the Handling Unit. The Non-Fuel Line Haul
rate will include all of the transportation and 1362    handling associated with
a Handling Unit. The Fuel Line Haul rate for the Night Network will not be 1363
   subject to a fuel adjustment. 1364    1365    Re-Labeling Charge 1366    The
Postal Service will pay an additional charge to the aviation supplier for
re-labeling Postal Service 1367    Handling Units for which the D&R tag is
missing or becomes illegible. The Postal Service will also 1368    provide all
equipment necessary to perform this function. The re-labeling charge per
Handling Unit is 1369    shown in Attachment 10: Pricing. This rate will not be
subject to an increase for the full term of the 1370    contract. 1371    1372
   Payment to the aviation supplier for transport of re-labeled Handling Units
will be based upon data 1373    received from the Hub Scan plus (combined and
matched with) the Delivery Scan for the Handling 1374    Unit. An average weight
per Handling Unit will be established based upon the previous month’s data 1375
   for average weight per Handling Unit and for Handling Units that are not
properly scanned due to 1376    conditions beyond the aviation supplier’s
control. 1377    1378    The equipment to be supplied by the Postal Service for
this function will be listed in Attachment 6: 1379    Postal Furnished Property,
and will be covered by Clause 2-22, Postal Service Property. Attachment 1380   
6 will be created upon successful installation of the equipment. Upon reasonable
advance notice to 1381    the aviation supplier, the Postal Service shall be
permitted to perform maintenance on any of the 1382    equipment located in an
aviation supplier’s facility listed in Attachment 6. 1383    1384    The payment
for the Night Network re-labeled Handling Units will be adjusted to reflect the
percentage 1385    of re-labeled Handling Units that have already been scanned.
This percentage of previously scanned 1386    Handling Units will be mutually
agreed upon by the Postal Service and the aviation supplier through an 1387   
audit sampling of re-labeled Handling Units. Contingency Handling Units are
excluded from this 1388    adjustment. 1389    1390    The average weight
process is detailed in Attachment 15, Average Weights. 1391    1392    1393   
Reconciliation Process 1394    Reconciliation of scanning and payment records
between the Postal Service and the aviation supplier 1395    will be conducted
in a scheduled meeting attended by the Postal Service and the aviation supplier
on 1396    an Operating Period basis not more than ninety (90) days after the
close of an Operating Period, or a 1397    time frame as agreed mutually by the
parties. The following procedures will be observed for the 1398   
reconciliation process: 1399    1400   

a.      All data exchanges between the aviation supplier and the Postal Service
for the reconciliation

1401   

process will be performed electronically and sent to specified mailboxes
operated by each

1402   

organization. Each file will have an individually specified transmission
interval.

1403   

 

Page 31 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 1: Statement of Work

 

1404   

b.      For all files exchanged between the aviation supplier and the Postal
Service, any changes to

1405   

layout or data definition must be communicated to the receiving party at a
minimum of sixty

1406   

(60) calendar days prior to implementation, or sooner if mutually agreed.

1407    1408   

c.      All file transfers must adhere to Postal Service Security and Privacy
rules.

1409    1410   

d.      Supplemental Charges / Assessments may be assessed each Operating
Period. The charges

1411   

shall include but not be limited to the following:

1412   

i.       Operating Period Volume Minimum and Contract Volume Minimum

1413   

ii.      Non-achievement of performance standards

1414    1415   

e.      Once the parties have mutually agreed on the Operating Period
reconciliation, both parties

1416   

agree that neither can re-open the Operating Period for further adjustments. By
mutually

1417   

agreeing to the Operating Period reconciliation, the parties thereby agree to
waive their right

1418   

to pursue a claim under the Contract Disputes Act based upon the Operating
Period

1419   

reconciliation.

1420    1421    In the event there is a catastrophic equipment or information
system failure, the aviation supplier will 1422    provide electronic files to
the Postal Service identifying all D&R Tags the aviation supplier scanned 1423
   that were lost. The aviation supplier will notify the Contracting Officer and
the COR as soon as the 1424    aviation supplier becomes aware of such a
failure. 1425    1426    If the Postal Service cannot produce D&R Tags, an
emergency contingency will be developed and 1427    implemented. Such a plan
will include specifications for operational and information technology 1428   
issues, as well as payment. 1429   

 

Page 32 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 3: Contract Clauses

 

1430    Part 3: Contract Clauses 1431    1432    1433    Clause B-1: Definitions
(March 2006) (Tailored) 1434    For purposes of this Contract, the following
terms shall have the following meanings: 1435    1436   

1.      Acceptable Dangerous Goods and Acceptable Hazardous Material: Those
articles or

1437   

substances which satisfy the air transportation requirements for the
transportation of

1438   

Hazardous Goods set forth in Chapter 601.10.0 of the Domestic Mail Manual and
which are

1439   

not required by applicable federal regulation to be accessible to crew members
during flight.

1440    1441   

2.      Advertisement: A free or paid mass or targeted communication under the
control of a party

1442   

intended for the general public or a specific potential or existing customer,
the ultimate

1443   

purpose of which is to promote the sale of such party’s products or services,
including, but not

1444   

limited to, television, radio and internet commercials, out-of-home ads (e.g.,
billboards, sports

1445   

stadium displays, transit signs), direct mail ads, print ads and free standing
inserts in

1446   

newspapers, magazines, and electronic media.

1447    1448   

3.      All Mail Due Aviation Supplier: A designated time predetermined when the
Postal Service

1449   

provides all mail to the aviation supplier as shown in Attachments 3: Operating
Plan, Day

1450   

Network, and Attachment 4: Operating Plan, Night Network

1451    1452   

4.      Aviation Supplier: The person or persons, partnership, or corporation
named that has been

1453   

awarded the contract.

1454    1455   

5.      Bypass Container: A ULD of mail designated for delivery to destination
Service Point on the

1456   

network which is transferred directly from one aircraft to another without going
through the sort

1457   

operation.

1458    1459   

6.      Con-Con: (Convoy and Conveyance) The concentration in a container of
Registered Mail for

1460   

single, daily, daylight, or authorized night air dispatch

1461    1462   

7.      Contract Volume Minimum: The volume (in cubic feet) per operational day,
averaged

1463   

across six (6) days per week, and measured across each Operating Period that is
guaranteed

1464   

by the Postal Service for the Day Network

1465    1466   

8.      Contracting Officer: The person executing this contract on behalf of the
Postal Service and

1467   

any other officer or employee who is a properly designated Contracting Officer;
the term

1468   

includes, except as otherwise provided in the contract, the authorized
representative of a

1469   

Contracting Officer acting within the limits of the authority conferred upon
that person.

1470    1471   

9.      Contracting Officer’s Representative (COR): A person who acts within the
limits of

1472   

authority delegated by the Contracting Officer.

1473    1474   

10.    Contingency Handling Units: Handling Units entered into the
transportation network without

1475   

an appropriate D&R tag. These Handling Units are subsequently processed at the
aviation

1476   

supplier’s hub through the re-labeling process.

1477    1478   

11.    Dangerous Goods (Hazardous Material): Articles or substances which are
capable of

1479   

posing a significant risk to health, safety or to property when transported by
air and which are

1480   

classified according to Section 3 (Classification) of the International Air
Transport Association

1481   

(IATA) Dangerous Good Regulations, regardless of variations, exceptions,
exemptions, or

1482   

limited quantity allowances.

1483    1484   

12.    Day Network: Planned network that operates Tuesday through Sunday
primarily for the

1485   

transportation of the Priority and First Class Mail.

1486   

 

Page 33 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 3: Contract Clauses

 

1487   

13.    Delivery: The hand-off, at a destination Service Point, of all mail to
the Postal Service in

1488   

accordance with contract requirements.

1489    1490   

14.    Delivery Scan: A scan performed by the aviation supplier that indicates
that the aviation

1491   

supplier has tendered volume to the Postal Service. In instances where a
Delivery Scan is

1492   

indicated by a combination of evidence of any scan performed by the aviation
supplier and a

1493   

CARDIT 3 from the THS indicating delivery of the Handling Unit to the third
party ground

1494   

handler, the time indicated for the latest ULD tendered on that Operating Day
will be used for

1495   

the purposes of determining service performance and associated payment
reductions

1496   

described in Part 1: Statement of Work; Performance Requirements and Measurement
and

1497   

Part 1: Statement of Work; Reduction of Payment.

1498    1499   

15.    D&R (Dispatch and Routing) Tag: Bar coded tag that identifies the origin
and destination

1500   

airports, mail class, Handling Unit weight, and the assigned network air
carrier.

1501    1502   

16.    Exception Sort Scan: A Hub Scan performed on mail Handling Units that
require re-labeling

1503   

due to a missing or unreadable D&R tag.

1504    1505   

17.    Express Mail: As defined in the U.S. Postal Service Domestic Mail Manual.

1506    1507   

18.    Failure to Load: A failure to accept and load mail as specified in the
contract.

1508    1509   

19.    Failure to Protect: Is a failure to protect and safeguard mail from
depredation, rifling,

1510   

inclement weather, mistreatment, or other hazard while in the aviation
supplier’s control.

1511    1512   

20.    Failure to Protect Postal Service Equipment: A failure to protect, return
or safeguard

1513   

Postal Service provided equipment. This includes MTE and Postal provided
scanning

1514   

equipment (if supplied by the Postal Service).

1515    1516   

21.    First-Class Mail: As defined in the U.S. Postal Service Domestic Mail
Manual.

1517    1518   

22.    Feeder: An aircraft normally used for local transport (for carriage of
cargo and / or containers)

1519   

to and from locations not scheduled to be serviced by primary aircraft from a
hub, directly

1520   

connecting these locations to a hub.

1521    1522   

23.    Ground Handling: Handling of mail, including unloading of mail from
aircraft or ground

1523   

vehicles, drayage, staging of mail, and loading of mail on receiving aircraft or
ground vehicles.

1524    1525   

24.    Handling Unit: A piece of mail (an outside) or a receptacle (such as
loose sacks, pouches,

1526   

trays, flat tubs) that contains multiple pieces of mail which is individually
processed.

1527    1528   

25.    Hub: A central sort facility that supports multiple markets via air and
ground networks on a

1529   

regional or national level by means of connecting flights and ground
transportation.

1530    1531   

26.    Hub Sort Scan: A scan performed by the aviation supplier at a hub
location.

1532    1533   

27.    Line Haul: Transporting mail by air between origin and destination
locations.

1534    1535   

28.    Live Animals: Animals accepted by the Postal Service in accordance with
Chapter 601.9.3 of

1536   

the Domestic Mail Manual.

1537    1538   

29.    Mail: Product that carries U.S. postage and the receptacles in which it
is tendered for

1539   

transportation. The term includes supplies and empty mail transportation
equipment of the

1540   

U.S. Postal Service.

1541    1542   

30.    Mail Bags: Postal Service bags which are used by the Postal Service in
the transportation of

1543   

mail.

 

Page 34 of 130

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Air Cargo Network

Contract ACN-13-FX

Part 3: Contract Clauses

 

1544    1545   

31.    Mis-delivered: Any mail delivered to the wrong destination. This
includes, but is not limited

1546   

to, mail placed in the wrong ULD, ULDs loaded onto an incorrect flight or truck,
and ULDs

1547   

incorrectly placarded.

1548    1549   

32.    Mixed Container: A Unit Load Device (ULD) containing mail for multiple
destinations that

1550   

requires sortation at the aviation supplier hub.

1551    1552   

33.    Nest Scan: The scan that associates the Handling Unit with the ULD (air
container).

1553    1554   

34.    Night Network: Planned network that operates Monday through Friday,
primarily for the

1555   

transportation of Express Mail.

1556    1557   

35.    Operating Period: A scheduled period ranging from four (4) to five (5)
weeks as agreed

1558   

between the Postal Service and aviation supplier.

1559    1560   

36.    Operating Period Volume Minimum: The volume minimum resulting from the
Planned

1561   

Capacity established through the Ordering Process for the Day and Night
Networks.

1562    1563   

37.    Overflow Mail: Mail that is tendered in excess of the Planned Capacity.

1564    1565   

38.    Outsides: Individual mail piece, with dimensions no greater than 108
inches in combined

1566   

length and girth and with no single dimension greater than 84 inches which is
not otherwise

1567   

containerized and must be processed as a Handling Unit.

1568    1569   

39.    Package: Any box or envelope that is accepted by the Postal Service for
delivery to a

1570   

consignee.

1571    1572   

40.    Payment Week: The period each week of an Operating Period between 00:00
Saturday and

1573   

23:59 Friday.

1574    1575   

41.    Perishables: Those items which are susceptible to decay, spoilage or
destruction.

1576    1577   

42.    Planned Capacity: Volume that the parties have agreed to by way of the
Ordering Process

1578   

for the Day and Night Networks.

1579    1580   

43.    Possession Scan: A scan performed by the aviation supplier that indicates
the aviation

1581   

supplier has accepted the volume from the Postal Service.

1582    1583   

44.    Priority Mail: Priority Mail and First-Class zone rated (Priority) mail
as defined in the U.S.

1584   

Postal Service Domestic Mail Manual, Chapter 3, Section 314.

1585    1586   

45.    Registered Mail: A mail piece which is mailed in accordance with the
requirements of

1587   

Chapter 501.2.0 of the Domestic Mail Manual. Registered Mail provides added
protection for

1588   

valuable or important mail. Registered Mail provides a receipt to the sender,
special security

1589   

between shipment points, a record of acceptance and delivery maintained by the
Postal

1590   

Service and, at the option of the mailer and for an additional fee, indemnity in
case of loss or

1591   

damage.

1592    1593   

46.    Re-Possessed: Regain possession of assigned mail.

1594    1595   

47.    Required Delivery Time (RDT): The latest delivery time to the Postal
Service as indicated in

1596   

Attachment 3: Operating Plan, Day Network, and Attachment 4: Operating Plan,
Night

1597   

Network.

1598   

 

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1599   

48.    Service Point: The physical location at which the aviation supplier must
hand-off mail to the

1600   

Postal Service or its duly appointed agent as specified in Attachment 3:
Operating Plan, Day

1601   

Network, and Attachment 4: Operating Plan, Night Network.

1602    1603   

49.    Tender: The drop-off, at an origin Service Point, of mail assigned by the
Postal Service to the

1604   

aviation supplier.

1605    1606   

50.    Tender Point: The physical location at which the Postal Service or its
duly appointed agent

1607   

provides mail to the aviation supplier.

1608    1609   

51.    Tender Time: The latest time at which the aviation supplier is required
to accept mail from

1610   

the Postal Service at an origin Service Point in accordance with contract
requirements.

1611    1612   

52.    Terminal Handling: The receipt, scanning, sorting, delivery and / or tug
and dolly

1613   

transportation of mail tendered under this contract.

1614    1615   

53.    Trans Log File: The Postal Service data file that contains, for each D&R
Tag, the actual

1616   

weight, origin, and destination market for each Handling Unit.

1617    1618   

54.    Transportation Payment:: Four items are included in the Transportation
Payment:

1619   

a.      Non-Fuel Line Haul

1620   

b.      Fuel Line Haul

1621   

c.      Aircraft Ground Handling

1622   

d.      Scanning

1623    1624   

55.    Trucking Location: Those Service Points to which mail volume is
transported via highway.

1625    1626   

56.    Unit Load Device (ULD): Airline container or pallet provided by the
aviation supplier

1627    1628    1629    Clause B-3: Contract Type (March 2006) (Tailored) 1630
   This Contract is a fixed-price, indefinite quantity with adjustments contract
for the purchase of 1631    commercial services pursuant to 39 Code of Federal
Regulations, Part 601 et seq. 1632    1633    This is not a requirements-type
contract. 1634    1635    1636    Clause B-9: Claims and Disputes (March 2006)
(Tailored) 1637   

a.      This contract is subject to the Contract Disputes Act of 1978 (41 U.S.C.
601-613) (“the Act” or

1638   

“CDA”).

1639    1640   

b.      Except as provided in the Act, all disputes arising under or relating to
this contract must be

1641   

resolved under this clause.

1642    1643   

c.      “Claim,” as used in this clause, means a written demand or written
assertion by one of the

1644   

contracting parties seeking, as a matter of right, the payment of money in a sum
certain, the

1645   

adjustment or interpretation of contract terms, or other relief arising under or
relating to this

1646   

contract. However, a written demand or written assertion by the aviation
supplier seeking the

1647   

payment of money exceeding $100,000 is not a claim under the Act until certified
as required

1648   

by subparagraph d.2 below. A voucher, invoice, or other routine request for
payment that is

1649   

not in dispute when submitted is not a claim under the Act. The submission may
be converted

1650   

to a claim under the Act by complying with the submission and certification
requirements of

1651   

this clause, if it is disputed either as to liability or amount is not acted
upon in a reasonable

1652   

time.

1653    1654   

d.      

 

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1655   

1.      A claim by the aviation supplier must be made in writing and submitted
to the

1656   

Contracting Officer for a written decision. A claim by the Postal Service
against the

1657   

aviation supplier is subject to a written decision by the Contracting Officer.

1658    1659   

2.      For aviation supplier claims exceeding $100,000, the aviation supplier
must submit

1660   

with the claim the following certification:

1661    1662   

“I certify that the claim is made in good faith, that the supporting data are

1663   

accurate and complete to the best of my knowledge and belief, that the

1664   

amount requested accurately reflects the contract adjustment for which the

1665   

aviation supplier believes the Postal Service is liable, and that I am duly

1666   

authorized to certify the claim on behalf of the aviation supplier.”

1667    1668   

3.      The certification may be executed by any person duly authorized to bind
the aviation

1669   

supplier with respect to the claim.

1670    1671   

e.      For aviation supplier claims of $100,000 or less, the Contracting
Officer must, if requested in

1672   

writing by the aviation supplier, render a decision within 60 days of the
request. For aviation

1673   

supplier-certified claims over $100,000, the Contracting Officer must, within 60
days, decide

1674   

the claim or notify the aviation supplier of the date by which the decision will
be made.

1675    1676   

f.       The Contracting Officer’s decision is final unless the aviation
supplier appeals or files a suit as

1677   

provided in the Act.

1678    1679   

g.      When a CDA claim is submitted by or against an aviation supplier, the
parties shall make a

1680   

good faith attempt to resolve the dispute, including an exchange of relevant
information toward

1681   

a mutual resolution. Accordingly, by mutual consent, the parties may agree to
use an

1682   

alternative dispute resolution (ADR) process to assist in resolving the claim. A
certification as

1683   

described in d (2) of this clause must be provided for any claim, regardless of
dollar amount,

1684   

before ADR is used. If either party declares the matter to be at an impasse, the
dispute will be

1685   

resolved through the CDA process as contemplated by Clause B-9.

1686    1687   

h.      The Postal Service will pay interest in the amount found due and unpaid
from:

1688   

1.      The date the Contracting Officer receives the claim (properly certified,
if required); or

1689    1690   

2.      The date payment otherwise would be due, if that date is later, until
the date of

1691   

payment.

1692    1693   

i.       Simple interest on claims will be paid at a rate determined in
accordance with the Interest

1694   

clause.

1695    1696   

j.       The aviation supplier must proceed diligently with performance of this
contract, pending final

1697   

resolution of any request for relief, claim, appeal, or action arising under the
contract

1698   

regardless of the initiating party, and comply with any decision of the
Contracting Officer.

1699    1700    1701    Clause B-10: Pricing of Adjustments (March 2006)
(Tailored) 1702    When costs are a factor in determining any contract price
adjustment under the Changes clause, the 1703    process set forth in Clause
4-1.c will be followed. For any other provision of this contract, the parties
1704    agree to use the process set forth in Attachment 10: Pricing and in the
Payment Processing sections 1705    of Part 1 for negotiating the adjustment.
1706    1707    1708    Clause B-15: Notice of Delay (March 2006) (Tailored)
1709    Immediately upon becoming aware of any difficulties that might delay
deliveries under this contract, 1710    the aviation supplier will notify the
Postal Service in writing. The notification must identify the

 

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1711    difficulties, the reasons for them, and the estimated period of delay
anticipated. Failure to give notice 1712    may preclude later consideration of
any request for an extension of contract time. 1713    1714    1715    Clause
B-22: Interest (March 2006) (Tailored) 1716    The Postal Service will pay
interest on late payments and unearned prompt payment discounts in 1717   
accordance with the Prompt Payment Act, 31 U.S.C. 3901 et. seq., as amended by
the Prompt 1718    Payment Act Amendments of 1988, P.L. 100-496. The aviation
supplier will pay interest on any 1719    payment to the Postal Service at a
rate equivalent to the prevailing Contract Disputes Act interest rate. 1720   
1721    1722    Clause B-25: Advertising of Contract Awards (March 2006) 1723   
Except with the Contracting Officer’s prior approval, the aviation supplier
agrees not to refer in its 1724    commercial advertising to the fact that it
was awarded a Postal Service contract or to imply in any 1725    manner that the
Postal Service endorses its products. 1726    1727    1728    Clause B-30:
Permits and Responsibilities (March 2006) (Tailored) 1729    The aviation
supplier is responsible, without additional expense to the Postal Service, for
obtaining 1730    any necessary licenses and permits, and for complying with any
applicable federal, state, and 1731    municipal laws, codes, and regulations in
connection with the performance of the contract. The 1732    aviation supplier
is responsible for all damage to persons or property, including environmental
damage 1733    that occurs as a result of its omission(s) or negligence. While
in performance of the contract, the 1734    aviation supplier must take proper
safety and health precautions to protect the work, the workers, the 1735   
public, the environment, and the property of others. 1736    1737    1738   
Clause B-39: Indemnification (March 2006) (Tailored) 1739    The aviation
supplier must save harmless and indemnify the Postal Service and its officers,
agents, 1740    representatives, and employees from all claims, losses, damage,
actions, causes of action, expenses, 1741    and/or liability resulting from,
brought forth, or on account of any personal injury or property damage 1742   
received or sustained by any person, persons, or property growing out of,
occurring, or attributable to 1743    any work performed under or related to
this contract, resulting in whole or in part from negligent acts or 1744   
omissions of the aviation supplier, any subcontractor of the aviation supplier,
or any employee, agent, 1745    or representative of the aviation supplier or of
the aviation supplier’s subcontractor. 1746    1747    The Postal Service must
save harmless and indemnify the aviation supplier and its officers, agents, 1748
   representatives, and employees from all claims, losses, damage, actions,
causes of action, expenses, 1749    and / or liability resulting from, brought
forth, or on account of any personal injury or property damage 1750    received
or sustained by any person, persons, or property growing out of, occurring, or
attributable to 1751    any work performed under or related to this contract,
resulting in whole or in part from negligent acts or 1752    omissions of the
Postal Service, or any employee, agent, or representative of the Postal Service.
1753    1754    1755    Clause B-45: Other Contracts (March 2006) (Tailored)
1756    The Postal Service may award other contracts for additional work, and
the aviation supplier must 1757    cooperate fully with the other aviation
suppliers and Postal Service employees. The aviation supplier 1758    must not
commit or permit any act that will interfere with the performance of work by any
other aviation 1759    supplier or by Postal Service employees. 1760    1761   
1762    Clause B-65: Adjustments to Compensation (March 2006) (Tailored) 1763   
Contract compensation may be adjusted, from time to time, by mutual agreement of
the aviation 1764    supplier and the Contracting Officer. No adjustment to
compensation will be made for changes arising 1765    from Clause 9-10: Service
Contract Act or from Clause 9-12: Fair Labor Standards Act and Service

 

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1766    Contract Act – Price Adjustment. Adjustments in compensation pursuant to
this clause shall be 1767    memorialized by formal modification to the
contract. All negotiations between the parties shall be 1768    conducted with
respect to the implied covenant of good faith and fair dealing. 1769   

 

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1770    1771    Clause B-69: Events of Default (March 2006) (Tailored) 1772 1773
1774    The aviation supplier’s right to perform this contract is subject to
termination, in whole or in part, in the
event of any of the following events of default. 1775 1776   

a.      The aviation supplier’s failure to perform service according to the
terms of the contract;

1777 1778 1779   

b.      If the aviation supplier has been administratively determined to have
violated Postal laws and
regulations and other laws related to the performance of the service;

1780 1781 1782   

c.      Failure to follow the instructions of the Contracting Officer that fall
within the scope of the
contract;

1783 1784 1785 1786 1787   

d.      If the aviation supplier transfers or assigns his contract, except as
authorized herein, or
sublets the whole or a portion of this contract contrary to the applicable
provisions of the U.S.
Postal Service Supplying Principles and Practices or without any required
approval of the
Contracting Officer;

1788 1789 1790   

e.      If the aviation supplier combines to prevent others from proposing for
the performance of
Postal Service contracts;

1791 1792 1793 1794 1795   

f.       If the aviation supplier or corporate officer has been or is, during
the term of the contract,
convicted of a crime affecting his or her reliability or trustworthiness as a
mail transportation
aviation supplier, such as any form of fraud or embezzlement that has impacted
the Postal
Service or the U.S. Government;

1796 1797 1798 1799   

g.      If at any time the aviation supplier, its principal owners, corporate
officers or personnel are
disqualified by law or regulation from performing services under this contract,
and upon notice
thereof, the aviation supplier fails to remove any such disqualification;

1800 1801 1802   

h.      If the aviation supplier fails to provide any notification of a change
in corporate officers which
this contract may require; or

1803 1804 1805   

i.       If the aviation supplier materially breaches any other requirement or
clause of this contract.

1806 1807    Clause B-75: Accountability of the Aviation Supplier (Non-Highway)
(March
2006) (Tailored) 1808 1809 1810 1811 1812   

a.      The aviation supplier shall supervise its operations and the operations
of its subcontractors
that provide services under this contract personally or through representatives.
The aviation
supplier or its supervising representatives must be easily accessible in the
event of
emergencies or interruptions in service.

1813 1814 1815 1816 1817 1818 1819 1820   

b.      In all cases, the aviation supplier shall be liable to the Postal
Service for the Postal Service’s
damages if mail is subject to loss, rifling, damage, wrong delivery,
depredation, and other
mistreatment while in the custody and control of the aviation supplier or its
subcontractors.
The aviation supplier shall also be accountable and answerable in damages for
the faithful
performance of all other obligations assumed under this contract, whether or not
it has
entrusted part or all of its performance to another, except for any failure to
perform that is
excused by the Force Majeure clause of this contract.

1821   

c.      The aviation supplier shall faithfully account for and deliver to the
Postal Service all:

1822   

1.      Mail,

1823   

2.      Moneys, and

1824 1825   

3.      Other property of any kind belonging to or entrusted to the care of the
Postal Service,
that come into the possession of the aviation supplier during the term of this
contract.

 

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1826    1827   

d.      The aviation supplier shall, promptly upon discovery, refund (i) any
overpayment made by the

1828   

Postal Service for service performed, or (ii) any payment made by the Postal
Service for

1829   

service not rendered.

1830       1831       1832    Clause B-77: Protection of the Mail (Non-Highway)
(March 2006) (Tailored) 1833    The aviation supplier must protect and safeguard
the mail from loss, theft, or damage while it is in the 1834    aviation
supplier’s custody or control, and prevent unauthorized persons from having
access to the 1835    mail.    1836       1837   

a.      Classification of Irregularities

1838   

The following classifications of irregularities are those that preclude the
Postal Service from

1839   

accomplishing its mission. The damage caused from these irregularities result in
actual

1840   

damage and degradation to its brand, and therefore, is associated with
liquidated damages as

1841   

stated:

   1842       1843   

1.      Failure to Protect

   1844   

Failure to protect the mail consists of: failure to protect or safeguard the
mail from

1845   

inclement weather, from damage caused by the mechanized sort, from acts of the

1846   

aviation supplier’s employees or contractors, and from loss, depredation, or
other

1847   

hazards while in the control or custody of the aviation supplier.

1848       1849   

2.      Theft of Mail

   1850   

The theft of mail can cause immeasurable damage to the Postal Service, both in

1851   

terms of actual economic loss to our customers and to the competitive standing
of our

1852   

products and services. The aviation supplier will support law enforcement
efforts to

1853   

prevent theft of mail, and will support enforcement officials in the
apprehension of

1854   

those who may be perpetrating such crimes.

1855       1856   

b.      Damages and Liquidated Damages

1857   

The following liquidated damages for damaged and unprotected mail are applicable
to the

1858   

associated classifications of irregularities:

1859       1860   

1.      Damaged and Unprotected Mail

   1861   

Liquidated damages may be assessed for damaged and unprotected mail. For

1862   

purposes of this section, damaged mail will consist of mail pieces whether
inside or

1863   

outside of Postal Service MTE. This category includes but may not be limited to:

1864       1865   

i.       Failure to Protect – Causing Damage to Mail

1866   

Failure to protect causing physical damage to the U.S. Mail or MTE for which

1867   

there may be damage assessed equal to the actual costs incurred by the

1868   

Postal Service necessary to remedy the situation and forward the mail onward

1869   

to its next processing or delivery operation. Such actual costs may include

1870   

items such as administrative time at an appropriate hourly rate for

1871   

documenting the irregular condition and implementing the damage, labor time

1872   

used to repossess the mail, unpack, sort, dry, repack / repackage, and re-

1873   

dispatch to a subsequent destination or processing operation.

1874       1875   

If actual damages are not ascertainable, a liquidated damage may be

1876   

assessed as follows, taking into account the actual damage that may typically

1877   

result from such situations:

1878       1879   

Per Letter Tray:

   [*] per letter tray 1880   

Per Flat Tub:

   [*] per flat tub 1881   

Per Mail Sack or Pouch:

   [*] per sack or pouch 1882   

Per Outside Parcel:

   [*] per piece

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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1883       1884   

ii.      Failure to Protect - Dropped or Abandoned Pouch or Piece

1885   

When U.S. Mail is discovered unprotected in an unsecured location or on the

1886   

airport ramp, Liquidated Damages may be assessed at $50.00 per incident.

1887    1888   

c.      Investigative Costs for Theft of Mail

1889   

In cases where a mail theft is committed by the aviation supplier’s or its
subcontractor’s

1890   

personnel, actual investigative costs to the U.S. Postal Inspection Service
and/or the Office of

1891   

the Inspector General may be assessed as actual damages. These costs will be
reasonably

1892   

determined and may begin accruing only when a specific investigation begins on
the basis of

1893   

probable cause. The costs of routine surveillance not associated with a specific
theft or series

1894   

of thefts will not be assessed. In addition to allocable investigative expenses,
the Postal

1895   

Service may assess actual damages for loss of product value resulting from
insurance claims

1896   

where payouts to postal customers can be traced to the incident(s).

1897    1898   

In addition to the above, in cases where mail theft occurs and the Postal
Service determines

1899   

that the aviation supplier’s failure to properly execute the mail handling
employee screening

1900   

requirements set forth in the Contract was a proximate cause of the theft, and
that by reason

1901   

of the theft it is necessary to conduct a complete audit of the aviation
supplier’s adherence to

1902   

the screening requirements with respect to the employment of other employees
subject to

1903   

those requirements, the Postal Service may assess an administrative damage in
the amount

1904   

of $5,000 in lieu of actual costs associated with that audit.

1905    1906   

Depending upon the circumstances of the incident, the Vice President, Network
Operations, in

1907   

consultation with the Postal Inspection Service or Office of the Inspector
General, and the

1908   

Contracting Officer, may determine that damages pursuant to this section are not
appropriate,

1909   

and may waive all or a portion of the amounts that may otherwise be due the
Postal Service

1910   

hereunder. Factors such as the seriousness of the misconduct, the aviation
supplier’s level of

1911   

cooperation in investigations, implementing corrective actions, and efforts
directed at loss

1912   

recovery will be considered in reaching that determination.

1913    1914    1915    Clause B-80: Laws and Regulations Applicable (March
2006) (Tailored) 1916    This contract and the services performed under it are
subject to all applicable federal, state, and local 1917    laws and
regulations. The aviation supplier assumes sole responsibility to faithfully
discharge all 1918    duties and obligations imposed by such laws and
regulations, and shall obtain and pay for all permits, 1919    licenses, and
other authorities required to perform this contract. The aviation supplier shall
hold 1920    harmless, save, and defend the Postal Service from any consequence
of the aviation supplier’s failure 1921    to abide by all applicable federal,
state, and local laws and regulations (including but not limited to 1922   
regulations promulgated by the DOL and IRS) relating to the contract and
throughout the term of the 1923    contract and any subsequent renewal periods.
1924    1925    1926    Clause B-81: Information or Access by Third Parties
(March 2006) (Tailored) 1927    The Postal Service retains exclusive authority
to release any or all information about mail matter in the 1928    custody of
the aviation supplier and to permit access to that mail in the custody of the
aviation 1929    supplier. All requests by non-postal individuals for
information about mail matter in the custody of the 1930    aviation supplier or
for access to mail in the custody of the aviation supplier must be referred to
the 1931    Contracting Officer or his or her designee. 1932    1933    1934   
Clause B-82: Access by Officials (March 2006) (Tailored) 1935    The aviation
supplier shall deny access to the cargo compartment of aircrafts or a vehicle
containing 1936    mail therein to state or local officials except at a postal
facility or in the presence of a postal employee 1937    or a Postal Inspection
Service officer, unless to prevent immediate damage to the aircraft, vehicle, or
1938    their contents. If authorized Federal law enforcement seeks access to
the cargo compartment of

 

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1939    aircrafts or vehicles contained mail therein, the aviation supplier
shall notify the Postal Inspection 1940    Service before permitting access,
unless to prevent immediate damage to the aircraft, vehicle, or their 1941   
contents. 1942    1943    1944    Clause 1-1: Privacy Protection (July 2007)
1945    In addition to other provisions of this contract, the aviation supplier
agrees to the following: 1946   

a.      Privacy Act. If the aviation supplier operates a system of records on
behalf of the Postal

1947   

Service, the Privacy Act (5 U.S.C. 522a) and Postal Service regulations at 39
CFR Parts 266-

1948   

267 apply to those records. The aviation supplier is considered to operate a
system of

1949   

records if it manages records (including collecting, revising, or disseminating
records) from

1950   

which information is retrieved by the name of an individual or by some number,
symbol, or

1951   

other identifier assigned to the individual. The aviation supplier agrees to
comply with the Act

1952   

and the Postal Service regulations in designing, developing, and operating the
system of

1953   

records, including ensuring that records are current and accurate for their
intended use, and

1954   

incorporating adequate safeguards to prevent misuse or improper disclosure of
personal

1955   

information. Violations of the Act may subject the violator to criminal
penalties.

1956    1957   

b.      Customer or Employee Information. If the aviation supplier has access to
Postal Service

1958   

customer or employee information, including address information, whether
collected online or

1959   

offline by the Postal Service or by a aviation supplier acting on its behalf,
the aviation supplier

1960   

must comply with the following:

1961    1962   

1.      General. With regard to the Postal Service customer information to which
it has access

1963   

pursuant to this contract, the aviation supplier has that access as an agent of
the Postal

1964   

Service and must adhere to its postal privacy policy at

1965   

www.usps.com/common/docs/privpol.htm.

1966    1967   

2.      Use, Ownership, and Nondisclosure. The aviation supplier may use Postal
Service

1968   

customer or employee information solely for purposes of this contract, and may
not collect

1969   

or use such information for non-Postal Service marketing, promotion, or any
other

1970   

purpose without the prior written approval of the Contracting Officer. The
aviation supplier

1971   

must restrict access to such information to those employees who need the
information to

1972   

perform work under this contract, and must ensure that each such employee
(including

1973   

subcontractors’ employees) sign a nondisclosure agreement, in a form suitable to
the

1974   

Contracting Officer, prior to being granted access to the information. The
Postal Service

1975   

retains sole ownership and rights to its customer or employee information.
Unless the

1976   

contract states otherwise, upon completion of the contract, the aviation
supplier must turn

1977   

over all Postal Service customer or employee information in its possession to
the Postal

1978   

Service, and must certify that no Postal Service customer or employee
information has

1979   

been retained unless otherwise authorized in writing by the Contracting Officer.

1980    1981   

3.      Security Plan. When applicable, and unless waived in writing by the
Contracting Officer,

1982   

the aviation supplier must work with the Postal Service to develop and implement
a

1983   

security plan that addresses the protection of customer or employee information.
The

1984   

plan will be incorporated into the contract and followed by the aviation
supplier, and must,

1985   

at a minimum, address notification to the Postal Service of any security breach.
If the

1986   

contract does not include a security plan at the time of contract award, it must
be added

1987   

within 60 days after contract award.

1988    1989   

4.      Breach Notification. If there is a breach of any nature in the security
of Postal Service

1990   

data, including customer or employee data, the aviation supplier must follow the
breach

1991   

notification requirements included in the security plan discussed in (3) above.
The aviation

1992   

supplier will be required to follow Postal Service policies regarding breach
notification to

1993   

customers and/or employees.

1994   

 

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1995   

5.      Legal Demands for Information. If a legal demand is made for Postal
Service customer or

1996   

employee information (such as by subpoena), the aviation supplier must
immediately

1997   

notify the Contracting Officer and the nearest office of the Postal Inspection
Service. After

1998   

notification, the Postal Service will determine whether and to what extent to
comply with

1999   

the legal demand. Should the Postal Service agree to or unsuccessfully resist a
legal

2000   

demand, the aviation supplier may, with the written permission of the
Contracting Officer,

2001   

release the information specifically demanded.

2002    2003   

c.      Online Assistance. If the aviation supplier assists in the design,
development, or operation of

2004   

a Postal Service customer Web site, or if it designs or places an ad banner,
button, or link on

2005   

a Postal Service Web site or any Web site on the Postal Service’s behalf, the
aviation supplier

2006   

must comply with the limitations in subparagraph b (1) above relating to ad
banners, buttons,

2007   

or links, and the use of cookies, web beacons, or other web analysis tools.
Exceptions to

2008   

these limitations require the prior written approval of the Contracting Officer
and the Postal

2009   

Service’s chief privacy officer.

2010    2011   

d.      Marketing E-Mail. If the aviation supplier assists the Postal Service in
conducting a marketing

2012   

e-mail campaign, the aviation supplier does so as an agent of the Postal Service
and must

2013   

adhere to the Postal Service policies set out in Postal Service Management
Instruction AS-

2014   

350-2004-4, Marketing E-mail. Aviation suppliers wishing to conduct marketing
email

2015   

campaigns to postal employees must first obtain the prior written approval of
the Contracting

2016   

Officer.

2017    2018   

e.      Audits. The Postal Service may audit the aviation supplier’s compliance
with the requirements

2019   

of this clause, including through the use of online compliance software.

2020    2021   

f.       Indemnification. The aviation supplier will indemnify the Postal
Service against all liability

2022   

(including costs and fees) for damages arising out of violations of this clause.

2023    2024   

g.      Flow-down. The aviation supplier will flow this clause down to
subcontractors that would be

2025   

covered by any portion of this clause if they were the aviation supplier.

2026    2027    2028    Clause 1-5: Gratuities or Gifts (March 2006) 2029   

a.      The Postal Service may terminate this contract for default if, after
notice and a hearing, the

2030   

Postal Service Board of Contract Appeals determines that the aviation supplier
or the aviation

2031   

supplier’s agent or other representative:

2032   

1.      Offered or gave a gratuity or gift (as defined in 5 CFR 2635) to an
officer or employee

2033   

of the Postal Service; and

2034   

2.      Intended by the gratuity or gift to obtain a contract or favorable
treatment under a

2035   

contract.

2036    2037   

b.      The rights and remedies of the Postal Service provided in this clause
are in addition to any

2038   

other rights and remedies provided by law or under this contract.

2039    2040    2041    Clause 1-6: Contingent Fees (March 2006) 2042   

a.      The aviation supplier warrants that no person or selling agency has been
employed or

2043   

retained to solicit or obtain this contract for a commission, percentage,
brokerage, or

2044   

contingent fee, except bona fide employees or bona fide, established commercial
or selling

2045   

agencies employed by the aviation supplier for the purpose of obtaining
business.

2046    2047   

b.      For breach or violation of this warranty, the Postal Service has the
right to annul this contract

2048   

without liability or to deduct from the contract price or otherwise recover the
full amount of the

2049   

commission, percentage, brokerage fee, or contingent fee.

2050   

 

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2051    2052    Clause 1-11: Prohibition Against Contracting with Former
Officers or PCES 2053    Executives (March 2006) (Tailored) 2054    During the
performance of this contract, former Postal officers or Postal Career Executive
Service 2055    (PCES) executives are prohibited from employment by the
contractor as key personnel, experts or 2056    consultants, if such
individuals, within two years after their retirement from the Postal Service,
would 2057    be performing substantially the same duties as they performed
during their career with the Postal 2058    Service. 2059    2060    2061   
Clause 1-12: Use of Former Postal Service Employees (March 2006) (Tailored) 2062
   During the term of this contract, the aviation supplier must identify any
former Postal Service officers 2063    or Postal Career Executive Service (PCES)
employees it proposes to be engaged, directly or 2064    indirectly, in contract
performance. Such individuals may not commence performance without the 2065   
Contracting Officer’s prior approval. If the Contracting Officer does not
provide such approval, the 2066    aviation supplier must replace the proposed
individual former employee with another individual equally 2067    qualified to
provide the services called for in the contract. 2068    2069    2070    Clause
2-11: Postal Service Property - Fixed-Price (March 2006) (Tailored) 2071   

a.      Postal Service-Furnished Property

2072   

1.      The Postal Service will deliver to the aviation supplier, for use in
connection with and

2073   

under the terms of this contract, the property described as Postal
Service-furnished

2074   

property in the Schedule or specifications, together with any related
information the

2075   

aviation supplier may request that may reasonably be required for the intended
use of

2076   

the property (hereinafter referred to as “Postal Service-furnished property”).

2077    2078   

2.      The contract delivery or performance dates are based on the expectation
that Postal

2079   

Service-furnished property suitable for use (except for property furnished “as
is”) will

2080   

be delivered at the times stated in the Schedule or, if not so stated, in
sufficient time to

2081   

enable the aviation supplier to meet these delivery or performance dates. If
Postal

2082   

Service-furnished property is not delivered by these times, the Contracting
Officer will,

2083   

upon timely written request from the aviation supplier, make a determination of
any

2084   

delay occasioned the aviation supplier and will equitably adjust the delivery or

2085   

performance dates or the contract price, or both, and any other contractual
provision

2086   

affected by the delay, in accordance with the Changes clause.

2087    2088   

3.      Except for Postal Service-furnished property furnished “as is,” if the
Postal Service-

2089   

furnished property is received in a condition not suitable for its intended use,
the

2090   

aviation supplier must notify the Contracting Officer and (as directed by the

2091   

Contracting Officer) either (a) return it at the expense of the Postal Service
or

2092   

otherwise dispose of it, or (b) effect repairs or modifications. Upon the
completion of

2093   

(a) or (b), the Contracting Officer (upon written request from the aviation
supplier) will

2094   

equitably adjust the delivery or performance dates or the contract price, or
both, and

2095   

any other affected contractual provision, in accordance with the Changes clause.

2096    2097   

4.      The provisions for adjustment in this paragraph a are exclusive, and the
Postal

2098   

Service is not liable to suit for breach of contract by reason of any delay in
delivery of

2099   

Postal Service-furnished property or its delivery in a condition not suitable
for its

2100   

intended use.

2101    2102   

b.      Changes in Postal Service-Furnished Property

2103   

1.      By written notice, the Contracting Officer may (a) decrease the property
provided or to

2104   

be provided by the Postal Service under this contract, or (b) substitute other
Postal

2105   

Service-owned property for the property to be provided by the Postal Service, or
to be

2106   

acquired by the aviation supplier for the Postal Service under this contract.
The

 

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2107   

aviation supplier must promptly take any action the Contracting Officer may
direct

2108   

regarding the removal and shipping of the property covered by this notice.

2109    2110   

2.      In the event of any decrease in or substitution of property pursuant to
subparagraph

2111   

b.1 above, or any withdrawal of authority to use property provided under any
other

2112   

contract or lease, which property the Postal Service had agreed in the Schedule
to

2113   

make available for the performance of this contract, the Contracting Officer,
upon the

2114   

aviation supplier’s written request (or - if substitution causes a decrease in
the cost of

2115   

performance - on the Contracting Officer’s own initiative), will equitably
adjust any

2116   

contractual provisions affected by the decrease, substitution, or withdrawal, in

2117   

accordance with the Changes clause.

2118    2119   

c.      Use of Postal Service Property. The Postal Service property, unless
otherwise provided in

2120   

this contract or approved by the Contracting Officer, must be used only for
performing this

2121   

contract.

2122    2123   

d.      Utilization, Maintenance, and Repair of Postal Service Property. The
aviation supplier must

2124   

maintain and administer, in accordance with sound industrial practice, a program
or system for

2125   

the utilization, maintenance, repair, protection, and preservation of Postal
Service property

2126   

until it is disposed of in accordance with this clause. If any damage occurs to
Postal Service

2127   

property, the risk of which has been assumed by the Postal Service under this
contract, the

2128   

Postal Service will replace the items or the aviation supplier must make such
repairs as the

2129   

Postal Service directs; provided, however, that if the aviation supplier cannot
effect these

2130   

repairs within the time required, the aviation supplier will dispose of the
property in the manner

2131   

directed by the Contracting Officer. The contract price includes no compensation
to the

2132   

aviation supplier for performing any repair or replacement for which the Postal
Service is

2133   

responsible, and an equitable adjustment will be made in any contractual
provisions affected

2134   

by such repair or replacement made at the direction of the Postal Service, in
accordance with

2135   

the Changes clause. Any repair or replacement for which the aviation supplier is
responsible

2136   

under the provisions of this contract must be accomplished by the aviation
supplier at the

2137   

aviation supplier’s own expense.

2138    2139   

e.      Risk of Loss. Unless otherwise provided in this contract, the aviation
supplier assumes the

2140   

risk of, and becomes responsible for, any loss or damage to Postal Service
property provided

2141   

under this contract upon its delivery to the aviation supplier or upon passage
of title to the

2142   

Postal Service as provided in paragraph i below, except for reasonable wear and
tear and

2143   

except to the extent that it is consumed in performing this contract.

2144    2145   

f.       Access. The Postal Service, and any persons designated by it, must at
reasonable times

2146   

have access to premises where any Postal Service property is located, for the
purpose of

2147   

inspecting it.

2148    2149   

g.      Final Accounting for and Disposition of Postal Service Property. Upon
completion, or at such

2150   

earlier dates as may be fixed by the Contracting Officer, the aviation supplier
must submit, in a

2151   

form acceptable to the Contracting Officer, inventory schedules covering all
items of Postal

2152   

Service property not consumed in performing this contract (including any
resulting scrap) or

2153   

not previously delivered to the Postal Service, and will prepare for shipment,
deliver f.o.b.

2154   

origin, or dispose of this property, as the Contracting Officer may direct or
authorize. The net

2155   

proceeds of disposal will be credited to the contract price or will be paid in
such other manner

2156   

as the Contracting Officer may direct.

2157    2158   

h.      Restoration of Aviation Supplier’s Premises and Abandonment. Unless
otherwise provided in

2159   

this contract, the Postal Service:

2160   

1.      May abandon any Postal Service property in place, whereupon all
obligations of the

2161   

Postal Service regarding it will cease; and

2162

  

 

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2163   

2.      Has no obligation with regard to restoration or rehabilitation of the
aviation supplier’s

2164   

premises, either in case of abandonment, disposition on completion of need or of
the

2165   

contract, or otherwise, except for restoration or rehabilitation costs properly
included

2166   

in an equitable adjustment under paragraph b or e above.

2167    2168   

i.       Title.

2169   

1.      Title to all Postal Service-furnished property remains in the Postal
Service. To define

2170   

the obligations of the parties under this clause, title to each item of
facilities, special

2171   

test equipment, or special tooling (other than that subject to a special-tooling
clause)

2172   

acquired by the aviation supplier on behalf of the Postal Service under this
contract

2173   

will pass to and vest in the Postal Service when its use in the performance of
this

2174   

contract begins, or upon payment for it by the Postal Service, whichever is
earlier,

2175   

whether or not title was previously vested.

2176    2177   

2.      Title to all material purchased by the aviation supplier for whose cost
the aviation

2178   

supplier is entitled to be reimbursed as a direct item of cost under this
contract will

2179   

pass to and vest in the Postal Service upon delivery of the material to the
aviation

2180   

supplier by the vendor.

2181    2182   

3.      Title to other material whose cost is reimbursable to the aviation
supplier under this

2183   

contract will pass to and vest in the Postal Service upon:

2184   

a)      Its issuance for use in the performance of this contract; or

2185   

b)      Reimbursement of its cost by the Postal Service, whichever occurs first.

2186    2187   

4.      All Postal Service-furnished property, together with all property
acquired by the

2188   

aviation supplier, title to which vests in the Postal Service under this
subsection i, is

2189   

subject to the provisions of this clause and is hereinafter collectively
referred to as

2190   

“Postal Service property.” Title to Postal Service property is not affected by
its

2191   

incorporation into or attachment to any property not owned by the Postal
Service, nor

2192   

does Postal Service property become a fixture or lose its identity as personal
property

2193   

by being attached to any real property.

2194    2195    2196    Clause 2-22: Value Engineering Incentive (March 2006)
2197   

a.      General.

2198   

The right of each party to improve its own methods for its own benefit, absent a
change to the

2199   

obligations of the other party which requires an modification to this Contract,
and to retain

2200   

such savings for itself is not affected by this clause.

2201    2202   

The aviation supplier is encouraged to develop and submit Value Engineering
Change

2203   

Proposals (VECPs) voluntarily. The aviation supplier will share in savings
realized from an

2204   

accepted VECP as provided in paragraph (h) below. No document submitted by the
aviation

2205   

supplier shall be considered to be a VECP unless the aviation supplier
specifically marks on

2206   

the document that it is to be considered a VECP and contains a statement that
the aviation

2207   

supplier intends the document to be a VECP subject to the provisions of this
Clause of the

2208   

Contract.

2209    2210   

b.      Definitions

2211   

1.      Value Engineering Change Proposal (VECP). A proposal that:

2212   

i.       Requires a change to the instant contract;

2213   

ii.      Results in savings to the instant contract; and

2214   

iii.     Does not involve a change in:

2215   

a)      Deliverable end items only;

2216   

b)      Test quantities due solely to results of previous testing under the
instant

2217   

contract;or

2218   

c)      Contract type only.

2219   

 

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2220

2221

  

2.      Instant Contract. The contract under which a VECP is submitted. It does
not include
additional contract quantities.

2222   

2223

2224

2225

  

3.      Additional Contract Quantity. An increase in quantity after acceptance
of a VECP due
to contract modification, exercise of an option, or additional orders (except
orders
under indefinite-delivery contracts within the original maximum quantity
limitations).

2226   

2227

2228

2229

2230

  

4.      Postal Service Costs. Costs to the Postal Service resulting from
developing and
implementing a VECP, such as net increases in the cost of testing, operations,
maintenance, logistics support, or property furnished. Normal administrative
costs of
processing the VECP are excluded.

2231   

2232

2233

2234

  

5.      Instant Contract Savings. The estimated cost of performing the instant
contract
without implementing a VECP minus the sum of: (a) the estimated cost of
performance after implementing the VECP, and (b) Postal Service costs.

2235   

2236

2237

2238

2239

  

6.      Additional Contract Savings. The estimated cost of performance or
delivering
additional quantities without the implementation of a VECP minus the sum of (a)
the
estimated cost of performance after the VECP is implemented and (b) Postal
Service
cost.

2240   

2241

2242

2243

2244

  

7.      Aviation Supplier’s Development and Implementation Costs. Aviation
supplier’s cost
in developing, testing, preparing, and submitting a VECP. Also included are the
aviation supplier’s cost to make the contractual changes resulting from the
Postal
Service acceptance of the VECP.

2245    2246   

c.      Content. A VECP must include the following:

2247   

2248

2249

2250

2251

  

1.      A description of the difference between the existing contract
requirement and that
proposed, the comparative advantages and disadvantages of each, a justification
when an item’s function or characteristics are being altered, the effect of the
change
on the end item’s performance, and any pertinent objective test data.

2252   

2253

2254

  

2.      A list and analysis of the contract requirements that must be changed if
the VECP is
accepted, including any suggested specification revisions.

2255   

2256

2257

2258

2259

  

3.      A separate, detailed cost estimate for: (a) the affected portions of the
existing contract
requirement and, (b) the VECP. The cost reduction associated with the VECP must
take into account the aviation supplier’s allowable development and
implementation
costs.

2260   

2261

2262

  

4.      A description and estimate of costs the Postal Service may incur in
implementing the
VECP, such as test and evaluation and operating and support costs.

2263    2264   

5.      A prediction of any effects the proposed change would have on Postal
Service costs.

2265   

2266

2267

2268

  

6.      A statement of the time by which a contract modification accepting the
VECP must be
issued in order to achieve the maximum cost reduction, noting any effect on the
contract completion time or delivery schedule.

2269   

2270

2271

2272

  

7.      Identification of any previous submissions of the VECP to the Postal
Service,
including the dates submitted, purchasing offices, contract numbers, and actions
taken.

2273    2274   

d.      Submission. The aviation supplier must submit VECPs to the Contracting
Officer.

2275   

2276   

e.      Postal Service Action

 

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2277   

2278

2279

2280

2281

2282

  

1.      The Contracting Officer will give the aviation supplier written
notification of action
taken on a VECP within 60 days after receipt. If additional time is needed, the
Contracting Officer will notify the aviation supplier, within the 60-day period,
of the
expected date of a decision. The Postal Service will process VECPs expeditiously
but
will not be liable for any delay in acting upon a VECP.

2283   

2284

2285

  

2.      If a VECP is not accepted, the Contracting Officer will so notify the
aviation supplier,
explaining the reasons for rejection.

2286   

2287

2288

  

f.       Withdrawal. The aviation supplier may withdraw a VECP, in whole or in
part, at any time
before its acceptance.

2289    2290   

g.      Acceptance

2291   

2292

2293

2294

2295

2296

2297

  

1.      Acceptance of a VECP, in whole or in part, will be by execution of a
supplemental
agreement modifying this contract and citing this clause. If agreement on price
(see
paragraph h below) is reserved for a later supplemental agreement, and if such
agreement cannot be reached, the disagreement is subject to the Claims and
Disputes clause of this contract, or another clause of the contract dealing with
disputes.

2298   

2299

2300

  

2.      Until a VECP is accepted by contract modification, both parties must
perform in
accordance with the existing contract.

2301   

2302

2303

2304

  

3.      The Contracting Officer’s decision to accept or reject all or any part
of a VECP is final
and not subject to the Claims and Disputes clause or otherwise subject to
litigation
under the Contract Disputes Act of 1978.

2305   

2306

2307

2308

2309

2310

2311

  

h.      Sharing. If a VECP is accepted, the aviation supplier and the Postal
Service shall negotiate
their respective shares of the contract savings. The contract savings are
calculated by
subtracting the estimated cost of performing the contract with the VECP, Postal
Service costs,
and the allowable development and implementation costs from the estimated cost
of
performing the contract without the VECP. Profit is excluded when calculating
contract
savings.

2312    2313   

i.       Data

2314   

2315

2316

  

1.      The aviation supplier may restrict the Postal Service’s right to use any
part of a VECP
or the supporting data by marking the following legend on the affected parts:

2317   

2318

2319

2320

2321

2322

2323

2324

  

“These data, furnished under the Value Engineering Incentive clause of contract,
may not be disclosed outside the Postal Service or duplicated, used, or
disclosed,
in whole or in part, for any purpose other than to evaluate a value engineering
change proposal submitted under the clause. This restriction does not limit the
Postal Service’s right to use information contained in these data if it has been
obtained or is otherwise available from the aviation supplier or from another
source without limitation.”

2325   

2326

2327

2328

2329

2330

  

2.      If a VECP is accepted, the aviation supplier hereby grants the Postal
Service
unlimited rights in the VECP and supporting data, except that, with respect to
data
qualifying and submitted as limited rights technical data, the Postal Service
will have
the rights specified in the contract modification implementing the VECP and will
appropriately mark the data.

2331    2332   

 

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2333

2334

   Clause 3-1: Small, Minority, and Woman-owned Business Subcontracting
Requirements (March 2006)

2335

2336

2337

2338

2339

2340

2341

2342

  

a.      All aviation suppliers, except small businesses, must submit a
subcontracting plan that is
specific to this contract and that separately addresses subcontracting with
small, minority, and
woman-owned businesses. A plan approved by the Postal Service must be included
in and
made a part of the contract. Lack of an approved plan may make the aviation
supplier
ineligible for award. A subcontract is defined as any agreement (other than one
involving an
employer-employee relationship) entered into by a Postal Service aviation
supplier or
subcontractor calling for supplies or services required for performance of the
contract or
subcontract.

2343    2344   

b.      The aviation supplier’s subcontracting plan must include the following:

2345

2346

2347

2348

2349

  

1.      Goals, in terms of percentages of the total amount of this contract that
the aviation
supplier will endeavor to subcontract to small, minority, and woman-owned
businesses. The aviation supplier must include all subcontracts that contribute
to
contract performance, and may include a proportionate share of supplies and
services
that are normally allocated as indirect costs.

2350    2351   

2.      A statement of the:

2352   

i.       Total dollars planned to be subcontracted under this contract; and

2353

2354

  

ii.      Total of that amount planned to be subcontracted to small, minority,
and
woman-owned businesses.

2355   

2356

2357

2358

  

3.      A description of the principal types of supplies and services to be
subcontracted under
this contract, identifying the types planned for subcontracting to small,
minority, and
woman-owned businesses.

2359    2360   

4.      A description of the method used to develop the subcontracting goals for
this contract.

2361   

2362

2363

2364

2365

  

5.      A description of the method used to identify potential sources for
solicitation purposes
and a description of efforts the aviation supplier will make to ensure that
small,
minority, and woman-owned businesses have an equitable opportunity to compete
for
subcontracts.

2366   

2367

2368

2369

2370

  

6.      A statement as to whether the offer included indirect costs in
establishing
subcontracting goals for this contract and a description of the method used to
determine the proportionate share of indirect costs to be incurred with small,
minority,
and woman-owned businesses.

2371   

2372

2373

  

7.      The name of the individual employed by the aviation supplier who will
administer the
subcontracting program and a description of the individual’s duties.

2374   

2375

2376

2377

  

8.      Assurances that the aviation supplier will require all subcontractors
receiving
subcontracts in excess of $1,000,000 to adopt a plan similar to the plan agreed
to by
the aviation supplier.

2378   

2379

2380

2381

  

9.      A description of the types of records the aviation supplier will
maintain to demonstrate
compliance with the requirements and goals in the plan for this contract. The
records
must include at least the following:

2382

2383

  

 i.     Source lists, guides, and other data identifying small, minority, and
woman-
owned businesses;

2384

2385

  

ii.      Organizations contacted in an attempt to locate sources that are small,
minority, and woman-owned businesses;

2386

2387

2388

  

iii.    Records on each subcontract solicitation resulting in an award of more
than
$100,000, indicating whether small, minority, or woman-owned businesses
were solicited and if not, why not; and

 

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2389

2390

  

iv.     Records to support subcontract award data, including the name, address,
and
business size of each subcontractor.

2391   

2392

2393

2394

  

c.      Reports. The aviation supplier must provide reports on subcontracting
activity under this
contract on a calendar-quarter basis. The report must be one of the types
described in Clause
3-2, Participation of Small, Minority, and Woman-owned Businesses.

2395    2396   

2397

2398

   Clause 3-2: Participation of Small, Minority, and Woman-owned Businesses
(March 2006)

2399

2400

2401

2402

  

a.      The policy of the Postal Service is to encourage the participation of
small, minority, and
woman-owned business in its purchases of supplies and services to the maximum
extent
practicable consistent with efficient contract performance. The aviation
supplier agrees to
follow the same policy in performing this contract.

2403   

2404

2405

  

b.      Subject to the agreement of the aviation supplier and the Postal
Service, the aviation supplier
will report subcontracting activity on one of the following bases:

2406   

1.      Showing the amount of money paid to subcontractors during the reporting
period;

2407

2408

  

2.      Showing subcontracting activity that is allocable to this contract using
generally
accepted accounting practices; or

2409   

3.      A combination of the methods listed above.

2410   

2411

2412

2413

2414

  

c.      The aviation supplier will submit a report to the Contracting Officer
within 15 calendar days
after the end of each calendar-year quarter, describing all subcontract awards
to small,
minority, or woman-owned businesses. The Contracting Officer may require more
frequent
reports.

2415    2416    2417    Clause 4-1: General Terms and Conditions (July 2007)
(Tailored) 2418   

a.      Inspection and Acceptance. Not applicable

2419   

2420

2421

2422

2423

2424

2425

2426

2427

2428

2429

  

b.      Assignment. If this contract provides for payments aggregating $10,000
or more, claims for
monies due or to become due from the Postal Service under it may be assigned to
a bank,
trust company, or other financing institution, including any federal lending
agency, and may
thereafter be further assigned and reassigned to any such institution. Any
assignment or
reassignment must cover all amounts payable and must not be made to more than
one party,
except that assignment or reassignment may be made to one party as agent or
trustee for two
or more parties participating in financing this contract. No assignment or
reassignment will be
recognized as valid and binding upon the Postal Service unless a written notice
of the
assignment or reassignment, together with a true copy of the instrument of
assignment, is filed
with:

2430   

1.      The Contracting Officer;

2431   

2.      The surety or sureties upon any bond; and

2432

2433

  

3.      The office, if any, designated to make payment, and the Contracting
Officer has
acknowledged the assignment in writing.

2434

2435

2436

  

4.      Assignment of this contract or any interest in this contract other than
in accordance
with the provisions of this clause will be grounds for termination of the
contract for
default at the option of the Postal Service.

2437    2438   

c.      Changes

2439 2440   

1.      The Contracting Officer may, in writing, without notice to any sureties,
order changes
within the general scope of this contract in the following:

2441

2442

  

  i.    Drawings, designs, or specifications when supplies to be furnished are
to be
specially manufactured for the Postal Service in accordance with them;

2443   

 ii.    Statement of work or description of services;

2444   

iii.    Method of shipment or packing;

 

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2445   

iv.     Places of delivery of supplies or performance of services;

2446   

 v.     Delivery or performance schedule;

2447   

vi.     Postal Service furnished property or facilities.

2448   

2449

2450

  

2.      Changes pursuant to the Ordering Process and the Operating Period Volume
Minimum sections in Part 1- Statement of Work are not applicable under this
clause.

2451   

2452

2453

2454

2455

2456

  

3.      Any other written or oral order (including direction, instruction,
interpretation, or
determination) from the Contracting Officer that causes a change will be treated
as a
change order under this paragraph, provided that the aviation supplier gives the
Contracting Officer written notice stating: (a) the date, circumstances, and
source of
the order and (b) that the aviation supplier regards the order as a change
order.

2457   

2458

2459

  

4.      If any such change affects the cost of performance or the delivery
schedule, the
contract may be modified to effect an equitable adjustment.

2460   

2461

2462

2463

2464

  

5.      The aviation supplier’s claim for equitable adjustment must be asserted
within 60 days
of receiving a written change order, or on a date otherwise agreed to by the
parties in
writing. A later claim may be acted upon — but not after final payment under
this
contract — if the Contracting Officer decides that the facts justify such
action.

2465   

2466

2467

  

6.      Failure to agree to any adjustment is a dispute under Clause B-9, Claims
and
Disputes.

2468    2469   

d.      Reserved

2470    2471   

e.      Reserved

2472    2473   

f.       Reserved

2474    2475   

g.      Invoices

2476

2477

2478

2479

2480

2481

  

The Postal Service intends to certify payment for services based, in part, upon
collected
scanned data. For services based upon scanned data, the aviation supplier need
not submit
an invoice for payment. Rather, payment will be automatically processed, on a
weekly basis,
based on the scan data. In addition, certain supplemental charges (including,
but not limited
to, charges related to minimum guaranteed volumes, surface transportation, and
non-
achievement of performance standards) may be assessed under the contract.

2482   

2483

2484

2485

2486

2487

2488

2489

2490

  

Any service requiring invoicing must meet the requirements specified herein. The
aviation
supplier shall submit an original invoice (or electronic invoice if authorized)
to the Contracting
Officer’s Representative. All invoices must be submitted within ninety (90) days
from
completion of the service or the applicable Operating Period to be eligible for
payment.
Invoices received after ninety (90) days from completion of the service or
Operating Period will
be subject to a 10% deduction or a deduction of $10,000, whichever is less, as a
liquidated
damage. The aviation supplier shall allow at least twenty-eight (28) calendar
days before
submitting a second invoice to the Postal Service for the same service.

2491   

2492

2493

  

To ensure prompt payment, an original paper invoice (or electronic invoice, if
authorized) must
contain:

2494

2495

  

1.      Aviation supplier’s name, remit to address (including ZIP+4), contact
person and
phone number;

2496   

2.      Unique invoice number and invoice date;

2497   

3.      Contract number;

2498   

4.      A description of the supplies or services and the dates delivered or
performed;

2499   

5.      Points (air stops or facility) of shipment tender and delivery; if
applicable;

2500

2501

  

6.      Quantity, unit of measure, unit price(s) and extension(s) of the items
delivered; if
applicable;

 

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2502   

7.      Payment terms, including any discounts offered;

2503 2504   

8.      Name, title, and phone number of the person to be notified in the event
of a defective
invoice; and

2505 2506   

9.      Any additional information required by the contract or specified by the
Contracting
Officer.

2507    2508 2509 2510 2511   

Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C.
3903) and
Office of Management and Budget (OMB) Circular A-125, Prompt Payment. Further
guidelines may be found in the Payment Processing and Reconciliation Process
sections of
Part I – Statement of Work.

2512    2513 2514 2515 2516 2517   

h.      Patent Indemnity. The aviation supplier will indemnify the Postal
Service and its officers,
employees and agents against liability, including costs for actual or alleged
direct or
contributory infringement of, or inducement to infringe, any United States or
foreign patent,
trademark, or copyright, arising out of the performance of this contract,
provided the aviation
supplier is reasonably notified of such claims and proceedings.

2518    2519   

i.       Payment

2520   

Payment will only be made for:

2521 2522   

1.      Items that have been properly scanned and delivered to the correct
delivery
destination Service Points set forth in this contract, and

2523    2524   

2.      Other services and charges agreed upon by the parties.

2525    2526 2527 2528   

The Postal Service will make payment in accordance with the Prompt Payment Act
(31 U.S.C.
3903) and 5 CFR 1315. Payments under this contract may be made by the Postal
Service
either by electronic funds transfer or other method agreed upon by the parties.

2529    2530 2531 2532 2533 2534   

j.       Risk of Loss. The Postal Service shall be liable for all third-party
customer claims arising from
or in connection with the loss, damage, or delay of any mail transported under
this contract,
except to the extent of any insurance proceeds received by the aviation supplier
as a result of
a catastrophic loss of an aircraft or other transport vehicle and attributable
to Postal Service
mail.

2535    2536 2537 2538 2539 2540 2541 2542 2543   

k.      Taxes. The contract price includes all applicable federal, state, and
local taxes and duties
except the applicable Federal excise tax on the transportation of property via
air. The aviation
supplier is required to report to the Postal Service on an annual basis (October
1), the portion
of the rates listed in Attachment 10: Pricing that are subject to federal excise
tax. The Postal
Service shall hold harmless, save, and defend the aviation supplier from any
demand or claim
of, or on behalf of, the IRS or the United States based on the application of
federal excise
taxes applicable to the transportation services performed by the aviation
supplier under this
contract.

2544    2545   

l.       Termination on Notice.

2546    2547 2548 2549 2550   

1.      This contract does not contain a Termination for Convenience clause. In
lieu of a
Termination for Convenience, either party may terminate this contract without
cause
by providing advanced written notice to the non-terminating party and a
termination
fee as follows:

2551   

 

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2552   

    

Advanced Notice

Provided

 

Postal Service

Termination Fee

 

Aviation Supplier
Termination Fee

        [*]   [*]   [*]      [*]   [*]   [*]      [*]   [*]   [*]      [*]   [*]
  [*]   

2553    2554    2555    2556 2557   

2.      The terminating party must pay the termination fee corresponding to the
advanced
written notice within ninety (90) of the written notice of termination.

2558    2559 2560 2561 2562 2563 2564 2565 2566   

3.      If the aviation supplier terminates the contract under this provision,
the aviation
supplier guarantees to provide the Postal Service a daily average capacity
through the
effective date of the termination of not less than the daily average capacity
offered in
the two most recently completed Operating Periods prior to the date of the
receipt of
the notice of termination, or, if two Operating Periods have not been completed
when
the notice of termination is received, the daily average capacity offered shall
be at
least equal to the average daily capacity transported prior to the receipt of
the written
notice of termination.

2567    2568 2569 2570 2571   

4.      Either party’s termination under this provision shall not prejudice the
aviation
supplier’s right to payment for services rendered, but neither party shall be
liable to
the other for any other damages, fees, or payment except for the termination fee
above.

2572    2573 2574 2575   

5.      This clause does not apply to changes in service resulting from the
Postal Service
changing from six (6) days to less than six (6) days of delivery per week. If
such a
scenario should occur, refer to the Frequency Adjustment clause of this
contract.

2576    2577 2578 2579 2580 2581 2582 2583 2584 2585 2586 2587   

m.     Termination for Default. The Postal Service may terminate this contract,
or any part hereof,
for default if the aviation supplier fails to cure such default within thirty
(30) days of being
advised in writing of such by the Postal Service, or if the aviation supplier
fails to provide the
Postal Service, upon request, with adequate assurances of future performance. In
the event
of termination for default, the Postal Service will not be liable to the
aviation supplier for any
amount for supplies or services not provided, and the Postal Service shall have
any and all
rights and remedies provided by law, including the right to assess reasonable
excess re-
procurement costs. The Postal Service may withhold payment otherwise due the
aviation
supplier for services already performed in order to protect its interest in
recouping excess re-
procurement costs, and will promptly determine such costs so as to mitigate
damage to the
aviation supplier.

2588    2589   

n.      Title. Not applicable

2590    2591 2592 2593 2594 2595 2596 2597 2598   

o.      Warranty. The aviation supplier warrants and represents that the
services delivered under this
contract shall be in accordance with the requirements and performance standards
set forth in
the contract. With respect to services for which performance standards are set
forth in the
contract, the Postal Service’s exclusive remedy (other than termination for
default) shall be
price adjustments as provided in this contract. With respect to all other
services, the Postal
Service’s exclusive remedy (other than termination for default) shall be for the
aviation
supplier to promptly correct, replace, or otherwise cure such performance at no
cost to the
Postal Service.

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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2599 2600 2601   

p.      Limitation of Liability. Except as otherwise provided by an express or
implied warranty, the
supplier will not be liable to the Postal Service for consequential damages
resulting from any
defect or deficiencies in accepted items or services.

2602    2603 2604 2605   

q.      Other Compliance Requirements. The aviation supplier will comply with
all applicable
Federal, State, and local laws, executive orders, rules and regulations
applicable to its
performance under this contract.

2606    2607 2608   

r.       Order of Precedence. Any inconsistencies in this solicitation or
contract will be resolved by
giving precedence in the following order:

2609   

1.      Contract clauses;

2610   

2.      Statement of Work;

2611   

3.      Attachments to the Statement of Work;

2612   

4.      Solicitation provisions

2613   

5.      Form 8203;

2614   

6.      Other documents and attachments associated with the contract.

2615    2616   

s.      Incorporation by Reference. Not applicable

2617    2618   

t.       Shipping. Not applicable

2619    2620    2621 2622    Clause 4-2: Contract Terms and Conditions Required
to Implement Policies,
Statutes, or Executive Orders (July 2009) (Tailored) 2623   

a.      Incorporation by Reference. Not applicable

2624    2625   

b.      Examination of Records.

2626 2627 2628   

1.      Records. “Records” includes books, documents, accounting procedures and
practices, and other data, regardless of type and regardless of whether such
items are
in written form, in the form of computer data, or in any other form.

2629    2630 2631 2632 2633 2634 2635 2636   

2.      Examination of Costs. If this is a cost-type contract, the aviation
supplier must
maintain, and the Postal Service will have the right to examine and audit all
records
and other evidence sufficient to reflect properly all costs claimed to have been
incurred or anticipated to be incurred directly or indirectly in performance of
this
contract. This right of examination includes inspection at all reasonable times
of the
aviation supplier’s plants, or parts of them, engaged in the performance of this
contract.

2637    2638 2639 2640 2641 2642   

3.      Cost or Pricing Data. If the aviation supplier is required to submit
cost or pricing data
in connection with any pricing action relating to this contract, the Postal
Service, in
order to evaluate the accuracy, completeness, and currency of the cost or
pricing
data, will have the right to examine and audit all of the aviation supplier’s
records,
including computations and projections directly, related to:

2643   

a.      The proposal for the contract, subcontract, or modification;

2644   

b.      Pricing of the contract, subcontract, or modification; or

2645   

c.      Performance of the contract, subcontract or modification.

2646    2647 2648 2649 2650   

4.      Reports. If the aviation supplier is required to furnish cost, funding
or performance
reports, the Contracting Officer or any authorized representative of the Postal
Service
will have the right to examine and audit the supporting records and materials,
for the
purposes of evaluating:

2651 2652   

a.      The effectiveness of the aviation supplier’s policies and procedures to
produce data compatible with the objectives of these reports; and

2653   

b.      The data reported.

2654   

 

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2655 2656 2657 2658 2659   

5.      Availability. The aviation supplier must maintain and make available at
its office at all
reasonable times the records, materials, and other evidence described in
(b)(1)-(4) of
this clause, for examination, audit, or reproduction, until three years after
final
payment under this contract or any longer period required by statute or other
clauses
in this contract. In addition:

2660 2661 2662   

a.      If this contract is completely or partially terminated, the aviation
supplier must
make available the records related to the work terminated until three years
after any resulting final termination settlement; and

2663    2664 2665 2666 2667   

b.      The aviation supplier must make available records relating to appeals
under
the claims and disputes clause or to litigation or the settlement of claims
arising under or related to this contract. Such records must be made
available until such appeals, litigation or claims are finally resolved.

2668    2669    2670    Clause 4-7: Records Ownership (March 2006) 2671 2672
2673 2674    Notwithstanding any state law providing for retention of rights in
the records, the aviation supplier
agrees that the Postal Service may, at its option, demand and take without
additional compensation all
records relating to the services provided under this agreement. The aviation
supplier must turn over
all such records upon request but may retain copies of documents produced by the
aviation supplier. 2675    2676    2677    Clause 6-1: Contracting Officer’s
Representative (March 2006) 2678 2679 2680 2681    The Contracting Officer will
appoint a Contracting Officer’s representative (COR), responsible for the
day-to-day administration of the contract, who will serve as the Postal
Service’s point of contact with
the aviation supplier on all routine matters. A copy of the notice of
appointment defining the COR’s
authority will be furnished to the aviation supplier upon award of the contract.
2682    2683 2684 2685 2686   

a.      The COR may be changed at any time by the Postal Service without prior
notice to the
aviation supplier, but notification of the change, including the name and
address of the
successor COR, will be promptly provided to the aviation supplier by the
Contracting Officer in
writing.

2687    2688   

b.      The responsibilities and limitations of the COR are as follows:

2689 2690 2691 2692   

1.      The COR is responsible for the operational and administrative aspects of
the contract
and technical liaison with the aviation supplier. The COR is responsible also
for the
final inspection and acceptance of aviation supplier performance and submitted
reports and has other responsibilities as specified by the contract.

2693    2694 2695 2696 2697 2698   

2.      The COR is not authorized to make any commitments or otherwise obligate
the Postal
Service or authorize any changes affecting the contract price, terms, or
conditions.
Any aviation supplier request for changes must be referred to the Contracting
Officer
directly or through the COR. No such changes may be made without the Contracting
Officer’s express prior authorization.

2699    2700 2701   

3.      The COR may place orders for the aviation supplier to transport and
process mail in
accordance with the provisions of the contract at the agreed-upon rate only.

2702    2703    2704    Clause 9-1: Convict Labor (March 2006) 2705 2706 2707   
In connection with the work under this contract, the aviation supplier agrees
not to employ any person
undergoing sentence of imprisonment, except as provided by E.O. 11755, December
28, 1973, as
amended and 18 USC 3621 and 3622. 2708    2709   

 

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2710 2711    Clause 9-2: Contract Work Hours and Safety Standards Act - Overtime
Compensation (March 2006) 2712 2713 2714 2715 2716   

a.      No aviation supplier or subcontractor contracting for any part of the
contract work may require
or permit any laborer or mechanic to work more than 40 hours in any workweek on
work
subject to the provisions of the Contract Work Hours and Safety Standards Act,
unless the
laborer or mechanic receives compensation at a rate not less than
one-and-one-half times the
laborer’s or mechanic’s basic rate of pay for all such hours worked in excess of
40 hours.

2717    2718 2719 2720 2721 2722 2723   

b.      Violation, Liability for Unpaid Wages, and Liquidated Damages. In the
event of any violation
of paragraph a above, the aviation supplier and any subcontractor responsible
for the violation
are liable to any affected employee for unpaid wages. The aviation supplier and
subcontractor
are also liable to the Postal Service for liquidated damages, which will be
computed for each
laborer or mechanic at $10 for each day on which the employee was required or
permitted to
work in violation of paragraph a above.

2724    2725 2726 2727 2728 2729 2730 2731   

c.      Withholding for Unpaid Wages and Liquidated Damages. The Contracting
Officer may
withhold from the aviation supplier, from any moneys payable to the aviation
supplier or
subcontractor under this or any other contract with the same aviation supplier,
or any other
federally assisted contract subject to the Contract Work Hours and Safety
Standards Act held
by the same aviation supplier, sums as may administratively be determined
necessary to
satisfy any liabilities of the aviation supplier or subcontractor for unpaid
wages and liquidated
damages pursuant to paragraph b above.

2732    2733 2734 2735 2736 2737 2738 2739 2740 2741 2742 2743   

d.      Records. The aviation supplier or subcontractor must maintain for 3
years from the
completion of the contract for each laborer and mechanic (including watchmen and
guards)
working on the contract payroll records which contain the name, address, social
security
number, and classification(s) of each such employee, hourly rates of wages paid,
number of
daily and weekly hours worked, deductions made, and actual wages paid. The
aviation
supplier or subcontractor must make these records available for inspection,
copying, or
transcription by authorized representatives of the Contracting Officer and the
Department of
Labor, and must permit such representatives to interview employees during
working hours on
the job. (The Department of Labor information collection and record keeping
requirements in
this paragraph d have been approved by the Office of Management and Budget under
OMB
control numbers 1215-0140 and 1215-0017.)

2744    2745 2746   

e.      Subcontracts. The aviation supplier must insert paragraphs a through d
of this clause in all
subcontracts, and must require their inclusion in all subcontracts at any tier.

2747    2748    2749    Clause 9-7: Equal Opportunity (March 2006) (Tailored)
2750    During the performance of this contract, the contractor agrees as
follows: 2751 2752 2753 2754 2755 2756 2757 2758 2759   

1.      The contractor may not discriminate against employees or applicants for
employment because
of race, color, religion, sex, or national origin. The contractor will take
affirmative action to
ensure that applicants are employed, and that employees are treated during
employment,
without regard to race, color, religion, sex, or national origin. Such action
shall include, but not
be limited to the following: Employment, upgrading, demotion, or transfer;
recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and
selection for training, including apprenticeship. The contractor agrees to post
in conspicuous
places, available to employees and applicants for employment, notices to be
provided by the
Contracting Officer setting forth the provisions of this nondiscrimination
clause.

2760    2761 2762 2763   

2.      The contractor, in all solicitations or advertisements for employees
placed by or on behalf of
the contractor, state that all qualified applicants will receive consideration
for employment
without regard to race, color, religion, sex, or national origin.

2764    2765 2766   

3.      The contractor will send to each labor union or representative of
workers with which he has a
collective bargaining agreement or other contract or understanding, a notice,
provided by the

 

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2767 2768 2769 2770   

agency Contracting Officer, advising the labor union or workers’ representative
of the
contractor’s commitments under section 202 of Executive Order 11246 of September
24,
1965, and must post copies of the notice in conspicuous places available to
employees and
applicants for employment.

2771    2772 2773 2774   

4.      The contractor will comply with all provisions of Executive Order (EO)
11246 of September 24,
1965, as amended, and of the rules, regulations, and relevant orders of the
Secretary of
Labor.

2775    2776 2777 2778 2779 2780   

5.      The contractor will furnish all information and reports required by
Executive Order, 11246 of
September 24, 1964, and by the rules, regulations, and orders of the Secretary
of Labor, or
pursuant thereto, and will permit access to his books, records, and accounts by
the
contracting agency and the Secretary of Labor for purposes of investigation to
ascertain
compliance with such rules, regulations, and orders.

2781    2782 2783 2784 2785 2786 2787 2788   

6.      In the event of the contractor’s non-compliance with the
non-discrimination clauses of this
contract or with any of such rules, regulations, or orders, this contract may be
canceled,
terminated, or suspended, in whole or in part and the contractor may be declared
ineligible for
further Government contracts in accordance with procedures authorized in
Executive Order
11246 of September 24, 1965, and such other sanctions may be imposed and
remedies
invoked as provided in Executive Order 11246 of September 24, 1965, or by rule,
regulation,
or order of the Secretary of Labor, or as otherwise provided by law.

2789    2790 2791 2792 2793 2794 2795 2796 2797 2798 2799   

7.      The contractor will include the provisions of paragraphs (1) through (7)
in every subcontract or
purchase order under this contract unless exempted by rules, regulations, or
orders of the
Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of
September 24,
1965, so that such provisions will be binding upon each subcontractor or vendor.
The
contractor will take such action with respect to any subcontract or purchase
order as may be
directed by the Secretary of Labor as a means of enforcing such provisions
including
sanctions for noncompliance, provided, however, that in the event the contractor
becomes
involved in, or is threatened with, litigation with a subcontractor or vendor as
a result of such
direction, the contractor may request the United States to enter into such
litigation to protect
the interest of the United States.

2800    2801    2802 2803    Clause 9-9: Equal Opportunity Preaward Compliance
of Subcontracts (March
2006) (Tailored) 2804 2805 2806    The aviation supplier may not enter into a
first-tier subcontract for an estimated or actual amount of $1
million or more without obtaining in writing from the Contracting Officer a
clearance that the proposed
subcontractor is in compliance with equal opportunity requirements and therefore
eligible for award. 2807    2808    2809    Clause 9-10: Service Contract Act
(March 2006) 2810 2811 2812   

a.      This contract is subject to the Service Contract Act of 1965, as amended
(41 U.S.C. 351 et
seq.), and to the following provisions and all other applicable provisions of
the Act and
regulations of the Secretary of Labor issued under the Act (29 CFR Part 4).

2813    2814   

b.      

2815 2816 2817 2818 2819   

1)      Each service employee employed in the performance of this contract by
the aviation
supplier or any subcontractor must be: a) paid not less than the minimum
monetary
wages and b) furnished fringe benefits in accordance with the wages and fringe
benefits determined by the Secretary of Labor or an authorized representative,
as
specified in any wage determination attached to this contract.

2820   

 

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2821    2822   

2)      

2823 2824 2825 2826 2827 2828 2829 2830 2831 2832 2833 2834   

a)      If a wage determination is attached to this contract, the Contracting
Officer
must require that any class of service employees not listed in it and to be
employed under the contract (that is, the work to be performed is not
performed by any classification listed in the wage determination) be
classified by the aviation supplier so as to provide a reasonable relationship
(that is, appropriate level of skill comparison) between the unlisted
classifications and the classifications in the wage determination. The
conformed class of employees must be paid the monetary wages and
furnished the fringe benefits determined under this clause. (The information
collection requirements contained in this paragraph b have been approved
by the Office of Management and Budget under OMB control number 1215-
0150.)

2835    2836 2837 2838 2839 2840 2841 2842 2843 2844 2845 2846 2847 2848 2849
2850 2851   

b)      The conforming procedure must be initiated by the aviation supplier
before
the performance of contract work by the unlisted class of employees. A
written report of the proposed conforming action, including information
regarding the agreement or disagreement of the authorized representative
of the employees involved or, if there is no authorized representative, the
employees themselves, must be submitted by the aviation supplier to the
Contracting Officer no later than 30 days after the unlisted class of
employees performs any contract work. The Contracting Officer must
review the proposed action and promptly submit a report of it, together with
the agency’s recommendation and all pertinent information, including the
position of the aviation supplier and the employees, to the Wage and Hour
Division, Employment Standards Administration, U.S. Department of Labor,
for review. Within 30 days of receipt, the Wage and Hour Division will
approve, modify, or disapprove the action, render a final determination in
the event of disagreement, or notify the Contracting Officer that additional
time is necessary.

2852    2853 2854 2855 2856 2857   

c)      The final determination of the conformance action by the Wage and Hour
Division will be transmitted to the Contracting Officer, who must promptly
notify the aviation supplier of the action taken. The aviation supplier must
give each affected employee a written copy of this determination, or it must
be posted as a part of the wage determination.

2858    2859   

d)      

2860 2861 2862 2863 2864 2865 2866 2867 2868 2869 2870 2871 2872 2873   

i.       The process of establishing wage and fringe benefit rates bearing a
reasonable relationship to those listed in a wage determination
cannot be reduced to any single formula. The approach used may
vary from determination to determination, depending on the
circumstances. Standard wage and salary administration practices
ranking various job classifications by pay grade pursuant to point
schemes or other job factors may, for example, be relied upon.
Guidance may also be obtained from the way various jobs are rated
under federal pay systems (Federal Wage Board Pay System and the
General Schedule) or from other wage determinations issued in the
same locality. Basic to the establishment of conformable wage rates
is the concept that a pay relationship should be maintained between
job classifications on the basis of the skill required and the duties
performed.

2874   

 

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2875    2876 2877 2878 2879 2880 2881 2882 2883 2884 2885 2886 2887 2888 2889   

ii.      If a contract is modified or extended or an option is exercised, or if
a
contract succeeds a contract under which the classification in
question was previously conformed pursuant to this clause, a new
conformed wage rate and fringe benefits may be assigned to the
conformed classification by indexing (that is, adjusting) the previous
conformed rate and fringe benefits by an amount equal to the
average (mean) percentage increase change in the wages and fringe
benefits specified for all classifications to be used on the contract that
are listed in the current wage determination, and those specified for
the corresponding classifications in the previously applicable wage
determination. If these conforming actions are accomplished before
the performance of contract work by the unlisted class of employees,
the aviation supplier must advise the Contracting Officer of the action
taken, but the other procedures in b.2(c) above need not be followed.

2890    2891 2892 2893   

iii.    No employee engaged in performing work on this contract may be
paid less than the currently applicable minimum wage specified under
section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended.

2894    2895 2896 2897 2898 2899 2900 2901   

e)      The wage rate and fringe benefits finally determined pursuant to b.2 (a)
and
(b) above must be paid to all employees performing in the classification
from the first day on which contract work is performed by them in the
classification. Failure to pay unlisted employees the compensation agreed
upon by the interested parties and/or finally determined by the Wage and
Hour Division retroactive to the date the class of employees began contract
work is a violation of the Service Contract Act and this contract.

2902    2903 2904 2905 2906   

f)      Upon discovery of failure to comply with b.2 (a) through (e) above, the
Wage and Hour Division will make a final determination of conformed
classification, wage rate, and / or fringe benefits that will be retroactive to
the date the class of employees commenced contract work.

2907    2908 2909 2910 2911 2912 2913   

3)      If, as authorized pursuant to section 4(d) of the Service Contract Act,
the term of this
contract is more than one year, the minimum monetary wages and fringe benefits
required to be paid or furnished to service employees will be subject to
adjustment
after one year and not less often than once every two years, pursuant to wage
determinations to be issued by the Wage and Hour Division, Employment Standards
Administration of the Department of Labor.

2914    2915 2916 2917 2918 2919   

c.      The aviation supplier or subcontractor may discharge the obligation to
furnish fringe benefits
specified in the attachment or determined conformably to it by furnishing any
equivalent
combinations of bona fide fringe benefits, or by making equivalent or
differential payments in
cash in accordance with the applicable rules set forth in Subpart D of 29 CFR
Part 4, and not
otherwise.

2920    2921   

d.      

2922 2923 2924 2925 2926 2927 2928   

1)      In the absence of a minimum-wage attachment for this contract, neither
the aviation
supplier nor any subcontractor under this contract may pay any person performing
work under the contract (regardless of whether they are service employees) less
than the
minimum wage specified by section 6(a)(1) of the Fair Labor Standards Act of
1938.
Nothing in this provision relieves the aviation supplier or any subcontractor of
any other
obligation under law or contract for the payment of a higher wage to any
employee.

2929   

 

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2930    2931   

2)      

2932 2933 2934 2935 2936 2937 2938 2939 2940 2941 2942 2943 2944   

a)      If this contract succeeds a contract subject to the Service Contract
Act,
under which substantially the same services were furnished in the same
locality, and service employees were paid wages and fringe benefits
provided for in a collective bargaining agreement, in the absence of a
minimum wage attachment for this contract setting forth collectively
bargained wage rates and fringe benefits, neither the aviation supplier nor
any subcontractor under this contract may pay any service employee
performing any of the contract work (regardless of whether or not the
employee was employed under the predecessor contract), less than the
wages and fringe benefits provided for in the agreement, to which the
employee would have been entitled if employed under the predecessor
contract, including accrued wages and fringe benefits and any prospective
increases in wages and fringe benefits provided for under the agreement.

2945    2946 2947 2948 2949 2950 2951 2952 2953 2954   

b)      No aviation supplier or subcontractor under this contract may be
relieved of
the foregoing obligation unless the limitations of section 4.1(b) of 29 CFR
Part 4 apply or unless the Secretary of Labor or an authorized
representative finds, after a hearing as provided in section 4.10 of 29 CFR
Part 4, that the wages and/or fringe benefits provided for in the agreement
vary substantially from those prevailing for services of a similar character in
the locality, or determines, as provided in section 4.11 of 29 CFR Part 4,
that the agreement applicable to service employees under the predecessor
contract was not entered into as a result of arm’s-length negotiations.

2955    2956 2957 2958 2959 2960 2961 2962 2963 2964 2965 2966 2967 2968 2969
2970   

c)      If it is found in accordance with the review procedures in 29 CFR 4.10
and/or 4.11 and Parts 6 and 8 that wages and/or fringe benefits in a
predecessor aviation supplier’s collective bargaining agreement vary
substantially from those prevailing for services of a similar character in the
locality, and/or that the agreement applicable to service employees under
the predecessor contract was not entered into as a result of arm’s-length
negotiations, the Department will issue a new or revised wage
determination setting forth the applicable wage rates and fringe benefits.
This determination will be made part of the contract or subcontract, in
accordance with the decision of the Administrator, the Administrative Law
Judge, or the Board of Service Contract Appeals, as the case may be,
irrespective of whether its issuance occurs before or after award (53 Comp.
Gen. 401 (1973)). In the case of a wage determination issued solely as a
result of a finding of substantial variance, it will be effective as of the date
of
the final administrative decision.

2971    2972 2973 2974 2975 2976 2977 2978   

e.      The aviation supplier and any subcontractor under this contract must
notify each service
employee starting work on the contract of the minimum monetary wage and any
fringe
benefits required to be paid pursuant to the contract, or must post the wage
determination
attached to this contract. The poster provided by the Department of Labor
(Publication WH
1313) must be posted in a prominent and accessible place at the worksite.
Failure to comply
with this requirement is a violation of section 2(a) (4) of the Act and of this
contract.
(Approved by the Office of Management and Budget under OMB control number
1215-0150.)

2979    2980 2981 2982 2983 2984 2985   

f.       The aviation supplier or subcontractor may not permit services called
for by this contract to be
performed in buildings or surroundings or under working conditions provided by
or under the
control or supervision of the aviation supplier or subcontractor that are
unsanitary or
hazardous or dangerous to the health or safety of service employees engaged to
furnish these
services, and the aviation supplier or subcontractor must comply with the safety
and health
standards applied under 29 CFR Part 1925.

2986   

 

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2987   

g.      

2988 2989 2990 2991 2992 2993 2994   

1)      The aviation supplier and each subcontractor performing work subject to
the Act must
maintain for 3 years from the completion of the work records containing the
information specified in (a) through (f) following for each employee subject to
the
Service Contract Act and must make them available for inspection and
transcription
by authorized representatives of the Wage and Hour Division, Employment
Standards
Administration of the U.S. Department of Labor (approved by the Office of
Management and Budget under OMB control numbers 1215-0017 and 1215-0150):

2995   

a)      Name, address, and social security number of each employee.

2996    2997 2998 2999   

b)      The correct work classification, rate or rates of monetary wages paid
and
fringe benefits provided, rate or rates of fringe benefit payments in lieu
thereof, and total daily and weekly compensation of each employee.

3000    3001   

c)      The number of daily and weekly hours so worked by each employee.

3002    3003 3004   

d)      Any deductions, rebates, or refunds from the total daily or weekly
compensation of each employee.

3005    3006 3007 3008 3009 3010 3011   

e)      A list of monetary wages and fringe benefits for those classes of
service
employees not included in the wage determination attached to this contract
but for whom wage rates or fringe benefits have been determined by the
interested parties or by the Administrator or authorized representative
pursuant to paragraph b above. A copy of the report required by b.2 (b)
above is such a list.

3012    3013 3014   

f)      Any list of the predecessor aviation supplier’s employees furnished to
the
aviation supplier pursuant to section 4.6(1) (2) of 29 CFR Part 4.

3015    3016 3017   

2)      The aviation supplier must also make available a copy of this contract
for inspection or
transcription by authorized representatives of the Wage and Hour Division.

3018    3019 3020 3021 3022 3023 3024   

3)      Failure to make and maintain or to make available the records specified
in this
paragraph g for inspection and transcription is a violation of the regulations
and this
contract, and in the case of failure to produce these records, the Contracting
Officer,
upon direction of the Department of Labor and notification of the aviation
supplier,
must take action to suspend any further payment or advance of funds until the
violation ceases.

3025    3026 3027 3028   

4)      The aviation supplier must permit authorized representatives of the Wage
and Hour
Division to conduct interviews with employees at the worksite during normal
working
hours.

3029    3030 3031 3032 3033 3034 3035   

h.      The aviation supplier must unconditionally pay to each employee subject
to the Service
Contract Act all wages due free and clear and without subsequent deduction
(except as
otherwise provided by law or regulations, 29 CFR Part 4), rebate, or kickback on
any account.
Payments must be made no later than one pay period following the end of the
regular pay
period in which the wages were earned or accrued. A pay period under the Act may
not be of
any duration longer than semimonthly.

3036    3037 3038 3039 3040 3041 3042 3043   

i.       The Contracting Officer must withhold or cause to be withheld from the
Postal Service aviation
supplier under this or any other contract with the aviation supplier such sums
as an
appropriate official of the Department of Labor requests or the Contracting
Officer decides
may be necessary to pay underpaid employees employed by the aviation supplier or
subcontractor. In the event of failure to pay employees subject to the Act wages
or fringe
benefits due under the Act, the Postal Service may, after authorization or by
direction of the
Department of Labor and written notification to the aviation supplier, suspend
any further

 

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3044 3045 3046 3047   

payment or advance of funds until the violations cease. Additionally, any
failure to comply with
the requirements of this clause may be grounds for termination of the right to
proceed with the
contract work. In this event, the Postal Service may enter into other contracts
or arrangements
for completion of the work, charging the aviation supplier in default with any
additional cost.

3048    3049 3050 3051   

j.       The aviation supplier agrees to insert this clause in all subcontracts
subject to the Act. The
term “aviation supplier,” as used in this clause in any subcontract, is deemed
to refer to the
subcontractor, except in the term “aviation supplier.”

3052    3053 3054 3055 3056 3057 3058   

k.      Service employee means any person engaged in the performance of this
contract other than
any person employed in a bona fide executive, administrative, or professional
capacity, as
those terms are defined in Part 541 of Title 29, Code of Federal Regulations, as
of July 30,
1976, and any subsequent revision of those regulations. The term includes all
such persons
regardless of any contractual relationship that may be alleged to exist between
an aviation
supplier or subcontractor and them.

3059    3060   

l.       

3061 3062 3063 3064 3065 3066 3067 3068 3069 3070 3071 3072 3073   

1)      If wages to be paid or fringe benefits to be furnished service employees
employed by
the aviation supplier or a subcontractor under the contract are provided for in
a
collective bargaining agreement that is or will be effective during any period
in which
the contract is being performed, the aviation supplier must report this fact to
the
Contracting Officer, together with full information as to the application and
accrual of
these wages and fringe benefits, including any prospective increases, to service
employees engaged in work on the contract, and furnish a copy of the agreement.
The report must be made upon starting performance of the contract, in the case
of
collective bargaining agreements effective at the time. In the case of
agreements or
provisions or amendments thereof effective at a later time during the period of
contract performance, they must be reported promptly after their negotiation.
(Approved by the Office of Management and Budget under OMB control number
1215-0150.)

3074    3075 3076 3077 3078 3079 3080 3081 3082 3083 3084 3085 3086 3087   

2)      Not less than 10 days before completion of any contract being performed
at a Postal
facility where service employees may be retained in the performance of a
succeeding
contract and subject to a wage determination containing vacation or other
benefit
provisions based upon length of service with a aviation supplier (predecessor)
or
successor (section 4.173 of Regulations, 29 CFR Part 4), the incumbent aviation
supplier must furnish to the Contracting Officer a certified list of the names
of all
service employees on the aviation supplier’s or subcontractor’s payroll during
the last
month of contract performance. The list must also contain anniversary dates of
employment on the contract, either with the current or predecessor aviation
suppliers
of each such service employee. The Contracting Officer must turn over this list
to the
successor aviation supplier at the commencement of the succeeding contract.
(Approved by the Office of Management and Budget under OMB control number
1215-0150.)

3088    3089 3090   

m.     Rulings and interpretations of the Service Contract Act of 1965, as
amended, are contained in
Regulations, 29 CFR Part 4.

3091    3092   

n.      

3093 3094 3095 3096   

1)      By entering into this contract, the aviation supplier and its officials
certify that neither
they nor any person or firm with a substantial interest in the aviation
supplier’s firm are
ineligible to be awarded government contracts by virtue of the sanctions imposed
pursuant to section 5 of the Act.

3097    3098 3099   

2)      No part of this contract may be subcontracted to any person or firm
ineligible for
award of a government contract pursuant to section 5 of the Act.

3100   

 

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3101   

3)      The penalty for making false statements is prescribed in the U.S.
Criminal Code, 18

3102   

U.S.C. 1001.

3103    3104   

o.      Notwithstanding any of the other provisions of this clause, the
following employees may be

3105   

employed in accordance with the following variations, tolerances, and
exemptions, which the

3106   

Secretary of Labor, pursuant to section 4(b) of the Act before its amendment by
Public Law

3107   

92-473, found to be necessary and proper in the public interest or to avoid
serious impairment

3108   

of the conduct of government business:

3109    3110   

1)      Apprentices, student-learners, and workers whose earning capacity is
impaired by

3111   

age, or physical or mental deficiency or injury may be employed at wages lower
than

3112   

the minimum wages otherwise required by section 2(a)(1) or 2(b)(1) of the
Service

3113   

Contract Act without diminishing any fringe benefits or cash payments in lieu
thereof

3114   

required under section 2(a)(2) of the Act, in accordance with the conditions and

3115   

procedures prescribed for the employment of apprentices, student-learners,

3116   

handicapped persons, and handicapped clients of sheltered workshops under
section

3117   

14 of the Fair Labor Standards Act of 1938, in the regulations issued by the

3118   

Administrator (29 CFR Parts 520, 521, 524, and 525).

3119    3120   

2)      The Administrator will issue certificates under the Service Contract Act
for the

3121   

employment of apprentices, student-learners, handicapped persons, or handicapped

3122   

clients of sheltered workshops not subject to the Fair Labor Standards Act of
1938, or

3123   

subject to different minimum rates of pay under the two Acts, authorizing
appropriate

3124   

rates of minimum wages (but without changing requirements concerning fringe

3125   

benefits or supplementary cash payments in lieu thereof), applying procedures

3126   

prescribed by the applicable regulations issued under the Fair Labor Standards
Act of

3127   

1938 (29 CFR Parts 520, 521, 524, and 525).

3128    3129   

3)      The Administrator will also withdraw, annul, or cancel such certificates
in accordance

3130   

with the regulations in Parts 525 and 528 of Title 29 of the Code of Federal

3131   

Regulations.

3132    3133   

p.      Apprentices will be permitted to work at less than the predetermined
rate for the work they

3134   

perform when they are employed and individually registered in a bona fide
apprenticeship

3135   

program registered with a State Apprenticeship Agency recognized by the U.S.
Department of

3136   

Labor, or if no such recognized agency exists in a state, under a program
registered with the

3137   

Bureau of Apprenticeship and Training, Employment and Training Administration,
U.S.

3138   

Department of Labor. Any employee not registered as an apprentice in an approved
program

3139   

must be paid the wage rate and fringe benefits contained in the applicable wage
determination

3140   

for the journeyman classification of work actually performed. The wage rates
paid apprentices

3141   

may not be less than the wage rate for their level of progress set forth in the
registered

3142   

program, expressed as the appropriate percentage of the journeyman’s rate
contained in the

3143   

applicable wage determination. The allowable ratio of apprentices to journeymen
employed

3144   

on the contract work in any craft classification may not be greater than the
ratio permitted to

3145   

the aviation supplier for its entire workforce under the registered program.

3146    3147   

q.      An employee engaged in an occupation in which he or she customarily and
regularly receives

3148   

more than $30 a month tips may have the amount of tips credited by the employer
against the

3149   

minimum wage required by section 2(a) (1) or section 2(b) (1) of the Act in
accordance with

3150   

section 3(m) of the Fair Labor Standards Act and Regulations, 29 CFR Part 531.
However, the

3151   

amount of this credit may not exceed $1.24 per hour beginning January 1, 1980,
and $1.34

3152   

per hour after December 31, 1980. To utilize this proviso:

3153   

1)      The employer must inform tipped employees about this tip credit
allowance before the

3154   

credit is utilized;

3155   

 

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3156   

2)      The employees must be allowed to retain all tips (individually or
through a pooling

3157   

arrangement and regardless of whether the employer elects to take a credit for
tips

3158   

received);

3159    3160   

3)      The employer must be able to show by records that the employee receives
at least

3161   

the applicable Service Contract Act minimum wage through the combination of
direct

3162   

wages and tip credit (approved by the Office of Management and Budget under OMB

3163   

control number 1214-0017); and

3164    3165   

4)      The use of tip credit must have been permitted under any predecessor
collective

3166   

bargaining agreement applicable by virtue of section 4(c) of the Act.

3167    3168   

r.       Disputes arising out of the labor standards provisions of this contract
are not subject to the

3169   

Claims and Disputes clause but must be resolved in accordance with the
procedures of the

3170   

Department of Labor set forth in 29 CFR Parts 4, 6, and 8. Disputes within the
meaning of this

3171   

clause include disputes between the aviation supplier (or any of its
subcontractors) and the

3172   

Postal Service, the U.S. Department of Labor, or the employees or their
representatives.

3173    3174    3175    Clause 9-12: Fair Labor Standards Act and Service
Contract Act - Price 3176    Adjustment (February 2010) 3177   

a.      The aviation supplier warrants that the contract prices do not include
allowance for any

3178   

contingency to cover increased costs for which adjustment is provided under this
clause.

3179    3180   

b.      The minimum prevailing wage determination, including fringe benefits,
issued under the

3181   

Service Contract Act of 1965 by the Department of Labor (DOL), current at least
every two

3182   

years after the original award date, current at the beginning of any option or
renewal period, or

3183   

in the case of a significant change in labor requirements, applies to this
contract and any

3184   

exercise of an option or renewal of this contract. When no such determination
has been made

3185   

as applied to this contract, the minimum wage established in accordance with the
Fair Labor

3186   

Standards Act applies to any exercise of an option or renewal of this contract.

3187    3188   

c.      When, as a result of the determination of minimum prevailing wages and
fringe benefits

3189   

applicable (1) every two years after original award date, (2) at the beginning
of any option or

3190   

renewal period, or (3) in the case of a significant change in labor
requirements, an increased

3191   

or decreased wage determination is applied to this contract, or when as a result
of any

3192   

amendment to the Fair Labor Standards Act enacted after award that affects
minimum wage,

3193   

and whenever such a determination becomes applicable to this contract under law,
the

3194   

aviation supplier increases or decreases wages or fringe benefits of employees
working on the

3195   

contract to comply, the aviation supplier and the Contracting Officer will
negotiate whether and

3196   

to what extent either party will absorb the costs of the wage change. Any
resulting change in

3197   

contract price is limited to increases or decreases in wages or fringe benefits,
and the

3198   

concomitant increases or decreases in Social Security, unemployment taxes, and
workers’

3199   

compensation insurance, but may not otherwise include any amount for general and

3200   

administrative costs, overhead, or profit.

3201    3202   

d.      The aviation supplier or Contracting Officer may request a contract
price adjustment within 30

3203   

days of the effective date of a wage change. If a request for contract price
adjustment has

3204   

been made, and the parties have not reached an agreement within thirty days of
that request,

3205   

the Contracting Officer should issue a unilateral change order in the amount
considered to be

3206   

a fair and equitable adjustment. The aviation supplier may then either accept
the amount, or

3207   

the aviation supplier may file a claim under Clause B-9: Claims and Disputes
unless the

3208   

Contracting Officer and aviation supplier extend this period in writing. Upon
agreement of the

3209   

parties, the contract price or unit price labor rates will be modified in
writing. Pending

3210   

agreement on or determination of any such adjustment and its effective date, the
aviation

3211   

supplier must continue performance.

3212   

 

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3213   

e.      The Contracting Officer or the Contracting Officer’s authorized
representative must, for 3

3214   

years after final payment under the contract, be given access to and the right
to examine any

3215   

directly pertinent books, papers, and records of the aviation supplier.

 

3216    3217    3218    Clause 9-13: Affirmative Action for Workers with
Disabilities (March 2006) 3219    (Tailored) 3220   

a.      The contractor will not discriminate against any employee or applicant
for employment

3221   

because of physical or mental disability in regard to any position for which the
employee or

3222   

applicant for employment is qualified. The contractor agrees to take affirmative
action to

3223   

employ, advance in employment, and otherwise treat qualified individuals with
disabilities

3224   

without discrimination based on their physical or mental disability in all
employment practices,

3225   

including the following:

3226   

1.      Recruitment, advertising, and job application procedures;

3227    3228   

2.      Hiring, upgrading, promotion, award of tenure, demotion, transfer,
layoff, termination,

3229   

right of return from layoff and rehiring

3230    3231   

3.      Rates of pay or any other form of compensation and changes in
compensation

3232    3233   

4.      Job assignments, job classifications, organizational structures,
position descriptions,

3234   

lines of progression, and seniority lists

3235    3236   

5.      Leaves of absence, sick leave, or any other leave

3237   

6.      Fringe benefits available by virtue of employment, whether or not
administered by the

3238   

contractor

3239    3240   

7.      Selection and financial support for training, including apprenticeship,
professional

3241   

meetings, conferences, and other related activities, and selection for leaves of

3242   

absence to pursue training

3243    3244   

8.      Activities sponsored by the contractor including social or recreational
programs; and

3245    3246   

9.      Any other term, condition, or privilege of employment.

3247    3248   

b.      The contractor agrees to comply with the rules, regulations, and
relevant orders of the

3249   

Secretary of Labor issued pursuant to the Rehabilitation Act of 1973, as
amended.

3250    3251   

c.      In the event of the contractor’s noncompliance with the requirements,
actions for

3252   

noncompliance may be taken in accordance with the rules, regulations, and
relevant orders of

3253   

the Secretary of Labor issued pursuant to the act.

3254    3255   

d.      The contractor agrees to post in conspicuous places, available to
employees and applicants

3256   

for employment, notices in a form to be prescribed by the Deputy Assistant
Secretary for

3257   

Federal Contract Compliance Programs, provided by or through the Contracting
Officer. Such

3258   

notices shall state the rights of applicants and employees as well as the
contractor’s obligation

3259   

under the law to take affirmative action to employ and advance in employment
qualified

3260   

employees and applicants with disabilities. The contractor must ensure that
applicants and

3261   

employees with disabilities are informed of the contents of the notice (e.g.,
the contractor may

3262   

have the notice read to a visually disabled individual, or may lower the posted
notice so that it

3263   

might be read by a person in a wheelchair).

3264    3265   

e.      The contractor will notify each labor organization or representative of
workers with which it has

3266   

a collective bargaining agreement or other understanding that the contractor is
bound by the

3267   

terms of section 503 of the Rehabilitation Act of 1973, as amended, and is
committed to take

3268   

affirmative action to employ and advance in employment individuals with physical
or mental

3269   

disabilities.

 

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3270    3271   

f.       The contractor must include the provisions of this clause in every
subcontract or purchase

3272   

order in excess of $10,000, unless exempted by the rules, regulations, or orders
of the

3273   

Secretary issued pursuant to section 503 of the Act, as amended, so that such
provisions will

3274   

be binding upon each subcontractor or vendor. The contractor will take such
action with

3275   

respect to any subcontract or purchase order as the Deputy Assistant Secretary
for Federal

3276   

Contract Compliance Programs may direct to enforce such provisions, including
action for

3277   

noncompliance.

3278    3279    3280    Clause 9-14: Equal Opportunity for Disabled Veterans,
Recently Separated 3281    Veterans, Other Protected Veterans, and Armed Forces
Service Medal Veterans 3282    (February 2010) (Tailored) 3283   

a.      The contractor will not discriminate against any employee or applicant
for employment

3284   

because he or she is a disabled veteran, recently separated veteran, other
protected veteran,

3285   

or Armed Forces service medal veteran in regard to any position for which the
employee or

3286   

applicant for employment is qualified. The contractor agrees to take affirmative
action to

3287   

employ, advance in employment and otherwise treat qualified individuals without

3288   

discrimination based on their status as a disabled veteran, recently separated
veteran, other

3289   

protected veteran, or Armed Forces service medal veteran in all employment
practices,

3290   

including the following:

3291    3292   

1.      Recruitment, advertising, and job application procedures;

3293    3294   

2.      Hiring, upgrading, promotion, award of tenure, demotion, transfer,
layoff, termination,

3295   

right of return from layoff and rehiring;

3296    3297   

3.      Rates of pay or any other form of compensation and changes in
compensation;

3298    3299   

4.      Job assignments, job classifications, organizational structures,
position descriptions,

3300   

lines of progression, and seniority lists;

3301    3302   

5.      Leaves of absence, sick leave, or any other leave;

3303    3304   

6.      Fringe benefits available by virtue of employment, whether or not
administered by the

3305   

contractor;

3306    3307   

7.      Selection and financial support for training, including apprenticeship,
and on-the-job

3308   

training under 38 U.S.C. 3687, professional meetings, conferences, and other
related

3309   

activities, and selection for leaves of absence to pursue training;

3310    3311   

8.      Activities sponsored by the contractor including social or recreational
programs; and

3312    3313   

9.      Any other term, condition, or privilege of employment.

3314    3315   

b.      The contractor agrees to immediately list all employment openings which
exist at the time of

3316   

the execution of this contract and those which occur during the performance of
this contract,

3317   

including those not generated by this contract and including those occurring at
an

3318   

establishment of the contractor other than the one where the contract is being
performed, but

3319   

excluding those of independently operated corporate affiliates, with the
appropriate

3320   

employment service delivery system where the opening occurs. Listing employment
openings

3321   

with the state workforce agency job bank or with the local employment service
delivery system

3322   

where the opening occurs will satisfy the requirement to list jobs with the
appropriate

3323   

employment service delivery system.

3324   

 

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3325    3326   

c.      Listing of employment openings with the appropriate employment service
delivery system

3327   

pursuant to this clause shall be made at least concurrently with the use of any
other

3328   

recruitment source or effort and shall involve the normal obligations which
attach to the

3329   

placing of a bona fide job order, including the acceptance of referrals of
veterans and

3330   

nonveterans. The listing of employment openings does not require the hiring of
any particular

3331   

job applicants or from any particular group of job applicants, and nothing
herein is intended to

3332   

relieve the contractor from any requirements in Executive orders or regulations
regarding

3333   

nondiscrimination in employment.

3334    3335   

d.      Whenever a contractor, other than a state or local governmental
contractor, becomes

3336   

contractually bound to the listing provisions in paragraphs 2 and 3 of this
clause, it shall advise

3337   

the state workforce agency in each state where it has establishments of the name
and location

3338   

of each hiring location in the state. As long as the contractor is contractually
bound to these

3339   

provisions and has so advised the state agency, there is no need to advise the
state agency of

3340   

subsequent contracts. The contractor may advise the state agency when it is no
longer bound

3341   

by this contract clause.

3342    3343   

e.      The provisions of paragraphs 2 and 3 of this clause do not apply to the
listing of employment

3344   

openings which occur and are filled outside of the 50 states, the District of
Columbia, the

3345   

Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, the

3346   

Commonwealth of the Northern Mariana Islands, Wake Island, and the Trust
Territories of the

3347   

Pacific Islands.

3348    3349   

f.       As used in this clause:

3350    3351   

1.      All employment openings includes all positions except executive and
senior

3352   

management, those positions that will be filled from within the contractor’s

3353   

organization, and positions lasting three days or less. This term includes
full-time

3354   

employment, temporary employment of more than three days’ duration, and
part-time

3355   

employment.

3356    3357   

2.      Executive and senior management means: (1) Any employee (a) compensated
on a

3358   

salary basis at a rate of not less than $455 per week (or $380 per week, if
employed

3359   

in American Samoa by employers other than the Federal Government), exclusive of

3360   

board, lodging or other facilities; (b) whose primary duty is management of the

3361   

enterprise in which the employee is employed or of a customarily recognized

3362   

department or subdivision thereof; (c) who customarily and regularly directs the
work

3363   

of two or more other employees; and (d) who has the authority to hire or fire
other

3364   

employees or whose suggestions and recommendations as to the hiring, firing,

3365   

advancement, promotion or any other change of status of other employees are
given

3366   

particular weight; or (2) any employee who owns at least a bona fide 20-percent

3367   

equity interest in the enterprise in which the employee is employed, regardless
of

3368   

whether the business is a corporate or other type of organization, and who is
actively

3369   

engaged in its management.

3370    3371   

3.      Positions that will be filled from within the contractor’s organization
means

3372   

employment openings for which no consideration will be given to persons outside
the

3373   

contractor’s organization (including any affiliates, subsidiaries, and parent
companies)

3374   

and includes any openings which the contractor proposes to fill from regularly

3375   

established “recall” lists. The exception does not apply to a particular opening
once

3376   

an employer decides to consider applicants outside of his or her own
organization.

3377    3378   

g.      The contractor agrees to comply with the rules, regulations, and
relevant orders of the

3379   

Secretary of Labor issued pursuant to the Act.

3380   

 

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3381   

h.      In the event of the contractor’s noncompliance with the requirements of
this clause, actions for

3382   

noncompliance may be taken in accordance with the rules, regulations, and
relevant orders of

3383   

the Secretary of Labor issued pursuant to the Act.

3384    3385   

i.       The contractor agrees to post in conspicuous places, available to
employees and applicants

3386   

for employment, notices in a form to be prescribed by the Deputy Assistant
Secretary for

3387   

Federal Contract Compliance, provided by or through the Contracting Officer.
Such notices

3388   

shall state the rights of applicants and employees as well as the contractor’s
obligation under

3389   

the law to take affirmative action to employ and advance in employment qualified
employees

3390   

and applicants who are disabled veterans, recently separated veterans, other
protected

3391   

veterans, or Armed Forces service medal veterans. The contractor must ensure
that

3392   

applicants or employees who are disabled veterans are informed of the contents
of the notice

3393   

(e.g., the contractor may have the notice read to a visually disabled
individual, or may lower

3394   

the posted notice so that it might be read by a person in a wheelchair).

3395    3396   

j.       The contractor will notify each labor organization or representative of
workers with which it has

3397   

a collective bargaining agreement or other contract understanding, that the
contractor is

3398   

bound by the terms of the Vietnam Era Veterans’ Readjustment Assistance Act of
1974, as

3399   

amended, and is committed to take affirmative action to employ and advance in
employment

3400   

qualified disabled veterans, recently separated veterans, other protected
veterans, and Armed

3401   

Forces service medal veterans.

3402    3403   

k.      The contractor will include the provisions of this clause in every
subcontract or purchase order

3404   

of $100,000 or more, unless exempted by the rules, regulations, or orders of the
Secretary

3405   

issued pursuant to the Vietnam Era Veterans’ Readjustment Assistance Act of
1974, as

3406   

amended, so that such provisions will be binding upon each subcontractor or
vendor. The

3407   

contractor will take such action with respect to any subcontract or purchase
order as the

3408   

Deputy Assistant Secretary for Federal Contract Compliance may direct to enforce
such

3409   

provisions, including action for noncompliance.

3410    3411    3412    Contract Term 3413    The contract base period of
performance will be October 1, 2013, through September 30, 2020, with 3414   
two, five year renewal periods to be exercised by mutual agreement of the
parties. The Night Network 3415    will begin operation on September 30, 2013;
the Day Network will begin operation on October 1, 2013. 3416    3417    3418   
Renewal Process 3419    [*] 3420    3421    3422    3423    3424    Amendments
or Modifications 3425    In order to be binding upon the Postal Service or the
aviation supplier, any amendment or modification 3426    of this Contract must
be in writing signed by the Contracting Officer on behalf of the Postal Service
3427    and an officer of the aviation supplier authorized to bind the company.
3428    3429    3430    Assignment 3431    Neither Party shall, directly or
indirectly (whether by succession, merger, or otherwise) assign, 3432   
delegate, novate, or otherwise transfer this Contract or any of its rights or
obligations hereunder, 3433    without the prior written approval of the other.
However, the aviation supplier may assign this contract 3434    to any of its
internal business affiliates upon written notice to the Postal Service. 3435   
3436   

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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3437    Bankruptcy 3438    In the event the aviation supplier enters into
proceedings relating to bankruptcy, whether voluntary or 3439    involuntary,
the aviation supplier will furnish, by certified mail, written notification of
the bankruptcy to 3440    the Contracting Officer responsible for administering
the contract. The notification must be furnished 3441    within five days of the
initiation of the bankruptcy proceedings. The notification must include the date
3442    on which the bankruptcy petition was filed, the court in which the
petition was filed, and a list of Postal 3443    Service contracts and
Contracting Officers for all Postal Service contracts for which final payment
has 3444    not yet been made. This obligation remains in effect until final
payment under this contract. 3445    3446    3447    Confidentiality 3448   

a.      During the term of this contract and until the earlier of five (5) years
after such termination or

3449   

until such time as the information is no longer confidential as described below,
each party

3450   

shall treat as confidential and appropriately safeguard and shall not use for
the benefit of any

3451   

person or corporation other than the other party:

3452    3453   

1.      Written information identified in writing as confidential or oral
information promptly

3454   

confirmed in writing as being confidential;

3455    3456   

2.      Written information or oral information disclosed by the parties during
the negotiation

3457   

of this contract and written information or oral information promptly confirmed
in

3458   

writing as confidential pertaining to a party’s pricing, business or assets
which is

3459   

received at any time from a party that is identified in writing; or

3460    3461   

3.      Any information or knowledge concerning the methods of operation,
promotion, sale,

3462   

or distribution used by a party which may be communicated to the other party or
which

3463   

a party may otherwise acquire by virtue of its performance of this Agreement.

3464    3465   

b.      Notwithstanding the provisions of subparagraphs 1 through 3, above,
neither party shall be

3466   

required to obtain prior written approval before providing information regarding
this contract:

3467    3468   

1.       To Members of Congress serving on a committee or subcommittee with
oversight

3469   

responsibility of the Postal Service;

3470    3471   

2.       In response to legal process or otherwise required by law;

3472    3473   

3.       In response to a request from the Department of Justice Antitrust
Division attorneys or

3474   

economists in pursuit of a non-public investigation; or

3475    3476   

4.       In response to requests submitted to the Postal Service under the
Freedom of

3477   

Information Act. In this regard, the Postal Service shall follow the procedures

3478   

promulgated at 39 CFR Section 265.8.

3479    3480   

c.      Information shall not be considered confidential if it is:

3481   

1.       Generally known to the trade or public;

3482   

2.       Rightfully possessed by a party prior to the effective date of this
contract;

3483   

3.       Received by a party from a third party which rightfully possesses it;

3484   

4.       Independently developed by the other party; or

3485   

5.       Releasable pursuant to Postal Service regulations addressing how
information is

3486   

maintained by the Postal Service.

3487    3488    3489    Entire Agreement 3490    This Contract, together with
all Attachments, constitutes the entire agreement and understanding 3491   
between the Parties in connection with the subject matter described, and
supersedes and cancels all 3492    previous negotiations, commitments, and
writings related to the subject matter.

 

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3493    3494    3495    Force Majeure 3496    Both the Postal Service and the
aviation supplier shall be excused from their obligations for volume 3497   
guarantees or service performance, respectively, under this Contract, and
neither Party shall be liable 3498    to the other or any other person or entity
for loss, damage, delay, mis-delivery or non-delivery of 3499    shipments
transported pursuant to this Contract, resulting in whole or in part from any of
the following: 3500    3501   

a.      When there occurs a State or Federal government-declared State of
Emergency and / or

3502   

instructions by a government agency that has actual or apparent powers or
authority

3503   

(including, but not limited to, the Federal Aviation Administration (FAA) or the
Transportation

3504   

Security Administration (TSA)) to order airport closures or limitations on
airport activity;

3505    3506   

b.      When the failure to meet contractual obligations results in whole or in
part from public

3507   

enemies, terrorist acts, criminal acts of any person or entity, public
authorities acting with

3508   

actual or apparent authority (including U.S. Postal Inspectors), civil
commotion, hazards

3509   

incident to a state of war, national disruptions in transportation networks or
operations (of any

3510   

mode) of the aviation supplier, Postal Service, or any other entity, strikes,
natural disasters, or

3511   

disruption or failure of third-party communication and information systems; or

3512    3513   

c.      When there exist any conditions that present a danger to each Party’s
personnel.

3514    3515   

d.      In every case the failure to perform must be beyond the control and
without the fault or

3516   

negligence of the party claiming that its performance is excused. Each Party is
required to

3517   

continue and attempt to recommence performance to the greatest extent possible
without

3518   

delay.

3519    3520    It is the responsibility of the Party asserting the Force
Majeure event to formally declare that a Force 3521    Majeure event has taken
place within twenty-four (24) hours of the event, except when the event 3522   
occurs on a Friday, Saturday or Sunday. Declaration of a Force Majeure event
that occurs on a Friday, 3523    Saturday, or Sunday must be made by the close
of business on the following Monday, except when 3524    the Monday falls on a
holiday, then it must be declared by the close of business on the following 3525
   Tuesday. The party declaring the Force Majeure event must document the
circumstances of the event 3526    in writing to the Contracting Officer’s
Representative, who will review the information with the 3527    Manager, Air
Transportation Operations, and relevant aviation supplier officials. In the
absence of a 3528    formal request for relief under this clause, all
appropriate volume guarantees and performance 3529    standards will remain in
force. Except for the calculation of the service levels, nothing in this section
3530    shall relieve or excuse the aviation supplier of its service
obligations. Subsequent to a Force Majeure 3531    event being declared, the
declaring party must provide reasonable, written documentation with 3532   
sufficient detail to support the declaration. 3533    3534    If, as a result of
the occurrence of one of the foregoing events, the aviation supplier is excused
from 3535    performance, and the Postal Service is excused from meeting its
minimum volume commitment for the 3536    identified period, the Parties will
meet to agree upon the pro-rata adjustments to be made. 3537    3538    On days
where mail volume is withdrawn, withheld, or not transported under this
provision, the 3539    minimum volume commitment for the identified period will
be reduced for that period by the amount of 3540    that volume. 3541    3542   
3543    Frequency Adjustment 3544    If, during the term of this contract, the
Postal Service decides to reduce, in whole or in part, the 3545    number of
delivery days, for any mail type it provides, to fewer than six (6) per week,
the Postal 3546    Service reserves the right to effectuate a change in delivery
days by adjusting the Statement of Work 3547    of this contract, including, but
not limited to, the annual number of operating days or the frequency of 3548   
service hereunder. The parties agree that such an adjustment does not constitute
a partial termination 3549    of the contract, nor will it give rise to an
equitable adjustment.

 

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3550    3551    If the number of delivery days is reduced, in whole or in part,
to five (5) and the Postal Service decides 3552    to reduce the number of
operating days under this contract, in whole or in part, to five (5), the
parties 3553    agree to reduce the Contract Volume Minimum calculation. The
Contract Volume Minimum calculation 3554    will be reduced by the average daily
volume for the previous twelve (12) months excluding the weeks 3555    of Peak
associated with the removed day of service without adjustment to the tier
structure, the 3556    contract rate, or be subject to any other price-related
adjustment. The monies associated with the 3557    volume removed from the
calculation will be eliminated. 3558    3559    If the number of delivery days
is reduced to fewer than five (5), and the Postal Service decides to 3560   
reduce the number of operating days under this contract, in whole or in part, to
fewer than five (5), the 3561    parties will negotiate an equitable adjustment
if necessary. 3562    3563    No later than 120 days prior to the effective date
of such reduction in delivery days, the parties shall 3564    commence
discussions as to how to implement the change. Within 90 days of such notice,
the 3565    supplier must implement the changes outlined above. 3566    3567   
3568    Notices 3569    Any notice, report, demand, acknowledgement or other
communication which under the terms of this 3570    Contract or otherwise must
be given or made by either Party, unless specifically otherwise provided in 3571
   this Contract, shall be in the English language and in writing, and shall be
given or made by express 3572    delivery service with proof of delivery,
certified air mail (return receipt requested). The parties may 3573    also send
a copy of the same communication through electronic mail, facsimile with
acknowledgement 3574    of receipt/proof of receipt, or personal delivery. If a
party sends a copy of the official correspondence 3575    by electronic mail or
facsimile, the correspondence shall not be deemed received until the receiving
3576    party confirms receipt. 3577    3578    Such notice, report, demand,
acknowledgement or other communication shall be deemed to have 3579    been
given or made in the case of express delivery service with tracking and tracing
capability on the 3580    date of signature of the proof of delivery, and in the
case of certified mail on the fifth business day in 3581    the place of receipt
after the date sent. 3582    3583    The notice address for the Postal Service
shall be: 3584   

U.S. Postal Service

3585   

Air Transportation CMC

3586   

Attention: Manager

3587   

475 L’Enfant Plaza SW, Room 1P 650

3588   

Washington, DC 20260-0650

3589    3590    The notice address for the aviation supplier shall be: 3591   

Federal Express Corporation

3592   

Attention: Vice President, Postal Transportation Management

3593   

3610 Hacks Cross Road

3594   

Building A 1st Floor

3595   

Memphis, TN 38125-8800

3596    3597    3598    Severability 3599 3600 3601 3602 3603 3604 3605   

a.      If any term, provision, covenant or condition of this Contract is held
by a court or Board of
competent jurisdiction or by a request, direction or indication of an agency or
department of a
Governmental Body having subject matter jurisdiction to be invalid or
unenforceable, the
remainder of the provisions shall continue in full force and effect unless the
rights and
obligations of the parties have been materially altered or abridged by such
invalidation or
unenforceability.

 

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3606 3607 3608 3609 3610 3611   

b.      If a material provision of this Contract is materially altered or
abridged as the result of a final
and binding order of a Governmental Body having subject matter jurisdiction,
then the Postal
Service and the aviation supplier will meet to negotiate in good faith to reach
a mutually
satisfactory modification to this Contract. If the Parties are unable to reach a
mutually
satisfactory resolution, then either Party may declare the negotiations to be at
an impasse and
the parties shall resolve the dispute in accordance with the provisions of this
contract.

3612    3613 3614   

c.      Notwithstanding the foregoing, the Parties agree to make their best
efforts to oppose any
changes requested by a Governmental Body to any material provision of this
Contract.

3615    3616    3617    Third Party Governmental Delays 3618    If, during the
term of this contract, a governmental entity with subject matter jurisdiction
enacts laws, 3619    promulgates regulations, or issues orders mandating that
the aviation supplier screen mail dispatched 3620    for transportation by
aircraft within the United States for bombs, explosives, or other hazardous 3621
   materials, and aviation supplier does not have a method for otherwise
complying at no additional cost 3622    to the Postal Service, either party may,
at no cost to the other party, suspend performance under the 3623    contract
during the period in which such screening is actually required to be
accomplished. 3624    3625    Within fourteen (14) days of the enactment of any
law, promulgation of any regulation, or issuance of 3626    any order referenced
above, the parties shall commence negotiations in an attempt to modify this 3627
   contract to address any adverse impacts and / or other concerns asserted by
one or both parties that 3628    may arise as a result of additional screening
requirements. 3629    3630    If the parties cannot agree upon such a
modification within 180 days, or within such longer period as 3631    the
parties may mutually agree, the contract and all orders hereunder may be
terminated at no cost to 3632    either party. 3633    3634    3635    Waiver of
Breach 3636    No waiver of breach of any of the provisions of this Contract
shall be construed to be a waiver of any 3637    succeeding breach of the same
or any other provision. 3638   

 

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Part 4: List of Attachments

 

Part 4 - List of Attachments and Forms

 

Attachments:     Attachment 1   Postal Service Operating Periods, dated June 27,
2014   Attachment 2   Air Stops & Projected Volumes, dated January 8, 2013  
Attachment 3   Operating Plan, Day Network, dated June 27, 2014   Attachment 4  
Operating Plan, Night Network, dated June 27, 2014   Attachment 5   Reserved  
Attachment 6   Postal Furnished Property, April 16, 2013   Attachment 7  
Electronic Data Interchange Service Requirements, dated September 1, 2012  
Attachment 8   Investigative / Security Protocol and Guidelines, dated July 2012
  Attachment 9   Wage Determination, dated October 31, 2012   Attachment 10  
Pricing, dated September 29, 20141   Attachment 11   Perishable Mail and Lives,
April 22, 2013   Attachment 12   Reserved   Attachment 13   Service Contract Act
Wage Determinations, dated April 17, 2013   Attachment 14   Contract Density,
dated June 27, 2014   Attachment 15   Average Weight Process, dated June 27,
2014   Attachment 16   Re-labeling Process, dated June 27, 2014   Attachment 17
  Handling Unit Types, dated June 27, 2014

Forms:      DOT Form F 5800.1    Hazardous Materials Incident Report   I-9 Form
   Employment Eligibility Verification   PS Form 2025    Contract Personnel
Questionnaire   PS Form 8203    Order / Solicitation / Offer / Award  
US Treasury Form 941    Quarterly Federal Tax Return

 

1 

Included herein

 

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Attachment 10: Pricing

 

Exercised Option 1, 2, and 3

Attachment 10

Pricing

January 13, 2015

 

Attachment 10 – Pricing Day Network (Proposal 2F)    1/13/2015

[*]

 

* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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Attachment 10: Pricing

 

Attachment 10 – Pricing Night Network (Proposal 2B)    18-Apr-13

[*]

 

Attachment 10 – Pricing    6/27/2014

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* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

 

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