Inside this Issue USPS Sets Strict Diversification Standard • 10 John Sheehy Bowing Out as President • 12 Contract Eligibility Linked to Safety • 15 Peering Into The Future
8521 Leesburg Pike, Suite 350, Vienna, Virginia 22182 • Toll Free 1-866-543-1661 • (202) 543-1661 • www.nsrmca.org Copyright 2023, National Star Route Mail Contractors Association All rights reserved. No part of this monthly publication may be reproduced – either wholly or in part – without the express permission of the copyright holder. National Executive Board Member at Large Tony Davis Davis Mail Services (844) 864-1767 [email protected] Member at Large Vacant Position to be filled at National Convention. John Sheehy President Glanta, Inc. (920) 202-5086 [email protected] Eastern Region Vice President Richard Jubb W&L Mail Service, Inc. (434) 736-0036 [email protected] Managers PNT - George Rood (330) 502-2023 [email protected] LDT - Lisa McAbee (864) 491-3576 [email protected] CDS - Vacant Central Region Vice President Larry Stough Sodrel Truck Lines (812) 282-7941 [email protected] Managers PNT - Tom Brandtner [email protected] LDT - Terry Leckel [email protected] CDS - Paul Millan [email protected] Suzan Porter Vice President C Blackburn, Inc. (845) 756-2261 [email protected] Jami Sweeney Secretary-Treasurer Katlyn, Inc. (301) 643-0212 [email protected] Southern Region Vice President Jeff Lepak Louis V. Lepak Trucking Co., Inc. (405) 236-0944 [email protected] Managers PNT - Ed Zengel, Jr. [email protected] LDT - Tony Davis [email protected] CDS - Cindy LoRusso [email protected] Western Region Vice President Mark Matheson Matheson Trucking, Inc. (916) 685-2330 [email protected] Managers PNT - Jack Khudikyan [email protected] LDT - Dan Rackley [email protected] CDS - Randy Weber [email protected] Caribbean Region Vice President Whesley Sepulveda SN Transport Inc. (787) 564-1444 [email protected] Northeast Region Vice President Richard Salanger Salanger Trucking LLC (315) 422-8867 [email protected] Managers PNT - Dwayne Andreasen [email protected] LDT - Kalib Carmichael [email protected] CDS - Jim Jennings [email protected] 2 NSRMCA
Editorial Managing Editor: Cameron Ayers Staff Writer: Landon Stamper Contributor: Donna Schwontkowski Production Layout: Cameron Ayers Printing/Distribution: Heritage Printing Photography Cover/Back: Dane Miller Feature: John Anthony Pool June 2023 • Volume 74 Number 6 CONTENTS 6 12 From the Executive Director 4 The Six Million Dollar Man-ager 6 Memo: 70% of Carriers’ Business Should Come From Outside USPS 10 NSRMCA President Sheehy Not Running for Re-Election 12 More Locations To Be Insourced 14 USPS Ties DOT Safety Ratings To Eligibilty on Future Contracts 15 AJR Nabs Excellence Award 16 What Are the Postal Service’s Competitive Procurement Rules? David Hendel 20 NSRMCA Rewind 22 Upcoming Events 24 DOE Fuel Indexes 30 President’s Perspective John Sheehy 32 CPI-W: CDS Contractor Index 34 JUNE 2023 3
Dear Star Carrier Readers, For the past two years, NSRMCA has been discussing the Postal Service’s Delivering for America plan and its prospective impact on the surface transportation network. At times, there was uncertainty around implementation and how the plan would impact suppliers. As reported later in this issue of The Star Carrier, NSRMCA has recently received significant clarity on how the Postal Service will evaluate and utilize suppliers moving forward. Change can be challenging. But NSRMCA members do not face it alone. The very mission of NSRMCA is to help support your business and its continued success. That often comes in the form of education, opportunities to connect with Postal Service decisionmakers, and guidance when conflicts arise. But NSRMCA’s work does not stop there. Since 2022, NSRMCA has hosted webinars introducing transportation suppliers to TMS solutions that will help them comply with the Postal Service’s new integrated logistics ecosystem (ILE) requirements. Recently, NSRMCA has used its webinars to introduce suppliers to additional tools that will help them succeed. For example, NSRMCA introduced suppliers to Enterprise Truck Rental’s new Flex-e-Rent program (and its GEOTAB partner). NSRMCA also introduced suppliers to predictive, real-time weather planning and route optimization from WeatherOptics. NSRMCA is also fast at work in building a partnership network that will enable members to receive valuable business support at members-only reduced prices. Today, NSRMCA members benefit from exclusive deals to advance safety (NoCell), reduce insurance costs (Kincaid), and provide back-office management (TLC Companies). In the coming months, NSRMCA will bring on new partners. Your business’s success depends on a lot more than updates from the Postal Service. NSRMCA is here to provide comprehensive support. If you have not already done so, now is the time to renew your membership. The year ahead will be pivotal. Sincerely, Gregory Reed From the Executive Director Gregory R. Reed [email protected] (202) 543-1661 Correction Captions in the May edition of The Star Carrier incorrectly identified Dan Rackley as being from Green Valley, Calif. Dan Rackley operates in Grass Valley, Calif. 4 NSRMCA
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The Six Million Dollar Man-ager y age 17, John Pool already had eight years of up close and personal experience with postal contracting. Every Sunday, his grandmother took him along on her 288 mile CDS-like route. “When you’re a kid, an hour is forever and the route was six hours,” explained Pool, who today serves as chief operating officer at Mail Management Services (MMS). “The worst part was that it was in the mid ’70s. I already missed a half hour of [The Six Million Dollar Man] TV show by the time I got back home.” Little did Pool know that years later, those formative experiences would give him abilities that — while not Lee Majors-like — still endowed him with exceptionally good insight into the postal delivery industry and taught him how to turn around failing businesses. Steering a Sinking Ship At age 18, he started driving that same route for his By Donna Schwontkowski John Pool poses with his large collection of vintage mailboxes and mailbags — amassed over 20 years — in Stockdale, Texas. (Photo by John Anthony Pool) Applying Past Lessons to Shape Innovative Future B 6 NSRMCA
SHIFT HOURS MINS K7 SATURDAY ONLY Q67 MONDAY-FRIDAY K7 Q7 BLYTHEVILLE, AR B 0015 0030 AR HORN LAKE, MS 0045 AR HERNANDO, MS 0100 0000 A 0015 0030 0045 001 0030 BLYTHEVILLE, AR 0045 LV NESBIT, MS 0030 AR 0000 0000 0015 0030 0045 HCR 380N9 P&DC MEMPHIS BW MMS YARD MEMPHIS 0045 LV MMS YARD MEMPHIS 003 004 0300 0000 BW MMS YARD MEMPHIS HERNANDO, MS 0015 LV MMS YARD MEMPHIS 0030 0200 0000 0015 BLYTHEVILLE, AR AR HERNANDO, MS OSCEOLA, AR LV HORN LAKE, MS 0500 0000 LV OSCEOLA, AR AR NESBIT, MS 0015 0400 0000 P&DC MEMPHIS LV NESBIT, MS 0030 AR HORN LAKE, MS 0045 LV HORN LAKE, MS 0045 LV BLYTHEVILLE, AR LV HERNANDO, MS 0600 0000 AR NESBIT, MS 0015 MMS YARD MEMPHIS 0045 EW MMS YARD MEMPHIS 0800 0000 0015 0030 0700 0000 P&DC MEMPHIS 0015 AR MMS YARD MEMPHIS 0030 EW MMS YARD MEMPHIS AR 1000 0000 0015 0030 0045 1100 0000 0015 0030 0045 C 0045 0900 0000 0015 0030 0045 MMS YARD MEMPHIS 002 1300 0000 D 0015 0030 0045 007 010 1400 0000 1200 0000 0015 0030 0045 K7 0045 LV MMS YARD MEMPHIS LV HERNANDO, MS 1600 0000 AR NESBIT, MS 0045 1500 0000 BLYTHEVILLE, AR P&DC MEMPHIS 0015 0030 BW MMS YARD MEMPHIS AR HERNANDO, MS 0000 AR NESBIT, MS 0015 LV NESBIT, MS 0030 AR HORN LAKE, MS LV HERNANDO, MS 1700 0000 AR BLYTHEVILLE, AR E 0015 LV NESBIT, MS 0030 AR HORN LAKE, MS HERNANDO, MS 0015 0030 BW MMS YARD MEMPHIS 0045 LV G 0015 0030 0045 0045 EW MMS YARD MEMPHIS 2100 0000 0015 0030 0045 AR MMS YARD MEMPHIS 0030 AR MMS YARD MEMPHIS EW MMS YARD MEMPHIS F 0015 MPA MEMPHIS 0030 0045 P&DC MEMPHIS 2300 0000 0015 0030 0045 2200 0000 0030 AR OSCEOLA, AR AR HERNANDO, MS 0045 LV OSCEOLA, AR LV HORN LAKE, MS MPA MEMPHIS 0015 LV BLYTHEVILLE, AR 2000 0000 P&DC MEMPHIS 0015 0045 LV HORN LAKE, MS 1900 0000 MPA MEMPHIS 1800 EW MMS YARD MEMPHIS HERNANDO, MS HERNANDO, MS LV MMS YARD MEMPHIS AR LV LV HORN LAKE, MS P&DC MEMPHIS AR MMS YARD MEMPHIS AR NESBIT, MS LV NESBIT, MS AR HORN LAKE, MS MPA MEMPHIS 090 010 HERNANDO, MS BW MMS YARD MEMPHIS MPA MEMPHIS ROUTE | 01 ROUTE | 02 A segment from John Pool’s timeline for an MMS contract. It shows at a glance where a vehicle is at any given time. grandmother — Joy Manning — and her company, Manning Mail Service. But a cascading series of poor decisions started to dog the company. “My grandmother grew her business from one car to eight trucks and 15 drivers,” Pool said. “But she didn’t understand what kept people in the business. Nobody was there to help tutor her to not make mistakes.” Pool recalls a steady stream of DOT audits and IRS seizures throughout the ’80s that gradually consumed the business. It got so bad, that in 1985 Pool quit the industry entirely. “I did a little standup comedy, but it turns out I’m not that funny,” he said. But as the 1980s drew to a close, Manning Mail Service “was a month-to-month existence,” so he returned to the fold to help manage it. Pool tried to convince Manning to sell the company and file for bankruptcy. “The IRS was threatening to shut her down. She still wouldn’t do it, so I filed it myself. That didn’t go well because she cancelled it.” Soon, the fateful day arrived. “I ran my shift and came back and saw all our trucks parked in front of the post office, which we never did. I drove into the driveway and was surrounded by Treasury agents with guns pointing at me … I rolled down the window and said, ‘Uhm … where do you want me to park it?’ Then two agents jumped on the side of my door while I was trying to park the truck! I shut it down, and as soon as I did, they opened the door, pulled me out, put the sticker on it, and one agent reared back like I was going to take a swing at him.” That’s when Pool’s level-headedness and conversation skills came in handy. He explained the situation to the agent and worked with the agency over the coming months to try and salvage the company. “During my experience with her business, I realized the importance of people,” said Pool. “It’s not [about] money or trucks. It’s people. The employees helped me through that time by working for no money — who does that? They believed in me ’til I paid them back and I kept them employed. But the whole experience made me bitter. I decided I didn’t want to do this ever again.” He ultimately managed to sell the business to Southern Mail Service, where he spent the next 28 years working, starting out as a driver because “they didn’t quite know what to do with me,” before rising through the ranks, eventually becoming general manager before he left in 2019. Pool eventually found his way to MMS, where he wound up negotiating his own position. His goal was to avoid the landmines MMS’s competitors faced and position them to continued on page 8 JUNE 2023 7
Six Million Dollar Continued Number of employees: 600 Number of vehicles: 400 Number of Postal Service contracts: 45 Total value of contracts $75 million Service locations: Colorado, Kansas, Louisiana, Maine, Michigan, Missouri, Nebraska, Ohio, Tennessee, Texas, Washington, Wisconsin Fast Facts claim contracts from a $400 million competitor that was failing. Plugging Into the Matrix That’s when he applied all the knowledge gained from life’s hard lessons. At MMS, Pool developed a method of diagramming complex logistics operations into simple, one-page charts: a timeline of deliveries and routes for every hour of the day, and a map laying out all the routes and time frames. Pool devised these charts — which he collectively refers to as his “matrix” — as a way to avoid spending hours poring over spreadsheets. It also shows “gaps in the schedule that wouldn’t be obvious in a spreadsheet,” he explained. Using his matrix system, Pool is able to supervise hundreds of people with minimal support. “It’s really a one-sheet, sort of a cheat sheet to finding everything on the route,” Pool explained. “It gives a standardized format for every location. We’re all reading off the same sheet of music.” Pool relies on his matrix to help train drivers, and the charts are widely distributed throughout MMS. “It’s important that they all understand how everything works and the clockwork of it.” He’s even shared the charts with local USPS officials to explain various facets of their operations. Further Innovation Pool has focused on other innovations at MMS, as well, including spearheading the development of a new TMS system. The company likes it so much, it’s planning to license the software to other companies, creating a new revenue stream for MMS. He’s also committed the company to purchase 40 electric unibody trucks, with MMS preparing to invest $400,000 in infrastructure for the vehicles. Pool is also looking to the skies for innovative methods of mail delivery, pitching USPS on the idea of using mail delivery drones for routes where traffic congestion or other impediments can cause headaches. All these innovations have paid serious dividends. When Pool started at MMS, its revenues were $20 million and it had 200 employees. Now two years later, revenue has reached $80 million and the company has 600 employees. “At MMS, we’re planning for everything that we know — and then there’s the unknown,” he said. “What does U.S. mail look like 10 years from now? Is it replaced by something else?” But Pool doesn’t fear the future and the change that comes with it. That’s because he’s already there. 8 NSRMCA
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Postmaster General Louis DeJoy fields questions during a National Postal Forum session in Charlotte, N.C. (Photo by Cameron Ayers) Memo: 70% of Carriers’ Business Should Come From Outside USPS By Cameron Ayers Going forward, the Postal Service wants contractors to derive 70 percent of their income from outside sources. This policy — part of USPS’s push for more diversified business partners — was outlined in a June 1 memo from USPS Chief Logistics Officer Kelly Abney. “When determining best value on new [contract] awards, the total dollar value of a carrier’s USPS awarded business, both existing and represented in the potential new business, should not exceed 30 percent of the carrier’s total annual revenue,” the memo stated. And while exceptions can be made, they must be granted by either Abney or USPS Vice President of Transportation Strategy Pete Routsolias, according to the memo. The Postal Service has been pressing carriers to diversify their business interests for some time, but this is the first instance where it’s given partners a specific threshold for diversification. 10 NSRMCA
The last requirement stated that, when asked, carriers “must provide a financial statement and bank references for the previous two years that will be evaluated by USPS to ensure fiduciary thresholds are sound.” The goal of all these changes is to “ensure we are able to meet our service, safety and fiduciary commitments to the organization and the While the memo did not mention any sort of timetable for carriers to adopt, Abney noted during a presentation a week prior at the National Postal Forum (NPF) that “if you have a lot of business with the postal service today ... you don’t have to diversify overnight. But we’ve been talking about this for a couple of years now, so, it is time to start showing us that you’re hearing what we’re saying.” USPS officials also specified where that 70 percent of revenue can come from. Routsolias said during another appearance at NPF that “somebody asked a question that says, what exactly does diversification of business mean? Does that mean I have to have other transportation customers, or does it mean my organization has to have other revenue streams? And the answer is the latter.” “I want you to have a second, third, fourth, fifth, 100 different streams of revenue coming in,” Routsolias continued. “It’s in both parties best interest for me not to have a carrier that has no other customers, and for you as a carrier, not to have only me as a customer,” he said. “Because when change comes in, if it doesn’t go in your favor, bad things happen. ... And if you need help finding other revenue streams, we can help with that. There are some of the best, brightest brokers in here that are looking for carriers every day. Talk to them, they’ll hire you, you’ll move some of their freight. That’s where we want this to go, folks.” Great Expectations The revenue threshold was just one of four revised contracting standards the Postal Service outlined in Abney’s memo. One of these tied carrier safety ratings to their ability to secure and maintain contracts (see related story, p. 15). Th second one specified that “all carriers must meet industry best practice technology standards, such as basic EDI, GPS and email capabilities to match the date of their migration into our new ecosystem.” Kelly Abney (USPS photo) American people for the foreseeable future,” the memo stated. During an NPF presentation, Postmaster General Louis DeJoy also referenced the need for contractors to get on board with the coming changes. “I expect the transportation providers to do what we’re asking them to do, right? They can’t continue to do what they’ve been doing. It has been bad. It has been not good. ... We’ve got to be a world-class service provider. We need to compete with FedEx and UPS and others and those guys are good. Okay, they’re like 20 years ahead of us. And we’re going to try and catch up to them in two or three [years]. ... You want to come along for the ride? Come along for the ride! We’d love to have you!” DeJoy also spoke to the importance of reducing USPS’s annual spending on contracting, which he pegged at $10.6 billion annually. “I need to start getting costs down; optimizing transportation, it’s a biggie,” he said during a town hall meeting at NPF. “We have a lot of initiatives that both improve our carrier base ... and makes everything work ... I’m expecting to get at least $3 billion out of that. I already have the models that show that we can.” JUNE 2023 11
NSRMCA President Sheehy Not Running for Re-Election NSRMCA President John Sheehy is stepping down when his term ends in August. Sheehy made the announcement ahead of the 84th Annual National Convention in August, where his successor will be selected. Having been in the role for 11 years, Sheehy said “it gets to a point where it feels like it’s enough.” “I just feel like I’ve accomplished everything I can accomplish,” he said. “I mean, certainly there’s other things I could do. But I feel like most of the challenges that I had foreseen [when elected] in 2012, I was able to accomplish them all.” Sheehy will finish his time in office one year shy of the 12 years served by Robert “Brownie” Matheson. When asked about his proudest accomplishments, Sheehy mentioned that the biggest problem when he took over was the Voyager fuel program, which was eliminated after working with USPS to get a different fuel program. Under his leadership, NSRMCA revised its dues structure to better “match what we need to do.” The association was also reorganized from a 50 state-structure to a six region-structure. Starting Point Sheehy said his first involvement with NSRMCA came in 1981, when he attended the convention in Milwaukee. In the years since, he served as both vice president and regional president before first running for president in 2010. He lost that year to incumbent Cliff Blackburn but was By Landon Stamper successful in another bid two years later. Looking back, Sheehy said he enjoyed every minute of his time as the head honcho and thinks that he’s helped set the “association up for a good, solid future.” Whomever replaces him, Sheehy offered some simple parting advice: listen more than you talk. “You can be a hard-nosed president, or you can be one that is more of a leader and pulls together all the good ideas that this association has,” he said. “And I think you’ll be way more successful [going] forward if you practice some of those laid-back, listen more than you talk-type attitudes.” NSRMCA President John Sheehy 12 NSRMCA
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More Locations To Be Insourced USPS’s chief logistics officer, Kelly Abney, speaks during his presentation at the National Postal Forum. (Photo by Cameron Ayers) The Postal Service plans to absorb more delivery contracts into its internal network in the coming years. This policy, which USPS dubs insourcing, claimed a number of contracts in Oklahoma City in early 2023. During a presentation at the National Postal Forum, USPS Chief Logistics Officer Kelly Abney noted that “our modernization plans will also include a renewed look at our private-versus-contract fleet balance. In some markets, where it makes sense, we will be insourcing current contract fleet operations.” “Many of you are aware of what we did in Oklahoma City; it was one of the first places that we started the changes there,” Abney continued. “First of all, I think it’s fair for me to say that when we decide to make these changes, many times it will have absolutely nothing to do with the carrier performance. ... Carrier performance is only one of the aspects that we look at what we try to make these decisions.” Robert Cintron, USPS’s vice president for logistics, emphasized that “there’s a lot of decision making that goes into making these changes. ... We’re looking at service, we’re looking at cost. We’re looking at how it fits into the [Delivering for America] plan and different things we’re doing as it relates to the plan. We look at the facility and capabilities. ... So, some places are going to make sense for us to do this in the organization. And in some places, it just won’t.” Pete Routsolias, vice president of transportation strategy at USPS, noted that the agency is looking at multiple sites for insourcing. “I don’t know where or when, but if the business case shows a positive return for us to do it ... we’re gonna do it. ... As soon as we know those other sites, folks, if you’re impacted, you will be the first to know.” By NSRMCA Staff NPF Coverage 14 NSRMCA
Starting July 1, carriers should have a satisfactory safety rating with the Department of Transportation [DOT] to qualify for future Postal Service contracts. This requirement was spelled out in a June 1 memo from USPS’s Chief Logistics Officer Kelly Abney, which listed four revised Postal Service contracting policies (see related story, p. 10). All carriers assigned a rating “must have a safety rating of satisfactory by July 2023,” the memo stated. “Conditional ratings will not qualify for future renewals or awards. All unrated carriers will be evaluated on a case-by-case basis to determine if their safety record and programs meet USPS expectations.” Additionally, “all carriers must report any serious accidents that were caused due to carrier negligence, which can be grounds for immediate contract cancellation if USPS deems appropriate remediation and safeguards were not in place per contract requirements.” The memo noted that any exception to its mandates must be approved either by Abney or by USPS Vice President for Transportation Strategy Pete Routsolias. Dead Serious Both men spoke to this issue the week before issuing the memo, during the National Postal Forum in Charlotte, N.C. During a presentation, Abney noted that “some large carriers didn’t believe this, and they are now exlarge carriers. So, it’s a big deal. We’re dead serious.” “When we award contracts, we put a heavier weight on fiduciary responsibility, safety and on-time performance,” he continued. “Safety and violation records are included in every one of our transportation supplier meetings. And I can tell you that there are no suppliers under contract with the Postal Service with unsatisfactory safety scores.” Routsolias spoke at NPF about what carriers could do to improve unsatisfactory or conditional ratings. “Going forward, we’re going to ask you to work with the DOT, work with [the Federal Motor Carrier Safety Administration] to get that score adjusted, or we’re not going to allow you to continue doing business with us.” He added that only carriers with at least one year of active certification will be eligible for future contracts. “You know, I’m worried about the mail, but I’m more worried about the driver. ... I’m more worried about the other car that might have gotten hit or the other bus that might have got hit, right? ... I can’t replace the driver, I can’t call somebody’s wife, or son, or daughter, or mother, or father and say your son’s not coming home. I don’t want to do that. So, we have to focus on safety each and every day.” “Major safety violations may result in immediate dismissal,” he added. “If you have a very bad accident, and you are very negligent in that accident, we may cancel all your contracts.” Safety Audits Additionally, Routsolias said carriers can expect to receive randomized safety audits from USPS officials. “One day, I’m going to randomly show up at your facility and say: ‘Show me your safety audits.’ ... show me your safety records,” he said. “Show me how you hire your drivers. Let’s see how many accidents you have. I’m just going to show up out of the blue. Carriers are mandated to call in serious accidents within 24 hours. I fired a carrier three days ago because after 24 hours and 30 minutes, I called them and said, How come you didn’t call me?” “This is not an option, folks,” he said. USPS Ties DOT Safety Ratings To Eligibility on Future Contracts By Cameron Ayers JUNE 2023 15
USPS officials recently honored California-based AJR Trucking with the prestigious Supplier Excellence Award. The award, which was conferred May 22 at the National Postal Forum in Charlotte, N.C., was accepted by AJR owner Jack Khudikyan on the company’s behalf. He was one of 13 honorees this year. USPS officials noted AJR’s “strong” on-time performance score; its considerable sustainability efforts; and its focus on “people, operations and equipment.” AJR Nabs Excellence Award at NPF Recognition of Service USPS officials flank AJR Trucking’s Jack Khudikyan, seen holding his plaque for supplier excellence. The officials are VP of Supply Managment Mark Guilfoil, Chief Financial Officer and Executive Vice President Joseph Corbett, and Vice President of Transportation Strategy Pete Routsolias. (Photo courtesy of USPS) 16 NSRMCA
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What Are the Postal Service’s Competitive Procurement Rules? With the Postal Service announcing that it would bid out expiring HCR contracts held by the same company for the past eight years, now is a good time to review the Postal Service’s competitive procurement requirements. Unlike the rest of the federal government, the Postal Service is not covered by the Federal Acquisition Regulation (FAR) and is not required to maximize competition. So let’s look at the Postal Service’s procurement policies contained in the USPS Supplying Principles and Practices manual (SPP), which was recently updated on April 1, 2023. While the SPP was not issued as a regulation, and thus does not have the force and effect of law, it is essentially binding on the Postal Service because it is the agency’s official and final rules. The SPP provides that the Postal Service’s procurement goal is to timely achieve best value solutions. The SPP states that these solutions are generally achieved through competition because competition brings market forces to bear and helps USPS purchase teams compare the relative value of proposals and prices. (SPP Section 2-10.) The first step in the procurement process is conducting “market surveillance,” which is the continuous process of updating market search to obtain a sense of the marketplace. Market surveillance allows the Postal Service to maximize competition and increases the likelihood that USPS will obtain the best value outcome. (SPP Section 2-10.1) Adequate Competition After procurement officials have conducted market surveillance and determined to use competitive procurement procedures, the selection must be made “utilizing adequate competition.” This means soliciting a sufficient number of the best-qualified suppliers to ensure that the required quality of services are obtained when needed and that the price is fair and reasonable. To achieve this, the SPP states that “[s]oliciting numerous potential suppliers is recommended whenever feasible.” (SPP Section 2-10.2) The SPP notes that the number of firms to be solicited will vary by the type of service, market conditions and the needs of the Postal Service. The SPP provides generally that purchasing opportunities are to be publicized to ensure adequate competition. The SPP notes that the Postal Service “works closely with trade and industry associations” to identify suppliers, and that it will “[p]ublicize purchasing and business opportunities in print or electronic media as appropriate to enhance competition.” (SPP Section 2-21.5.) Prequalified Suppliers The Postal Service may limit competition to prequalified suppliers. But if there is any doubt that the identified list of potential sources does not represent the most capable suppliers or will not result in adequate competition, the opportunity should be publicized. While publicizing requirements is a matter of judgment, the SPP lists a variety of circumstances under which they should be publicized. These include when the best value could be realized from By David Hendel LEGAL CORNER 20 NSRMCA
companies not previously identified as potential suppliers or when publicizing the information will further the business and competitive interests of the Postal Service. (SPP Section 2-27.1) Even when the Postal Service believes it has solicited enough suppliers to obtain adequate competition, the RFP should be made available to any qualified supplier that requests one. If the competition is limited to prequalified suppliers, the RFP should still be provided to other suppliers who request it. Alternatively, the Postal Service may publicize an RFP through SAM.gov. (SPP Section 2-27.2.) When that method does not provide the most effective communications channel, the opportunity should also be publicized through other media. Analysis What to make of these general procurement rules on competing and publicizing procurement opportunities? Overall, the SPP provides procurement officials with discretion in determining which suppliers are to be solicited and the means of publicizing the opportunity. In a perfect world, that discretion will be reasonably exercised, without playing favorites and not used as pretext to hide administrative convenience, bias, or worse. But in a less-than-perfect world, sometimes that discretion will not be exercised rationally or will be abused. In those cases, you would have grounds to challenge the Postal Service’s failure to publicize the procurement or allow you to bid on it. For example, if you are the incumbent contractor and have performed satisfactorily, then — absent extraordinary circumstances — you should be notified of any reprocurement of the service and given an opportunity to submit a bid. As another example, if you have been denied the opportunity to participate in a procurement in retaliation for taking a lawful action, such as filing a claim or disagreement, that would also be an abuse of discretion. In these cases, you would have good grounds to challenge the failure to solicit your company or publicize the opportunity through the Postal Service’s disagreement resolution process or protest in federal court. (David Hendel is a partner at Culhane Meadows Haughian & Walsh with a special focus on postal contracting law. The views expressed here are his own.) JUNE 2023 21
Mistakes are inevitable in publishing, even within the august pages of The Star Carrier, but this one from March 1974 is a doozy. A correction at the bottom of the page references an NSRMCAbacked pension plan with a return on investment that was slightly less than first promised. As an aside, the correction is seated beside Robert “Brownie” Matheson’s long-running “Let’s Talk Shop” column. What’s a Few Decimal Points Between Friends? 1974 22 NSRMCA
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PROPANE AUTOGAS TRUCKS DELIVER RESULTS Challenge: Result: Economic Savings: By the Numbers: • 26 Ford-750 trucks equipped with ROUSH CleanTech propane fuel systems • 8,000 miles per vehicle per month • 16,000 gallons of propane autogas used per year per vehicle Lisa McAbee, Owner of McAbee Trucking ROUSHcleantech.com | 800.59.ROUSH Company: McAbee Trucking, Inc. Industry: United States Postal Service contractor Location: Blacksburg, South Carolina Making the switch to alternative-fuel vehicles had to make sense financially. “Propane is very favorable for us economically,” McAbee said. With the money saved overall due to propane’s efficiency, the company has upgraded its facilities, vehicles and parking lots. With the addition of propane autogas delivery trucks, McAbee Trucking is reducing harmful emissions, benefiting employees’ health and improving the local community’s air quality — all while reducing costs. To cut emissions of its fleet vehicles, lead the industry in the use of alternative transportation fuels and “do the right thing” for generations to come. I want my grandkid’s grandkids to have a clean environment. I have breathing issues, as so many others do. I want to do more than my part to help. Contact ROUSH CleanTech to learn more about propane vehicles for your fleet. JUNE 2023 25
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Fuel Indexes The charts below detail the average monthly retail prices for diesel and gasoline, according to the Department of Energy. Consult the top chart to determine which of the eight regions you occupy. The middle chart covers diesel prices while the bottom one addresses regular gasoline prices. New England Central Atlantic Lower Atlantic Midwest Gulf Coast Rocky Mountain West Coast California ME NY WV ND NM MT WA CA NH PA VA SD TX WY OR VT NJ NC NE AR UT NV MA DE SC KS LA CO AZ CT MD GA OK MS ID AK RI DC PR MN AL HI FL IA MO WI IL MI IN OH KY TN US Retail on Highway Gas & Diesel Update for DOE Monthly Average Retail Gasoline All Formulations New England (PADD 1A) Retail Gasoline Prices Central Atlantic (PADD 1B) Retail Gasoline Prices Lower Atlantic (PADD 1C) Retail Gasoline Prices Midwest (PADD 2) Retail Gasoline Prices Gulf Coast (PADD 3) Retail Gasoline Prices Rocky Mountain (PADD 4) Retail Gasoline Prices West Coast (PADD 5) Retail Gasoline Prices October 2022 3.558 3.702 3.295 3.744 3.218 3.874 5.402 November 2022 3.790 3.851 3.305 3.587 3.065 3.662 4.810 December 2022 3.427 3.427 2.960 3.014 2.715 3.180 4.102 January 2023 3.325 3.469 3.201 3.217 2.996 3.287 3.992 February 2023 3.420 3.560 3.320 3.303 3.089 3.887 4.284 March 2023 3.392 3.507 3.312 3.340 3.125 3.781 4.487 April 2023 3.494 3.657 3.526 3.584 3.333 3.612 4.588 May 2023 3.575 3.678 3.416 3.528 3.170 3.677 4.630 Highway Diesel New England (PADD 1A) No 2 Diesel Retail Sales (C/gal) Central Atlantic (PADD 1B) No 2 Diesel Retail Sales (C/gal) Lower Atlantic (PADD 1C) No 2 Diesel Retail Sales (C/gal) Midwest (PADD 2) No 2 Diesel Retail Sales (C/gal) Gulf Coast (PADD 3) No 2 Diesel Retail Sales (C/gal Rocky Mountain (PADD 4) No 2 Diesel Retail Sales (C/gal) West Coast (PADD 5) Less CA: No 2 Diesel Retail Sales (C/gal) California No 2 Diesel Retail Sales (C/gal) October 2022 5.449 5.549 5.065 5.226 4.885 5.195 5.838 6.330 November 2022 5.962 5.946 5.188 5.253 4.826 5.392 5.401 6.121 December 2022 5.380 5.459 4.743 4.609 4.309 4.971 4.980 5.558 January 2023 5.105 5.121 4.671 4.427 4.277 4.727 4.753 5.467 February 2023 4.989 4.897 4.459 4.242 4.132 4.645 4.643 5.423 March 2023 4.684 4.659 4.171 4.055 3.959 4.378 4.517 5.263 April 2023 4.553 4.485 4.048 3.983 3.867 4.118 4.451 4.990 May 2023 4.285 4.251 3.816 3.832 3.619 4.101 4.398 4.842 30 NSRMCA
OUR MEMBERS FORM the foundation OF THE COMMUNITIES THEY SERVE. YOU ARE Since 1925, we’ve prided ourselves on helping members build a solid financial foundation for themselves and their families. That’s why nobody can serve our members like we can. For more information on benefits of membership, visit us online at www.apcu.com. a Tradition of Service serving postal employees and their families since 1925 JUNE 2023 31
I attended my first NSRMCA national convention in August of 1981; the site was Milwaukee, Wisconsin. My father and mother had been to several national conventions prior to that, but this was my first. My family has served USPS as postal suppliers since 1952, 29 years before I officially started my career (as a child of family business owners, you actually start working as soon as you can do something). Over the next 42 years, I would miss very few national meetings and became involved with the Wisconsin branch, which I served as a delegate, state vice president and state president before eventually becoming a regional director. In 2012, I was elected as your national president and have had the privilege of leading this great organization through some very interesting times. When I started as president, our state branches were losing membership as larger companies consolidated the smaller companies and won more solicitations. Older members retired while some companies succumbed to financial pressures and shut down. It became clear that our once-decentralized, state-oriented structure was no longer sufficient. A new, more national approach was introduced and while we were getting that up to speed, a worldwide pandemic with lockdowns was added to the gauntlet. Association meetings were suspended, and leaderships terms were extended to provide continuity through this unprecedented period. And if all this were not quite enough to manage, our national director of 52 years, Skip Maraney, was forced to retire due to health issues. With the cooperative effort of our twoperson staff and the board, the association met the challenge and hired Greg Reed in 2021. As the pandemic issue subsided, the association got a chance to super-charge all the changes it had tirelessly implemented in the previous few years. With a clear vision forward, a structure that suited our needs and an energetic new director, the association again became the vibrant force it had been in the not-too-distant past. Now, the NSRMCA is just beginning to realize its collective potential, its reach to sponsors, members and other stakeholders and is poised to do great things for the industry in the years to come. As my fifth term as president concludes at the national convention in Washington, D.C. this August, I wanted to reflect on how I have been truly blessed to have been given the chance to guide an organization and a business that I truly love. Together, we have met every challenge head on, created a strong organization and most importantly, we have created friendships and bonds that will last a lifetime. The board of directors and the talented staff we have developed over the past decade are ready and able to continue the great work of the NSRMCA. Although I will be stepping down from my leadership role, the love and support I have for this organization will not waver, and my thoughts and prayers will be for your continued success and the success of the next group of leaders. The last 42 years have gone by in a minute, the last 11 years in a second, but those last 11 have been some of the best years in my memory, thanks to all the support I got from all of you. It has truly been an honor! Put a stamp on it! Sign up for Informed Delivery President’s Perspective John Sheehy NSRMCA President 32 NSRMCA
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CPI-W: CDS Contractor Index The CPI-W is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services. The CPI-W is based on the spending patterns of urban wage earners and clerical workers. The CPI-W can be used to request an adjustment to your contract to accommodate increased costs. Line items 1B, 5, and 17 are adjustable by the CPI-W. A contractor may simply make a request to the Postal Service to incorporate the latest CPI adjustment and it will do the calculations. But there may be times when the comparison period reflects a downward CPI and if you ask the Postal Service to incorporate the CPI adjustment you could be faced with a downward adjustment resulting in reduced compensation. The CPI does not always go up, so it is best to do the math prior to applying for the adjustment. Source: https://www.ssa.gov/oact/STATS/cpiw.html Month & Year Rebased January 2019 245.1 February 2019 246.2 March 2019 247.7 April 2019 249.3 May 2019 249.8 June 2019 249.7 July 2019 250.2 August 2019 250.1 September 2019 250.2 October 2019 250.8 November 2019 250.6 December 2019 250.4 January 2020 251.3 February 2020 251.9 March 2020 251.3 April 2020 249.5 May 2020 249.5 June 2020 251.0 July 2020 252.6 August 2020 253.5 September 2020 254.0 October 2020 254.0 November 2020 253.8 December 2020 254.0 January 2021 255.2 February 2021 256.8 Month & Year Rebased March 2021 258.9 April 2021 261.2 May 2021 263.6 June 2021 266.4 July 2021 267.7 August 2021 268.3 September 2021 269.0 October 2021 271.5 November 2021 273.0 December 2021 273.9 January 2022 276.3 February 2022 279.0 March 2022 283.1 April 2022 284.6 May 2022 288.0 June 2022 292.5 July 2022 292.2 August 2022 291.6 September 2022 291.8 October 2022 293.0 November 2022 292.5 December 2022 291.1 January 2023 293.5 February 2023 295.0 March 2023 296.0 April 2023 297.7 34 NSRMCA
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