Rule2024-18270
Competitive Postal Products
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 20, 2024
Effective
September 19, 2024
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission is adopting final rules establishing requirements for reviewing contracts negotiated between the Postal Service and customers for competitive services. These contracts are known as competitive negotiated service agreements (NSAs). The final rule includes a default method for reviewing competitive NSAs and three optional streamlined methods. Different requirements apply to each method for reviewing proposed competitive NSAs. In addition, the final rules include requirements for administering approved competitive NSAs.
Full Text
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<title>Federal Register, Volume 89 Issue 161 (Tuesday, August 20, 2024)</title>
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[Federal Register Volume 89, Number 161 (Tuesday, August 20, 2024)]
[Rules and Regulations]
[Pages 67292-67301]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-18270]
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POSTAL REGULATORY COMMISSION
39 CFR Parts 3000, 3010, 3040, and 3041
[Docket No. RM2023-5; Order No. 7353]
RIN 3211-AA34
Competitive Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adopting final rules establishing
requirements for reviewing contracts negotiated between the Postal
Service and customers for competitive services. These contracts are
known as competitive negotiated service agreements (NSAs). The final
rule includes a default method for reviewing competitive NSAs and three
optional streamlined methods. Different requirements apply to each
method for reviewing proposed competitive NSAs. In addition, the final
rules include requirements for administering approved competitive NSAs.
DATES: Effective September 19, 2024.
[[Page 67293]]
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
I. Background
II. Basis of Final Rules
I. Background
A Negotiated Service Agreement (NSA) is ``a written contract, to be
in effect for a defined period of time, between the Postal Service and
a mailer, which provides for customer-specific rates or fees and/or
terms of service in accordance with the terms and conditions of the
contract.'' 39 CFR 3010.101(f). These NSAs require prior Commission
approval before they are added to the applicable product lists;
however, different statutory and regulatory criteria apply to the
approval of Market Dominant NSAs and Competitive NSAs.\1\
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\1\ See, e.g., 39 U.S.C. 3642; Postal Regulatory Commission,
Annual Report to the President and Congress Fiscal Year 2021,
January 25, 2022, at 26 (FY 2021 Annual Report) (stating that the
Commission reviews Market Dominant NSAs to ensure they comply with
39 U.S.C. 3622(c)(10) and the Commission's regulations in 39 CFR
part 3040, subpart G); id. at 28 (stating that Competitive NSAs
require prior Commission review for compliance with 39 U.S.C.
3633(a) and 39 CFR part 3035). The focus of this docket is
Competitive NSAs.
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Before adding a product (such as a Competitive NSA) to the
Competitive product list, the Commission undertakes two types of
review: (1) review under 39 U.S.C. 3642; and (2) review under 39 U.S.C.
3633. Upon consideration of required information submitted by the
Postal Service, including projections of the proposed product's
revenues and costs and responses to any information requests,\2\ the
Commission determines whether the product complies with the
requirements for Competitive products in 39 U.S.C. 3642. The Commission
also makes a preliminary determination of whether the proposed product
will comply with the criteria outlined in 39 U.S.C. 3633(a). Final
determination of compliance with 39 U.S.C. 3633(a) is made
retrospectively, in the Commission's Annual Compliance Determination(s)
(ACD), as set forth in 39 U.S.C. 3653.
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\2\ See 39 CFR 3035.105. This information includes
``[s]ufficient revenue and cost data for the 12-month period
following the effective date of the rate or class to demonstrate
that each affected competitive product will be in compliance with 39
U.S.C. 3633(a)(2)[.]'' 39 CFR 3035.105(c)(1).
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Over the years, various efforts have sought to streamline review of
NSAs in certain respects by applying the concept of functional
equivalence to groups of NSAs.\3\ An umbrella product is a grouping of
NSAs that are functionally equivalent to a baseline agreement. The
Commission has used a functional equivalence analysis to approve
umbrella product agreements.\4\ Non-published rates NSA products are a
refinement of umbrella products that receive further streamlined review
because the products ``conform to a template agreement and offer prices
within specified, pre-approved ranges.'' Order No. 5753 at 3. These
products must comply with Commission classification and regulatory
requirements, including pre-approved pricing formulas, minimum cost
coverage, and documentation, and allow for a streamlined review process
because the contract template and financial model are approved in
advance.\5\
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\3\ See, e.g., Docket No. CP2008-5, Order Concerning Global
Expedited Package Services Contracts, June 27, 2008 (Order No. 86).
\4\ See, e.g., Order No. 5753 at 2-3 (summarizing the
Commission's approach to ``umbrella'' products); Docket No. R2013-9,
Order Granting, in Part, Motion for Partial Reconsideration of Order
No. 1864 and Modifying, in Part, Order No. 1864, August 11, 2014, at
7 (Order No. 2148) (allowing then-existing ``umbrella'' products to
designate multiple baseline agreements but ``plan[ning] to
discontinue the practice of designating more than one baseline
reference.''). The Commission also has considered similar
arrangements termed ``shell classifications,'' which may use a
``shell'' or template in lieu of an actual agreement as a baseline.
See Docket No. CP2008-8 et al., Order Concerning Global Plus
Negotiated Service Agreements, June 27, 2008, at 7-8 (Order No. 85);
cf. Docket No. MC2008-6 et al., Order Concerning Prices Under
Inbound Direct Entry Contracts with Certain Foreign Postal
Administrations, September 4, 2008, at 3, 7 (Order No. 105).
\5\ See Order No. 5753 at 3; Docket Nos. MC2010-29 and CP2010-
72, Order Approving Postal Service Request to Add Global Expedited
Package Services--Non-Published Rates 1 to the Competitive Product
List, November 22, 2010, at 15 (Order No. 593) (``[T]he model
contract is based on business rules which ensure that each contract
covers its attributable costs and makes a contribution to
institutional costs.'').
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In Order No. 6446,\6\ the Commission outlined concepts for
potential enhancements to its regime for adding NSAs to the Competitive
product list in a conceptual framework. See Order No. 6446 at 12. The
Commission received comments in response to Order No. 6446. Having
considered the comments received, the Commission proposed rules.\7\
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\6\ Advance Notice of Proposed Rulemaking on Regulations
Pertaining to Competitive Negotiated Service Agreements, February
24, 2023, at 1 (Order No. 6446); 88 FR 13752 (March 6, 2023).
\7\ Notice of Proposed Rulemaking to Amend Rules Regarding
Competitive Negotiated Service Agreements, January 30, 2024 (Order
No. 6953); 89 FR 8377 (February 7, 2024).
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II. Basis of the Final Rules
The Commission codifies, with modifications, its existing NSA
filing and review procedures as default rules for proposals to add NSAs
to the Competitive product list. The Commission codifies, with
modifications, existing, optional, streamlined methods for adding
qualifying umbrella products and non-published rate products to the
Competitive product list. The Commission also creates a new streamlined
filing option for qualifying NSAs called Standardized Distinct
Products. Each streamlined option has distinct filing and review
procedures providing different levels of scrutiny and streamlined
review. The final rules preserve the Postal Service's existing
contracting flexibility with default review procedures, while providing
the option for streamlined pre-implementation review of NSAs that
satisfy the eligibility requirements of one of the optional streamlined
methods.
The Commission establishes new filing and review procedures for
Standardized Distinct Product NSAs. These procedures include advance
review of financial models to streamline review of individual NSAs that
are based on existing Postal Service competitive products. Proposing
new non-published rate products also involves advance review of
financial models. By contrast, filing and review procedures for
umbrella products generally follow current practices. Default filing
and review procedures consist of former, generally applicable filing
and review practices for competitive NSAs (other than umbrella product
or non-published rate product NSAs).
The Commission also establishes rules for administering NSAs on the
competitive product list. These rules cover amendments, renewals,
extensions, and terminations of competitive NSAs, as well as periodic
reporting requirements.
The final rules are designed to streamline competitive NSA review,
while ensuring transparency and accountability, preserving existing
flexibility, and enabling a smooth transition with minimum disruption
for stakeholders. Under the final rules, the vast majority of proposed
competitive NSAs should qualify for a streamlined review procedure. Use
of such streamlined procedures, particularly the Standardized Distinct
Product option, should markedly simplify adding new NSAs to the
competitive product list.
Final Rules
List of Subjects
39 CFR Part 3000
Organization and functions, Seals and insignia.
[[Page 67294]]
39 CFR Part 3010
Administrative practice and procedure, Confidential business
information, Freedom of information, Sunshine Act.
39 CFR Part 3040
Administrative practice and procedure, Foreign relations, Postal
service.
39 CFR Part 3041
Administrative practice and procedure, Postal service, Reporting
and recordkeeping requirements.
For the reasons stated in the preamble, the Commission amends
chapter III of title 39 of the Code of the Federal Regulations as
follows:
PART 3000--THE COMMISSION AND ITS OFFICES
0
1. The authority citation for part 3000 continues to read as follows:
Authority: 39 U.S.C. 503; 5 U.S.C. 552.
0
2. Amend Sec. 3000.114 by revising paragraph (a) to read as follows:
Sec. 3000.114 The Public Representative.
(a) Pursuant to 39 U.S.C. 505, the Commission appoints a staff
member, on a case-by-case basis, to serve as a representative of the
general public's interests in public proceedings before the Commission;
pursuant to 39 U.S.C. 3653, 39 U.S.C. 3661, and 39 U.S.C. 3662, and 39
U.S.C. 3705, the Commission also appoints a staff member, on a case-by-
case basis, to serve as a representative of the general public's
interests in certain proceedings; and, pursuant to 39 U.S.C. 504(a),
the Chairman may appoint a staff member, on a case-by-case basis, to
serve as a representative of the general public's interests in other
proceedings before the Commission. In all such proceedings, the
appointee is called the Public Representative.
* * * * *
PART 3010--RULES OF PRACTICE AND PROCEDURE
0
3. The authority citation for part 3010 continues to read as follows:
Authority: 39 U.S.C. 404(d); 503; 504; 3661.
0
4. Amend Sec. 3010.101 by:
0
a. Redesignating paragraphs (p) through (u) as paragraphs (q) through
(v);
0
b. Adding new paragraph (p); and
0
c. Revising newly redesignated paragraph (q).
The addition and revision read as follows:
Sec. 3010.101 Definitions.
* * * * *
(p) Public proceeding means a proceeding developing rules,
regulations, and procedures or a proceeding materially affecting the
interests of the general public. A proceeding considering a request for
summary approval of a negotiated service agreement or of an amendment
to a negotiated service agreement is not a public proceeding. A
proceeding considering a request to amend a negotiated service
agreement for the sole purpose of extending the expiration date of the
negotiated service agreement is not a public proceeding.
(q) Public Representative or PR means an officer of the Commission
designated to represent the interests of the general public:
(1) In a public proceeding;
(2) With respect to any one of the following:
(i) The Commission's annual determination of compliance;
(ii) A request for an advisory opinion on a change in the nature of
postal services which will generally affect service on a nationwide or
substantially nationwide basis,
(iii) A rate or service complaint; or
(iv) Appeal of a Postal Service determination to close or
consolidate a post office; or
(3) As appointed by the Chairman.
* * * * *
0
5. Amend Sec. 3010.102 by redesignating paragraphs (d)(1)(vii) through
(xiv) as paragraphs (d)(1)(viii) through (xv) and adding a new
paragraph (d)(1)(vii).
The addition reads as follows:
Sec. 3010.102 Commission dockets.
* * * * *
(d)(1) * * *
(vii) Competitive Negotiated Service Agreement (K);
* * * * *
0
6. Revise Sec. 3010.140 to read as follows:
Sec. 3010.140 Opportunity to comment.
Except for proceedings involving an appeal of a Postal Service
determination to close or consolidate a post office, any person may
submit comments in public proceedings before the Commission. An
opportunity to provide a reply to comments shall be at the discretion
of the Commission, or the presiding officer if one is appointed. The
scope and timing of comments and reply comments may be specified by
notice, order, or presiding officer's ruling. There is no requirement
to intervene in a proceeding as a party in order to submit comments.
0
7. Amend Sec. 3010.152 by revising paragraphs (a) and (b)(5) and (6)
to read as follows:
Sec. 3010.152 Notices initiating dockets for consideration of
negotiated service agreements.
(a) The Secretary shall issue a notice to initiate a docket for
each request that proposes the addition or removal of a negotiated
service agreement from the market dominant or the competitive product
list, or the modification of an existing product currently appearing on
the market dominant or the competitive product list. Multiple requests
may be combined into a single notice.
(b) * * *
(5) The appointment of an officer of the Commission to represent
the interests of the general public in the proceeding, unless the
proceeding is not a public proceeding;
(6) The comment deadline pertaining to each request, unless the
proceeding is not a public proceeding.
* * * * *
0
8. Amend Sec. 3010.200 by revising paragraph (b) to read as follows:
Sec. 3010.200 Applicability.
* * * * *
(b) Unless the Commission orders otherwise, this subpart shall not
apply to proceedings governed by subpart F of this part (Proceedings
with an Opportunity for a Hearing on the Record). This subpart also
shall not apply to the following parts of subchapter D of chapter III
(Special Rules of Practice for Specific Proceeding Types) of this
title: part 3020 (Rules Applicable to Requests for Changes in the
Nature of Postal Services), part 3021 (Rules for Appeals of Postal
Service Determinations to Close or Consolidate Post Offices), part 3022
(Rules for Complaints) of this chapter, part 3023 (Rules for Rate or
Service Inquiries), and part 3024 (Special Rules for Complaints
Alleging Violations of 39 U.S.C. 404a). This subpart shall not apply to
any proceeding governed by Sec. Sec. 3041.325, 3041.505(f), and
3041.505(g) (Competitive Negotiated Service Agreements) of this
chapter.
PART 3040--PRODUCT LISTS AND THE MAIL CLASSIFICATION SCHEDULE
0
9. The authority citation for part 3040 continues to read as follows:
Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
10. Amend Sec. 3040.101 by adding paragraph (e) to read as follows:
[[Page 67295]]
Sec. 3040.101 Applicability.
* * * * *
(e) Modification of the competitive product list to add a
competitive negotiated service agreement is not governed by this part
but is governed by part 3041 of this chapter. The rules in part 3041 of
this chapter regarding removal of a negotiated service agreement from
the competitive product list supersede any conflicting rules in this
part.
0
11. Add part 3041 to subchapter E to read as follows:
PART 3041--COMPETITIVE NEGOTIATED SERVICE AGREEMENTS
Subpart A--General
Sec.
3041.105 General.
3041.110 Definitions.
Subpart B--Advance Review
3041.205 Advance review of non-published rates products and
standardized distinct products.
Subpart C--Adding Negotiated Service Agreements to the Competitive
Product List
3041.305 Applicability.
3041.310 General procedures and filing requirements.
3041.315 Procedures and filing requirements for umbrella products.
3041.320 Procedures and filing requirements for non-published rates
negotiated service agreements.
3041.325 Procedures and filing requirements for standard distinct
product negotiated service agreements.
Subpart D--Commission Review
3041.405 Docket and notice.
3041.410 Required findings.
3041.415 Commission review and disposition of requests to add
negotiated service agreements to the competitive product list.
Subpart E--Negotiated Service Agreements on the Competitive Product
List
3041.505 Amendments to competitive negotiated service agreements.
3041.510 Renewals of competitive negotiated service agreements.
3041.515 Extensions
3041.520 Terminations
Subpart F--Negotiated Service Agreement Reporting and Compliance
3041.605 Competitive negotiated service agreement reporting
requirements.
Authority: 39 U.S.C. 503; 39 U.S.C. 3633.
Subpart A--General
Sec. 3041.105 General.
(a) This part applies to competitive negotiated service agreements.
(b) When a general rule conflicts with a rule governing a specific
streamlined option, the rule governing the specific streamlined option
shall take precedence.
(c) Commission findings that the addition of a competitive
negotiated service agreement to the competitive product list is not
inconsistent with the standards of 39 U.S.C. 3633 are provisional and
subject to subsequent review.
(d) The addition of a competitive negotiated service agreement to
the competitive product list is limited to the term of the negotiated
service agreement, as it may be extended. The Commission will remove a
negotiated service agreement from the competitive product list
automatically upon the expiration or termination of the negotiated
service agreement. Any request to remove a negotiated service agreement
from the competitive product list unrelated to expiration or
termination of the negotiated service agreement shall follow the
applicable procedures outlined in part 3040 of this chapter.
(e) When a rule in subpart E of this part conflicts with a
provision of a negotiated service agreement added to the competitive
product list before September 19, 2024, the provision of the negotiated
service agreement shall take precedence.
Sec. 3041.110 Definitions.
The definitions in this section apply to this part.
(a) Baseline agreement. A negotiated service agreement that serves
as a model for an included contract in an umbrella product.
(b) Contract template. A template for included contracts in a non-
published rates product.
(c) Financial model. A workbook showing detailed projected cost,
revenue, and volume data for a negotiated service agreement; containing
all supporting inputs and calculations; and identifying the sources of
all such inputs. A financial model must not be inconsistent with
accepted analytical principles within the meaning of part 3050 of this
chapter and must not be inconsistent with accepted quantification
techniques within the meaning of part 3050 of this chapter.
(d) Functionally equivalent negotiated service agreements.
Negotiated service agreements that have similar cost characteristics
and similar market characteristics.
(e) Included contract. A negotiated service agreement included as
part of an umbrella product or non-published rates product.
(f) Minimum rates. The set of lowest rates that could be offered
pursuant to the terms of a negotiated service agreement, or specified
in a financial model, for each rate cell.
(g) Negotiated service agreement. As defined in Sec. 3010.101(f)
of this chapter, a written contract, to be in effect for a defined
period of time, between the Postal Service and a mailer, which provides
for customer-specific rates or fees and/or terms of service in
accordance with the terms and conditions of the contract. A rate
associated with a negotiated service agreement is not a rate of general
applicability.
(h) Negotiated Service Agreement (NSA) summary proceeding. A
streamlined proceeding considering a Postal Service request to add to
the competitive product list a product for which use of a financial
model has been authorized in a streamlined-option rulemaking or a
Postal Service request to amend such a product. Such a proceeding is
not a public proceeding.
(i) Non-published rates product. A single product consisting of a
contract template and any included contracts that are functionally
equivalent to the contract template and use a single common financial
model.
(j) Notice information. Contact information specified in a
negotiated service agreement for one party to provide the other party
with notice in accordance with the terms of the negotiated service
agreement.
(k) Postal Service executive. The Postmaster General, the Deputy
Postmaster General, or a Postal Service vice president. The term
``Postal Service executive'' also includes any Postal Career Executive
Service employee whose principal duties include the administration of
negotiated service agreements and who reports directly to the Postal
Service vice president overseeing the administration of negotiated
service agreements.
(l) Rate cell. Each and every separate rate identified in a
financial model or negotiated service agreement.
(m) Standardized distinct product. A negotiated service agreement
that is a variation of one or more competitive products offered as
rates of general applicability or added to the competitive product list
as rates not of general applicability.
(n) Streamlined option. An optional procedural approach to filing
requirements for a request to add a negotiated service agreement to the
competitive product list and to review of such negotiated service
agreement.
(o) Streamlined-option rulemaking. A rulemaking proceeding that
considers financial models, contract templates, and Mail Classification
Schedule
[[Page 67296]]
changes in connection with a streamlined option.
(p) Umbrella product. A single product consisting of a baseline
agreement and one or more included contracts that are functionally
equivalent to the baseline agreement.
Subpart B--Advance Review
Sec. 3041.205 Advance review of non-published rates products and
standardized distinct products.
(a) The Commission reviews proposed financial models, minimum
rates, and Mail Classification Schedule changes in streamlined-option
rulemakings to permit streamlined review of non-published rates
products and standardized distinct products.
(b) Streamlined-option rulemakings follow the procedures set forth
in part 3010, subpart E of this chapter and the additional procedures
set forth in this section.
(c) In addition to providing the information required by Sec.
3010.201(b)(1) of this chapter, a petition for a streamlined-option
rulemaking must:
(1) Provide a proposed financial model containing:
(i) Minimum rates for all rate cells;
(ii) Projected volume for all rate cells;
(iii) Projected revenue at minimum rates;
(iv) Projected costs attributable;
(v) Projected coverage of costs attributable within the meaning of
39 U.S.C. 3633(a), expressed as a percentage; and
(vi) All input data, sources, and calculations used;
(2) Provide a narrative explanation of how the proposed financial
model complies with paragraph (d)(1) of this section;
(3) Explain why the projected cost, revenue, and volume data in the
proposed financial model are reasonable and reliable;
(4) Identify the existing competitive product(s) on which proposed
products will be based and the Commission order(s) in which such
existing competitive product(s) were determined to be competitive;
(5) Identify each way in which proposed products could differ from
the existing competitive product(s) identified in paragraph (c)(4) of
this section;
(6) Explain why the potential differences identified in paragraph
(c)(5) of this section do not cause any proposed products to satisfy
the definition of a market dominant product within the meaning of 39
U.S.C. 3642(b)(1); and
(7) Identify the Mail Classification Schedule section in which
proposed products will be listed and provide any proposed changes
therein in legislative format.
(d) The financial model must:
(1) Demonstrate that each negotiated service agreement that will
use the minimum rates is not inconsistent with the standards of 39
U.S.C. 3633; and
(2) Rely on reasonable and reliable projected cost, revenue, and
volume data.
(e) The Mail Classification Schedule entry, including any proposed
changes, must:
(1) Identify all material differences between proposed products and
the exiting competitive product(s) on which proposed products are
based;
(2) Specify all options and features of proposed products included
in the financial model; and
(3) For proposed products based on an existing product with rates
not of general applicability, including a negotiated service agreement,
describe all material aspects of the proposed products, including the
information identified in Sec. 3040.104(b)(3)(ii)(A) of this chapter.
(f) The Commission will issue an order authorizing the proposed
financial model, minimum rates, and any Mail Classification Schedule
changes for use in requests to add standardized distinct products and
non-published rates products to the competitive product list if, after
review, the Commission finds that:
(1) The financial model and minimum rates are not inconsistent with
the standards of 39 U.S.C. 3633;
(2) The products using such proposed financial model, minimum
rates, and Mail Classification Schedule changes will be competitive
products; and
(3) The proposed Mail Classification Schedule changes comply with
the requirements of this section and are not inconsistent with the
proposed financial model.
(g) As a condition of any authorization issued pursuant to
paragraph (f) of this section, the Postal Service shall be required to
update the financial model whenever more accurate or complete cost,
revenue, or volume data are available and no less frequently than every
12 months from the date on which such authorization is granted. Upon
review of any updated financial model, the Commission may require
changes to any applicable minimum rates to ensure that the minimum
rates are not inconsistent with the standards of 39 U.S.C. 3633.
Subpart C--Adding Negotiated Service Agreements to the Competitive
Product List
Sec. 3041.305 Applicability.
(a) This subpart imposes requirements regarding the addition of
negotiated service agreements to the competitive product list. These
requirements are in addition to other requirements imposed by part 3035
of this chapter.
(b) The general requirements appearing in Sec. 3041.310 apply to a
request to add a negotiated service agreement to the competitive
product list unless the request is filed under one of the streamlined,
alternative options for competitive negotiated service agreement
consideration appearing in Sec. Sec. 3041.315, 3041.320, and 3041.325.
(c) Section 3041.320 is not applicable to any request to add an
included contract to a non-published rates product listed on the
competitive product list as of the effective date of this part. Any
such request is governed by the terms of the Commission order approving
the addition of such non-published rates contract to the competitive
product list.
Sec. 3041.310 General procedures and filing requirements.
(a) Except as otherwise provided in Sec. Sec. 3041.315, 3041.320,
and 3041.325, in order to add a negotiated service agreement to the
competitive product list, a request must be filed with the Commission
as provided in this section and Sec. 3035.105 of this chapter.
(b) Each request to add a negotiated service agreement to the
competitive product list must include each of the following items:
(1) A copy of the negotiated service agreement;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed negotiated
service agreement and the record of the proceedings in connection with
such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed changes therein in legislative format;
(4) The name, and class if applicable, of the proposed negotiated
service agreement;
(5) A description clearly explaining the operative components of
the negotiated service agreement;
(6) An explanation of the reason for initiating the docket and of
why the proposed negotiated service agreement is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
[[Page 67297]]
(7) An explanation of the reasons why the addition of the product
to the competitive product list will not result in a violation of the
standards of 39 U.S.C. 3633;
(8) Verification that the change does not classify as competitive a
product over which the Postal Service exercises sufficient market power
that it can, without risk of losing a significant level of business to
other firms offering similar products:
(i) Set the price of such product substantially above costs;
(ii) Raise prices significantly;
(iii) Decrease quality; or
(iv) Decrease output;
(9) Explanation of whether or not the proposed negotiated service
agreement is covered by the postal monopoly as reserved to the Postal
Service under 18 U.S.C. 1696 subject to the exceptions set forth in 39
U.S.C. 601;
(10) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the proposed negotiated
service agreement or substantially similar products;
(11) Any information available on the views of those who use, or
will use, the proposed negotiated service agreement on the
appropriateness of the proposed negotiated service agreement;
(12) A description of the likely impact of the proposed negotiated
service agreement on small business concerns;
(13) The information required by Sec. 3035.105(a) of this chapter;
(14) The information required by Sec. 3035.105(b) of this chapter;
(15) The information required by Sec. 3035.105(c) of this chapter;
(16) All other supporting justification upon which the Postal
Service proposes to rely; and
(17) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed negotiated service agreement.
(c) In order to authorize the addition of a negotiated service
agreement to the competitive product list, the Commission must:
(1) Give due regard to:
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
(2) Make the following findings:
(i) The proposed negotiated service agreement is a competitive
product; and
(ii) The proposed negotiated service agreement is not inconsistent
with the standards of 39 U.S.C. 3633.
Sec. 3041.315 Procedures and filing requirements for umbrella
products.
(a) The procedures described in this section and in Sec.
3035.105(a) of this chapter apply to requests to add an included
contract to an umbrella product or to create an umbrella product by
adding an included contract to an existing baseline agreement. Requests
to add a new negotiated service agreement to the competitive product
list for use as a baseline agreement must instead follow the
requirements of Sec. 3041.310.
(b) Any of the following negotiated service agreements may function
as a baseline agreement:
(1) An active negotiated service agreement, other than an included
contract in a non-published rates product, listed on the competitive
product list as of the effective date of this part.
(2) An active negotiated service agreement added to the competitive
product list following a request pursuant to Sec. 3041.310.
(3) An expired or terminated negotiated service agreement, other
than an included contract in a non-published rates product or a
standardized distinct product, that the Commission authorized to serve
as a baseline agreement before its expiration or termination.
(c) Only the Postal Service is permitted to propose to add an
included contract to an umbrella product.
(d) A proposal to add an included contract to an umbrella product
must include:
(1) A copy of the proposed included contract;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed included
contract and the record of the proceedings in connection with such
decision;
(3) A statement identifying the applicable baseline agreement;
(4) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition thereto in legislative format;
(5) A description clearly explaining the operative components of
the included contract;
(6) An explanation of the reason for initiating the docket and of
why the proposed negotiated service agreement is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
(7) An explanation of the reasons why the addition of the included
contract to the umbrella product will not result in a violation of the
standards of 39 U.S.C. 3633;
(8) A demonstration that the proposed included contract is
functionally equivalent to the baseline agreement;
(9) The information required by Sec. 3035.105(a) of this chapter;
(10) The information required by Sec. 3035.105(b) of this chapter;
(11) The information required by Sec. 3035.105(c) of this chapter;
(12) All other supporting justification upon which the Postal
Service proposes to rely; and
(13) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed included contract.
(e) In order to authorize the addition of an included contract to
an umbrella product, the Commission must make the following findings:
(1) The proposed included contract is functionally equivalent to
the baseline agreement; and
(2) With the addition of the proposed included contract, the
umbrella product is not inconsistent with the standards of 39 U.S.C.
3633.
Sec. 3041.320 Procedures and filing requirements for non-published
rates negotiated service agreements.
(a) A request to add a non-published rates product to the
competitive product list must comply with the requirements of this
section and the requirements of Sec. 3035.105(a) of this chapter.
(b) A non-published rates product contract template may be proposed
at any time during or following the pendency of a streamlined-option
rulemaking considering a proposed financial model, minimum rates, and
Mail Classification Schedule changes for standardized distinct products
and non-published rates products.
(c) A non-published rates product is added to the competitive
product list after:
(1) Issuance of a Commission order authorizing the use of an
applicable financial model, minimum rates, and Mail Classification
Schedule changes in a streamlined-option rulemaking; and
(2) Issuance of a Commission order approving the non-published
rates product contract template.
(d) A non-published rates product financial model, minimum rates,
and Mail Classification Schedule changes must be, or have been,
proposed in a streamlined-option rulemaking.
[[Page 67298]]
(e) A proposal for a non-published rates product contract template
must include the following information:
(1) The proposed non-published rates product contract template;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed non-published
rates product contract template and the record of the proceedings in
connection with such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition therein in legislative format;
(4) The number of the Commission order approving the use of the
financial model associated with the proposed non-published rates
product contract template or the number of the docket in which the
financial model associated with the proposed non-published rates
product contract template is being considered;
(5) A description clearly explaining the operative components of
the non-published rates product contract template;
(6) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the postal services
involved in the proposed non-published rates product contract template;
(7) A description of the views of those who will use the postal
services involved in the proposed non-published rates product contract
template on the appropriateness of the proposed non-published rates
product contract template;
(8) A description of the likely impact of the proposed non-
published rates product contract template on small business concerns;
(9) In lieu of the certified statement required by Sec.
3035.105(c)(2) of this chapter, a sworn statement of a Postal Service
executive certifying that the proposed non-published rates product
contract template is not inconsistent with the financial model
approved, or under consideration by the Commission, in the order or
docket identified in paragraph (e)(4) of this section;
(10) All other supporting justification upon which the Postal
Service proposes to rely; and
(11) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed non-published rates product contract template.
(f) A non-published rates product contract template may include
optional provisions to be selected by customers, provided that:
(1) The addition of any optional provision in any included contract
will not be inconsistent with the standards of 39 U.S.C. 3633;
(2) The addition of any optional provision in any included contract
represents a minor change to the included contract; and
(3) Each included contract that could be derived from the contract
template is functionally equivalent to every other included contract
that could be derived from the contract template.
(g) In order to authorize the addition of a non-published rates
product to the competitive product list, the Commission must:
(1) Give due regard to:
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
(2) Make the following findings:
(i) The proposed non-published rates product is a competitive
product; and
(ii) The proposed non-published rates product contract template is
not inconsistent with the standards of 39 U.S.C. 3633.
(h) After a non-published rates product has been approved, the
Postal Service may add one or more included contracts to the product
without filing a request or otherwise obtaining further approval from
the Commission, provided that:
(1) The included contract does not deviate in any way from the non-
published rates product contract template;
(2) No rate in any included contract is less than the corresponding
minimum rate authorized in the associated streamlined-option
rulemaking;
(3) The included contract bears a unique serial number; and
(4) Within 10 days after the effective date of each included
contract, the Postal Service:
(i) Notifies the Commission of the effective date and scheduled
expiration date of the included contract; and
(ii) Files a version of the applicable financial model updated to
include all projected cost, revenue, and volume data specific to the
included contract.
(i) Only the Postal Service is permitted to add an included
contract to a non-published rates product.
(j) If any included contract is terminated before its scheduled
expiration date, the Postal Service must inform the Commission within 7
days after such termination.
(k) If the Commission finds that the Postal Service has failed to
comply with any requirements of paragraph (h) or (j) of this section,
the Commission may take any of the following actions:
(1) Require the Postal Service to request Commission approval in
accordance with such terms as the Commission may specify by order, and
obtain such approval, before adding any additional included contracts
to non-published rates products; or
(2) Take other appropriate remedial action.
Sec. 3041.325 Procedures and filing requirements for standard
distinct product negotiated service agreements.
(a) A request to add a standardized distinct product to the
competitive product list must comply with the requirements of this
section and the requirements of Sec. 3035.105(a) of this chapter.
(b) A standardized distinct product may be proposed at any time
during or following the pendency of a streamlined-option rulemaking
considering a proposed financial model, minimum rates, and Mail
Classification Schedule changes for standardized distinct products and
non-published rates products. A single standardized distinct product
may include minimum rates and Mail Classification Schedule changes
authorized in multiple streamlined-option rulemakings.
(c) A standardized distinct product is added to the competitive
product list after:
(1) Issuance of one or more Commission orders authorizing the use
of one or more applicable proposed financial models, minimum rates, and
Mail Classification Schedule changes in a streamlined-option
rulemaking; and
(2) Issuance of a Commission order approving the addition of the
standardized distinct product to the competitive product list in an NSA
summary proceeding.
(d) In each NSA summary proceeding, the Postal Service shall
submit:
(1) A copy of the negotiated service agreement;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed negotiated
service agreement and the record of the proceedings in connection with
such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition therein in legislative format;
[[Page 67299]]
(4) The number(s) of the Commission order(s) resolving the
streamlined-option rulemaking(s) applicable to the proposed negotiated
service agreement;
(5) The planned effective date(s) of the planned rates.
(6) A description clearly explaining the operative components of
the negotiated service agreement;
(7) An explanation of the reason for initiating the docket and of
why the proposed standardized distinct product is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
(8) An explanation of the reasons why the addition of the
standardized distinct product to the competitive product list will not
result in a violation of the standards of 39 U.S.C. 3633;
(9) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the postal services that
are the subject of the proposed standardized distinct product;
(10) Any information available on the views of those who use, or
will use, the proposed standardized distinct product on the
appropriateness of the proposed standardized distinct product;
(11) A description of the likely impact of the proposed
standardized distinct product on small business concerns;
(12) In lieu of the certified statement required by Sec.
3035.105(c)(2) of this chapter, a sworn statement of a Postal Service
executive certifying that the proposed standardized distinct product is
not inconsistent with the financial model authorized for use in the
applicable Commission order identified in paragraph (e)(4) of this
section;
(13) In lieu of the revenue and cost data required by Sec.
3035.105(c)(1) of this chapter, a version of the applicable financial
model updated to include all projected cost, revenue, and volume data
specific to the proposed product;
(14) All other supporting justification upon which the Postal
Service proposes to rely; and
(15) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed standardized distinct product.
(e) Only the Postal Service is permitted to propose to add a
standardized distinct product to the competitive product list.
(f) In order to authorize the addition of a standardized distinct
product to the competitive product list, the Commission must:
(1) Give due regard to:
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
(2) Make the following findings:
(i) The proposed standardized distinct product is a competitive
product; and
(ii) The proposed standardized distinct product is not inconsistent
with the standards of 39 U.S.C. 3633.
Subpart D--Commission Review
Sec. 3041.405 Docket and notice.
(a) The Commission will issue a notice establishing a docket for
each request to add a negotiated service agreement to the competitive
product list under this part. The Commission will also issue a notice
upon receiving a request complying with the requirements of Sec.
3041.505(b) to amend an existing negotiated service agreement. Notices
issued pursuant to this paragraph (a) will include:
(1) The general nature of the proceeding;
(2) A reference to the legal authority pursuant to which the
proceeding is to be conducted;
(3) A concise description of the proposal;
(4) If applicable, the identification of an officer of the
Commission to represent the interests of the general public in the
docket;
(5) If applicable, a specified period for public comment; and
(6) Such other information as the Commission deems appropriate.
(b) The Commission will post the notice on its website. The
Commission will promptly publish the notice in the Federal Register.
(c) In the case of a request to add a standardized distinct product
to the competitive product list or to amend a standardized distinct
product, an officer of the Commission to represent the interests of the
general public will not be appointed in the docket.
(d) In the case of a request to add a standardized distinct product
to the competitive product list or to amend a standardized distinct
product, public comment will not be requested in the docket.
Sec. 3041.410 Required findings.
(a) In order to authorize the addition of a negotiated service
agreement to the competitive product list, the Commission must make the
findings specified in Sec. 3041.310, except as provided in Sec. Sec.
3041.315, 3041.320, and 3041.325.
(b) [Reserved].
Sec. 3041.415 Commission review and disposition of requests to add
negotiated service agreements to the competitive product list.
(a) The Commission will review each request to add a negotiated
service agreement to the competitive product list and any responsive
comments, except as set forth in Sec. 3041.320 regarding non-published
rates product included contracts. The Commission will either:
(1) Grant the request upon making the required findings;
(2) Grant the request upon making the required findings with such
conditions as the Commission may consider appropriate;
(3) Deny the request; or
(4) Direct other action as the Commission may consider appropriate.
(b) Each grant of a request under paragraph (a)(1) or (2) of this
section is conditional upon the submission of accurate information in
support of the request. Any such grant may be revoked if the Commission
finds that any of the information submitted with the request contained
a material misrepresentation.
Subpart E--Negotiated Service Agreements on the Competitive Product
List
Sec. 3041.505 Amendments to competitive negotiated service
agreements.
(a) Except as provided in paragraph (c) of this section, an
amendment to an existing negotiated service agreement is not effective
until the Commission has approved the amendment. In order to approve an
amendment to an existing negotiated service agreement the Commission
must find that the negotiated service agreement, as amended by the
proposed amendment, is not inconsistent with the standards of 39 U.S.C.
3633.
(b) A request to amend a negotiated service agreement must include:
(1) A copy of the amendment;
(2) The planned effective date(s) of the amendment;
(3) A statement explaining the operative components of the
amendment; and
(4) If the amendment changes any rates in the negotiated service
agreement,
(i) The information required by Sec. 3035.105(a) of this chapter;
(ii) The information required by Sec. 3035.105(b) of this chapter;
and
[[Page 67300]]
(iii) The information required by Sec. 3035.105(c) of this
chapter, except that, for a request to amend a standardized distinct
product, a copy of the applicable financial model updated to include
all projected cost, revenue, and volume data specific to the product,
as amended by the proposed amendment, must be provided.
(5) All other supporting justification upon which the Postal
Service proposes to rely; and
(6) Such other information and data, and such statements of reasons
and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed amendment.
(c) An amendment to an existing negotiated service agreement may
take effect upon filing with the Commission without Commission approval
if each of the following requirements is satisfied:
(1) The Postal Service submits a notice to the Commission
containing:
(i) A copy of the amendment;
(ii) The planned effective date(s) of the amendment;
(iii) A statement explaining the operative components of the
amendment; and
(iv) A sworn statement from a Postal Service executive attesting
that the amendment modifies the existing negotiated service agreement
only in one or more of the ways specified in paragraph (c)(2), (e)(2),
or (f)(2) of this section; and
(2) The amendment modifies the existing negotiated service
agreement only in one or more of the following ways:
(i) Changing the customer's name to recognize a change to the legal
name of the customer;
(ii) Changing the customer's address;
(iii) Changing the name of any individual identified in the
contract;
(iv) Changing notice information;
(v) Increasing any rates, prices, fees, or charges in the
negotiated service agreement;
(d) Special rules regarding amending umbrella products.
(1) A baseline agreement shall not be amended, except to:
(i) Change the customer's name to recognize a change to the legal
name of the customer;
(ii) Change the customer's address;
(iii) Change the name of any individual identified in the contract;
(iv) Change notice information;
(v) Extend the term of the baseline agreement in accordance with
Sec. 3041.515; or
(vi) Make rate changes not inconsistent with the standards of 39
U.S.C. 3633.
(2) An included contract in an umbrella product shall not be
amended, unless the amendment remains functionally equivalent to the
baseline agreement.
(e) Special rules regarding non-published rates products.
(1) A non-published rates contract template shall not be amended.
(2) An included contract in a non-published rates product shall not
be amended, except to:
(i) Change the customer's name to recognize a change to the legal
name of the customer;
(ii) Change the customer's address;
(iii) Change the name of any individual identified in the contract;
(iv) Change notice information;
(v) Make rate changes provided that the rates to be charged equal
or exceed the current minimum rates approved by the Commission in the
applicable streamlined-option rulemaking;
(vi) Extend the included contract's expiration date provided that
the rates to be charged equal or exceed the current minimum rates
approved by the Commission in the applicable streamlined-option
rulemaking;
(vii) Select an alternative optional provision available in the
contract template.
(3) An amendment to an existing included contract will take effect
without Commission further approval upon filing with the Commission of
the notice specified in paragraph (c)(1) of this section.
(f) Special rules regarding standardized distinct products.
(1) A request to amend a standardized distinct product is reviewed
in an NSA summary proceeding.
(2) An amendment to an existing standardized distinct product may
take effect upon filing with the Commission without Commission approval
if:
(i) The Postal Service files the notice specified in paragraph
(c)(1) of this section; and
(ii) The amendment modifies the existing standardized distinct
product in one or more of the following ways:
(A) Changing the customer's name to recognize a change to the legal
name of the customer;
(B) Changing the customer's address;
(C) Changing the name of any individual identified in the contract;
(D) Changing notice information;
(E) Extending the standardized distinct product's expiration date
provided that the rates to be charged equal or exceed the current
minimum rates approved by the Commission in the applicable streamlined-
option rulemaking; or
(F) Implementing changes to rates provided that such changed rates
equal or exceed the current minimum rates approved by the Commission in
the applicable streamlined-option rulemaking.
(g) Special rules regarding a request to amend a negotiated service
agreement to extend the expiration date of the negotiated service
agreement.
(1) A request to amend a negotiated service agreement to extend the
expiration date of the negotiated service agreement must be submitted
in accordance with Sec. 3041.515.
(2) A proceeding considering a request to amend a negotiated
service agreement to extend the expiration date of the negotiated
service agreement is not a public proceeding.
(h) When a general rule conflicts with a special rule in this
section, the special rule shall take precedence.
Sec. 3041.510 Renewals of competitive negotiated service agreements.
(a) A renewal of a negotiated service agreement is deemed a new
negotiated service agreement.
(b) A renewal of a competitive negotiated service agreement will be
added to the competitive product list pursuant to the applicable rules
for adding a new negotiated service agreement to the competitive
product list.
Sec. 3041.515 Extensions.
(a) A negotiated service agreement may be extended prior to its
expiration date upon one of the following:
(1) Timely filing of notice with the Commission of the valid
exercise of an extension right in the negotiated service agreement; or
(2) Approval by the Commission of a timely filed amendment
extending the expiration date of the negotiated service agreement.
(b) For the purposes of paragraph (a) of this section, a notice or
amendment is timely filed if it is filed at least 7 days prior to the
expiration of the negotiated service agreement.
(c) Upon expiration, a negotiated service agreement shall be
removed automatically from the competitive product list.
(d) No negotiated service agreement shall remain on the competitive
product list following its expiration. An expired negotiated service
agreement shall not be extended retroactively.
(e) Notwithstanding any other rule in this chapter, the
prohibitions in paragraph (d) of this section shall not be waived.
Sec. 3041.520 Terminations.
(a) The Postal Service shall file notice of the termination of a
negotiated
[[Page 67301]]
service agreement within 7 days after such termination.
(b) Upon termination, a negotiated service agreement shall be
removed automatically from the competitive product list. No negotiated
service agreement shall remain on the competitive product list after
its termination.
Subpart F--Negotiated Service Agreement Reporting and Compliance
Sec. 3041.605 Competitive negotiated service agreement reporting
requirements.
(a) The Postal Service must file, on a quarterly basis, a summary
spreadsheet listing all negotiated service agreements active during any
part of the prior quarter. Negotiated service agreements must be listed
by Mail Classification Schedule section or in such other way as the
Commission requires by order. Such spreadsheet must identify all
extensions, expirations, and terminations of negotiated service
agreements and any other information the Commission requires by order.
(b) A report is due within 14 days after the last day of each
quarter of the fiscal year.
(c) Upon finding that any report contains significant omissions,
inaccuracies, or other deficiencies, the Commission may take any of the
following actions:
(1) Require the Postal Service to file such reports on a more
frequent basis;
(2) Require a Postal Service executive to submit a sworn statement
attesting to the accuracy and completeness of each subsequent report;
and
(3) Impose other conditions the Commission finds reasonable and
appropriate to ensure the accuracy and completeness of such reports.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024-18270 Filed 8-19-24; 8:45 am]
BILLING CODE 7710-FW-P
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</html>Indexed from Federal Register on August 20, 2024.
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