Rule2025-20252
Purchasing of Property and Services
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
November 19, 2025
Effective
November 19, 2025
Issuing agencies
Postal Service
Abstract
The Postal Service is revising its purchasing regulations governing debarment, suspension, and ineligibility from contracting to provide improved organization and clarity, updates to definitions and processes to better reflect actual practice, and alternatives in lieu of suspension and debarment.
Full Text
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<title>Federal Register, Volume 90 Issue 221 (Wednesday, November 19, 2025)</title>
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[Federal Register Volume 90, Number 221 (Wednesday, November 19, 2025)]
[Rules and Regulations]
[Pages 51994-51997]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20252]
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POSTAL SERVICE
39 CFR Part 601
Purchasing of Property and Services
AGENCY: Postal Service.
ACTION: Final rule.
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SUMMARY: The Postal Service is revising its purchasing regulations
governing debarment, suspension, and ineligibility from contracting to
provide improved organization and clarity, updates to definitions and
processes to better reflect actual practice, and alternatives in lieu
of suspension and debarment.
DATES: Effective November 19, 2025.
FOR FURTHER INFORMATION CONTACT: Robert Dietz at 202-268-6088 or Susan
Witt at 202-268-4833
SUPPLEMENTARY INFORMATION: The following updates to 39 CFR 601.113 are
being included:
<bullet> Section 601.113 is now titled ``Debarment, Suspension, and
Ineligibility from Contracting.''
<bullet> Paragraph (a): General was augmented to further describe
the purpose of the Postal Service's suspension and debarment process,
and clarify that suspension and debarment are separate from the
procedures under Sec. 601.105;
<bullet> Paragraph (b): Definitions was revised to clarify all
prior definitions, and add the following new definitions:
Administrative Compliance Agreement, concurrence, contract, Debarment
Official, excluded party, party, and voluntary exclusion;
<bullet> Paragraph (c): Debarment now consolidates the procedures
and grounds for debarment, which were previously included in paragraphs
(h) through (k);
<bullet> Paragraph (c)(1): Procedures (previously located at
paragraph (k)) was expanded to more clearly define the processes and
standards used to initiate and conduct debarment proceedings;
<bullet> Paragraph (c)(2): Grounds (previously titled ``Causes for
debarment'' and located at paragraph (h)) was revised for clarity,
including confirming that a violation of federal ethics law or
principles is grounds for debarment;
<bullet> Paragraph (c)(3): Mitigation (previously located at
paragraph (i)) received minor modifications for clarity;
<bullet> Paragraph (c)(4): Period of Debarment (previously located
at paragraph (j)) was revised to increase the standard period of
debarment from 3 years to 5 years, confirm that the Debarment Official
may debar a party for longer than 5 years, and clarify the process for
a party to later seek a reduction of the debarment period;
<bullet> Paragraph (c)(5): Alternative remedies is a new paragraph
confirming the ability of a party to enter into an Administrative
Compliance Agreement or agree to a voluntary exclusion in lieu of
debarment;
<bullet> Paragraph (d): Suspension consolidated the procedures for
suspension, grounds for suspension, and period of suspension, which
were previously located at paragraphs (e) through (g);
<bullet> Paragraph (e): Imputation of Conduct was restructured as a
stand-alone paragraph (previously located at paragraph (h)(4) and
(h)(5)) and revised to confirm that the conduct of a party's affiliate
may be imputed to that party;
<bullet> Paragraph (f): Suspension, debarment, and ineligible list
(previously located at paragraph (c)) was revised to clarify the Postal
Service's use of the General Services Administration's System for Award
Management (<a href="http://SAM.gov">SAM.gov</a>) in reporting debarments and suspensions, and
confirm that contracting officers must review the database before
making any contract award;
<bullet> Paragraph (g): Treatment of debarred, suspended, or
ineligible parties (previously titled ``Treatment of suppliers included
in the SAM Exclusions database'' and located at paragraph (d)) was
augmented to further define how debarred, suspended, or ineligible
parties will be treated with regards to contracting with or performing
any services for the Postal Service; and
<bullet> Paragraph (h): Notices was added to identify how all
notices from the Debarment Official under this section must be sent.
List of Subjects in 39 CFR Part 601
Administrative practice and procedure, Government procurement,
Postal Service.
Accordingly, the Postal Service amends 39 CFR part 601 as follows:
PART 601--PURCHASING OF PROPERTY AND SERVICES
0
1. The authority citation for 39 CFR part 601 continues to read as
follows:
[[Page 51995]]
Authority: 39 U.S.C. 401, 404, 410, 411, 2008, 5001-5605.
0
2. Section 601.113 is revised to read as follows:
Sec. 601.113 Debarment, suspension, and ineligibility from
contracting.
(a) General. The Postal Service's suspension and debarment process
protects the Postal Service and other federal government entities from
doing business with parties that engage in improper conduct. Except as
provided otherwise in this part, the Postal Service may not solicit
proposals from, or award new contracts to, parties that are excluded
from federal contracting. Postal Service suppliers are also prohibited
from awarding subcontracts to excluded parties, or employing excluded
parties as key personnel or in positions that require access to Postal
Service data, mail or facilities. Debarment, suspension and
ineligibility under the procedures described in this section are
separate from the procedures for declining to accept proposals under
Sec. 601.105.
(b) Definitions--(1) Administrative Compliance Agreement. An
agreement between the Postal Service Debarment Official and another
party used to resolve suspension or debarment proceedings, or potential
suspension or debarment proceedings.
(2) Affiliate. A business, organization, person, or individual
connected by the fact that one controls or has the power to control the
other, or by the fact that a third party controls or has the power to
control both. Indications of control include, but are not limited to,
interlocking management or ownership, identity of interests among
family members, shared facilities and equipment, contractual
relationships, common use of employees, or a business entity organized
following the suspension, debarment, ineligibility or proposed
debarment of a supplier which has the same or similar management,
ownership, or principal employees as the supplier that was suspended,
debarred, ineligible or proposed for debarment. Franchise agreements
are not conclusive evidence of affiliation if the franchisee has a
right to profit in proportion to its ownership and bears the risk of
loss or failure.
(3) Concurrence. Written confirmation from the General Counsel that
the conduct in question satisfies the legal requirements for suspension
or debarment of a party, and advice on whether suspension or debarment
is in the best interests of the Postal Service.
(4) Contract. Any agreement entered into between the Postal Service
and another party under the authority delegated pursuant to Sec.
601.104 or other delegated authority.
(5) Debarment. An exclusion from Postal Service and Federal
Government contracting and subcontracting for a reasonable, specified
period of time commensurate with the seriousness of the offense,
failure, or inadequacy of performance.
(6) Debarment Official. The Postal Service's vice president, Supply
Management, or his or her designee under a written delegation of
authority.
(7) Excluded party. An individual or business entity that is
ineligible to be awarded a Postal Service or other Federal contract as
a result of the suspension and debarment process or by voluntary self-
exclusion by the party. An excluded party may include a current or
former Postal Service supplier or subcontractor; a current or former
Postal Service employee; or an employee of a current or former supplier
or subcontractor. Customers, strategic alliance partners, and other
actual or former business associates of the Postal Service may also be
excluded through this process.
(8) General Counsel. This includes both the General Counsel and the
General Counsel's authorized representatives in the Law Department
assigned to advise the Debarment Official.
(9) Indictment. Indictment for a criminal offense. An information
or other filing by a competent authority charging a criminal offense is
given the same effect as an indictment.
(10) Ineligible. An exclusion from contracting or subcontracting by
an entity other than the Postal Service under statutes, executive
orders, or regulations, such as the Davis-Bacon Act, the Service
Contract Act, the Equal Employment Opportunity Act, the Walsh-Healy
Public Contracts Act, the National Environmental Protection Act, and
similar laws authorizing exclusion. As a matter of policy, the Postal
Service does not do business with excluded parties, even if the
exclusion did not arise under a Postal Service-specific law.
(11) Party. In this section, includes any individual, corporation,
or similar businesses organization, any supplier as defined in
paragraph (b)(13) of this section, or any customer or other legal
entity that may do business with the Postal Service or be the subject
of a suspension or debarment proceeding.
(12) Suspension. An exclusion from contracting and subcontracting
for a reasonable period of time due to the pendency of a debarment
proceeding or for other specified reasons.
(13) Supplier. For the purposes of this part, a supplier is any
individual or other legal entity that:
(i) Directly or indirectly (e.g., through an affiliate) submits
offers for, is awarded, or reasonably may be expected to submit offers
for or be awarded, a Postal Service contract or ordering agreement,
including a contract for carriage under Postal Service or commercial
bills of lading, or a subcontract under a Postal Service contract; or
(ii) Conducts business or reasonably may be expected to conduct
business with the Postal Service as a subcontractor, an agent, or a
representative of another supplier.
(14) Voluntary exclusion. Voluntary exclusion results from a
supplier's written agreement to be excluded for a period of time under
the terms of a settlement between the supplier and the Debarment
Official of the Postal Service or another Federal agency.
(c) Debarment--(1) Procedures. (i) A debarment proceeding is
initiated by submitting a written request to the Debarment Official.
The request should identify all parties who are proposed for debarment
and describe the factual or legal grounds upon which the request is
made. The request should also include any pertinent supporting
documentation.
(ii) After reviewing the basis for a debarment request and
obtaining concurrence from the General Counsel, the Debarment Official
may initiate debarment proceedings by sending the party proposed for
debarment a written notice of proposed debarment. The notice will state
that debarment is being considered; the reasons for the proposed
debarment; the anticipated period of debarment and the proposed
effective date; and that, within 30 days of the notice, the party,
individually or through a representative, may submit in writing
information in opposition to the proposed debarment. In the event a
party does not submit information in opposition to the proposed
debarment to the Debarment Official within the time allowed, the
debarment will become final with no further review or appeal.
(iii) If there is any question of material fact involving the
debarment allegations, the Debarment Official may seek additional
information from the party or other persons. In establishing such
material fact(s), the Debarment Official may in his or her discretion
request the Judicial Officer to hold a fact-finding hearing on such
matters. The hearing will be governed by the rules of procedure at 39
CFR part 955. The Debarment Official must consider
[[Page 51996]]
but may reject any findings of fact, in whole or in part. Questions of
fact to be resolved by a hearing before the Judicial Officer will be
based on a preponderance of the evidence.
(iv) After consideration of the circumstances and any information
and argument submitted by the party, the Debarment Official, with the
concurrence of the General Counsel, will issue a written decision
regarding whether the party is debarred, and, if so, the period of
debarment. The decision will be final and binding, unless the decision
was procured by fraud or other criminal misconduct, or the decision was
obtained in violation of the regulations contained in this part or an
applicable public law enacted by Congress.
(v) If the party enters into any agreement regarding improper
conduct whereby the party states that it will not contest any debarment
on the grounds of the improper conduct, the Debarment Official is not
required to comply with the requirements of this paragraph (c)(1) and,
with the concurrence of the General Counsel, may proceed to immediately
debar the party by providing a written decision stating that the party
is debarred effective immediately and identifying the period of
debarment.
(2) Grounds. (i) The Debarment Official, with the concurrence of
the General Counsel, may debar a party, including any of its
affiliates, for engaging in improper conduct such as the following:
(A) Indictment or charging of a criminal offense incidental to
obtaining or attempting to obtain contracts or subcontracts, or in the
performance of a contract or subcontract.
(B) Violation of a Federal antitrust statute arising out of the
submission of bids or proposals.
(C) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, tax
evasion, receiving stolen property, or any other criminal offense of
moral turpitude.
(D) Misconduct involving theft or abuse of mail, narcotics
trafficking, willful disregard of applicable laws or safety standards,
or other conduct demonstrating a lack of honesty or responsibility.
(E) Breach of a Postal Service contract so severe as to justify
debarment, including, but not limited to, willful failure to perform a
Postal Service contract in accordance with the specifications or within
the time limit(s) provided in the contract; repeated failures to
perform or unsatisfactory performance in accordance with the terms of
one or more Postal Service contracts; violation of a contractual
provision against contingent fees; or acceptance of a contingent fee
paid in violation of a contractual provision against contingent fees.
(F) Violation of, or aiding any Postal Service employee or agent in
the violation of, any federal ethics laws or principles.
(G) Any other offense indicating a lack of business integrity or
business honesty.
(H) Any other cause of a serious and compelling nature for which
debarment is warranted.
(ii) The existence of any of the causes for debarment in this
section can be established by a preponderance of the evidence, as
determined by the Debarment Official.
(3) Mitigation. (i) The decision to debar is within the discretion
of the Debarment Official, with the concurrence of the General Counsel,
and must be made in the best interests of the Postal Service. The
Debarment Official may consider the following mitigating factors in
deciding whether debarment is warranted, and even if warranted, the
period of debarment established:
(A) Whether the party had, or was in the process of establishing,
written standards of conduct and published internal control systems at
the time of the improper conduct, or adopted such procedures prior to
any Postal Service investigation of the activity cited that constitutes
the grounds for debarment.
(B) Whether the party promptly brought the improper conduct to the
attention of the Postal Service.
(C) Whether the party promptly and fully investigated the
circumstances involving the grounds for debarment and, if so, made the
full results of the investigation available to the Postal Service.
(D) Whether the party cooperated fully with the Postal Service
during its investigation into the circumstances involving debarment.
(E) Whether the party paid or agreed to pay all criminal, civil and
administrative penalties or liability, and any other costs arising out
of the improper conduct, including any investigative or administrative
costs incurred by the Postal Service.
(F) Whether the party took appropriate disciplinary action against
the individual(s) responsible for the improper conduct.
(G) Whether the party implemented and/or agreed to implement
remedial measures, including those identified by the Postal Service.
(H) Whether the party instituted and/or agreed to institute new
and/or revised review and control procedures and ethics programs.
(I) Whether the party had adequate time to eliminate circumstances
within the party's organization that could lead to debarment.
(J) Whether the party's senior officers and mid-level management
recognize and understand the seriousness of the misconduct giving rise
to debarment.
(ii) The existence or nonexistence of mitigating factors or
remedial measures such as those listed in paragraph (c)(3)(i) of this
section is not determinative of whether or not a party should be
debarred. The party has the burden of demonstrating, to the
satisfaction of the Debarment Official, that debarment is not warranted
or necessary, or that the period of debarment should be reduced.
(4) Period of debarment. (i) When an applicable statute, executive
order, or controlling regulation of another agency provides a specific
period of debarment, that period applies. In other cases, debarment by
the Postal Service shall be for a reasonable, definite, stated period
of time, commensurate with the seriousness of the offense or the
failure or inadequacy of performance. While generally a period of
debarment should not exceed 5 years, the Debarment Official may, in his
or her discretion, debar a party for longer than 5 years in cases of
severe improper conduct.
(ii) Except as precluded by an applicable statute, Executive order,
or controlling regulation of another agency, a debarred party may
submit a request to the Debarment Official to remove the debarment or
reduce the period of debarment. The party must support the request with
a reasonable justification, such as newly discovered material evidence,
acquittal or reversal of a conviction, bona fide change of ownership or
management, or the elimination of the causes for which debarment was
imposed. The Debarment Official may, in his or her discretion, approve
or deny any such request by written decision.
(5) Alternative remedies--(i) Administrative Compliance Agreement.
After considering the improper conduct and any mitigating factors, as
well as any information submitted by the party proposed for debarment,
the Debarment Official may determine, in his or her discretion, with
concurrence from the General Counsel, that it is in the best interests
of the Postal Service to forgo debarring or suspending a party, but
only if the party agrees to undertake certain remedial measures. In
such cases, the Debarment Official may, after consultation with the
General Counsel, enter into an Administrative
[[Page 51997]]
Compliance Agreement with the party on such terms and conditions as the
Debarment Official and the party may agree.
(ii) Voluntary exclusion. After considering the improper conduct
and any mitigating factors, as well as any information submitted by the
party proposed for debarment, the Debarment Official may determine, in
his or her discretion, that it is in the best interests of the Postal
Service to forgo debarring or suspending a party, provided that the
party agrees not to submit proposals for new Postal Service business
for a specified period of time.
(d) Suspension--(1) Procedures. (i) For a suspension pursuant to
paragraph (d)(2)(i) or (ii) of this section, or any extension of a
suspension, the Debarment Official will notify the party of a
suspension or an extension of a suspension and the reason(s) therefor.
(ii) For a suspension pursuant to paragraph (d)(2)(iii) of this
section, the suspension is effective upon issuance of the notice of
proposed debarment and for the period stated in the notice, unless
superseded by the party's debarment.
(iii) Within 30 days of notice of suspension or any extension, a
party may submit to the Debarment Official, in writing, any information
or reason(s) the party believes makes a suspension or an extension
inappropriate. The Debarment Official, after consultation with the
General Counsel, will consider the party's submission and, in his or
her discretion, may revoke a suspension or an extension of a suspension
by written decision.
(2) Grounds. The Debarment Official, after consultation with the
General Counsel, may suspend any party, including any of its
affiliates, for the following:
(i) If the party commits, is indicted for, or is charged with any
of the offenses identified in paragraph (c)(2)(i) of this section and
the Debarment Official determines not to institute debarment
proceedings until the conclusion of any judicial or administrative
proceedings related thereto;
(ii) For any other cause of such serious and compelling nature that
suspension is warranted; or
(iii) If the Postal Service has notified a party of its proposed
debarment under this part.
(3) Period of suspension. A suspension shall generally not exceed 1
year in duration, except that the Debarment Official may extend a
suspension for reasonable periods of time beyond 1 year. The
termination of a suspension will not prejudice the Postal Service's
position in any debarment proceeding. A suspension is superseded by a
decision rendered by the Debarment Official to debar a party.
(e) Imputation of conduct. (1) The improper conduct of an
individual may be imputed to the firm with which he or she is or has
been connected when the grounds for debarment or impropriety were
committed. Likewise, when a firm is involved in criminal, fraudulent,
or other improper conduct, any person who participated in, knew of, or
had reason to know of the impropriety may be debarred.
(2) The improper conduct of one party participating in a joint
venture or similar arrangement may be imputed to other participating
parties if the conduct occurred for or on behalf of the joint venture
or similar arrangement, or with the knowledge, approval, or
acquiescence of the other parties. Acceptance of the benefits derived
from the conduct will be evidence of such knowledge, approval, or
acquiescence.
(3) The improper conduct of a party may be imputed to an affiliate,
and the improper conduct of an affiliate may be imputed to a party.
(f) Debarment, suspension, and ineligible list. (1) The Postal
Service uses the General Services Administration's System for Award
Management (<a href="http://SAM.gov">SAM.gov</a>) to determine if parties are debarred, suspended,
proposed for debarment, or ineligible. Inquiries concerning listed
parties should be directed to the agency or other authority that took
the action.
(2) Through a representative, the Debarment Official will use
<a href="http://SAM.gov">SAM.gov</a> to report Postal Service debarments, suspensions, proposed
debarments, and changes in status.
(3) Contracting officers must review the <a href="http://SAM.gov">SAM.gov</a> Exclusions
Database before making any contract award.
(g) Treatment of debarred, suspended, or ineligible parties. (1)
Parties that are debarred, suspended, or ineligible are excluded from
the following:
(i) Being awarded any contract with the Postal Service;
(ii) Receiving any subcontract to provide property or services
under any Postal Service contract;
(iii) Submitting proposals or offers of any manner to the Postal
Service in an attempt to obtain an award of a contract;
(iv) Providing property or services to other persons or entities
for resale, in whole or part, to the Postal Service;
(v) Being employed and performing as designated key personnel under
a Postal Service contract or subcontract; or
(vi) Having access to mail, Postal Service data, or Postal Service
facilities under a Postal Service contract or subcontract.
(2) The debarment, suspension, or ineligibility of a party does
not, of itself, affect the rights and obligations of the parties to any
valid, pre-existing contract. The Postal Service may terminate for
default a contract with a party that becomes debarred, suspended, or
ineligible during the contract's period of performance. Contracting
officers may not add new work to any contract with a party that is
debarred, suspended, or ineligible by supplemental agreement, by
exercise of any option, or otherwise (unless the work is classified as
an insignificant or significant minor service change to a mail
transportation contract).
(3) All parties doing business with the Postal Service are
obligated to review the database identified in paragraph (f) of this
section in order to exclude debarred, suspended, or ineligible parties
from performing any part of a Postal Service contract.
(4) Notwithstanding paragraphs (g)(1) through (3) of this section,
and in his or her discretion, the Debarment Official may approve a
deviation from any part of this paragraph (g) if, after consultation
with the General Counsel, it is determined to be in the best interests
of the Postal Service.
(h) Notices. Any decision by or notice from the Debarment Official
to a party under this section shall be sent by any method that provides
evidence of receipt, with a copy furnished to the USPS Office of the
Inspector General.
Colleen Hibbert-Kapler,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2025-20252 Filed 11-18-25; 8:45 am]
BILLING CODE 7710-12-P
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