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Supplying Principles and Practices > USPS Supplying Practices Process Step 4: Deliver and Receive Requirements > Returns
Returns
A return is the actual giving back by the Postal Service to the Supplier of a
previously accepted product. Returns are very common when the delivered
product has defects; does not conform to contract specifications; or has been
improperly ordered, received, or accepted. The legal guidelines for returns
are typically contained within, and outlined by, the terms and conditions of the
contract and any warranty clauses. All returns require proper authorization
from the Contracting Officer or the issuing activity and the use of applicable
forms (e.g., Request for Return Authorization from the current Repair Parts
Bulletin). Some returns, such as those to the Material Distribution Center
(MDC), Mail Transportation Equipment Service Center (MTESC), the office
suppliers' catalog on eBuy, etc., do not directly involve the Contracting
Officer.
Defects and nonconformant characteristics are detected during an inspection,
which is conducted during the Receipt and Inspection topic of the Complete
Delivery task of Process Step 4: Deliver and Receive Requirements. The
Client is responsible for notifying the Contracting Officer and Supplier of items
that have failed inspection. The Supplier is expected to deliver goods and
services that are free of defects and fit for their predetermined purpose, in
accordance with Clause 4-1: General Terms and Conditions and Clause 2-1:
Inspection and Acceptance and/or with Clause B-5: Certificate of
Conformance.
For defective items (as opposed to nondefective items that have been lost or
damaged) covered by a warranty (e.g., paragraph o of Clause 4-1: General
Terms and Conditions, or Clause 2-8: Warranty), every attempt should be
made to resolve all complaints, as informally as possible, through an
appropriate Supplier representative. Damaged goods should be processed in
accordance with the guidance found in the Acceptance topic of the Complete
Delivery task of Process Step 4: Deliver and Receive Requirements.
Although the Postal Service should not compromise its position, the
Contracting Officer should discuss defects and nonconformance with the
Supplier because elimination of potential misunderstandings is in the best
interest of both the Postal Service and the Supplier. When resolutions cannot
be informally reached, complaints will be addressed in the Supplier
Disagreement Resolution topic of the General Practices. If the defective
items adversely effect Postal Service operations during this resolution
process, the Postal Service may obtain acceptable products from another
source and include the costs as part of the negotiations.
A warranty requires the Supplier to repair or replace defects in materials or
workmanship for a certain period of time after acceptance of the work by the
Postal Service during the Complete Delivery task of Process Step 4: Deliver
and Receive Requirements. A warranty reflects risks that the Supplier and
subcontractors can identify and analyze, based on experienced warranty or
callback costs. The Client will contact the Contracting Officer for further
guidance if the Supplier refuses to correct or fails to replace a defective item
or an aspect of the service under the warranty. The contract will lay out the
terms of the warranty.
Paragraph o: warranty of Clause 4-1: General Terms and Conditions states
that the supplier warrants and supplies that items delivered are merchantable
and fit for the use described in the contract. Clause 2-8: Warranty, which
may be used in lieu of paragraph o of Clause 4-1, signifies that the Supplier
legally warrants, for the period specified, that all supplies furnished under the
awarded contract, including packaging and markings, will be free from
defects in material or workmanship and will conform to the specifications and
all other requirements of the contract. Within the time specified in the
schedule, the Contracting Officer must give written notice to the Supplier of
any breach of warranty and must do either of the following:
• Require the prompt correction or replacement of any defective or
nonconforming supplies
• Retain them, reducing the contract price by an amount equitable
under the circumstances
In accordance with the warranty language in the contract, if there is no
receiving document with the (original) shipment, the designated receiving
personnel must make an effort to ensure that the shipment is:
• Forwarded to the intended consignee
• Returned to the consignor, the person or organization that directs
or arranges for a shipment (the consignor may or may not be the
shipper)
The documents and actions associated with shipment, receipt, and
acceptance of deliveries are respectively explained in further detail in the
Shipping, Receipt and Inspection, and Acceptance topics of the Complete
Delivery task of Process Step 4: Deliver and Receive Requirements.
Return actions are influenced by:
• Supplier responsibilities
• Corrections
• Replacements
• Simple returns
• Internal returns
• Exceptions
• Documentation
In accordance with Clause 2-8: Warranty, if the Supplier fails or refuses to
correct or replace defective or nonconforming supplies, the Contracting
Officer may correct or replace them with similar supplies and charge to the
Supplier any cost to the Postal Service. In addition, the Contracting Officer
may dispose of the nonconforming supplies, with reimbursement from the
Supplier. Coordination with the Supplier must be documented prior to taking
these actions.
Depending on the terms and conditions of the contract or the language of the
delivery order, the Supplier may also be financially responsible for
compensating the Postal Service for lost time if defective/nonconforming
supplies adversely affected the project or caused delays. In such cases, the
Purchase/SCM Team must ensure that any claims, unliquidated damages, or
other complaints are documented.
Products eligible for correction are either not fit for their particular purpose or
have a defect that inhibits functionality. A product that needs to be corrected
will be returned to the Supplier, who is responsible for making all changes
and repairs necessary to achieving the performance outlined in the awarded
contract. When return for correction is required off-site or is covered by
warranty, the Supplier is responsible for all costs of transportation and for risk
of loss in transit. When the cost of physical return makes it impracticable to
return an item for correction, the contract should also provide that the Postal
Service may correct, or require the Supplier to correct, the item in its current
physical location, at the Supplier's expense.
A product that is not fit for its particular purpose or that has a defect that
inhibits functionality and cannot be corrected must be replaced. A product
that needs to be replaced will be returned to the Supplier, who is responsible
for substituting for the item another item that meets the contractual
requirements and is void of all defects. When return for replacement is
required, the Supplier is responsible for all costs of transportation and for risk
of loss in transit. When the cost of physical return makes it impractical to
return an item for replacement, the Supplier will be responsible for removing
the item from its current physical location, with Postal Service concurrence,
and for disposing of the item at the Supplier's expense.
A simple return is the actual return of a product to the Supplier when the
product does not mandate corrections or replacement. Items that are shipped
without a receiving document or mistakenly delivered or accepted (such as
wrong items or wrong quantity) are eligible for simple returns. Suppliers are
responsible for delivering the items explicitly established in the awarded
contract. The receiving activity or Client should contact the Contracting
Officer or the National Materials Customer Service for return authorization
and instructions. Where a contract is involved, the Contracting Officer should
be informed of the error and resolution. This information will be used by the
Contracting Officer in supplier performance evaluations.
In accordance with Clause B-4: Variation in Quantity, the Supplier is
responsible for delivering each item quantity within any allowable variations.
If the Supplier delivers, and the Postal Service receives, quantities of any
item in excess of the quantity called for (after considering any allowable
variation in quantity), these excess quantities will be treated as being
delivered for the Supplier's convenience. Quantities in excess of $100 will, at
the option of the Postal Service, either be returned at the Supplier's expense
or retained and paid for at the contract unit price. The Postal Service may
retain excess quantities up to $100 in value without compensating the
Supplier for them, and the Supplier waives all right, title, or interests in them.
Items with a cumulative value of $100 are, therefore, "excepted" or
"exempted" from returns.
Various equipment and supply items across Postal Service commodities are
stocked internally and ordered directly through the Material Distribution
Center (MDC), the Critical Parts Center (CPC), the Express and Priority Mail
Supply Center (E&PMSC), Mail Equipment Shops (MES), and elsewhere.
Overhauling or repairing defective parts is often the most effective way of
meeting Client needs. Items with defective parts that must be overhauled and
repaired are designated during the integrated logistics support planning
process in the Develop Logistics Support Strategy topic of the Decide on
Make vs. Buy task of Process Step 1: Identify Needs. These items are
addressed in different ways (e.g., local activity repair [on-site at the same
facility], central depot repair [sending the item off-site to the Central Repair
Facility in Topeka, Kansas, or to the Indianapolis Repair Facility in
Indianapolis, Indiana], or supplier repair [directed shipment to the original
manufacturer or other commercial source]). Specific procedures regarding
managing repairables and the ways they are addressed are outlined in
Handbook MS-63, Maintenance Operations Support, and in current Repair
Part Bulletins.
All Postal Service facilities ordering parts, supplies, or equipment from the
MDC may request authorization to return excess items that are new, properly
marked, and properly packaged. Returned supplies must be of the current
edition date and bulk pack quantity. Postal Service facilities that later obtain
authorization for returns will not generate credits for items that were initially
procured with capital funds. Authorized capitalized returns will be accepted at
zero credit and averaged into wholesale inventory.
Items ordered or shipped in error from one of these or other central supply
sources (e.g., General Services Administration [GSA] or Defense Logistics
Agency [DLA]) will follow the procedures and instructions for returning
supplies to these organizations found in Publication 247, Supply and
Equipment Catalog and in Handbook AS-701, Material Management.
Items that are returned must be packed to ensure adequate protection during
transit. Items are returned to the designated facility (MDC or Repair) using
the mail system or Transportation Management Service Provider (TMSP) and
must include an Electronic Return Program (ERP) return label, a
computer-generated tag that eliminates the manual recording of information
at field sites, which is available on the Postal Service's intranet (at the depot
repair operations site) at http://crf.usps.gov/asp/ofc_entry_tab.asp.
The ERP must also be used to obtain and print the appropriate address
labels used for the return of reparable items to destinations (ship-to address).
The ERP generates addresses other than the Topeka MDC that reduce
handling and transportation costs by eliminating the Topeka MDC as an
intermediary destination. Addresses may vary on occasion for a given item,
resulting from the available amount of stock on hand and need to repair the
item. Procedures are in place to ensure that these items are processed
correctly at the receiving point, proper credits are given, and one-for-one
returns are generated, when appropriate.
The various return procedures associated with most materials are not
applicable to the following:
• Cost transfers within district boundaries (these are considered as
local decisions)
• Individual transactions with a cumulative value of $100 or less (to
avoid the high cost of processing)
All defects, nonconforming supplies, and instances of noncompliance with the
warranty language of the contract must be reported and properly documented
(in the contract file) by the Contracting Officer. When the Supplier has been
qualified on the basis of quality management systems and defects
subsequently become apparent, the Purchase/SCM Team should require
review of the Supplier's quality assurance documentation or processes.
When discrepancies are apparent, this information should be taken under
consideration for the Decide to Renew a Contract or Exercise Options topic
of the Manage Delivery and Contract Performance task of Process Step 5:
Measure and Manage Supply. Discrepancies should also be addressed
during lessons learned discussions with the Supplier described in the Share
Lessons Learned topic of the Manage Delivery and Contract Performance
task of Process Step 5: Measure and Manage Supply.
Shipping topic, Complete Delivery task, Process Step 4: Deliver and Receive
Requirements
Receipt and Inspection topic, Complete Delivery task, Process Step 4:
Deliver and Receive Requirements
Acceptance topic, Complete Delivery task, Process Step 4: Deliver and
Receive Requirements
Supplier Disagreement Resolution topic, General Practices
Clause 2-1: Inspection and Acceptance
Clause 2-8: Warranty
Clause B-4: Variation in Quantity
Clause B-5: Certificate of Conformance
Clause 4-1: General Terms and Conditions
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