39 C.F.R. Subpart L—Rules Applicable to Negotiated Service Agreements
Title 39 - Postal Service
Source: 69 FR 7593, Feb. 18, 2004, unless otherwise noted.
(a) The rules in this subpart govern requests of the Postal Service for recommended decisions pursuant to sections 3622 or 3623 of the Act that are based on Negotiated Service Agreements. The Rules of General Applicability in subpart A of this part are also applicable to proceedings on requests subject to this subpart. The requirements and procedures specified in these sections apply exclusively to requests predicated on Negotiated Service Agreements. Except where specifically noted, this subpart does not supersede any other rules applicable to Postal Service requests for recommendation of changes in rates, fees, or mail classifications. (b) In administering this subpart, it shall be the policy of the Commission to recommend Negotiated Service Agreements that are consistent with statutory criteria, and benefit the Postal Service, without causing unreasonable harm to the marketplace. Except in extraordinary circumstances and for good cause shown, the Commission shall not recommend Negotiated Service Agreements of more than three years duration; however, this limitation is not intended to bar the Postal Service from requesting: (1) The renewal of the terms and conditions of a previously recommended Negotiated Service Agreement, see §3001.197; or (2) Recommendation of a Negotiated Service Agreement that is functionally equivalent to a previously recommended Negotiated Service Agreement, see §3001.196. (a) Whenever the Postal Service proposes to establish or change rates or fees and/or the mail classification schedule based on a Negotiated Service Agreement, the Postal Service shall file with the Commission a formal request for a recommended decision. The request shall clearly state whether it is a request for a recommended decision pursuant to: (1) The review of a baseline Negotiated Service Agreement, see §3001.195; (2) The review of a Negotiated Service Agreement that is functionally equivalent to a previously recommended Negotiated Service Agreement, see §3001.196; (3) The renewal of the terms and conditions of a previously recommended Negotiated Service Agreement, see §3001.197; or (4) The modification of the terms and conditions of a previously recommended Negotiated Service Agreement, see §3001.198. Such request shall be filed in accordance with the requirements of §§3001.9 through 3001.12. Within 5 days after the Postal Service has filed a formal request for a recommended decision in accordance with this subsection, the Secretary shall lodge a notice thereof with the director of the Office of the Federal Register for publication in the (b) The Postal Service shall clearly identify all parties to the Negotiated Service Agreement. Identification by the Postal Service shall serve as Notice of Intervention for such parties. Parties to the Negotiated Service Agreement are to be considered co-proponents, procedurally and substantively, during the Commission's review of the proposed Negotiated Service Agreement. (a) Simultaneously with the filing of the formal request for a recommended decision under this subpart, the Postal Service and its co-proponents shall file all of the prepared direct evidence upon which they propose to rely in the proceeding on the record before the Commission to establish that the proposed Negotiated Service Agreement is in the public interest and is in accordance with the policies and the applicable criteria of the Act. Such prepared direct evidence shall be in the form of prepared written testimony and documentary exhibits, which shall be filed in accordance with §3001.31. (b) Direct evidence may be filed in support of the Negotiated Service Agreement prepared by, or for, any party to the Negotiated Service Agreement. Direct evidence in support of the Negotiated Service Agreement prepared by, or for, any party to the Negotiated Service Agreement shall not be accepted without prior Postal Service review. The Postal Service shall affirm that it has reviewed such testimony and that such testimony may be relied upon in presentation of the Postal Service's direct case. (a) General requirements. (1) Each formal request filed under this subpart shall include such information and data and such statements of reasons and bases as are necessary and appropriate fully to inform the Commission and the parties of the nature, scope, significance, and impact of the proposed changes or adjustments in rates, fees, and/or the mail classification schedule(s) associated with the Negotiated Service Agreement, and to show that the changes or adjustments are in the public interest and in accordance with the policies and the applicable criteria of the Act. To the extent information is available or can be made available without undue burden, each formal request shall include the information specified in paragraphs (b) through (k) of this section. If the required information is set forth in the Postal Service's prepared direct evidence, it shall be deemed to be part of the formal request without restatement. (2) If any information required by paragraphs (b) through (k) of this section is not available and cannot be made available without undue burden, the request shall include a request for waiver of that requirement supported by a statement explaining with particularity: (i) The information which is not available or cannot be made available without undue burden; (ii) The reason or reasons that each such item of information is not available and cannot be made available without undue burden; (iii) The steps or actions which would be needed to make each such item of information available, together with an estimate of the time and expense required therefor; (iv) Whether it is contemplated that each such item of information will be supplied in the future and, if so, at what time; and (v) Whether sufficiently reliable estimates are available to mitigate the need for such information, and if so, the specifics of such estimates. (3) If the Postal Service believes that any of the data or other information required to be filed under §3001.193 should not be required in light of the character of the request, it shall move for a waiver of that requirement, stating with particularity the reasons why the character of the request and its circumstances justify a waiver of the requirement. (4) Grant of a waiver under paragraphs (a)(2) or (a)(3) of this section will be grounds for excluding from the proceeding a contention that the absence of the information should form a basis for rejection of the request, unless the party desiring to make such contention: (i) Demonstrates that, having regard to all the facts and circumstances of the case, it was clearly unreasonable for the Postal Service to propose the change in question without having first secured the information and submitted it in accordance with §3001.193; or (ii) Demonstrates other compelling and exceptional circumstances requiring that the absence of the information in question be treated as bearing on the merits of the proposal. (5) The provisions of paragraphs (a)(2) and (a)(3) of this section for the Postal Service to include in its formal request certain alternative information in lieu of that specified by paragraphs (b) through (k) of this section are not in derogation of the Commission's and the presiding officer's authority, pursuant to §§3001.23 through 3001.28, respecting the provision of information at a time following receipt of the formal request. (6) The Commission may request information in addition to that required by paragraphs (b) through (k) of this section. (b) Negotiated Service Agreement. Every formal request shall include a copy of the Negotiated Service Agreement. (c) Rates and standards information. Every formal request shall include a description of the proposed rates, fees, and/or classification changes, including proposed changes, in legislative format, to the text of the Domestic Mail Classification Schedule and any associated rate or fee schedule. (d) Description of agreement. Every formal request shall include a statement describing and explaining the operative components of the Negotiated Service Agreement. The statement shall include the reasons and bases for including the components in the Negotiated Service Agreement. (e) Financial analysis. Every formal request shall include an analysis, as described in §3001.193(e)(1), of the effects of the Negotiated Service Agreement on Postal Service volumes, costs and revenues in a one-year period intended to be representative of the first year of the proposed agreement. If the agreement is proposed to extend beyond one year, the request shall also include an analysis of the effects of the agreement on Postal Service volumes, costs and revenues in each subsequent year of the proposed agreement, as described in §3001.193(e)(2). For each year, the analysis shall provide such detail that the analysis of each component of a Negotiated Service Agreement can be independently reviewed, and shall be prepared in sufficient detail to allow independent replication, including citation to all referenced material. (1) The financial analysis for the one-year period intended to be representative of the first year of the proposed agreement shall: (i) Set forth the estimated mailer-specific costs, volumes, and revenues of the Postal Service for that year, assuming the then effective postal rates and fees absent the implementation of the Negotiated Service Agreement; (ii) Set forth the estimated mailer-specific costs, volumes, and revenues of the Postal Service for that year which result from implementation of the Negotiated Service Agreement; (iii) Include an analysis of the effects of the Negotiated Service Agreement on contribution to the Postal Service for that year (including consideration of the effect on contribution from mailers who are not parties to the agreement); (iv) Utilize mailer-specific costs for that year, and provide the basis used to determine such costs, including a discussion of material variances between mailer-specific costs and system-wide average costs; and (v) Utilize mailer-specific volumes and elasticity factors for that year, and provide the bases used to determine such volumes and elasticity factors. If mailer-specific costs or elasticity factors are not available, the bases of the costs or elasticity factors that are proposed shall be provided, including a discussion of the suitability of the proposed costs or elasticity factors as a proxy for mailer-specific costs or elasticity factors. (2) The financial analysis for each subsequent year covered by the agreement (if the proposed duration of the agreement is greater than one year) shall: (i) Identify each factor known or expected to operate in that subsequent year which might have a material effect on the estimated costs, volumes, or revenues of the Postal Service, relative to those set forth in the financial analysis provided for the first year of the agreement in response to §3001.193(e)(1). Such relevant factors might include (but are not limited to) cost level changes, anticipated changes in operations, changes arising from specific terms of the proposed agreement, or potential changes in the level or composition of mail volumes; (ii) Discuss the likely impact in that subsequent year of each factor identified in §3001.193(e)(2)(i), and quantify that impact to the maximum extent practical; and (iii) Estimate the cumulative effect in that subsequent year of all factors identified in §3001.193(e)(2)(i) on the estimated costs, volumes, and revenues of the Postal Service, relative to those presented for the first year of the agreement in response to §3001.193(e)(1). (f) Impact analysis. (1) Every formal request shall include an analysis of the impact over the duration of the Negotiated Service Agreement on: (i) Competitors of the parties to the Negotiated Service Agreement other than the Postal Service; (ii) Competitors of the Postal Service; and (iii) Mail users. (2) The Postal Service shall include a copy of all completed special studies that were used to make such estimates. If special studies have not been performed, the Postal Service shall state this fact and explain the alternate bases of its estimates. (g) Data collection plan. Every formal request shall include a proposal for a data collection plan, which shall include a comparison of the analysis presented in §3001.193(e)(1)(ii) and §3001.193(e)(2)(iii) with the actual results ascertained from implementation of the Negotiated Service Agreement. The results shall be reported to the Commission on an annual or more frequent basis. (h) Workpapers. (1) Whenever the Service files a formal request it shall accompany the request with seven sets of workpapers, five for use by the Commission staff and two which shall be available for use by the public at the Commission's offices. (2) Workpapers shall contain: (i) Detailed information underlying the data and submissions for paragraphs (b) through (k) of this section; (ii) A description of the methods used in collecting, summarizing and expanding the data used in the various submissions; (iii) Summaries of sample data, allocation factors and other data used for the various submissions; (iv) The expansion ratios used (where applicable); and (v) The results of any special studies used to modify, expand, project, or audit routinely collected data. (3) Workpapers shall be neat and legible and shall indicate how they relate to the data and submissions supplied in response to paragraphs (b) through (k) of this section. (4) Workpapers shall include citations sufficient to enable a reviewer to trace any number used but not derived in the associated testimony back to published documents or, if not obtained from published documents, to primary data sources. Citations shall be sufficiently detailed to enable a reviewer to identify and locate the specific data used, e.g., by reference to document, page, line, column, etc. With the exception of workpapers that follow a standardized and repetitive format, the required citations themselves, or a cross-reference to a specific page, line, and column of a table of citations, shall appear on each page of each workpaper. Workpapers that follow a standardized and repetitive format shall include the citations described in this paragraph for a sufficient number of representative examples to enable a reviewer to trace numbers directly or by analogy. (i) Certification by officials. (1) Every formal request shall include one or more certifications stating that the cost statements and supporting data submitted as a part of the formal request, as well as the accompanying workpapers, which purport to reflect the books of the Postal Service, accurately set forth the results shown by such books. (2) The certificates required by paragraph (i)(1) of this section shall be signed by one or more representatives of the Postal Service authorized to make such certification. The signature of the official signing the document constitutes a representation that the official has read the document and that, to the best of his/her knowledge, information and belief, every statement contained in the instrument is proper. (j) Rejection of requests. The Commission may reject any request under this subpart that patently fails to substantially comply with any requirements of this subpart. If the Postal Service fails to provide any information specified by this subpart, or otherwise required by the presiding officer or the Commission, the Commission, upon its own motion, or upon motion of any participant to the proceeding, may stay the proceeding until satisfactory compliance is achieved. The Commission will stay proceedings only if it finds that failure to supply adequate information interferes with the Commission's ability promptly to consider the request and to conduct its proceedings with expedition in accordance with the Act. (a) This section governs Postal Service requests for a recommended decision in regard to a baseline Negotiated Service Agreement, i.e., a Negotiated Service Agreement that is not predicated on a functionally equivalent Negotiated Service Agreement currently in effect. The purpose of this section is to establish procedures which provide for maximum expedition of review consistent with procedural fairness, and which allows for the recommendation of a baseline Negotiated Service Agreement. The Postal Service request shall include: (1) A written justification for requesting a Negotiated Service Agreement classification as opposed to a more generally applicable form of classification; and (2) A description of the operational bases of the Negotiated Service Agreement, including activities to be performed and facilities to be used by both the Postal Service and the mailer under the agreement. (b) The Commission will treat requests predicated on a baseline Negotiated Service Agreement as subject to the maximum expedition consistent with procedural fairness. A schedule will be established, in each case, to allow for prompt issuance of a decision. (a) This section governs Postal Service requests for a recommended decision in regard to a Negotiated Service Agreement that is proffered as functionally equivalent to a Negotiated Service Agreement previously recommended by the Commission and currently in effect. The previously recommended Negotiated Service Agreement shall be referred to as the baseline agreement. The purpose of this section is to establish procedures that provide for accelerated review of functionally equivalent Negotiated Service Agreements. The Postal Service request shall include: (1) A detailed description of how the proposed Negotiated Service Agreement is functionally equivalent to the baseline agreement; (2) A detailed description of how the proposed Negotiated Service Agreement is different from the baseline agreement; (3) Identification of the record testimony from the baseline agreement docket, or any other previously concluded docket, on which the Postal Service proposes to rely, including specific citation to the locations of such testimony; (4) All available special studies developing information pertinent to the proposed Negotiated Service Agreement; (5) If applicable, the identification of circumstances unique to the request; and (6) If applicable, a proposal for limitation of issues in the proceeding, except that the following issues will be relevant to every request predicated on a functionally equivalent Negotiated Service Agreement: (i) The financial impact of the Negotiated Service Agreement on the Postal Service over the duration of the agreement; (ii) The fairness and equity of the Negotiated Service Agreement in regard to other users of the mail; and (iii) The fairness and equity of the Negotiated Service Agreement in regard to the competitors of the parties to the Negotiated Service Agreement. (b) When the Postal Service submits a request predicated on a functionally equivalent Negotiated Service Agreement, it shall provide written notice of its request, either by hand delivery or by First-Class Mail, to all participants in the Commission docket established to consider the baseline agreement. (c) The Commission will schedule a prehearing conference for each request. Participants shall be prepared at the prehearing conference to address whether or not it is appropriate to proceed under §3001.196, and to identify any issue(s) that would indicate the need to schedule a hearing. After consideration of the material presented in support of the request, and the argument presented by the participants, if any, the Commission shall promptly issue a decision on whether or not to proceed under §3001.196. If the Commission's decision is to not proceed under §3001.196, the request will proceed under §3001.195. (d) The Commission will treat requests predicated on functionally equivalent Negotiated Service Agreements as subject to accelerated review consistent with procedural fairness. If the Commission determines that it is appropriate to proceed under §3001.196, a schedule will be established which allows a recommended decision to be issued not more than: (1) 60 days after the determination is made to proceed under §3001.196, if no hearing is held; or (2) 120 days after the determination is made to proceed under §3001.196, if a hearing is scheduled. (a) This section governs Postal Service requests for a recommended decision seeking to extend the duration of a previously recommended and currently in effect negotiated service agreement (existing agreement). The purpose of this section is to establish procedures that provide for accelerated review of Postal Service requests to extend the duration of an existing agreement under substantially identical obligations. In addition to extending the duration of the existing agreement, modifications may be entertained that do not materially alter the nature of the existing agreement for the purposes of: correcting a technical defect, updating the schedule of rates and fees, or accounting for an intervening event since the recommendation of the existing agreement. The Postal Service request shall include: (1) Identification of the record testimony from the existing agreement docket, or any other previously concluded docket, on which the Postal Service proposes to rely, including citation to the locations of such testimony; (2) A detailed description of all proposed modifications to the existing agreement; (3) A detailed description of any technical defect, rationale for revising the schedule of rates and fees, or intervening event since the recommendation of the existing agreement, to substantiate the modifications proposed in paragraph (a)(2) of this section; (4) All special studies developing information pertinent to the request completed since the recommendation of the existing agreement; (5) A comparison of the analysis presented in §3001.193(e)(1)(ii) and §3001.193(e)(2)(iii) applicable to the existing agreement with the actual results ascertained from implementation of the existing agreement, together with the most recent available projections for the remaining portion of the existing agreement, compared on an annual or more frequent basis; (6) The financial impact of the proposed negotiated service agreement on the Postal Service in accordance with §3001.193(e) over the extended duration of the agreement utilizing the methodology employed by the Commission in its recommendation of the existing agreement; and (7) If applicable, the identification of circumstances unique to the request. (b) When the Postal Service submits a request to renew a negotiated service agreement, it shall provide written notice of its request, either by hand delivery or by First-Class Mail, to all participants in the Commission docket established to consider the original agreement. (c) The Commission will schedule a prehearing conference for each request. Participants shall be prepared to address at that time whether or not it is appropriate to proceed under §3001.197, and whether or not any material issues of fact exist that require discovery or evidentiary hearings. After consideration of the material presented in support of the request, and the argument presented by the participants, if any, the Commission shall promptly issue a decision on whether or not to proceed under §3001.197. If the Commission's decision is to not proceed under §3001.197, the docket will proceed under §3001.195 or §3001.196, as appears appropriate. (d) The Commission will treat requests to renew negotiated service agreements as subject to accelerated review consistent with procedural fairness. If the Commission determines that it is appropriate to proceed under §3001.197, a schedule will be established which allows a recommended decision to be issued not more than: (1) Forty-five (45) days after the determination is made to proceed under §3001.197, if no hearing is held; or (2) Ninety (90) days after the determination is made to proceed under §3001.197, if a hearing is scheduled. [70 FR 32497, June 3, 2005] (a) This section governs Postal Service requests for a recommended decision seeking a modification to a previously recommended and currently in effect negotiated service agreement (existing agreement). The purpose of this section is to establish procedures that provide for accelerated review of Postal Service requests to modify an existing agreement where the modification is necessary to correct a technical defect, to account for unforeseen circumstances not apparent when the existing agreement was first recommended, or to account for an intervening event since the recommendation of the existing agreement. This section is not applicable to requests to extend the duration of a negotiated service agreement. The Postal Service request shall include: (1) Identification of the record testimony from the existing agreement docket, or any other previously concluded docket, on which the Postal Service proposes to rely, including citation to the locations of such testimony; (2) A detailed description of all proposed modifications to the existing agreement; (3) A detailed description of the technical defect, unforeseen circumstance, or intervening event since the recommendation of the existing agreement, to substantiate the modifications proposed in paragraph (a)(2) of this section; (4) All special studies developing information pertinent to the request completed since the recommendation of the existing agreement; (5) If applicable, an update of the financial impact of the negotiated service agreement on the Postal Service in accordance with §3001.193(e) over the duration of the agreement utilizing the methodology employed by the Commission in its recommendation of the existing agreement; and (6) If applicable, the identification of circumstances unique to the request. (b) When the Postal Service submits a request to modify a negotiated service agreement, it shall provide written notice of its request, either by hand delivery or by First-Class Mail, to all participants in the Commission docket established to consider the original agreement. (c) The Commission will schedule a prehearing conference for each request. Participants shall be prepared to address at that time whether or not it is appropriate to proceed under §3001.198, and whether or not any material issues of fact exist that require discovery or evidentiary hearings. After consideration of the material presented in support of the request, and the argument presented by the participants, if any, the Commission shall promptly issue a decision on whether or not to proceed under §3001.198. If the Commission's decision is to not proceed under §3001.198, the docket will proceed under §3001.195 or §3001.196, as appears appropriate. (d) The Commission will treat requests to modify negotiated service agreements as subject to accelerated review consistent with procedural fairness. If the Commission determines that it is appropriate to proceed under §3001.198, a schedule will be established which allows a recommended decision to be issued not more than: (1) Forty-five (45) days after the determination is made to proceed under §3001.198, if no hearing is held; or (2) Ninety (90) days after the determination is made to proceed under §3001.198, if a hearing is scheduled. [70 FR 32497, June 3, 2005]
Title 39: Postal Service
PART 3001—RULES OF PRACTICE AND PROCEDURE
Subpart L—Rules Applicable to Negotiated Service Agreements
§ 3001.190 Applicability.
§ 3001.191 Filing of formal requests.
§ 3001.192 Filing of prepared direct evidence.
§ 3001.193 Contents of formal requests.
§ 3001.194 Failure to comply.
§ 3001.195 Requests to recommend a baseline Negotiated Service Agreement.
§ 3001.196 Requests to recommend a Negotiated Service Agreement that is functionally equivalent to a previously recommended Negotiated Service Agreement.
§ 3001.197 Requests to renew previously recommended negotiated service agreements with existing participant(s).
§ 3001.198 Requests to modify previously recommended negotiated service agreements.
