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(8) Transporting passengers. Contractors are prohibited from carrying passengers in highway post office vehicles, other than postal personnel and contractors' employees. Contractors' employees may be permitted to ride in the driver's compartment when traveling on company business directly related to highway post office service, when such travel does not interfere with safe operation of the vehicle.

(e) Extensions, discontinuances, and changes. The director, transportation division, may:

(1) Order an increase in service on any route.

(2) Change schedule of arrivals and departures in all cases, particularly to make them conform to connections with railroads and other mail routes.

(3) Discontinue, change, or curtail the service, to improve mail service or to serve public interest.

(4) Extend the service on a route to improve mail service.

(f) Forfeitures or contract annulment. See 521.4(d) (3).

(g) Subcontracts. Contractors for highway post office service must not subcontract the service unless the subcontract is approved by the director, transportation division. Subcontractors must conform to all requirements stated for the contractor himself. Approved subcontractors must perform the same service required of the original contractor.

(h) Payments—(1) For regular service. See § 521.4(e) (1).

(2) Allowance for detours. See § 521.4 (e) (4).

(3) Readjustment of compensation. See part 526 of this chapter.

(4) Deductions for service omitted. See § 521.4(d) (4).

(5) Fine. When a contractor fails to comply with terms of the contract or when serious irregularities occur, the postmaster in charge of the mobile unit and the director, transportation division, will make every effort, by letter or by personal interview, to correct the situation. If the contractor persists in the irregularities, the transportation division may issue an order on Form 5440-C-D-E imposing a fine.

(6) Record of performance. See § 521.5. (1) Inspection of highway post office vehicles. Vehicles and equipment shall

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be inspected by officials of the postal service to assure compliance with departmental instructions.

§ 523.3 Reports.

(a) Special reports of irregularities. Postmasters and other designated installation heads shall analyze trip reports promptly upon receipt, and issue a brief against the contractor on Form 5500, unless there is a satisfactory explanation, when the following irregularities occur:

(1) Gross negligence on the part of the contractor or his employees.

(2) Trips repeatedly not performed or service omitted.

(3) Delays of 30 minutes or more due to driver's failure to report or because of equipment failure. (Delays of less than 30 minutes may be briefed in unusual circumstances.)

(4) Heat and light failures of 30 minutes or more during one round trip. (5) Unsanitary and unclean conditions in the vehicle.

(6) Failure to provide potable water. (7) Loss or damage to mail or postal equipment.

(8) Failure of the contractor or his employees to follow reasonable instructions of postal officials or employees.

(9) Violation of postal laws or regulations.

(10) Failure to give proper supervision to performance of contracted service.

(11) Transporting as cargo matter due to be in the mail.

(12) Entrusting the vehicle to an unsuitable person.

The postmaster in charge of the mobile unit will review the irregularities reported along with the contractors' comments in section 2 of Form 5500; will consult with the contractors and take any corrective action possible. When such corrective action fails to cause the contractor to comply with the terms of the contract, the matter should be referred to the director, transportation division, with the complete file.

(b) Accident reports-(1) Contractor's reports. The postmaster to whom the highway post office is assigned shall require the contractor to submit reports of all accidents occurring when the highway post office is in scheduled operation. Copies of State, municipal, ICC, insurance carrier's accident report forms, or a narrative written report are acceptable.

(2) HPO supervisor's report. Accidents are reported to the postmaster to whom the highway post office is assigned on trip reports. See that each accident reported on trip report is followed by the contractor's report of accident. Form 1769, Supervisor's Report of Accident, must accompany trip report if postal employees are injured or Government property is damaged.

(3) Postmaster's reports. On receipt of accident reports the postmaster to whom the highway post office is assigned must:

(i) Advise the inspector in charge immediately of any accidents requiring inspection service attention.

(ii) Report serious accidents immediately to director, transportation division. (iii) Compare contractor's report with trip report.

(iv) Prepare and submit a brief abstract of accident to the director, transportation division, to include:

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§ 524.1 Description.

Water route service is a contract service established by the Department to provide for the transportation of mail between post offices, or other designated points, via steamboats, or other powerboats, when land transport is unavailable or impracticable. It is operated under formal contracts, awarded after competitive bidding. In addition to transportation of mail, contracts may require: (a) Box delivery and collection service.

(b) Sale of stamp stock.

(c) Delivery of registered, insured, certified and COD matter.

(d) Acceptance of matter presented for registration, certification, or insurance, or to be sent COD, and money with applications for money orders.

(e) Facilities for distribution of mail en route by postal clerks.

§ 524.2 Postal services provided.

(a) Exchange of mail. The contractor shall exchange mail with:

(1) All intermediate post offices and nonpost office points on the route, as stated in the advertisement, on both outward and return trips, unless otherwise instructed.

(2) Post offices established after the advertisement is issued. No additional pay is made in such instances if the distance is not increased.

(3) Post offices at each end of the route, unless the director, transportation division, has otherwise provided for such terminal service.

(4) Mail carriers on connecting routes, if necessary.

(b) Box delivery and collection service. Advertisements and contracts state whether box delivery and collection service is required. They also state the scope of such service. Instructions contained in part 159 of this chapter are applicable to water route service, so far as practicable. See also § 521.2(b) and (c) of this chapter.

(c) Acceptance of mail en route. Every mail carrier shall receive any mail presented to him, if it is properly prepaid by stamps, and deliver it at the next post office at which he arrives. No fees are allowed for this service.

(d) Other postal services. On routes where provisions of the contract require,

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(a) Contract terms. See § 521.3 (a) of this chapter.

(b) Obtaining bids. See § 521.3(c) of this chapter except § 521.3 (c) (2) (i) (a) of this chapter as bidders for water route service are not restricted as to residence.

(c) Award of contract. See § 521.3(d) of this chapter.

(d) Contractor's responsibilities—(1) Providing equipment. Contractors must provide:

(i) Steamboats or other powerboats which are safe, suitable, and satisfactory to the Department.

(ii) The means recessary to transport all mail, regardless of size, weight, or increase in volume during the term of the contract.

(2) Performing service. Contractors shall:

(i) Carry the mail or supervise the service in person or by an agent.

(ii) Be held accountable for the acts and omissions of the persons to whom they commit the care and transportation of the mail and for careful and faithful performance of duties by those persons. They shall discharge any persons engaged in carrying the mail whenever the director, transportation division, requires that they take such action.

(iii) Carry the mail with certainty, celerity, and security.

(iv) Transport foreign mail in transit across the territory of the United States.

(v) Not carry, otherwise than in the mail, letters that should go by mail or transport any person engaged in carrying letters that should go by mail.

(3) Maintaining schedules. Contractors shall:

(i) Provide scheduled service satisfactory to director, transportation division.

(ii) Observe the schedule stated in the advertisement or such other schedule of like running time as may be directed by the transportation division having supervision over the route.

(4) Giving preference to mail. See § 521.3 (e) (3) of this chapter.

(5) Transporting postal employees and equipment. (i) Postal clerks may be assigned to water routes. The contractor

on those routes shall provide and fit up suitable space for their use in accordance with specifications in the advertisements.

(ii) Contractors shall furnish post office officials, on exhibition of credentials, transportation on trips handling mail between scheduled points on the mail route.

(iii) The contractor shall transport, without extra charge, all post office blanks, mail bags, lock and keys, and other postal supplies offered to him.

(6) Providing carriers.—(i) Qualifications. See § 521.3 (e) (7) (i) of this chapter.

(ii) Persons ineligible. See § 521.3(c) (2) (ii) (e) and § 521.3 (e) (7) (ii) of this chapter.

(e) Renewals, extensions, and changes without advertising-(1) Renewals. See § 521.3 (f) of this chapter.

(2) Extensions of contract period. See § 521.3(g) of this chapter.

(3) Changes in service-(i) Extensions of service. Service may be increased or extended by allowing a pro rata increase in compensation, but the contractor, if he prefers, may elect to relinquish the service on timely notice.

(ii) Reduction of service. Service may be curtailed or discontinued in whole or in part by allowing 1 month's extra pay on the amount of service dispensed with and not exceeding pro rata compensation for the service retained.

(f) Irregularities-(1) Deductions or fines. See § 521.4(d) (1) or (4) of this chapter.

(2) Forfeitures or contract annulment. See § 521.4(d) (3) of this chapter.

(g) Payments—(1) Payments. See § 521.4(e) (1) of this chapter.

(2) Pound rate contracts. Claims for payment for service performed will be submitted by the contractor to the director, transportation division, each accounting period, on Standard Form 1034, Public Voucher for Purchases and Services Other Than Personal, with two copies of SF 1034A, Memorandum Copy of SF 1034, supported by an itemized statement of all service performed, rates per pound, and the amount due. The director, transportation division, will verify all items shown on the itemized statement submitted by the contractor with the reports submitted by the postmasters.

SF 1034 will be covered by certification of service on Form 5429, to the postal data center.

(3) Readjustment of compensation. See Part 526 of this chapter.

§ 524.4 Protection of mail.

See § 521.3 (e) (9) of this chapter. § 524.5 Record of performance.

See § 521.5 of this chapter. In lieu of Form 5399, postmasters and other designated installation heads may be required by the director, transportation division, to maintain whatever records are necessary as evidence of service performed. § 524.6 Routes under administration of postmasters.

See § 521.7 of this chapter.

§ 524.7 Screening contractors, subcontractors, and certain employees.

See § 521.8 of this chapter.

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star routes on Form 5435, Advertisement for Mail Service. See § 521.3 (c) (1) of this chapter.

(c) Requirements for bidders. Bidders must meet the following:

(1) Age. Contract motor vehicle contractors shall not be under 21 years of age, and their assistants not under 18.

(2) Residence. See § 522.2(c) (2) of this ehapter.

(3) Reliability. See § 522.2(c)(3) of this chapter.

(4) Dual employment. See § 521.3(c) (2) (i) (b) and (c) of this chapter.

(d) Bid procedures. See § 521.3 (c) of this chapter. Form 5449-5449-A, Contract Motor Vehicle Service Bid and Bond-Work Sheet, is used in submitting bids for contract motor vehicle service.

(e) Oaths. See § 521.3(d) (9) of this chapter.

(f) Employment of assistants. Contract motor vehicle contractors must either personally supervise their contracts or employ competent supervisors who will personally supervise performance of the contracts. They may not assign or sublet their contracts without approval of the director, transportation division. They may employ assistants at their own expense. Assistants so employed must meet the minimum requirements shown in paragraph (c) of this section.

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(b) Instruction for contractors. Postmasters shall instruct contract motor vehicle contractors as to service requirements in accordance with instructions contained in advertisements.

(c) Changes in service.-(1) Extension. The director, transportation division, will issue orders for extension of contract motor vehicle service.

(2) Reduction. Postmasters shall report promptly to the director, transportation division, when contract motor vehicle requirements are reduced, so that a lower rate may be negotiated.

(d) Irregularities.—(1) Observation of service. See § 522.3(d) (1) of this chapter.

(2) Record of irregularities. See § 522.3 (d) (2) of this chapter.

(3) Assessing fines. See § 522.3(d) (3) of this chapter.

(4) Investigation of complaints. See § 522.3(d) (4) of this chapter.

§ 525.4 Protection of mail.

(a) Contract motor vehicle contractors and their employees must protect the mail in the manner stated in § 522.4. Contractors and sureties may be held financially liable for loss or damage to mail in their custody.

(b) Contractor shall provide vehicles as required by the contract. Vehicle bodies must be fully enclosed, waterproof, equipped with key or combination locks, and kept locked en route between exchange points. § 525.5

Termination.

(a) The director, transportation division, after approval by the Highway Transportation Branch, Bureau of Transportation may annul any contract motor vehicle contract for failure by the contractor or any of his employees to perform service or to furnish equipment in accordance with provisions of the advertisement, or for reasons stated in § 521.4(d) (3) of this chapter.

(b) The director, transportation division, may discontinue service under a contract motor vehicle contract whenever public interest requires discontinuance by allowing, as full indemnity to the contractor, as extra pay one-twelfth of the per annum rate, unless the contract has been terminated for cause.

§ 525.6 Payments.

(a) Certification. Postmasters or other designated installation heads will use Form 2640 to certify performance of contract motor vehicle service.

(b) Contract payments. Postal data centers must pay contract motor vehicle contractors at the close of each accounting period upon certification that service has been performed. Payment may not be made without an order awarding or renewing contract.

(c) Readjustment of compensation. See Part 526 of this chapter.

§ 525.7 Screening contractors, subcontractors, and certain employees.

See § 521.8 of this chapter.

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(a) The laws authorizing contract pay adjustments provide that the contract compensation may be readjusted by mutual consent for increased or decreased costs occasioned by changed conditions occurring during the contract term which could not reasonably have been anticipated at the time of contracting or renewing. Only regular contractors or subcontractors are eligible for consideration (star, water, contract motor vehicle and highway post office).

(b) The law authorizes readjustment consideration for the pay of mail messengers by mutual consent for increased or decreased costs occasioned by changed conditions which could not reasonably have been anticipated at the time of designation. Only regular mail messengers are eligible for this consideration. § 526.2

Requests.

It is unlawful for a Federal Official to encourage a claim against the Government. The request must be instituted by the contractor, subcontractor, or messenger. Preferably, it should be written; however, verbal requests may be accepted to initiate action. Immediate written record shall be made of any verbal requests, particularly regarding date. All requests received by postmasters, whether written or verbal, shall be immediately forwarded to the director, transportation division. § 526.3 Cost statement-contract service.

(a) Furnishing forms. When requests are received by the director, transportation division, from a contractor or through a postmaster, he will furnish the contractor, subcontractor, or mail messenger, three copies of Form 5478, Cost Statement Contract Service, under cover of Form 5478-A, Transmittal Letter and Instructions for Completing Form 5478.

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