(iii) The presence of a postal inspector in the carrier's vehicle or in the vicinity of the route shall not be revealed by the carrier to any person at any time.

(iv) Contractors must convey, without extra charge, all post office blanks, mail bags, lock and keys, and other postal supplies offered them. This does not include furniture, letter cases, mail boxes, and other similar items. Such equipment must not be shipped under penalty labels for transportation on star routes unless it has been determined in advance that the contractors involved are willing to perform the additional work without compensation. This does not prevent

contractors from handling such equipinent as freight or express.

(7) For providing carriers-(i) Qualifications. Carriers must be:

(a) Not less than 18 years of age. (b) Of good character, reliable, and trustworthy.

(c) Sufficiently educated to enable them to perform all required duties in a satisfactory manner.

(ii) Persons ineligible. The following are ineligible to serve as carriers on star routes: (a) All postal employees, including temporaries and substitutes.

(b) Members of the immediate families of postmasters and assistant postmasters as defined in paragraph (c) (2) (i) (c) of this section unless they become members of the immediate family after the contract was awarded.

(c) Persons undergoing sentences of hard labor imposed by a criminal court (out on parole or under suspended sentence).

(d) Persons with known criminal records involving moral turpitude dishonesty.

or

(e) Persons whose traffic records indicate that their driving motor vehicles would be hazardous.

(8) For identifying equipment. (i) The use of a sign or lettering reading, "United States Mail" or "U.S. Mail" is optional, but may be used only on vehicles that are actually carrying mail. If a sign is used, it must be removed when the vehicle is used exclusively for other purposes. If the lettering is painted on the vehicle, it must be covered when the vehicle is being used exclusively for other than mail service.

(ii) Vehicles that are painted red, white, and blue must have inscribed on both tractor or truck cab side doors in block letters at least 1 inch high, U.S. Mail Contractor. Trailers, so painted,

must also bear the same inscription in block letters at least 2 inches high on the front of the trailer, sufficiently high to be visible above the tractor unit.

(f) Renewal, extensions, and changes without advertising-(1) Renewals. A regular contract may be renewed for additional terms, without advertising, at the rate prevailing at the end of the contract.

(2) Extensions of contract period. A contract may be continued in force beyond its expressed term for a period of not more than 6 months. The extension of a contract also extends any subcontract in effect on the route.

(3) Changes in service. (1) The director transportation division may at any time issue orders extending, increasing frequency, and changing the line of travel, by allowing a pro rata increase in compensation for any increased service required. They may also issue orders curtailing, reducing frequency, discontinuing, or changing line of travel by allowing 1 month's extra pay on the amount of service eliminated, and not exceeding pro rata compensation for the service retained.

(ii) For contracts entered into prior to October 23, 1962, extensions during the contract term without the concurrence of the contractor may not exceed a net aggregate of 50 miles one way. If the contractor in such a contract agrees to a larger extension, then an extension during a contract term may be made not in excess of a net aggregate of 100 miles one way. The contractor's agreement to an extension greater than 50 miles must be evidenced in writing for contracts entered into on and after October 23, 1962. Extensions up to 100 miles one way may be unilaterally ordered provided the contract general provisions have been amended to read 100 instead of 50 miles.

(iii) Star route service may not be extended to take over a segment of a rural route unless the segment becomes detached from the rural route and it is impracticable for the rural carrier to serve such segment.

(iv) If the road usually traveled becomes impassable, the carrier must use the most available road to perform full service. He should immediately report the matter to the postmaster at the head of the route. See paragraph (h) (4) of this section.

(4) Changes in schedules. (1) Directors, transportation divisions, may issue orders changing schedules of departure

and arrival, particularly to make them conform to connections with railroads or other mail routes, without increase in pay.

(ii) Changes in schedules must be authorized by the director, transportation division.

(iii) The schedule on a route must not be changed for the convenience of the contractor, subcontractor, or carrier, if the change would be detrimental to the service.

(iv) The financial effect that a change in schedule may have on a contractor must be taken into consideration. Reversal of schedule or excessive layover time could result in material increase in cost or undue hardship and provide a basis for readjustment of compensation.

(v) Postmasters must inform the proper postal service officer or the director, transportation division, whenever changes in schedules are necessary or appear advisable, with a full explanation of the reasons. They should not recommend changes entirely in the interest of the contractor.

(g) Irregularities—(1) Deductions for service omitted. Directors, transportation divisions, are authorized, in their discretion, to make deductions for trips not performed and service omitted. When a deduction is made, an order will be issued on Form 5440-C-D-E, "Contract Route Service Order."

(i) When

(2) Fines for irregularities. a contractor fails to comply with terms of the contract or when serious irregularities occur, 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 will issue a brief against him by use of Form 5178, "Notification of Irregularity." If the contractor makes no satisfactory reply, the transportation division may issue an order on Form 5440-C-D-E imposing a fine.

(ii) Fines may be imposed for:

(a) Failure to carry all or any portion of the mail in order to accommodate passengers, freight, or express.

(b) Failure to arrive within schedule time.

(c) Neglect to take mail from or deliver it to a post office.

(d) Refusal to deliver or collect the mail along the route.

(e) Failure to protect mail from rain or extremes of weather.

(f) Permitting mail to become damaged or destroyed.

(g) Loss of or depredation to mail through fault of contractor or his agent.

(3) Forfeitures or contract annulment. Forfeitures may be imposed or contracts may be annulled for:

(1) Failure to follow instructions of the Department.

(ii) Administratively determined violations of the postal laws and regulations and other laws related to the performance of the service.

(iii) Failure to give proper supervision to performance of service.

(iv) Transporting matter due to be in the mail as cargo other than mail.

(v) Entrusting mail to an unsuitable person.

(vi) Refusing to discharge a carrier when instructed to do so by the Department.

(vii) Subletting a contract without consent of the director, transportation division.

(viii) Participating in combinations to prevent others from bidding.

(ix) Violation of any of the provisions of the advertisement or contract.

(x) Conviction of a crime such as embezzlement, robbery, burglary, larceny, perversion, or other notoriously immoral acts, or serious moving traffic violations.

(xi) Association with known criminals. (h) Payments-(1) For regular service. Payments for stated services are: (1) Made by check after the expiration of each 4-week accounting period. (ii) Not made under new or renewed contract until the contract is executed.

(2) For special-delivery service. Postmasters may pay special-delivery fees to contractors and carriers when special service is rendered. If the special delivery mail is delivered into the patrons box the carrier is not entitled to the fee. (3) Readjustment of compensation. See Subpart F of this part.

(4) Allowance for detours. (i) Transportation requirement and procurement officers may authorize pro rata additional payments to contractors for necessary increased travel caused by obstruction of roads, destruction of bridges, discontinuance of ferries, or any other cause, provided the increase amounts to as much as $1 during any 4-week accounting period and a report is made within 90 days after service is performed.

(ii) The contractor or carrier is responsible for reporting to the postmaster

at the head of the route all necessary detours, with the reasons and the additional distance travel on each trip.

(iii) The postmaster is responsible for obtaining all pertinent facts and reporting them to the proper director, transportation division. Report net miles traveled after deducting scheduled miles of travel from detoured miles traveled, for each date a detour is in effect. See § 521.7(b)..

(5) Pro rata computation of change in pay. To determine the amount to be allowed or deducted in making changes in service, transportation requirement and procurement officers must observe the following instructions:

(1) Determine the one-way length of the route as it would operate if changed as proposed.

(ii) Multiply the one-way length by the number of trips to be required, as determined by th the Frequency Conversion Table. If the route has more than one part, follow the same procedure for each part and add annual mileages for all parts.

(iii) Determine the difference between the total annual mileage as shown on the records and the new annual mileage.

(iv) Multiply the difference in annual mileage by the prevailing rate per mile, except as otherwise provided in this subparagraph.

(v) When a change has been made at less than pro rata, or without allowance of additional pay, and a further change is proposed, base the computation on the original distance and pay.

(vi) If service that has been added without the allowance of additional pay, or at less than pro rata, is to be discontinued, base the computation on the rate per mile allowed when the service was added.

(vii) When a change involves part of the original service and service added under conditions outlined in subdivision (vi) of this subparagraph, base the computation on the two rates.

(viii) When a contract is renewed, a new basic rate per mile is established effective at the beginning of the new contract term, regardless of any orders issued during the previous term.

(6) Withholding payments. (i) When a contractor has more than one route and fails to perform service on any one of them according to contract, payment will be withheld on all routes until the unsatisfactory conditions are remedied and all penalties are satisfied.

(ii) When a contractor dies, payments should be suspended until the necessary court orders or claim papers or both can be approved. Freqently there is considerable delay in making payments following the death of a contractor.

(i) Termination—(1) Time. Star route contracts may be terminated at the end of any 4-year term at the option of the Postmaster General or the contractor or they may be terminated at any tim (330) of this section.) time as provided by law. (See paragraph (f)

(2) For changed service conditions. Star routes may be readvertised and new contracts may be awarded for the purpose of releasing contractors and sureties on routes where undue hardships have been imposed by:

(i) An ordered change which increases or decreases the amount of service required. f

(ii) An abnormal or sustained increase in the quantity of mail to be carried during a contract term, necessitating larger equipment.

(iii) An ordered change in schedule, requiring the contractor to be away from the initial terminal much more or less time than was required in the advertised schedule.

(3) For inadequate compensation. A star route may be readvertised and a new contract may be awarded to release the contractor and his sureties when, after: full investigation, compensation is found to be wholly inadequate and continuation of the contract will impose undue hardship, even though conditions have not changed since the contractor submitted his bid. This action may be taken only: when the contractor:: II

(i) Gives: 90-days' advance notice of: his desire to be released.

(ii) Waives the 1-month extra pay authorized by law where contracts are canceled under this provision.

(iii) Continues service until another contract is awarded even though the award may be made more than 90 days after filing the advance notice.

(4) Death of a contractor—(1) Notification. When a contractor dies, the postmaster should immediately notify the director, transportation division of the date and approximate time of contractor's death. The transportation division will suspend payments and notify the Highway Transportation: Branch, Bureau of Transportation and International Services and sureties on the contracts. Postmasters must notify

the transportation division of the death of a contractor, even though the route has been sublet. (ii) Transfer of

responsibility for route. On the death of a contractor, performance of service becomes the responsibility of the executor or administrator of the deceased contractor or the sureties of his contract.

(iii) Responsibility of legal representative. If a legal representative is appointed, he has the right, after obtaining the necessary court orders, to continue the service for the benefit of the estate or to sublet to himself or some other suitable person, after obtaining permission from the Department.

(iv) Responsibility of sureties. The surety or sureties on the contract are responsible for assuming charge of the route and continuing the service in person, by a suitable carrier, or under a subcontract when no executor or administrator is appointed or the service is not continued by the legal representative for the benefit of the estate.

(v) Temporary service. If service is not provided promptly by or for the estate of a deceased contractor or his sureties, the postmaster at the head of the route or the transportation requirement and procurement officer who has supervision over the route should arrange for employment of a temporary carrier at the lowest obtainable rate. Temporary service should be continued until regular service is resumed by the legal representative of the estate of the deceased contractor or by sureties. Payments to temporary carriers should not be made until they are approved by the Department.

(5) Insanity of a contractor. When a contractor becomes temporarily or permanently incapacitated because of insanity or unsound mind, the postmaster shall immediately notify the transportation requirement and procurement officer having jurisdiction over the route. [26 F.R. 11625, Dec. 6, 1961, as amended at 26 F.R. 12218, Dec. 21, 1961; 28 F.R. 6451, June 23, 1963; 29 F.R. 6537, May 20, 1964; 29 F.R. 9338, July 8, 1964; 30 F.R. 10150, Aug. 14, 1965; 30 F.R. 11351, Sept. 4, 1965. Redesignated at 31 F.R. 15351, Dec. 8, 1966]

may cause a route to be relet, thereby making the contractor and his sureties liable under their bond for damages.

(2) Subletting for an amount less than the contract rate of pay is prohibited by law.

(3) The contractor and subcontractor must warrant that the subcontractor has not given or agreed to give to the contractor, directly or indirectly, any consideration for subletting of the contract. Such a consideration includes, but is not limited to, a cash payment for the agreement to sublet; rebates from the compensation received from the Government; payment of unusually high prices for equipment; and purchase of unnecessary operating rights.

(4) Subcontracts are executed in triplicate, providing a copy for transportation requirements and procurement officer; contractor; and subcontractor.

(5) After an order has been issued recognizing a subcontract, payments are made directly to and in name of the subcontractor.

(b) Requirements of subcontractors. A subcontractor must:

(1) Meet the legal residence and other requirements of contractors as provided in § 521.3 (c) (2) (1) (a) except that subcontractors must be not less than 18 years of age.

(2) Be in a position to supervise the service properly.

(3) Be financially and morally responsible.

(4) Have fully adequate and suitable equipment.

(c) Assignment. Assignment or transfer of a contract for transporting mail is prohibited by law, except as provided in the Assignment of Claims Act of 1940, as amended. A contract may be sublet as provided by law.

(d) Term. The subcontract must be executed for service on the whole route and for a period of not less than 1 year or for the remainder of the contract term when less than 1 year.

(e) Responsibility of contractor. The execution and recognition of a subcontract does not release a contractor from his obligation, but it relieves him of the necessity of giving the route his personal supervision.

(f) Termination-(1) For cause. The director, transportation division, may terminate a subcontract on abandonment, unsatisfactory service by the subcontractor, or for the reasons stated in § 521.3(g) (3).

(2) By request. The distribution and traffic manager will recognize the termination of a subcontract prior to its stated period on proper notification by either party to the subcontract.

On

(3) By death of subcontractor. the death of a subcontractor, the contractor, legal representative of the estate of a deceased contractor, or sureties in charge should immediately resume charge of the route. Postmasters should notify the transportation requirement and procurement officer having supervision over the route, who will issue necessary instructions to all concerned.

(g) Contracting with subcontractors. When a contractor has sublet a route in accordance with law and does not indicate in writing to the Postmaster General at least 90 days before the end of the contract term that he desires to renew the contract, the distribution and traffic manager may enter into a contract on the same terms, without advertising the route for bids, with a subcontractor who has performed satisfactory service on the route for a period of at least 6 months. [26 F.R. 11630, Dec. 6, 1961, as amended at 30 F.R. 10150, Aug. 14, 1965; 31 F.R. 12637, Sept. 27, 1966. Redesignated at 31 F.R. 15351, Dec. 8, 1966]

§ 521.5 Temporary service.

(a) On new routes. (1) Contracts for temporary star route service may be made without formal advertisements for periods not to exceed 1 year.

(2) No bond is required with a temporary contract. These contracts may run to the end of the fiscal year or not exceeding 1 full calendar year.

(3) Contracts for temporary service provide for their termination on 15-days' notice by either party.

(4) Before temporary service is authorized, bids are usually solicited by transportation planning and procurement officer. The lowest bid must be accepted unless there is sufficient reason for rejecting it.

(b) On regular routes. Temporary service may be provided under the following conditions:

(1) When a contractor fails to provide service, the transportation requirement and procurement officer in charge of the service, or the postmaster at the head of the route, has authority to employ a carrier at the lowest obtainable rate.

(2) The expense of temporary service is charged to the contractor.

(3) Employment of temporary service is to be continued until regular service is resumed by or for the contractor or his sureties.

(4) Where temporary carriers have been employed by postmasters, full report of the circumstances must be made to the transportation requirement and procurement officer.

(5) When the employment of a temporary carrier is necessary on a regular route, payment to the regular contractor must be suspended until proper adjustments are made.

(6) No payment will be made to a temporary carrier before the director, transportation division has issued an order authorizing the payment.

(c) In lieu of train service-(1) Limited interruption of railroad service. When temporary interruption of railroad service of a very limited nature is expected to last no more than a day or two, temporary service should be employed at the lowest obtainable rate. Bills shall be prepared on Form 2524, "Bill for Temporary Service in Lieu of Railroad Service," and must be charged to the Railroad Transportation account.

(2) Extended interruption of railroad service. When an interruption of railroad service appears to be of an extended nature, such as a strike or damage to or destruction of rail facilities, temporary star route service should be employed. This service shall be certified to on Form 5429, "Certification of Exceptional Contract Service Performed," appropriately marked to be charged to "Temporary in Lieu of Fail" account. When there is temporary interruption of railroad service, temporary service should be employed at the lowest obtainable rate. The cost of the service is chargeable to the Railroad Transportation, and must not be reported as star route service. Bills covering employment of service under these conditions are prepared on Form 2524 "Bill for Temporary Service in Lieu of Railroad Service."

(d) Emergency temporary service. When an emergency makes it necessary to divert mail in transit, temporary service may be provided.

(e) On airmail routes. In the event of a major disaster, temporary service may be provided, without advertising. for the transportation of mail by aircraft to or from the affected localities.

(f) Death of a temporary contractor. When a contractor or carrier for a tem