3063 CONTENTS STATEMENTS American Trucking Associations, Inc... Batrus, Frederick E., Deputy Assistant Postmaster General, Bureau of Transportation, accompanied by Joseph F. Jones, Director of Division of Domestic Transportation, and Tyler Abell, Associate General Counsel, Cunningham, Hon. Glenn, a Representative in Congress from the State of Ernst, Lawrence E., general manager, National Star Route Mail Carriers Fort, James F., counsel, public affairs, American Trucking Associations, Inc.: Letter dated November 11, 1963, to Senator Monroney. Fraley, Orrin H., vice president, Consolidated Freightways, Inc., Menlo Matthews, Joe G., executive director, Highway Mail Transportation Con- ference: Letter, dated November 6, 1963, to Senator Johnston__ O'Connor, R. J., vice president in charge of marketing, Eastern Greyhound Lines; accompanied by William E. Hastings, director of traffic, Grey- hound Corp., and Fred Hill, general counsel, National Association of Motor Bus Owners, on behalf of National Association of Motor Bus AUTHORIZING THE POSTMASTER GENERAL TO ENTER INTO AGREEMENTS FOR THE TRANSPORTATION OF MAIL BY PASSENGER COMMON CARRIERS BY MOTOR VEHICLE, AND FOR OTHER PURPOSES WEDNESDAY, NOVEMBER 6, 1963 U.S. SENATE, SUBCOMMITTEE ON POSTAL AFFAIRS OF THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE, Washington, D.C. The subcommittee met at 11:40 a.m., pursuant to other business, in room 6202, New Senate Office Building, Senator A. S. Mike Monroney (chairman of the subcommittee) presiding. Present: Senator Monroney. Also present: Senator Boggs. Staff members present: William P. Gulledge, staff director and counsel; Dr. Robert L. Sumwalt, assistant staff director; and Frank A. Paschal, minority clerk. Senator MONRONEY. The committee will please be in order. The committee this morning will consider H.R. 5179, which would authorize the Postmaster General to enter into contracts with bus companies for the transportation of mail on the companies' regular routes without advertising for bids. I will place the bill and the reports thereon in the record at this point. (The exhibits are as follows:) [H.R. 5179, 88th Cong., 1st sess.] AN ACT To authorize the Postmaster General to enter into agreements for the transportatoin of mail by passenger common carriers by motor vehicle, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That chapter 101 of title 39, United States Code, is amended by adding immediately following section 6402 thereof the following new section: "§ 6402a. Agreements with passenger common carriers by motor vehicle "The Postmaster General may enter into agreements, under such terms and conditions as he shall prescribe and without advertising for bids and without bond, for the transportation of mail, in passenger-carrying motor vehicles, by passenger common carriers by motor vehicle over the regular routes on which the carrier is permitted by law to transport passengers.". SEC. 2. The table of contents of chapter 101 of title 39, United States Code, is amended by inserting "6402a. Agreements with passenger common carriers by motor vehicle." immediately below "6042. Authority to contract for mail transportation.". 1 SEC. 3. Section 6402(a) of title 39, United States Code, is amended (1) by striking out the word "and" immediately following the semicolon in subparagraph (4) thereof; (2) by striking out the period at the end of subparagraph (5) thereof and inserting in lieu thereof a semicolon and the word "and"; and (3) by adding at the end thereof the following new subparagraph: Passed the House of Representatives August 5, 1963. RALPH R. ROBERTS, Clerk. [H. Rept. 580, 88th Cong., 1st sess.] AGREEMENTS FOR MAIL TRANSPORTATION BY PASSENGER-CARRYING MOTORVEHICLE COMMON CARRIERS The Committee on Post Office and Civil Service, to whom was referred the bill (H.R. 5179) to authorize the Postmaster General to enter into agreements for the transportation of mail by passenger common carriers by motor vehicle, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill, as amended, do pass. AMENDMENTS The amendments are as follows: Page 2, line 1, insert ", in passenger carrying motor vehicles," immediately following "mail". Page 2, line 2, strike out "within the area in" and insert in lieu thereof "over the regular routes on". Page 2, line 16, insert ", in passenger carrying motor vehicles," immediately following "mail". PURPOSE OF AMENDMENTS The purpose of the first and third amendments is to remove any possible doubt that the authority granted by this legislation will be used by the Postmaster General only when the mail is to be transported in passenger-carrying motor vehicles and not in trucks of the common carrier. The second amendment will limit the area in which a particular common carrier may transport the mail in passenger-carrying motor vehicles to a regular route of the common carrier. PURPOSE The purpose of this legislation is to authorize the Postmaster General to enter into contracts with motor vehicle passenger-carrying common carries, without advertising for bids and without a bond, for transportation of mail in passengercarrying motor vehicles over the regular routes on which the carrier is permitted by law to transport passengers. STATEMENT Contracts for the transportation of mail by passenger-carrying motor vehicles are subject to the law (41 U.S.C. 5) requiring formal advertised bidding procedures. The Post Office Department found, in connection with transportation of mail by bus, that no matter on what terms it advertised its requirements only one bus company was able to bid since no two bus companies have service and comparable schedules between all of the same points. Moreover, bus companies do not freeze their schedules to the mail requirements normally required and used in connection with formal advertising procedures. In view of such circumstances, the Post Office Department some years ago entered into a number of systemwide contracts with bus companies without advertising. These contracts required the bus companies to transport the mail on the buses-usually in the baggage compartment at a fixed rate per mailpouch regardless of the distance-75 cents per pouch in some cases. A legal review in 1959 by the General Accounting Office of the contracts with the bus companies led to the conclusion that the statutory advertising requirements must be followed when the existing contracts expire unless additional legislation is Most of obtained exempting such contracts from the advertising requirements. the contracts have now expired. The decisions of the Comptroller General are set forth in the printed hearing on H.R. 5179. This legislation will authorize contracts with the bus companies to be entered into by the Postmaster General without regard to advertising but such authority is limited to contracts for the transportation of mail in passenger motor vehicles over the regular routes on which the passenger common carrier is permitted by law to transport passengers. The mailpouches, as in the past, are expected to be carried in the baggage compartment of the bus as the limited authority may not be used to contract with a passenger-carrying motor vehicle common carrier for transportation of mail by truck. The legislation will eliminate the mandatory feature of the advertising requirements as applied to such contracts and will give the Postmaster General the discretion to determine which method of contracting-advertising for bids or negotiation-would best serve the interest of the Government. It will give the Postmaster General flexibility in obtaining transportation of mail by passenger motor vehicle common carriers similar to the flexibility he now has in obtaining transportation of mail on regular scheduled operations of railroad and air common carriers. The legislation also permits the Postmaster General to enter into such contracts without requiring a bond from the contractor. The cost of the bond merely adds to the cost of the contract without any compensating benefit to the Government, as the activities of the common carriers are always subject to financial review by the Interstate Commerce Commission. HEARINGS Public hearings were held on this proposal. The Post Office Department witnesses offered no opposition to favorable consideration of the legislation. The committee knows of no opposition to the bill as amended. COST The rate per mailpouch under prior negotiated contracts generally was less than the rate for transporting similar mail under contracts entered into under after formal advertising. The committee believes that this legislation will result in a reduction in cost in the transportation of mail on passenger carrying motor vehicles as a result of the more flexible procedure. REPORTS The favorable reports of the Post Office Department and the General Accounting Office follow: Hon. Tом MURRAY, OFFICE OF THE POSTMASTER GENERAL, Chairman, Committee on Post Office and Civil Service, DEAR MR. CHAIRMAN: This is in reply to your request for a report on H.R. 5179, a bill to authorize the Postmaster General to enter into agreements for the transportation of mail by passenger common carriers by motor vehicle, and for other purposes. The postal service needs greater flexibility in arranging for the transportation of mail by passenger common carriers by motor vehicle. The systemwide scheduled operations of common carrier bus companies are of significant value in expediting the delivery of first-class mail. They should be available for such use by the Department on any and all schedules when and where needed to improve the mail service. The Department has made a number of systemwide contracts with bus companies on a noncompetitive basis. Formal advertising and competitive bidding procedures are normally required in contracting for our highway service. In connection with bus service, no matter on what terms the Department advertises its requirements, usually only one bus company is able to bid since no two buslines have service and comparable schedules between all of the same points. Furthermore, bus companies do not like to freeze their schedules to mail requirements which would normally be the case in using formal advertising procedures. |