H.R. 5530: Postal Contracting Financial Accountability Act

HR5530, the Postal Contracting Financial Accountability Act, amends section 404 of title 39, United States Code, by adding a new subsection (f). The core change is simple: a "covered contractor" running a contract postal unit, or CPU, can elect to keep operating after the United States Postal Service decides to terminate or not renew the contract postal unit operation agreement, but only if several conditions are met.

Those conditions are narrow and specific. The Postal Service's decision cannot be primarily or entirely based on a breach by the contractor. The Postal Service also must not have already entered into a new agreement with that same contractor for that specific unit. And the contractor has to submit a notice of election and agree to amend the terms and conditions of the agreement as required by the new subsection.

If the election is valid, the default rule is that the agreement continues under the same terms and conditions that were in effect immediately before the scheduled termination or non-renewal date. But there is a major catch: the Postal Service is not obligated to make payments to the contractor unless the Postmaster General decides otherwise. The Postmaster General also gets to decide whether any payments are appropriate and what terms and conditions apply to those payments.

The continued agreement does not last forever. It stays in effect only until one of 3 things happens: the Postal Service terminates the agreement for a breach by the contractor, the contractor terminates the agreement, or the contractor permanently ceases operating the contract postal unit. In practice, that gives USPS-contracted retail locations a way to avoid immediate closure, while shifting major financial discretion to the Postmaster General and keeping the Postal Service's power to end the arrangement if a breach occurs.