Next Section: Subcontracting

The Postal Service^TM uses a series of sourcing processes to capture supply data and knowledge to build a dynamic supplier base, thereby ensuring continuous improvement of the entire supply chain.

Each category team develops, implements, and maintains sourcing strategies. Sourcing is initiated based on the best information available to identify and assess the qualifications, capabilities, and performance among broad sets of suppliers.

Purchase teams (contracting professionals in Supply Management, Distribution Network Offices, Facilities Service Offices, Administrative Services Offices, and their internal clients) perform two types of sourcing. The first, pre-sourcing, is performed to locate suppliers for anticipated purchases. The second, category sourcing, is performed to locate suppliers for a specific purchase. Both processes require market and industry analysis to select a supplier or groups of suppliers to work with and to develop mutually beneficial business relationships.

Purchase teams also use prequalification, a process whereby a supplier's ability to meet specific requirements is evaluated. After evaluation, the supplier is placed on a pre-qualified list for particular purchases or series of purchases competed solely among other pre-qualified suppliers.

Market Analysis…continuously assess the marketplace for drivers of market segments, industry trends, impact of new technology, competitive dynamics, supplier characteristics, and number of suppliers (national or regional) in a market.

• Use the latest in print and electronic resources (industry reports, supply periodicals, databases, etc.) to identify leading edge suppliers in an industry.
  
• Use supplier and industry resources, such as trade associations, to obtain data on the structure of the industry, supplier value chain analysis, supplier economics, and total cost of ownership (TCO) of items and services.
  
• Analyze the purchase history of an item or service to determine the level of competition, prices, and performance results of existing suppliers to determine if a new supplier would better meet our needs.
  
• Investigate to determine what goods or services are available to satisfy the postal need or whether products or requirements can be modified or tailored.
  
• Attend and host industry briefings to identify potential suppliers to meet postal needs.
  
• Participate in business and trade fairs to research commercially available products, pricing, and potential suppliers.
  
• Evaluate products that appear to be the same across suppliers (beyond branding) to determine if there are real differences in the product or services and to identify the supplier with the most competitive advantage.
  
• Obtain source lists (proven suppliers) from trade and industry associations, government agencies, business development, and purchasing organizations.
  
• Conduct industry-specific sourcing to identify diverse candidates to be included in supplier development initiatives.

Publicizing Opportunities…opportunities will be announced in whatever media is deemed appropriate to enhance competition, identify new sources, and improve the quality of the supply base.

• Issue pre-solicitation notices (also called “sources sought” notices) to identify suppliers based on the business and competitive needs of the Postal Service.
  
• Publicize purchase opportunities and prequalification for non-commercially available products and services valued at over $100,000 (see Purchasing Manual 3.5.3.a for details).
  
• Publicize purchase opportunities and pre-qualification for commercially available goods or services valued at $1 million.
  
• Announce contract awards, competitive or non-competitive, having significant subcontracting opportunities to promote competition in subcontracting.
  
• Ensure that each purchase plan fully considers the use of small, minority-owned and women-owned businesses (SMWOBs) and demonstrate active sourcing efforts in order to obtain approval.
  
• Ensure that each purchase team's market research includes specific efforts to identify SMWOBs capable of meeting prequalification criteria and encourage these firms to compete.

Credit Card Buys…Credit card policies support the local business community and encourage economic development of all diverse groups. When operational needs cannot be satisfied through eBuy, area contracts, and ordering agreements-which generally represent our lowest total cost for acquiring equipment, suppliers and services-the credit card serves as the primary means of buying and paying. Cardholders are encouraged to seek out and use SMWOBs when making credit card buys to meet their day-to-day operational needs.

Cardholders must strive to obtain the best value for the Postal Service on each purchase. Best value is obtained by evaluating the price, quality, and any other factors necessary to meet the need. The maximum single credit card transaction cannot be greater than $10,000; for purchases of $10,000 or more, competition is required.