rates during subsequent contract years. Request, Attachment B at 13. Combined with sufficiently high first-year cost coverage, the contract’s price adjustments will help ensure that the contract will cover attributable costs in subsequent contract years. For these reasons, the Commission also finds that the contract should not result in competitive products as a whole being subsidized by market dominant products, in accordance with 39 U.S.C. § 3633(a)(1). Similarly, the Commission finds the contract is unlikely to prevent competitive products as a whole from contributing an appropriate share of institutional costs, consistent with 39 U.S.C. § 3633(a)(3). See also 39 C.F.R. § 3015.7(c). Accordingly, a preliminary review of the contract indicates it is consistent with section 3633(a). The Commission will review the contract’s cost coverage and the contribution of competitive products as a whole to the Postal Service’s institutional costs in the Commission’s ACD to ensure that they continue to comply with 39 U.S.C. § 3633(a). Other considerations. By its terms, the contract becomes effective two business days after the date that the Commission issues all necessary regulatory approval. Request, Attachment B at 14. The contract is scheduled to expire three years from the effective date, unless, among other things, either party terminates the contract with 30 days’ written notice to the other party or it is renewed by mutual agreement. The contract also contains a provision that allows the parties to extend the contract for two 90-day periods if a successor agreement is prepared and the Commission is notified at least seven days prior to the contract’s expiration date. Id. During the extension periods, prices will be adjusted as described in the contract. Id. The Commission finds the two potential 90-day extension periods are reasonable because: (1) prices are automatically adjusted in the extension period; and (2) the extension(s) should assist the Postal Service’s contract negotiations by providing additional flexibility.
rates during subsequent contract years. Request, Attachment B at 13. Combined with sufficiently high first-year cost coverage, the contract’s price adjustments will help ensure that the contract will cover attributable costs in subsequent contract years. For these reasons, the Commission also finds that the contract should not result in competitive products as a whole being subsidized by market dominant products, in accordance with 39 U.S.C. § 3633(a)(1). Similarly, the Commission finds the contract is unlikely to prevent competitive products as a whole from contributing an appropriate share of institutional costs, consistent with 39 U.S.C. § 3633(a)(3). See also 39 C.F.R. § 3015.7(c). Accordingly, a preliminary review of the contract indicates it is consistent with section 3633(a). The Commission will review the contract’s cost coverage and the contribution of competitive products as a whole to the Postal Service’s institutional costs in the Commission’s ACD to ensure that they continue to comply with 39 U.S.C. § 3633(a). Other considerations. By its terms, the contract becomes effective two business days after the date that the Commission issues all necessary regulatory approval. Request, Attachment B at 14. The contract is scheduled to expire three years from the effective date, unless, among other things, either party terminates the contract with 30 days’ written notice to the other party or it is renewed by mutual agreement. The contract also contains a provision that allows the parties to extend the contract for two 90-day periods if a successor agreement is prepared and the Commission is notified at least seven days prior to the contract’s expiration date. Id. During the extension periods, prices will be adjusted as described in the contract. Id. The Commission finds the two potential 90-day extension periods are reasonable because: (1) prices are automatically adjusted in the extension period; and (2) the extension(s) should assist the Postal Service’s contract negotiations by providing additional flexibility.
Order%20No.%204900.docx