Background

This report presents the results of our self-initiated audit to assess the management of Highway Contract Route (HCR) irregularities due to contractor failure at the New Jersey International (NJI) Network Distribution Center (NDC).

Late trips occur when various conditions cause a delay in the arrival or departure of transportation beyond the scheduled times. When trucks are late, dock expeditors choose a reason code in the Surface Visibility Web scanner to provide visibility to management and accurately reflect root causes for why a trip is late. Late trip reason codes include late processing, equipment failure, traffic/construction/detour, and contractor failure.

When HCR trucks are late due to contractor failure, a Postal Service Form 5500, Contract Route Irregularity Report, is generated to document that HCR drivers did not comply with the requirements of the HCR contract. A breach of any of the requirements by a contractor, their employee(s), or their representative(s) is an irregularity. HCR irregularities consist of services not provided or provisions omitted by contractors, such as late arrivals or departures, mechanical failure, or vehicles not meeting required contract specifications. A Postal Service Administrative Official (AO) is required to review the irregularities reported.

If an HCR contractor is at fault for a late trip, the Postal Service can pursue reimbursement for the omitted service as a chargeable irregularity. However, if the late trip is outside of the HCR contractor’s control or is due to an isolated event, it is a non-chargeable irregularity, and the Postal Service cannot pursue reimbursement.

The NJI NDC is in the New York Metro Division within the Eastern Region. From January 1 to December 31, 2020, the NJI NDC had the highest number of late trips due to contractor failures in the country with 11,213. Our objective was to assess the management of HCR irregularities due to contractor failure at the NJI NDC.

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