TABLE OF CONTENTS The bills (H. R. 4408 and H. R. 2270, by Congressman Hildebrandt James W. Cole, deputy second assistant postmaster general M. H. Ackerman, post office inspector in charge, Atlanta division.. Hon. Fred H. Hildebrandt, a Representative in Congress from the Ivan Bowen, attorney, representing the National Association of 13-15 III 22 STAR-ROUTE CONTRACTS WEDNESDAY, FEBRUARY 10, 1937 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE POST OFFICE AND POST ROADS, Washington, D. C. Subcommittee No. 7, having to do with rural mails, met at 10:45 a. m., Hon. Thomas G. Burch presiding, for consideration of H. R. 4408, to provide for the renewal of star-route contracts at 4-year intervals, which reads as follows: [H. R. 4408, 75th Cong, 1st sess.] A BILL To provide for the renewal of star-route contracts at four-year intervals, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the last sentence of section 3951 of the Revised Statutes, as amended by the Act of August 11, 1876 (amending sections 246 and 251 of the Act of June 8, 1872) (U. S. C., 1934 ed., title 39, sec. 434), is hereby amended to read as follows: "In all cases of regular contracts the contract may, in the discretion of the Postmaster General, and in the interests of the Postal Service, be renewed for single periods of four years from date of expiration, and like renewals of such contracts may thereafter be made as often as the interests of the service may require; or any such contract may be continued in force beyond its express terms for a period not exceeding six months, until a new contract with the same or another contractor shall be made by the Postmaster General."; and (b) Such section is further amended by adding at the end thereof the following new paragraphs: "The Postmaster General may, in discretion, and in the interests of the Postal Service, allow extra pay to a contractor for (a) necessary increased travel caused by obstruction of roads, destruction of bridges, or discontinuance of ferries occurring during the contract term, when such increased travel is for not less than one mile and if for a period not less than ten consecutive days (trips), or (b) where an abnormal and sustained increase in the quantity of mail develops during a contract period or after bid has been submitted, providing such increase necessitates larger capacity equipment to maintain service, or (c) where a change in schedule is ordered that will necessitate an additional unit of equipment and driver to maintain service; or the pay may be reduced where a schedule is so changed as to permit its maintenance with a reduction in units of equipment and drivers; or, instead of allowing extra pay or ordering a reduction in pay, the route may be readvertised and relet for the remainder of the contract term. No extra pay allowed or reduction in pay ordered under the provisions of this section shall be proportionately greater than the rate established by the contract involved. The provisions of section 3960 of the Revised Statutes (U. S. C., 1934 ed., title 39, sec. 440) that no compensation shall be paid for additional service in carrying the mail until such additional service is ordered, the sum to be allowed therefor to be expressed in the order and entered upon the books of the department, and that no compensation shall be paid for any additional regular service rendered before the issuing of such order, shall not apply to any service authorized under this paragraph. "Where a change in schedule is ordered that will necessitate the contractor being away from the initial terminal an excessively longer period than was required in the advertised schedule, the route may be readvertised if the changed schedule is not acceptable to the contractor; or where a schedule is so 1 changed that will permit the contractor to be away from the initial terminal a substantially shorter period than was required in the advertised schedule, the Postmaster General may, in his discretion, and in the interests of the Postal Service, readvertise the route. Less than three hours shall not constitute an excessively longer or substantially shorter period.” SEC. 2. Section 3945 of the Revised Statutes, as amended by the Act entitled "An act making appropriations for the service of the Post Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-five, and for other purposes", approved June 23, 1874 (U. S. C., 1934 ed., title 39, sec. 426), is hereby amended by adding at the end thereof the following new paragraph: "Every application for renewal of contract for carrying the mail shall be accompanied by the bond of the applicant, with sureties approved by a postmaster, and in cases where the amount of the bond exceeds $5,000, by a postmaster of the first, second, or third class, in a sum of the same amount stated in the current contract, or of an amount designated by the Postmaster General, and of which the applicant has been notified before forwarding application for renewal; and in case of failure of any applicant to renew such contract, or, having renewed a contract, in case of failing to perform service according to his contract, he and his sureties shall be liable for the amount of said bond as liquidated damages, to be recovered in an action of debt on the said bond. No application shall be considered unless it shall be accompanied by such bond, and there shall have been affixed to said application the oath of the applicant, taken before an officer qualified to administer oaths, that he has the ability, pecuniarily, to fulfill his obligations, and that the application is made in good faith, and with the intention to renew the contract and perform the service in case his application is accepted." SEC. 3. Section 3946 of the Revised Statutes, as amended by such Act of August 11. 1876 (U. S. C., 1934 ed., title 39, sec. 427), is hereby amended by inserting after the word "bidder" in such section a comma and the following: "or applicant for renewal of contract." SEC. 4. Section 8 of the Act entitled "An Act to amend the Act approved June twenty-five, nineteen hundred and ten, authorizing the postal savings system, and for other purposes", approved May 18, 1916 as amended (U. S. C., 1934 ed., title 39, sec. 434), is hereby amended to read as follows: "SEC. 8. That whenever an accepted bidder or applicant for renewal of the contract shall fail to enter into or renew contract, or a contractor on any mail route shall fail or refuse to perform the service on said route according to his contract, or when a new route shall be established or new service required, or when, from any other cause, there shall not be a contractor legally bound or required to perform such service, the Postmaster General may make a temporary contract for carrying the mail on such route, without advertisement, for such period as may be necessary, not in any case exceeding one year, until the service shall have commenced under a contract made according to law: Provided, That the cost of temporary service rendered necessary by reason of the failure of any accepted bidder or applicant for renewal of contract to enter into contract or a contractor to perform service shall be charged to such bidder, applicant, or contractor: Provided further, That the provisions of section 3960, Revised Statutes (U. S. C., 1934 ed., title 39, sec. 440), that no compensation shall be paid for additional service in carrying the mail until such additional service is ordered, the sum to be allowed therefor to be expressed in the order and entered upon the books of the department, and that no compensation shall be paid for any additional regular service rendered before the issuing of such order, shall not apply to any service authorized under this Act." [H R. 2270, 75th Cong., 1st sess.] A BILL To provide for the issuance of renewable four-year term contracts to qualified star-route contractors and subcontractors, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever any contract for a star route now in force expires, and if the contractor has rendered satisfactory service and has complied with the postal laws and the rules and regulations issued pursuant thereto, the Postmaster General shall issue to such contractor a contract for such route renewable at four-year intervals. Any subcontractor for star route service of record as of November 16, 1936, who has rendered satisfactory service and complied with such postal laws, rules, and regulations shall be deemed the contractor for the purposes of this Act. Contractors shall furnish satisfactory bonds under such terms and conditions as the Postmaster General may prescribe. The Postmaster General is authorized to cancel at any time any contract issued under this Act for willful failure of the contractor to comply with the postal laws or any rule, regulation, or order promulgated by the Postmaster General pursuant to this Act, after reasonable notice and opportunity for hearing to the contractor concerned. The Postmaster General is authorized to promulgate such rules and regulations as may be necessary for carrying out this Act. A report on H. R. 4408 by the Post Office Department reads as follows: Hon. JAMES M. MEAD, OFFICE OF THE POSTMASTER GENERAL, Chairman, Committee on the Post Office and Post Roads, House of Representatives. MY DEAR MR. MEAD: The receipt is acknowledged of your letter of the 6th instant, requesting a report upon H. R. 4408, a bill to provide for the renewal of star-route contracts at 4-year intervals, and for other purposes. It is the view of this Department that good administration would require the following changes in the proposed measure: The substitution of the following for the text embraced in lines 8 to 14, inclusive, upon page 2 of the bill: "The Postmaster General may, in his discretion, and in the interest of the Postal Service and under such regulations as he may prescribe, allow extra pay to a contractor for (a) necessary increased travel caused by construction of roads, destruction of bridges, or discontinuance of ferries occurring during the contract term; or (b) where an." Strike out the sentence beginning in line 3 and ending with line 11 upon page 3 of the bill. The final word of the bill as presented should be changed from "Act" to "Section." The addition of the following provision to the bill: "Proposals for carrying the mail on star routes shall not be considered unless the bidder is a legal resident of the county or counties traversed by the roads over which the mails are to be carried, or a legal resident within the counties adjoining such county or counties; except, that proposals for carrying the mail tendered by firms, companies, or corporations, shall be considered, providing such firms, companies, or corporations are actually engaged in business, or have a license or franchise to engage in business, within the counties to residence in which individuals are herein restricted." It has been ascertained from the Bureau of the Budget that the foregoing suggestions for amendments to H. R. 4408 would be in accord with the program of the President. However, subsection (a) of section 1 of the bill, relating to the renewal of star-route contracts at 4-year intervals is stated to be not in accord with the program of the President. Yours very truly, HARLLEE BRANCH, Acting Postmaster General. Mr. BURCH. The committee will please come to order. We have before the committee this morning for consideration H. R. 4408, introduced by Mr. Hildebrandt, to provide for the renewal of star-route contracts at 4-year intervals. Last year, it will be recalled, the committee asked the Post Office Department, in conjunction with the Star Route Carriers' Association, to make an investigation of this proposed legislation and to report at this session of the Congress. I understand that the Post Office Department has made that investigation, and I am going to ask that we first hear Mr. Cole. |