So you want to be a mail contractor?
Are you considering tendering for or taking over a mail contract? Before you do, you should familiarise yourself with the terms and conditions of the mail contract itself. This includes such matters as security checks, review of contract, term of contract, and so on.
Assignment
When a mail contract is transferred from the incumbent mail contractor to a new mail contractor the process is known as assignment. The AP manager who is responsible for the mail contract will conduct an interview with the mail contractor and the person who is proposing to take over the contract for the balance of the term.
AP has the final decision on whether or not the assignment will take place. The proposed contractor has to prove to APís satisfaction that they are capable of performing the contract itself as well as passing a security check. AP will not give you information on payments made to the current mail contractor. The current mail contractor should give you this information.
Tendering for a mail contract
Please note that if you are tendering for a mail contract, the tendering process is outlined in the tender documentation sent to you by AP. It is a competitive tendering process. Carefully complete the required documentation. Remember ñ AP is not compelled to accept the lowest tender. And nor should the Contractor subsidise AP by tendering too low.
The Mail Contract Itself
As any good lawyer will tell you, read and understand the mail contract before you agree to it! The specifications section of the contract details the daily timetable for sorting and delivery, anticipated mail volumes, and so on. The general conditions specify the compulsory insurances and the term of the agreement, along with details on mail contract reviews. You may choose to seek legal advice on the contract.
AP will not give you information on payments made to the current mail contractor.
Term of the Contract
How long is it until the contract expires? Contracts may be for a period of up to five years. At the end of the term, AP will publicly re-tender for the mail service.
There are very few non-specified term mail contracts. These types of contracts may be terminated by either AP or the contractor with three months notice.
Goodwill
AP does not acknowledge any goodwill attached to a contract. AP has made it clear that it will not be bound by any claim made against it in respect of a loss of goodwill by those who choose to pay for this as part of a mail contract purchase price. Clause 16.1 of the mail contract states as such.
Incorporation
It is commonplace for AP to demand that mail contractors be an incorporated company. If, in order to take over a mail contract, you purchase the company, you should be aware that AP may still demand that any persons undertaking the mail contract must satisfy the security check requirements set out under the contract.
Other Documents
Other significant documents that impact upon mail contracts are the Mail Contract Management Manual and the Post Guide. The Mail Contract Management Manual is a guide for AP to manage mail contracts, and details the procedures for making alterations to mail contracts and other such tasks. The Post Guide includes information on what sort of goods may be accepted for carriage by AP and information on placement of letter boxes.
Surety
AP will require the mail contractor to have a surety and contract performance bond. Refer to the mail contract for more information on the matter of surety and contract performance.
Insurances
The general conditions of the mail contract contain clauses which specify which insurances are compulsory for the contract. Typically the compulsory insurances include Public Liability insurance, Marine Cargo (goods in transit) insurance, Personal Accident insurance and PDT (hand-held scanner) insurance. POAAL offers a Master Policy for these insurances to its members.
Contact the POAAL National Office on (03) 96544533 for more information.
For quotes and information on other insurances, including vehicle insurance, directors & officers insurance, home & contents insurance and workers compensation insurance, contact GWS Genco Group on 1300 881 229 (Melbourne callers: 9459 3388).
Professional Advice
Before signing any contract or submitting a tender, it is well worth considering seeking professional advice from your solicitor and your accountant.