[Code of Federal Regulations]
[Title 39, Volume 1]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 39CFR501.5]

[Page 175-176]
 
                        TITLE 39--POSTAL SERVICE
 
                 CHAPTER I--UNITED STATES POSTAL SERVICE
 
PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE METERS--Table 
of Contents
 
Sec. 501.5  Suspension and revocation of authorization.

    (a) The Postal Service may suspend and/or revoke authorization to 
manufacture and/or distribute any or all of a manufacturer's postage 
meters if the manufacturer engages in any unlawful scheme or enterprise, 
fails to comply with any provision in this part 501, or fails to 
implement instructions issued in accordance with any final decision 
issued by the Postal Service within its authority over the meter 
program.
    (b) The decision to suspend or revoke a manufacturer's authorization 
shall be based on the nature and circumstances of the violation (whether 
the violation was willful, whether the manufacturer voluntarily admitted 
to the violation, whether the manufacturer cooperated with the Postal 
Service, whether the manufacturer implemented successful remedial 
measures) and on the manufacturer's performance history. Before 
determining whether a manufacturer's authorization to manufacture and/or 
distribute meters should be revoked, the procedures in paragraph (c) of 
this section shall be followed.
    (c) Suspension in all cases shall be as follows:
    (1) Upon determination by the Postal Service that a manufacturer is 
in violation of the provisions in this part 501, the Postal Service 
shall issue a written notice of proposed suspension citing deficiencies 
for which suspension of authorization to manufacture and/or distribute a 
specific meter or class of meters may be imposed under paragraph (c)(2) 
of this section. Except in cases of willful violation, the manufacturer 
shall be given an opportunity to correct deficiencies and achieve 
compliance with all requirements within a time limit corresponding to 
the potential risk to postal revenue.
    (2) In cases of willful violation, or if the Postal Service 
determines that the manufacturer has failed to correct cited 
deficiencies within the specified time limit, the Postal Service shall 
issue a written notice setting forth the facts and reasons for the 
decision to suspend and the effective date if a written defense is not 
presented as provided in paragraph (d) of this section.
    (3) If, upon consideration of the defense as provided in paragraph 
(e) of this section, the Postal Service deems that the suspension is 
warranted, the suspension shall remain in effect for up to 90 days 
unless withdrawn by the Postal Service, as provided in paragraph 
(c)(4)(iii) of this section.
    (4) At the end of the 90-day suspension, the Postal Service may:
    (i) Extend the suspension in order to allow more time for 
investigation or to allow the manufacturer to correct the problem;
    (ii) Make a determination to revoke authorization to manufacture 
and/or distribute the manufacturer's meters in part or in whole; or

[[Page 176]]

    (iii) Withdraw the suspension based on identification and 
implementation of a satisfactory solution to the problem. Manufacturer 
suspensions may be withdrawn  before the end of the 90-day period if the 
Postal Service determines that the manufacturer's solution and 
implementation are satisfactory.
    (d) The manufacturer may present the Postal Service with a written 
defense to any suspension or revocation determination within 30 calendar 
days of receiving the written notice (unless a shorter period is deemed 
necessary). The defense must include all supporting evidence and state 
with specificity the reasons for which the order should not be imposed.
    (e) After receipt and consideration of the defense, the Postal 
Service shall advise the manufacturer of the decision and the facts and 
reasons for it. The decision shall be effective on receipt unless it 
provides otherwise. The decision shall also advise the manufacturer that 
it may appeal that determination within 30 calendar days of receiving 
written notice (unless a shorter time frame is deemed necessary), as 
specified therein. The appeal must include all supporting evidence and 
state with specificity the reasons the manufacturer believes that the 
decision is erroneous.
    (f) An order or final decision under this section does not preclude 
any other criminal or civil statutory, common law, or administrative 
remedy that is available by law to the Postal Service, the United 
States, or any other person or concern.