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02-A12-345-67-890 Office of Inspector General—Office of Audit 

MINE SAFETY & HEALTH 

ADMINISTRATION 

MSHA'S CONTROLS OVER CONTRACT 

AWARDS NEED STRENGTHENING 

Date Issued: February 16, 2011 

Report Number: 05-11-001-06-001 
 

U.S. Department of Labor 

Office of Inspector General 

Office of Audit 

BRIEFLY... 

Highlights of Report Number 05-11-001-06-001, to the 

Assistant Secretary of Labor for Mine Safety and 

Health. 

WHY READ THE REPORT 

The mission of the U.S. Department of Labor’s (DOL) 

Mine Safety and Health Administration (MSHA) is to 

promote safe and healthful workplaces for the nation's 

miners. DOL’s Office of the Assistant Secretary for 

Administration and Management (OASAM) 

responsibilities include managing the Department’s 

procurement programs. OASAM has delegated to 

MSHA the authority and responsibility to contract for all 

of MSHA’s program property and services. Within 

MSHA, the Directorate of Administration and 

Management (A&M) is responsible for managing 

contracting activity. 

Federal procurement regulations require, among other 

things, that MSHA promote full and open competition, 

provide maximum opportunities to small businesses, 

and ensure compliance with general procurement 

requirements. Past Office of Inspector General (OIG) 

audit work at MSHA identified weaknesses in these 

areas. Specifically, a 2004 report concluded that MSHA 

consistently demonstrated a lack of regard for Federal 

Acquisition Regulation principles, and a 2008 report 

identified weaknesses in MSHA’s awarding of 

procurement actions without full and open competition 

(i.e., sole source). 

WHY OIG CONDUCTED THE AUDIT 

We conducted this audit to determine whether MSHA 

complied with appropriate procurement regulations and 

procedures when making new contract awards. 

The audit covered 133 new awards with individual 

values of $25,000 or more that MSHA awarded from 

April 1, 2008, through September 30, 2009, totaling 

$16 million. 

READ THE FULL REPORT 

To view the report, including the scope, methodology, 

and full agency response, go to: 

http://www.oig.dol.gov/public/reports/oa/2011/05-11-

001-06-001.pdf. 

February 2011 

MSHA'S CONTROLS OVER CONTRACT 

AWARDS NEED STRENGTHENING 

WHAT OIG FOUND 

The OIG found that MSHA did not adequately support 

sole source awards, promote full and open competition, 

or maximize small business opportunities for 28 percent 

of the contract awards. Deficiencies included no 

justifications or inadequate justifications to make 

awards without full and open competition, no 

Procurement Review Board reviews and Chief 

Acquisition Officer approvals when required, no 

publication of solicitations, and no review of proposed 

procurements by the Office of Small Business 

Programs. 

In addition, MSHA did not comply with applicable DOL 

procurement procedures for 38 percent of the awards. 

Deficiencies included no review of solicitations or preaward packages by DOL’s Office of the Solicitor as 

required by a Memorandum of Agreement, no approval 

by the Assistant Secretary for Administration and 

Management, no conflict of interest certifications from 

program officials, and incomplete Simplified Acquisition 

Documentation Checklists (Form DL 1-2216) for 

contracts under $100,000. 

These deficiencies occurred because of a lack of 

management oversight. By not promoting full and open 

competition, maximizing small business opportunities, 

or following appropriate procurement procedures, 

MSHA could not demonstrate that it made the best 

award decisions. 

WHAT OIG RECOMMENDED 

The OIG made 4 recommendations to the Assistant 

Secretary for Mine Safety and Health to ensure 

procurement officials comply with procedures, require 

supervisory review of contracts, provide refresher 

training to personnel, and develop and implement 

controls to assure the Office of the Solicitor completes 

pre-award reviews of selected contracts as required. 

The Assistant Secretary agreed with our 

recommendations and stated that MSHA is taking 

action to review its procurement program, identify 

lapses, and develop and implement new management 

procedures to improve the effectiveness and 

accountability of its contracting. 
 

 

U.S. Department of Labor – Office of Inspector General 

Table of Contents 

Assistant Inspector General’s Report ......................................................................... 1
 

Results In Brief.............................................................................................................. 2
 

Objective 1 — Did MSHA comply with appropriate procurement regulations and 

procedures in awarding contracts?.................................................... 3
 

Restrictions on competition and small business opportunities were not 

always supported; noncompliance with procurement regulations and 

procedures was common. .................................................................................... 3
 

Finding 1 — MSHA did not adequately justify sole source procurements, 

promote full and open competition, or maximize opportunities for 

small businesses.................................................................................... 3
 

Finding 2 — MSHA generally did not follow established procurement 

procedures. .......................................................................................... 10
 

Recommendations ...................................................................................................... 14
 

Exhibits 

Exhibit 1 Contracts Awarded Without Full and Open Competition ........................... 19
 

Exhibit 2 Contracts Where MSHA Did Not Follow General Procurement 

Procedures ................................................................................................ 21
 

Exhibit 3 Contracts with Incomplete DL 1-2216 ....................................................... 23
 

Appendices 

Appendix A Background .......................................................................................... 27
 

Appendix B Objective, Scope, Methodology, and Criteria........................................ 29
 

Appendix C Acronyms and Abbreviations................................................................ 33
 

Appendix D MSHA's Response to Draft Report....................................................... 35
 

Appendix E Acknowledgements .............................................................................. 39
 

MSHA Procurement 

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U.S. Department of Labor – Office of Inspector General 

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MSHA Procurement 

Report No. 05-11-001-06-001 
 

 

 

 

 

U.S. Department of Labor – Office of Inspector General 

U.S. Department of Labor Office of Inspector General 

Washington, D.C. 20210 

February 16, 2011 

Assistant Inspector General’s Report 

Joseph A. Main 

Assistant Secretary for Mine Safety and Health 

U.S. Department of Labor 

1100 Wilson Boulevard 

Arlington, Virginia 22209 

The mission of the U.S. Department of Labor’s (DOL) Mine Safety and Health 

Administration (MSHA) is to promote safe and healthful workplaces for the nation's 

miners. DOL’s Office of the Assistant Secretary for Administration and Management 

(OASAM) responsibilities include managing the Department’s procurement programs. 

OASAM has delegated to MSHA the authority and responsibility to contract for all of 

MSHA’s program property and services. Within MSHA, the Directorate of Administration 

and Management (A&M) is responsible for managing contracting activity. 

Federal procurement regulations require, among other things, that MSHA promote full 

and open competition, provide maximum opportunities to small businesses, and ensure 

compliance with general procurement requirements. Past Office of Inspector General 

(OIG) audit work at MSHA identified weaknesses in these areas. Specifically, a 20041 

report concluded that MSHA consistently demonstrated a lack of regard for Federal 

Acquisition Regulation (FAR) principles, and a 20082 report identified weaknesses in 

MSHA’s awarding of procurement actions without full and open competition (i.e., sole 

source). 

From April 1, 2008, to September 30, 2009, MSHA completed 1,648 procurement 

actions valued at $36 million. These actions consisted of 1,000 modifications to existing 

contracts3 and 648 new awards. 

We conducted an audit to determine whether MSHA complied with appropriate 

procurement regulations and procedures when making new contract awards. Our audit 

1

 Mine Safety and Health Administration Procurements Showed a Pattern of Disregard for Federal and DOL 

Acquisition Rules and Requirements. (Report No. 25-05-001-06-001, October 29, 2004). 2 The Department of Labor’s Controls Over Sole Source Procurements Need Strengthening. 

(Report No. 03-08-002-07-711, September 30, 2008). 

3

 Contracts include: General Services Administration (GSA) orders, purchase orders, delivery orders issued under 

blanket purchase agreements, and Governmentwide Acquisition Contracts. 

MSHA Procurement 

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U.S. Department of Labor – Office of Inspector General 

covered 133 new awards with individual values of $25,000 or more that MSHA awarded 

from April 1, 2008, through September 30, 2009, totaling $16 million. 

To accomplish our audit, we reviewed applicable sections of the Federal Acquisition 

Regulation (FAR) and DOL’s procurement policies and procedures through 

May 10, 2010. We interviewed MSHA officials and staff to gain an understanding of their 

procurement process and controls. We reviewed contract files for a statistical sample of 

133 new awards for compliance with FAR and DOL procurement requirements. We 

conducted audit work at MSHA’s Headquarters located in Arlington, Virginia and the 

National Mine Health and Safety Academy located in Beaver, West Virginia. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objective. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our 

audit objective. Our objective, scope, methodology, and criteria are detailed in Appendix 

B. 

RESULTS IN BRIEF 

MSHA did not always adequately support sole source awards, promote full and open 

competition, or maximize small business opportunities for 28 percent of the awards of 

$25,000 or more. Deficiencies included no justifications or inadequate justifications to 

make awards without full and open competition (12 instances); no Procurement Review 

Board (PRB) reviews and Chief Acquisition Officer (CAO) approvals when required 

(4 instances); no publication of solicitations (10 instances); and no review of proposed 

procurements by the Office of Small Business Programs (OSBP) (14 instances). 

In addition, MSHA did not comply with appropriate DOL procurement procedures for 

38 percent of the awards of $25,000 or more. Deficiencies included no review of 

solicitations or pre-award packages by DOL’s Office of the Solicitor (SOL) as required 

by a Memorandum of Agreement (MOA) (16 instances); no approval by the Assistant 

Secretary for Administration and Management (ASAM) (4 instances); no conflict of 

interest certifications from program officials (9 instances); and incomplete Simplified 

Acquisition Documentation Checklists (Form DL 1-2216) for contracts under $100,000 

(17 instances)4

. 

These deficiencies occurred because of a lack of management oversight. By not 

promoting full and open competition, maximizing small business opportunities, or 

following appropriate procurement procedures, MSHA could not demonstrate that it 

made the best award decisions. 

4

 As a result of our audit, MSHA recreated, corrected, or completed these forms. 

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U.S. Department of Labor – Office of Inspector General 

We recommended that the Assistant Secretary for Mine Safety and Health (1) ensure 

MSHA procurement officials comply with procedures for PRB review and CAO approval 

as required by DOL policy; (2) require the Director of A&M to document, prior to final 

contract award, supervisory review of all contracts awarded without full and open 

competition, all contracts with a value of $100,000 or more, and a representative 

sample of contracts valued from $25,000 to $100,000; (3) define and implement a 

program to provide refresher training on procurement requirements contained in the 

FAR, Department of Labor Acquisition Regulation (DOLAR), and Department of Labor 

Manual Series (DLMS) to all MSHA contracting personnel at least annually; (4) and 

develop and implement controls to track the Acquisitions Management Division’s (AMD) 

compliance with the provisions of the MOA with DOL’s SOL. 

In responding to our draft report, the Assistant Secretary for Mine Safety and Health 

agreed that additional management controls and oversight would strengthen 

accountability. He agreed with all of our recommendations and specifically stated that 

MSHA is taking aggressive action to review its procurement program, identify lapses, 

and correct them. He also reiterated MSHA’s longstanding commitment to a robust 

procurement program that provides both opportunities for small business and a 

successful competitive environment that maximizes value for the government. 

The Assistant Secretary’s entire response is contained in Appendix D. 

RESULTS AND FINDINGS 

Objective 1 — Did MSHA comply with appropriate procurement regulations and 

procedures in awarding contracts? 

 Restrictions on competition and small business opportunities were not always 

supported; noncompliance with procurement regulations and procedures was 

common. 

Finding 1 — MSHA did not adequately justify sole source procurements, promote 

full and open competition, or maximize opportunities for small 

businesses. 

In 19 percent5

 of contracts between $25,000-$100,000 and 42 percent of contracts 

above $100,000, MSHA did not adequately justify sole source procurements, assure full 

and open competition, or assure maximum opportunities for small businesses. 

Specifically, our review of 88 contracts identified 40 instances in 25 contracts6

 in which 

MSHA had no or inadequate justifications to award the contracts on a sole source basis 

(12 instances); did not obtain PRB reviews and CAO approvals when required by DOL 

policy (4 instances); did not publicize proposed contracts (10 instances); or did not 

5 The projected result of the statistical sample, at a 95 percent confidence level, ranges between 11 percent and 

27 percent. 

6

 Some contracts demonstrated more than one deficiency. 

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U.S. Department of Labor – Office of Inspector General 

coordinate requirements with the Department’s OSBP for unrestricted procurements 

above $100,000 (14 instances). See Exhibit 1 for a summary of deficiencies identified in 

each of the 25 contracts. 

MSHA’s internal controls, including management oversight, did not ensure adherence to 

applicable procurement procedures. As a result, MSHA could not demonstrate that it 

made the best contract award decisions. 

Most sole source contracts had no justification or lacked an adequate justification. 

Of the 19 contracts in the audit sample that MSHA awarded on a sole source basis, 

5 had no justification and 7 lacked an adequate justification. For example: 

 On April 22, 2008, MSHA awarded a delivery order totaling $230,340 through an 

existing General Services Administration (GSA) Schedule for noise dosimeter 

kits. The delivery order was awarded without evidence of any competition and 

without the sole source justification required by the FAR. 

MSHA stated that “This is a GSA Schedule order in which MSHA did not restrict 

competition and followed the procedure of FAR 8.405-1(c)(1).” This FAR 

provision states that orders placed through a GSA supply schedule should be 

placed with the schedule contractor that can provide the best value. Before 

placing an order, an ordering activity shall “[survey] at least three schedule 

contractors through the GSA Advantage! on-line shopping service, or by 

reviewing the catalogs or pricelists of at least three schedule contractors.” The 

contract file contained no evidence that the contracting officer surveyed or 

reviewed information from three schedule contractors. 

Instead, the file contained a handwritten note stating “single source under a GSA 

contract.” The contract file also contained an email from the contract recipient 

stating that it was the sole source manufacturer of the desired product and the 

lone authorized participant in the GSA schedule contract. Under these 

circumstances, FAR 8.405-6(g)(2) required that the contract file contain a 

“Limited Source Justification” that addressed a minimum of ten specific elements, 

including a determination by the contracting officer that the order represented the 

best value, the actions, if any, the agency may take to remove or overcome 

barriers that led to the restricted consideration before any subsequent 

acquisition, and the contracting officer’s certification that the justification was 

accurate and complete. The contract file did not contain a document or 

documents that addressed the limited source justification elements required by 

the FAR. 

 On June 9, 2009, MSHA awarded a delivery order totaling $54,000 through an 

existing GSA Schedule for respirable dust cassettes. The delivery order was 

awarded without evidence of any competition and without the sole source 

justification required by the FAR. 

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U.S. Department of Labor – Office of Inspector General 

MSHA stated that “This is a GSA Schedule order in which MSHA did not restrict 

competition and followed the procedure of FAR 8.405-1(c)(1).” As explained in 

the previous example, this FAR reference requires the contracting officer to place 

the order with the schedule contractor providing the best value after surveying or 

reviewing pricelists from three schedule contractors. The contract file contained 

no evidence that MSHA’s contracting officer performed these actions. 

Instead, the contract file contained a handwritten note, dated June 3, 2009, that 

read “Per [the Director of AMD] award under GSA single source contract due 

to lead time required and districts urgent need [bolding added for emphasis].” 

Although FAR 8.405-6(b)(3) does allow the restriction of competition when there 

is an “urgent and compelling need,” AMD received the request to purchase these 

items on March 19, 2009 - almost 3 months prior to actually placing the order. 

This delay does not support an “urgent need.” 

 On December 10, 2008, and May 14, 2009, MSHA placed separate delivery 

orders, each valued at $339,300, to a GSA Schedule contractor for the purchase 

of respirable dust filters. Neither contract file contained any evidence of 

competition. Instead, both contract files contained written justifications for “Other 

Than Full and Open Competition,” although neither justification was signed by a 

program official or the contracting officer, as required. Both justification 

statements incorrectly cited FAR 6.302-5 as their authority to restrict competition. 

This FAR provision does not apply to GSA Schedule orders, which are 

specifically exempt from FAR Part 6.7 

MSHA stated that each of these delivery orders was “a GSA Schedule order in 

which MSHA did not restrict competition and followed the procedure of 

FAR 8.405-1(c)(1).” However, as previously explained, this FAR provision 

requires a contracting officer to survey at least three scheduled contractors 

through the GSA website or review the catalogs or pricelists of at least three 

schedule contractors prior to placing an order. The contract file contained no 

evidence that MSHA’s contracting officer performed these actions. 

Without proper support for contracts awarded on a sole source basis, MSHA cannot 

demonstrate that it determined prices to be fair and reasonable or that it received the 

best possible value in these procurements. 

Required PRB reviews and CAO approvals were not obtained. 

MSHA did not obtain a PRB review and recommendation or a CAO approval for four of 

eight contracts in the audit sample that required them. As a result, MSHA lacked 

7

 FAR 8.405-6(a)(2) states: Orders placed under Federal Supply Schedules are exempt from the requirements in Part 

6. However, an ordering activity must justify its action when restricting competition to an item peculiar to one 

manufacturer. 

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U.S. Department of Labor – Office of Inspector General 

assurance that the contracts had been properly awarded and that MSHA had received 

the best value. 

DLMS 2, Chapter 836, established the PRB as a senior-level clearinghouse to review 

selected noncompetitive acquisition proposals and assistance instruments and 

recommend approval or disapproval to the CAO. PRB review and CAO approval applies 

to various actions, including all proposed acquisitions and assistance actions over 

[$100,000], which are to be awarded under “other than full and open competition” 

procedures, and all contracted advisory services, valued above $50,000, to be awarded 

under “full and open competition” procedures. Requests for PRB review are to be 

forwarded at least 60 days before planned award to allow the PRB sufficient time to 

review and consider its recommendation. 

The following two examples show the lack of controls to assure that these requirements 

were being met. 

 MSHA awarded a noncompetitive contract on December 1, 2008, totaling 

$132,800, for personal dust monitors and related items. The contracting officer 

did not obtain a review or recommendation from the PRB or approval from the 

CAO prior to making the award, as required. 

MSHA stated that AMD received this purchase request on December 1, 2008, 

along with assertions from the requesting program office that the quoted price 

was only good through the end of that day. After December 1, 2008, the cost 

reportedly would increase by $900 per unit (an additional $9,900 for the 11 units 

purchased). The contracting officer indicated the CAO had approved the 

procurement. However, the contract file did not contain nor did the contracting 

officer provide evidence to support this assertion. The Director of AMD stated 

that he approved the justification for a noncompetitive purchase in order to obtain 

the discounted price. 

The Director of AMD lacked the authority to exempt this procurement action from 

the requirement for PRB review and CAO approval prior to issuing a 

noncompetitive contract. 

 On June 1, 2009, MSHA awarded an advisory and assistance contract totaling 

$175,000 through full and open competition procedures for statistical analysis 

and evaluation services. The contracting officer did not obtain a review or 

recommendation from the PRB or approval from the CAO prior to making the 

award, as required. 

MSHA stated that it had obtained PRB review and CAO approval and provided a 

copy of a Request for Recommendation by Procurement Review Board and a 

letter from the CAO. 

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U.S. Department of Labor – Office of Inspector General 

The documents provided by MSHA did not relate to the contract we reviewed. 

Rather they related to a prior purchase order that MSHA had awarded without 

competition to the same contractor on October 1, 2008, in the amount of 

$100,000. CAO approval of this prior purchase order does not have any bearing 

on separate, subsequent contracts. 

By not obtaining PRB review and CAO approval when required, MSHA lacked 

assurance that the contracts had been properly awarded and that MSHA had received 

the best value. 

Proposed contracts were not publicized. 

MSHA did not publish a public notice for 10 of 30 contracts in the audit sample that 

required them. As a result, MSHA had no assurance that all interested, responsible 

parties had an opportunity to compete for the award of these contracts. 

FAR 5.002 requires contracting officers to publicize contract actions to increase 

competition, broaden industry participation in meeting Government requirements, and 

assist various small businesses in obtaining contracts and subcontracts. Specifically, 

FAR 5.101(a) requires contracting officers to disseminate information on proposed 

contract actions expected to exceed $25,000 in the “Governmentwide Point of Entry” 

(GPE)8

 for at least 10 days beginning no later than the date the solicitation is issued. 

FAR 5.202 lists 14 specific exceptions to this requirement for public notice. For 

example, public notice is not required if: 

 Disclosure would compromise national security; 

 The proposed contract action is expressly authorized or required by statute to be 

made through another government agency or from a specific source; 

 The proposed contract action is for utility services other than telecommunications 

services and only one source is available; or 

 The agency head determines, in writing, that advance notice is not appropriate or 

reasonable. 

MSHA did not synopsize 10 contracts (including seven sole source actions) in the GPE 

to ensure offers were solicited from as many potential sources as practicable, as 

required by FAR 5.2. For example: 

 On November 17, 2008, MSHA awarded a purchase order totaling $41,470 

without competition to upgrade a computer program that was part of its Trapped 

Miner Detection and Location system. MSHA did not publish this contract in the 

GPE as required. 

8

 Per FAR 2.101, the Governmentwide Point of Entry is located at http://www.fedbizopps.gov. 

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U.S. Department of Labor – Office of Inspector General 

MSHA cited FAR 5.202(a)(13)(i) and FAR 5.301(b)(7)(i) and stated that this 

purchase order was exempt from requirements for publication in the GPE 

because its estimated value was less than $100,000. 

However, the exception listed at FAR 5.202(a)(13) is a three-pronged test. It 

states that a contracting officer need not submit the notice to the GPE when 

(13) The proposed contract action— 

(i) Is for an amount not expected to exceed the simplified 

acquisition threshold [$100,000]; 

(ii) Will be made through a means that provides access to the 

notice of proposed contract action through the GPE; and 

(iii) Permits the public to respond to the solicitation electronically. 

[Bolding added for emphasis] 

To meet this exception all three elements of the test must be met. While the 

purchase order was below the $100,000 threshold (test 1), there was no 

evidence that the purchase order met either of the other two exception tests. 

FAR 5.301(b)(7)(i) relates to publishing contract award information and is 

therefore not relevant to the deficiency cited. However, it too contains the same 

three-pronged test as in FAR 5.202(a)(13). 

By not publishing this proposed purchase order in the GPE, MSHA did not 

assure the fullest level of competition. Thus, there is no assurance that the 

government obtained the best value on this purchase order. 

 From May 2008 to August 2009, MSHA awarded three contracts for the purchase 

and calibration of anemometers for use by mine inspectors totaling $276,855 to 

one contractor. MSHA again cited the same FAR exemption as in the previous 

example, but provided no evidence that these actions met the second or third 

elements of the exception. 

In addition, MSHA stated that the product purchased was the only anemometer 

certified by MSHA for use in mines. Since the Federal Mine Safety and Health 

Act of 1977 (the Mine Act) requires that only products certified by MSHA as 

intrinsically safe can be used in mines, MSHA argued that this purchase met the 

FAR exception (FAR 5.202(a)(4)) of being required by statute to be purchased 

from a specific source. 

However, MSHA’s Approval and Certification Center stated that it had no record 

that it had approved anemometers from this manufacturer for use in mines and 

that other manufacturers do hold MSHA approvals for anemometers. 

MSHA Procurement 

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U.S. Department of Labor – Office of Inspector General 

 On April 18, 2008 MSHA awarded a contract totaling $298,220 for the purchase 

of multi gas detectors. MSHA did not publish this contract in the GPE as 

required. Instead, the contracting officer simply requested price quotes from 

three vendors who had competed for a previous contract for the same 

equipment. 

The FAR does not provide an exception to the requirement to publish contracts in 

the GPE based on publication of previous contracts. MSHA agreed that this 

action should have been published in the GPE. 

 On June 20, 2008, MSHA issued a purchase order totaling $28,567 for the 

maintenance of computer servers. MSHA had not published this proposed 

purchase order in the GPE as required. 

MSHA agreed that this proposed purchase order should have been published in 

the GPE. 

By not publishing proposed contracts in the GPE as required, MSHA did not promote 

full and open competition. As a result, MSHA had no assurance that it obtained 

maximum competition, and therefore, the best value in its procurements. 

Small Businesses did not receive maximum practicable opportunities for unrestricted 

procurements above $100,000. 

For all 38 contracts above $100,000, MSHA did not obtain the required review of 

proposed contracts by the OSBP. As a result, MSHA did not ensure maximum 

practicable opportunities to small businesses. 

DOLAR 2919.201(c) requires that 

All DOL procurements over the simplified acquisition threshold [$100,000], 

whether being conducted via open market or by ordering from a 

pre-existing contract vehicle such as GSA Schedule, must be reviewed 

and receive a recommendation by the OSBP9

 ... prior to being advertised. 

The Acquisition Screening and Review Form DL 1–2004 shall be used for 

this purpose and the statement of work and market survey documentation 

shall be submitted to Office of Small Business Programs with the request 

for review. 

The AMD Director and a former OSBP official stated that MSHA and OSBP had 

modified this requirement through an informal agreement in 2006 because MSHA 

had outperformed its small business goals. Under the verbal agreement, OSBP 

required MSHA to submit only open market contracts that MSHA did not set 

aside for small business participation. 

9

 On March 1, 2010, OSBP was reorganized into the Office of Small and Disadvantaged Business Utilization. 

MSHA Procurement 

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U.S. Department of Labor – Office of Inspector General 

Neither OSBP nor MSHA had the authority to modify existing Departmental 

procurement requirements. In addition, MSHA still routinely violated the less 

stringent provisions of this informal agreement. Fourteen of the 38 contracts in 

the audit sample were open market contracts that were awarded to large 

businesses. So even under the informal agreement, MSHA should have provided 

these contracts to OSBP for review. However, MSHA did not complete the 

Acquisition Screening and Review Form or obtain an OSBP review of any of 

these contracts (see Exhibit 1). 

MSHA agreed that, even under the supposed informal agreement, 10 of the 

14 contracts should have been referred to OSBP for review, but that the remaining 4 

actions did not require OSBP review because they were sole source procurements. 

However, the regulation, as cited above, contains no exception for sole source 

contracts. Effective March 1, 2010, the Office of Small and Disadvantaged Business 

Utilization required MSHA to prepare and submit a DL 1-2004 form for all contacts that 

meet the DOLAR requirement. 

By not obtaining the required OSBP review of proposed contracts as required, MSHA 

did not assure that small businesses received maximum opportunities to participate in 

the award. 

Overall, MSHA lacked adequate controls, including appropriate management oversight, 

to assure that its contracting personnel complied with procurement regulations and 

procedures. The AMD Director only reviewed a sample of contracts prior to award and 

his supervisor, the A&M Director, did not review any contracts. As a result, restrictions 

on competition and small business opportunities were not justified or supported. 

Finding 2 — MSHA generally did not follow established procurement procedures. 

In 47 percent10 of contracts between $25,000 - $100,000 and 24 percent of contracts 

above $100,000, MSHA did not follow procurement procedures specified in the DOLAR, 

the DLMS, and an MOA with the Department’s SOL. Specifically, our review of 

88 contracts identified 46 instances in 33 contracts11 in which MSHA did not follow the 

MOA with the SOL (16 instances); obtain ASAM approval prior to awarding advisory 

and assistance contracts (4 instances); obtain conflict of interest certifications for sole 

source or advisory and assistance contracts (9 instances); or complete the Simplified 

Acquisition Documentation Checklist (17 instances). (See Exhibit 2 for a summary of 

deficiencies identified in each of the 33 contracts.) 

These deficiencies occurred because MSHA’s contracting officers either did not know 

of, did not understand, or misinterpreted the regulatory and policy requirements, and the 

10 The projected result of the statistical sample, at a 95 percent confidence level, ranges between 38 percent and 57 

percent. 

11 Some contracts in the sample demonstrated more than one deficiency. 

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U.S. Department of Labor – Office of Inspector General 

AMD Director did not provide adequate supervisory oversight prior to contract awards. 

As a result, there is no assurance that MSHA properly awarded these contracts. 

MOA between MSHA and the SOL was not being followed. 

Under terms of an MOA, MSHA was required to submit solicitations and pre-award 

packages meeting specified criteria to the Department’s SOL for review prior to 

finalizing a contract. MSHA awarded all 16 contracts in the audit sample that met the 

specified MOA criteria without submitting them for SOL review as required (as shown in 

Exhibit 2). As a result, there was an increased risk that complex, high-dollar contracts 

were not properly awarded. 

In April 2006, to address procurement concerns raised in a prior OIG audit report12, 

MSHA established procedures under which SOL would review MSHA solicitations prior 

to issuance and pre-award packages prior to award for: 

 All solicitations and pre-awards for information technology contracts greater than 

$100,000 in total contract value; 

 All solicitations and pre-awards for large, multi-year service contracts greater 

than $500,000. (Examples are Guard and Food Services at the Mine Academy); 

 All solicitations and pre-awards for special security services, such as background 

investigation services, or contracts relating to continuing operations greater than 

$100,000; 

 Any termination of a contract before the termination becomes effective, except in 

emergency mine rescue situations; 

 All advisory and assistant contracts; and 

 All non-GSA sole source procurements above $50,000. 

The MOA stated that MSHA would not finalize any contract until SOL’s review was 

completed and it would maintain a copy of the results of the SOL review in the 

associated contract file. 

However, although 16 of the contracts in the audit sample met the MOA criteria, none of 

the contract files contained evidence of the required SOL review. MSHA stated that only 

5 of the 16 contracts required SOL review and offered various explanations as to why 

the other 11 were exempt from the MOA. For example: 

 MSHA stated that two of the contracts had been reviewed by the PRB, and 

therefore, based on a verbal agreement with SOL, did not require separate SOL 

review. However, SOL denied that any such agreement existed and stated that a 

PRB review did not substitute for the required SOL review. 

 MSHA stated that four of the contracts were purchases against existing contracts 

(e.g., a contract awarded by another federal agency), and were therefore, 

12 Mine Safety and Health Administration Procurements Showed a Pattern of Disregard for Federal and DOL 

Acquisition Rules and Requirements. (Report No. 25-05-001-06-001, October 29, 2004) 

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U.S. Department of Labor – Office of Inspector General 

exempt from the MOA. However, the MOA contains no language that exempts 

pre-existing contracts from SOL review. 

SOL agreed that all 16 contracts should have been sent to it for review. 

The current MOA process has no control to assure that contracts meeting the MOA 

criteria are, in fact, submitted to SOL for review. As a result, the MOA is ineffective in 

meeting its stated purpose of “reducing overall risk to the agency and Department.” 

ASAM approvals were not obtained. 

MSHA awarded four advisory and assistance contracts without the required ASAM 

approval. In responding to our inquiries, MSHA did not provide any explanation for not 

obtaining ASAM approval. By awarding advisory and assistance contracts without 

ASAM’s approval, the contracting officers violated MSHA’s independent contracting 

authority. 

DLMS-2, Chapter 814, lists the DOL agencies with independent contracting authority 

and each agency’s respective delegated authority and responsibilities. DLMS-2, 

Chapter 817, lists exclusions to this delegated authority. Specifically, DLMS-2, Chapter 

817(A1), states: 

The ASAM retains authority and responsibility for approval of requests for 

contracted advisory services for individuals and organizations ... when 

acquisitions by either contract or purchase order are to be awarded 

without competition, regardless of amount, or for those competitive actions 

costing $50,000 or more. 

MSHA awarded all four contracts in the audit sample that met the exclusion criteria 

without evidence of the ASAM’s approval (as shown in Exhibit 2). 

Advisory & Assistance Contracts Awarded Without ASAM Approval 

Evidence of Contract # Competed? Contract Value ASAM Approval 

DOLB09MR20643 No $100,000 No 

DOLB09MR20637 No $50,000 No 

DOLJ094R22465 Yes $87,500 No 

DOLJ094R22516 Yes $175,000 No 

Conflict of interest certifications were not obtained. 

MSHA had not obtained conflict of interest certifications from program officials for 9 of 

13 contracts in the audit sample that required them. These certifications were intended 

to identify any relationships between program officials and the proposed contract 

recipient. Because MSHA had not obtained conflict of interest certifications prior to 

awarding these contracts, it had no assurance that they were properly awarded. 

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U.S. Department of Labor – Office of Inspector General 

DLMS-2, Chapter 835A states: 

The program office official responsible for an “other than full and open 

competition” request or a request for contracted advisory and assistance 

services shall, as part of the request, explain any past or existing business 

or personal relationships with the proposed recipient or certify that none 

exist. 

Thirteen contracts in the audit sample met the criteria for conflict of interest certification 

because they were either awarded without competition or because they were advisory 

and assistance contracts. MSHA had not obtained conflict of interest certifications for 9 

of these 13 contracts as shown below: 

Contracts Awarded Without Conflict of Interest Certifications 

Contract # Contract 

Value Competed? Advisory & 

Assistance? 

Conflict of 

Interest 

Certification? 

1 DOLB084R21987 $ 64,875 No No No* 

2 DOLB084R22093 $ 27,221 No No No 

3 DOLB09MR20643 $100,000 No Yes Yes 

4 DOLB09MR20637 $ 50,000 No Yes Yes 

5 DOLB094R22313 $ 27,783 No No No 

6 DOLB094R22346 $ 41,470 No Yes No* 

7 DOLJ094R22371 $132,800 No No No* 

8 DOLJ094R22465 $ 87,500 Yes Yes No 

9 DOLJ094R22403 $159,480 No No No* 

10 DOLJ09MR20672 $ 38,400 No No Yes 

11 DOLJ094R22516 $175,000 Yes Yes No 

12 DOLJ094R22554 $155,653 No No No 

13 DOLB094R22590 $ 52,500 No No Yes 

* Subsequent to our audit work and after the contract had been completed, MSHA obtained a signed conflict of 

interest certification from a program official for these contracts. 

MSHA concurred that the contracting officers had not obtained certifications for 6 of the 

9 contracts (Items 1, 2, 5, 6, 7, and 9). For two contracts (Items 8 and 11), MSHA 

provided signed conflict of interest certifications for prior contracts with the same 

contractor. This does not satisfy the DLMS requirement. For the final contract (Item 12), 

MSHA stated that a conflict of interest certification was not required because the 

contract was a purchase related to a pre-existing contract. However, this action was 

processed as a separate contract, not a modification of a prior contract. 

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U.S. Department of Labor – Office of Inspector General 

Simplified Acquisition Documentation Checklists (DL 1-2216) were not properly 

maintained. 

For awards below the simplified acquisition threshold of $100,000, 17 of 50 contract 

files had incomplete simplified acquisition checklists. The checklist must be completed 

and certified by a contracting officer because it supports the decisions made by the 

contracting officer. 

DOLAR 2953.101 provides a Simplified Acquisition Documentation Checklist (DL 1– 

2216) that all contracting officers must use to document all simplified acquisitions at or 

below the simplified acquisition threshold. Furthermore, a 2006 OIG audit report13 

examined whether DOL agencies with independent contracting authority procured 

supplies and services through the GSA Schedules Program in accordance with 

prescribed rules and regulations and found no evidence that MSHA’s contracting 

officers were checking required sources before making GSA schedule procurements. In 

response to the audit recommendations, OASAM responded they would require all DOL 

contracting officers to use the revised Form DL 1-2216 by the first quarter of FY 2007. 

Fifty contracts in the audit sample were at or below the simplified acquisition threshold 

($100,000). MSHA contracting officers did not complete Simplified Acquisition 

Documentation Checklists for 17 of these 50 contracts as shown in Exhibit 3. 

MSHA could not demonstrate that it made the best decisions in awarding contracts to 

carry out its activities. MSHA has not followed the procedural reforms it put into place as 

corrective actions in response to previous OIG audit reports. As a result, the 

procurement weaknesses identified in the 2004 and 2006 OIG reports are still present. 

RECOMMENDATIONS 

We recommend that the Assistant Secretary for Mine Safety and Health Administration: 

1. Ensure MSHA procurement officials comply with procedures for PRB review and 

CAO approval as required by DOL policy. 

2. Require the Director of A&M to document, prior to final contract award, 

supervisory review of all contracts awarded without full and open competition, all 

contracts with a value of $100,000 or more, and a representative sample of 

contracts valued from $25,000 – $100,000; 

3. Define and implement a program to provide refresher training on procurement 

requirements contained in the FAR, DOLAR, and DLMS to all MSHA contracting 

personnel at least annually; and 

13 Report Number 05-06-004-07-001, There Is No Evidence Contracting Officers Are Checking Required Sources 

before Making GSA Schedule Procurements 

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U.S. Department of Labor – Office of Inspector General 

4. Develop and implement controls to track AMD’s compliance with the provisions 

of the MOA with the Department’s SOL. 

We appreciate the cooperation and courtesies that MSHA personnel extended to the 

Office of Inspector General during this audit. OIG personnel who made major 

contributions to this report are listed in Appendix E. 

Elliot P. Lewis 

Assistant Inspector General 

 for Audit 

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Exhibits 

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 Contract # Date Issued Amount ($) Missing

Adequate Sole 

Source 

Justification

No PRB Review 

and CAO

Approval

Sole Source 

and Not

Synopsized 

Competed and

Not Synopsized 

Missing DL 1­

2004 and OSBP

Review 

SAMPLE 1 

1 DOLB094R22313* 11/06/08 27,783 Yes 

2 DOLB084R22044 06/20/08 28,567 Yes 

3 DOLJ09MR20672* 04/01/09 38,400 Yes Yes 

4 DOLB094R22346* 11/17/08 41,470 Yes 

5 DOLB09MR20637* 10/01/08 50,000 Yes 

6 DOLB094R22590* 08/03/09 52,500 Yes 

7 DOLF094R22547 06/09/09 54,000 Yes 

8 DOLB084R21987* 05/05/08 64,875 Yes 

9 DOLB09MR20643* 10/01/08 100,000 Yes 

Total Amount1 457,595 

Total Exceptions 4 0 5 1 0 

Total Contracts 11 3 7 12 0 

Total Exceptions (% of Total) 36% 0% 71% 8% 0% 

SAMPLE 2 

1 DOLJ094R22628 09/24/09 101,664 Yes 

2 DOLF094R22588 07/29/09 102,655 Yes 

3 DOLJ094R22371* 12/01/08 132,800 Yes Yes Yes 

4 DOLJ094R22521 05/12/09 137,832 Yes 

5 DOLJ094R22613 09/08/09 138,793 Yes 

6 DOLJ094R22554* 06/12/09 155,653 Yes Yes Yes Yes

7 DOLJ094R22403* 03/07/09 159,480 Yes Yes Yes Yes

8 DOLJ094R22516* 06/01/09 175,000 Yes 

9 DOLF094R22471 03/24/09 175,440 Yes Yes 

10 DOLJ084R22085 08/13/08 193,908 Yes 

11 DOLF084R21975 04/22/08 230,340 Yes Yes 

12 DOLF09MR20693* 09/30/09 244,400 Yes 

13 DOLF084R21971 04/18/08 250,293 Yes Yes 

14 DOLJ084R21968 04/18/08 298,220 Yes Yes 

15 DOLF094R22386 12/10/08 339,300 Yes Yes 

16 DOLF094R22528 05/14/09 339,300 Yes Yes 

Total Amount1 3,175,079 

Total Exceptions 8 4 2 2 14 

Total Contracts 8 5 2 9 14 

Total Exceptions (% of Total) 100% 80% 100% 22% 100% 

U.S. Department of Labor – Office of Inspector General 

Exhibit 1 

Contracts Awarded Without Full and Open Competition 

*These twelve (12) contracts also have a deficiency in Finding 2. See Exhibit 2. 

1 Total amounts have been rounded to the nearest dollar. 

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Exhibit 2 

Contracts Where MSHA Did Not Follow General Procurement Procedures 

Contract # Date 

Issued 

Amount 

($) 

No SOL 

Review 

No ASAM 

Approval 

No COI 

Certification 

Incomplete 

DL 1-2216 

SAMPLE 1 

1 DOLB094R22231 10/20/08 25,000 Yes 

2 DOLB084R22014 05/23/08 26,031 Yes 

3 DOLF084R22042 06/17/08 26,562 Yes 

4 DOLB084R22093 08/20/08 27,221 Yes 

5 DOLB094R22313* 11/06/08 27,783 Yes 

6 DOLB094R22603 08/28/09 28,397 Yes 

7 DOLB084R22049 06/24/08 28,655 Yes 

8 DOLF094R22573 07/10/09 29,576 Yes 

9 DOLF084R22078 08/04/08 33,416 Yes 

10 DOLB094R22228 10/18/08 37,500 Yes 

11 DOLJ09MR20672* 04/01/09 38,400 Yes 

12 DOLF094R22468 03/18/09 41,020 Yes 

13 DOLB094R22346* 11/17/08 41,470 Yes 

14 DOLF094R22562 07/07/09 42,654 Yes 

15 DOLB09MR20637* 10/01/08 50,000 Yes Yes Yes 

16 DOLB094R22590* 08/03/09 52,500 Yes 

17 DOLF094R22594 08/04/09 55,757 Yes 

18 DOLB084R21987* 05/05/08 64,875 Yes Yes Yes 

19 DOLF084R22086 08/13/08 69,660 Yes 

20 DOLJ094R22465 03/01/09 87,500 Yes Yes Yes 

21 DOLB094R22618 09/18/09 89,639 Yes 

22 DOLB08MR20613 05/22/08 94,225 Yes 

23 DOLB084R22043 06/18/08 95,040 Yes 

24 DOLB09MR20643* 10/01/08 100,000 Yes Yes Yes 

Total Amount1 1,212,882 

Total Exceptions 7 3 5 17 

Total Contracts 7 3 9 50 

Total Exceptions (% of Total) 100% 100% 56% 34% 

SAMPLE 2 

1 DOLJ094R22371* 12/01/08 132,800 Yes Yes 

2 DOLB09MR20654 12/30/08 150,825 Yes 

3 DOLJ094R22554* 06/12/09 155,653 Yes Yes 

4 DOLJ094R22403* 03/07/09 159,480 Yes Yes 

5 DOLF09MR20684 06/26/09 163,050 Yes 

6 DOLJ094R22516* 06/01/09 175,000 Yes Yes Yes 

7 DOLJ084R22121 09/25/08 182,665 Yes 

8 DOLB08MR20629 12/03/08 218,505 Yes 

9 DOLF09MR20693* 09/30/09 244,400 Yes 

Total Amount1 1,582,378 

Total Exceptions 9 1 4 0 

Total Contracts 9 1 4 0 

Total Exceptions (% of Total) 100% 100% 100% 0% 

* These twelve (12) contracts also have a deficiency in Finding 1. See Exhibit 1. 

1 Total amounts have been rounded to the nearest dollar. 

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6 

U.S. Department of Labor – Office of Inspector General 

Exhibit 3 

Contracts with Incomplete DL 1-2216 

Amount Contract # Checklist Items Not Completed ($) 

▪ Part II, Pricing Memorandum 1 DOLB084R21987 64,875 ▪ Part IV, Large Business Documentation 

▪ Part I-A, Item 1 Excess supply and inventory 2 DOLB08MR20613 94,225 ▪ Part I-A, Item 2 Consulted required sources 

▪ Sec. B, Item 1 Required source checked 

3 DOLB084R22014 26,031 ▪ Sec. B, Item 2 Excess inventory checked 

▪ Sec. B, Item 7 No reason selected for using a large business 

4 DOLF084R22042 26,562 ▪ Part III, Sole Source Documentation 

5 DOLB084R22043 95,040 ▪ Part I-B, Item 2 Small business set aside 

▪ Sec. B, Item 7 No reason selected for using “other than small DOLB084R22049 28,655 business” 

▪ Sec. B, Item 1 Required source checked 

▪ Sec. B, Item 2 Excess inventory checked (no explanation of “N/A” 7 DOLF084R22078 33,416 selection) 

▪ Sec. B, Item 7 No reason selected for using a large business" 

▪ Sec. B, Item 1 Required source checked (no explanation of “N/A” 

selection) 8 DOLF084R22086 69,660 ▪ Sec. B, Item 2 Excess inventory checked (no explanation of “N/A” 

selection)" 

▪ Sec. B, Item 1 Required source checked (no explanation of “N/A” 

selection) 9 DOLB09MR20643 100,000 ▪ Sec. B, Item 2 Excess inventory checked (no explanation of “N/A” 

selection)" 

▪ Sec. B, Item 1 Required source checked (no explanation of “N/A” 

selection) 10 DOLB09MR20637 50,000 ▪ Sec. B, Item 2 Excess inventory checked (no explanation of “N/A” 

selection)" 

11 DOLB094R22228 37,500 ▪ Sec. B, Item 2 Excess inventory checked 

▪ Sec. B, Item 1 Required source checked 

12 DOLB094R22231 25,000 ▪ Sec. B, Item 2 Excess inventory checked 

▪ Sec. B, Item 7 No reason selected for using a large business" 

13 DOLJ09MR20672 38,400 ▪ Part IV Large Business Documentation 

▪ Part I-A, Item 1 Excess supply and inventory 

▪ Part I-A, Item 2 Consulted required sources 14 DOLF094R22573 29,576 ▪ Part I-A, Item 4 Quotations, clearances, and approvals 

▪ Part I-B, Item 2 Small business set aside" 

▪ Part I-A, Item 1 Excess supply and inventory 

▪ Part I-A, Item 2 Consulted required sources 15 DOLF094R22594 55,757 ▪ Part I-A, Item 4 Quotations, clearances, and approvals 

▪ Part I-B, Item 2 Small business set aside" 

16 DOLB094R22603 28,397 ▪ Part IV Large Business Documentation 

▪ Sec. B, Item 1 Required source checked 17 DOLB094R22618 89,639 ▪ Sec. B, Item 2 Excess inventory checked 

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Appendices 

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Appendix A 

Background 

The DOL MSHA helps in reducing deaths, injuries, and illnesses in the Nation's mines 

with a variety of activities and programs. The agency develops and enforces safety and 

health rules applying to all U.S. mines; helps mine operators with special compliance 

problems; and makes available technical, educational, and other types of assistance. 

MSHA also works cooperatively with industry, labor, and other Federal and state 

agencies toward improving safety and health conditions for all miners. MSHA’s 

responsibilities are spelled out in the Mine Act and amended by the Mine Improvement 

and New Emergency Response Act (MINER Act). These acts apply to all U.S. mining 

and mineral processing operations. 

In DOL, OASAM, through the Department's Procurement Executive, is responsible for 

implementing the Department's procurement program and ensuring that the program is 

performing in accordance with the appropriate laws and regulations. The Department’s 

procurement program is a decentralized structure with OASAM, MSHA, the 

Employment and Training Administration, the Bureau of Labor Statistics, and the OIG 

having their own procurement authority. MSHA is delegated authority and responsibility 

for contracting for all program property and services. 

From April 1, 2008, to September 30, 2009, MSHA’s contracts totaled 1,648 and were 

valued at approximately $36 million. 

MSHA’s A&M provides administrative and management advice, products, and services 

to assist the Office of the Assistant Secretary in implementing the Mine Act and the 

MINER Act. The Director of A&M is the Head of Contracting Activity for MSHA, and has 

the overall responsibility for managing contracting activity. The AMD is a division within 

A&M responsible for procurement and contracting. Contracting officers are responsible 

for all stages of a contract, including pre-award, award, post-award, administration, and 

close out. AMD has contracting officers and purchase agents located at MSHA’s 

headquarters in Arlington, Virginia, and in the National Mine Health and Safety 

Academy in Beaver, West Virginia. 

Past OIG audit work has identified weaknesses in MSHA’s procurement and contracting 

function. A 2004 report concluded that MSHA consistently demonstrated a lack of 

regard for FAR principles and that MSHA fostered an environment that allowed, or at 

the very least had the appearance of allowing, best value through competition to be 

replaced with awarding contracts based on favoritism or convenience. To address the 

findings raised in the 2004 audit report, MSHA and the SOL entered into a 5-year MOA, 

dated April 5, 2006, which established procedures under which SOL will review MSHA 

solicitations and contract awards that are complex or of a high dollar value. Moreover, a 

2006 report examined whether DOL agencies with independent contracting authority 

procured supplies and services through the GSA Schedules Program in accordance 

with prescribed rules and regulations concluded that MSHA’s contracting officers were 

not checking required sources before making GSA schedule procurements. Finally, a 

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U.S. Department of Labor – Office of Inspector General 

2008 report that examined sole source procurements by DOL agencies with 

independent contracting authority identified several weaknesses in MSHA’s awarding of 

non-competitive procurement actions. 

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Appendix B 

Objective, Scope, Methodology, and Criteria 

Objective 

The OIG conducted the audit to determine whether MSHA complied with appropriate 

procurement regulations and procedures in awarding contracts. 

Scope 

The audit examined selected MSHA contracts awarded from April 1, 2008, through 

September 30, 2009. We considered whether internal controls significant to the 

awarding of contracts were properly designed and placed in operation. We confirmed 

our understanding of these controls and procedures through interviews and a review of 

contracts. 

Of the 1,648 contracts totaling $36 million awarded by MSHA during this period, we 

eliminated contracts valued at $25,000 or less and modifications. The remaining 

procurement actions totaled 133 and were valued at approximately $16 million. 

Fieldwork was conducted at MSHA’s headquarters located in Arlington, Virginia, and the 

National Mine Health and Safety Academy located in Beaver, West Virginia. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objective. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our 

audit objective. 

Methodology 

To accomplish our objective, we obtained an understanding of MSHA’s procurement 

procedures for contract awarding. We identified significant risks in contracting that can 

result in violations of Federal and DOL laws and regulations. We then interviewed 

MSHA officials from A&M, the Director of AMD, contracting officers and purchasing 

agents, and SOL personnel to determine whether MSHA had internal controls in place 

to mitigate contracting risks, the likelihood of the contracting risks, and the impact of the 

contracting risks. We also reviewed criteria for awarding contracts in the FAR, DOLAR, 

the DLMS, and the MOA between MSHA and the SOL, and the Partnership Agreement 

for 8(a) contracts between SBA and DOL. 

In performing the audit, MSHA provided us with a Federal Procurement Data SystemNext Generation (FPDS-NG) report as of November 4, 2009. We performed a data 

reliability assessment to ensure we have complete and accurate procurement data. To 

determine whether the data was reliable to select our sample, we compared the 

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U.S. Department of Labor – Office of Inspector General 

FPDS-NG procurement data reports MSHA provided us with a report OASAM provided 

us. We did note a few differences, but the differences were not material for the purpose 

of selecting a sample of contracts to review. We concluded the data to be sufficiently 

reliable for our purposes. 

To determine whether MSHA awarded contracts in accordance with procurement 

procedures and if the procurement files contained the required documentation and an 

appropriate level of management oversight, we reviewed a random stratified statistical 

sample of contract files. Our review focused on actions $25,000 and above awarded 

from April 1, 2008, through September 30, 2009. In addition to excluding contracts 

valued below $25,000, we also excluded actions with no obligation made, actions with a 

negative obligation, and modifications. The remaining contracts totaled 133 and were 

valued at approximately $16 million. 

Different Federal and DOL procurement rules and regulations apply to contracts below 

and above $100,000. As a result, we stratified the 133 contracts into two strata based 

on the obligation amount. Stratum One consisted of 95 contracts with award values 

between $25,000 - $100,000. We randomly selected 50 contracts from Stratum One. 

The results of this sample were projected to the population. Stratum Two consisted of 

contracts with award values above $100,000 and we selected all 38 contracts for 

review. 

For contracts at or below the simplified acquisition threshold (currently $100,000), we 

verified that the actions were awarded in accordance with simplified acquisition 

procedures and other agreements (e.g., MOA and the Partnership Agreement with the 

SBA). For contracts above the simplified acquisition threshold, we reviewed the 

following areas: 

 Purchase request, acquisition planning information, and other pre-solicitation 

documentation; 

 SOL’s review for each complex or high dollar contract; 

 Justifications (e.g., Justifications for other than full and open competition) and 

approvals (e.g., PRB review and CAO approval, ASAM approval, etc.); 

 The list of sources solicited and selected; 

 A copy of the solicitation and amendments (if any); 

 Contractor’s representations and certifications; 

 Cost or price analysis; and 

 The original signed contract or award. 

We evaluated internal controls used by MSHA for reasonable assurance that AMD 

complied with appropriate procurement regulations and procedures in awarding 

contracts. Our consideration of MSHA’s internal controls for procurement procedures 

related to awarding contracts would not necessarily disclose all matters that might be 

reportable conditions. Because of inherent limitations in internal controls, 

misstatements, or losses, noncompliance may nevertheless occur and not be detected. 

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Criteria 

Federal Acquisition Regulation 

The Code of Federal Regulations, Title 48, Federal Acquisition Regulations System, 

Volume 7, Chapter 29 Department of Labor 

Department of Labor Manual Series 

06-MOU-082, Memorandum of Agreement between MSHA and SOL, effective 

April 5, 2006 

Partnership Agreement between the Small Business Administration and DOL 

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Appendix C 

Acronyms and Abbreviations 

A&M Directorate of Administration & Management 

AMD Acquisitions Management Division 

ASAM Assistant Secretary for Administration and Management 

CAO Chief Acquisition Officer 

DLMS Department of Labor Manual Series 

DOL Department of Labor 

DOLAR Department of Labor Acquisition Regulation 

FAR Federal Acquisition Regulation 

FPDS-NG Federal Procurement Data System-Next Generation 

GPE Governmentwide Point of Entry 

GSA General Services Administration 

MOA Memorandum of Agreement 

Mine Act Federal Mine Safety and Health Act of 1977 

MINER Act Mine Improvement and New Emergency Response Act 

MSHA Mine Safety and Health Administration 

OASAM Office of the Assistant Secretary for Administration and 

Management 

OIG Office of Inspector General 

OSBP Office of Small Business Programs 

PRB Procurement Review Board 

SOL Office of the Solicitor 

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Appendix D 

MSHA's Response to Draft Report 

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Appendix E 

Acknowledgements 

Key contributors to this report were Charles Allberry, Michael Kostrzewa, Richard 

Donna Jr., Ann Marie Lawrence, Kathleen Mitomi, Elizabeth Garcia, and Ajit Buttar. 

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39 Report No. 05-11-001-06-001 
 

TO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT: 

Online: http://www.oig.dol.gov/hotlineform.htm 

Email: hotline@oig.dol.gov 

Telephone:	 1-800-347-3756 

202-693-6999 

Fax: 202-693-7020 

Address: Office of Inspector General 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

 Room S-5506 

Washington, D.C. 20210