Audit Report

OIG-06-036

MANUFACTURING OPERATIONS: The Mint Needs to Determine 

Whether Its Long-Delayed A-76 Competition for Coin Blank 

Production Should Be Continued 

August 28, 2006 

Office of 

Inspector General 

Department of the Treasury 

Contents 

MANUFACTURING OPERATIONS: The Mint Needs to Determine Page 1 

 Whether Its Long-Delayed A-76 Competition for Coin Blank 

 Production Should Be Continued (OIG-06-036) 

Audit Report.................................................................................................. 3 

 Results in Brief...............................................................................................4 

 Background ................................................................................................. 7 

 Finding and Recommendation ........................................................................ 9 

The Mint Did Not Properly Plan and Has Not Properly 

Implemented Its BAU Standard Competition................................................ 9 

Recommendation .................................................................................... 27 

Appendices

 Appendix 1: Objectives, Scope, and Methodology ...................................... 30 

 Appendix 2: Specific Agency A-76 Requirements ....................................... 31 

 Appendix 3: Management Response ......................................................... 34 

 Appendix 4: Major Contributors to This Report........................................... 38 

 Appendix 5: Report Distribution ............................................................... 39 

Abbreviations

 

 ASM/CFO Assist Secretary for Management/Chief Financial Officer 

 ATO Agency tender official 

 BAU Blanking, annealing, and upsetting 

 Circular A-76 OMB Circular No A-76 (Revised) 

 CO Contracting officer 

 CSO Competitive sourcing official 

 FAR Federal Acquisition Regulation 

 GFE Government-furnished equipment 

 GFP Government-furnished property 

 H.Rep. House Report 

 Mint United States Mint 

 MEO Most Efficient Organization 

 OCS Office of Competitive Sourcing 

 OMB Office of Management and Budget 

 P.L. Public Law 

 PWS Performance work statement 
MANUFACTURING OPERATIONS: The Mint Needs to Determine Page 2 

 Whether Its Long-Delayed A-76 Competition for Coin Blank 

 Production Should Be Continued (OIG-06-036) 

 QASP Quality assurance surveillance plan

 Treasury Department of the Treasury 

 
OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

MANUFACTURING OPERATIONS: The Mint Needs to Determine Page 3

 Whether Its Long-Delayed A-76 Competition for Coin Blank 

 Production Should Be Continued (OIG-06-036) 

August 28, 2006 

David A. Lebryk 

Acting Director 

United States Mint 

Office of Management and Budget (OMB) Circular No. A-76 

(Revised), Performance of Commercial Activities (Circular A-76) 

was last revised on May 29, 2003, and reiterates the longstanding 

policy of the federal government to rely on the private sector for 

needed commercial services. In general, Circular A-76 requires that 

federal agencies identify activities performed by government 

personnel as either commercial or inherently governmental.1

 As 

appropriate, agencies are then to use a competition to determine 

whether government personnel should perform a commercial 

activity. 

On October 23, 2003, the United States Mint (Mint) issued Public 

Announcement of OMB Circular A-76 Standard Competition Study 

on United States Mint Preparation of Ready-to-Coin Planchets, 

which involved the manufacturing processes of blanking, annealing, 

and upsetting (BAU) of coin blanks. Under Circular A-76, a 

standard competition is to be completed and a “performance 

decision” made within 12 months. As a result, the BAU standard 

competition performance decision—whether to contract out these 

manufacturing processes to the private sector or to continue to 

have Mint personnel perform them—was due by October 23, 2004. 

In November 2003, House Conference Report (H. Rep. 108-401) 

for the Consolidated Appropriations Act, Fiscal Year 2004 [Public 

Law (P.L.) 108-199], directed our office to perform a study on the 

potential and cost-effectiveness of expanded use of coin blanks in 

the production of circulating coins. We were to report on our study 

 

1

 A commercial activity is a recurring service that could be performed by the private sector, while an 

inherently governmental activity is so intimately related to the public interest as to mandate 

performance by government personnel. 
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 Whether Its Long-Delayed A-76 Competition for Coin Blank 

 Production Should Be Continued (OIG-06-036) 

to the House and Senate Committees on Appropriations by 

April 1, 2004. In letters dated March 23, 2004, we informed 

Congress that since the Mint had already publicly announced the 

BAU standard competition, our study as described in the 

Conference Report could not be performed because a Circular A-76 

standard competition had already begun. On October 29, 2004, we 

issued an interim audit report, OIG-05-002, MANUFACTURING 

OPERATIONS: Mint’s Standard A-76 Competition Study for the 

Preparation of Ready-to-Coin Planchets Is Delayed and Requires 

Significant Actions to Complete. 

In the interim audit report, we stated that the Mint had not met 

certain critical intermediate milestones it had established for the 

BAU standard competition and had not completed it by 

October 23, 2004, the due date. Nearly 3 years after the Mint 

announced the BAU standard competition; it continues to 

experience problems. We are issuing this report to provide Mint 

management, the Department of the Treasury (Treasury) 

competitive sourcing official (CSO),2

 and Congress with the current 

status of the BAU standard competition, our audit results, and our 

overall recommendation that the BAU standard competition be 

revisited because of deficiencies in the Mint’s implementation of 

the standard competition. 

The findings in this report are based on the interim audit report and 

additional work we performed from November 2004 to March 

2006 at the Treasury and Mint headquarters in Washington, D.C. 

Appendix 1 provides a more detailed description of our audit 

objectives, scope, and methodology. 

Results in Brief

We found that the Mint did not adequately plan for or implement 

the BAU standard competition. Therefore, we believe that the Mint 

should complete a formal business case analysis to determine 

whether the activity should still be competed. Our conclusion is 

based not only on the fact that the Mint did not adequately plan 

 

2

 A CSO is an inherently governmental agency official responsible for implementing the Circular within 

an agency. The Treasury CSO is the Assistant Secretary for Management and Chief Financial Officer 

(ASM/CFO). 
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the standard competition, but also that it failed to meet Circular 

A-76’s requirement that standard competitions be completed 

within 1 year of initiation and because it has not complied with 

several other Circular A-76 requirements. Deficiencies in the Mint’s 

planning and implementation of the BAU standard competition 

include the following: 

• Hiring a contractor to develop the Performance Work 

Statement (PWS), but changing it 

• Publishing a PWS with errors in the specifications for coin 

blanks 

• Not addressing the government-furnished property (GFP)3

approval issue; specifically, the use of potential excess 

space, as required by Circular A-76 

• Not addressing security issues in the draft PWS or draft 

solicitations 

• Issuing a draft Mint directive for conducting A-76 

competitions but not following its guidelines 

• Obtaining a deviation from OMB from certain A-76 

requirements after the allowed time period 

• Not obtaining an authorization on the performance bond,4

 as 

required by Circular A-76 

In addition to these planning and implementation issues, the Mint 

faces other issues and obstacles to a successful completion of the 

BAU study, including the following: 

• Concerns related to the timing of the transfer of governmentfurnished equipment (GFE) to new vendors 

• More than 300 questions, concerns, and comments received 

from potential vendors in response to the September 2005 

draft solicitation 

• Questions raised by the Agency Tender Official (ATO),5

 who 

is responsible for the tender and represents the agency 

tender during source selection 

 

3

 GFP consists of facilities, equipment, material, supplies, or other services provided by the government 

for use by all prospective providers in the solicitation. 

4

 A performance bond is issued by an insurance company to guarantee satisfactory completion of a 

project by a contractor. 

5

 The ATO for the BAU study is the Denver Mint plant manager. 
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We recommend that the Mint should expeditiously complete a 

formal business case analysis to determine whether to continue the 

standard competition. If, on the basis of the business case 

analysis, the Mint decides to discontinue the standard competition, 

the Mint should work with the Department to cancel the BAU 

standard competition. 

In the Mint’s August 14, 2006, written response to this report, 

management acknowledged that better preliminary planning efforts 

would have led to a more expeditious completion of its complex 

A-76 public-private competition on BAU coin planchets. The Mint 

stated that planning prior to competition announcement could have 

been more extensive; however, it was responding to an inquiry by 

a Congressional committee regarding the feasibility of purchasing 

ready-made blanks, and was attempting to be responsive to the 

President's Management Agenda goal of opening additional 

commercial activities to public-private competition. The Mint 

further stated that it did not conduct a formal business case 

analysis to determine the advantages and disadvantages of 

conducting a competition, and the optimal method for performing 

the competition; however, it did conduct examinations, reviews, 

and inquiries of the BAU activity prior to competition 

announcement. These other items led the Mint’s senior 

management to a consensus that approximately 30 percent savings 

could be obtained by performing a competition; therefore, the Mint 

proceeded to implement a standard competition. 

The Mint concurred with our recommendation and will develop a 

business case analysis to determine if the best course of action is 

to proceed with the BAU competition or take alternative action to 

ensure the Mint makes or purchases planchets as efficiently and 

cost-effectively as possible. However, management did not agree 

with some of our findings. We provide additional comments to their 

disagreements at the end of each section of the report where the 

Mint provided comments. 

In conclusion, we agree with the Mint’s statement that it lacked 

experience with OMB Circular A-76 competitions and better 

preliminary planning could have led to a more expeditious 

competition. These comments support our conclusion that the Mint 
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did not properly plan and implement its BAU standard competition. 

The full text of the Mint’s response is provided as Appendix 3. 

Background

On October 23, 2003, the Mint issued a public announcement of a 

Circular A-76 standard competition on the Mint’s preparation of 

ready-to-coin planchets, which involved the manufacturing 

processes of BAU of coin blanks. Blanks are round disks from 

which coins are manufactured. For all coins except the penny (for 

which the Mint purchases ready-made blanks), the Mint buys coiled 

strips of metal about 13 inches wide and 1,500 feet long. Each coil 

is fed through a blanking press, which punches out blanks for 

coins. The blanks are heated in an annealing furnace to soften 

them. After the blanks are washed and dried, they go through an 

upsetting mill, which creates a raised rim along their edges. The 

blanks then go to a coining press, where they are stamped with 

appropriate designs and inscriptions. Coin blanks are also known as 

planchets. 

Circular A-76 establishes federal policy for the competition of 

commercial activities. It assigns responsibilities to specific 

government personnel and identifies additional requirements, such 

as those in the Federal Acquisition Regulation (FAR),6 that are 

applicable to competitions conducted under Circular A-76. Agencyspecific acquisition regulations are to be limited to those necessary 

to implement FAR policies and procedures within the agency and 

additional policies, procedures, solicitation provisions, or contract 

clauses that supplement the FAR to satisfy the specific needs of 

the agency.7

 Some of Circular A-76’s specific requirements for 

agencies are detailed in appendix 2. 

 

6

 The FAR was established to codify uniform policies for acquisition of supplies and services by federal 

executive agencies. It is issued and maintained jointly by the Secretary of Defense, the Administrator of 

the General Services Administration, and the Administrator of the National Aeronautics and Space 

Administration. 

7

 Under its Public Enterprise Fund authority (P.L. 104-52), the Mint is exempt from the provisions of law 

governing procurement or public contracts (i.e., the FAR) for the procurement of goods or services 

necessary for carrying out Mint programs and operations. For A-76 competition studies the Mint must 

comply with the Circular A-76 including applicable provisions in the FAR. 
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The Mint’s Draft Directive MD 2A-2, Performance of Commercial 

Activities, dated in October 2003, established policy and assigned 

responsibility for implementing Circular A-76 at the Mint. The 

Policy Section of MD 2A-2 contains specific requirements 

applicable to the Mint’s implementation of Circular A-76. 

The FAR requires that agencies conduct market research. The 

results of this research are to be used to determine whether 

suitable sources exist and commercial items are available that 

(1) meet the agency’s needs, (2) could be modified to meet the 

agency’s needs, or (3) could meet the agency’s requirements if 

they were modified to a reasonable extent. We believe a business 

case analysis would include market research. 

Each government solicitation contains specifications that describe 

the contract work. Clear and unambiguous specifications are an 

essential of the procurement process because vague or otherwise 

incomplete specifications will not adequately describe the agency’s 

needs and may result in an unacceptable product or service. 

Ambiguous specifications also restrict competition and invite 

performance problems. The term “defective specifications” usually 

refers to a defect or inconsistency in the specifications so severe 

that performance of the contract as stated cannot be attained by 

any contractor or can be obtained only at an exorbitant cost. 

Actual impossibility exists when the contract cannot be performed 

according to its terms by the contractor or by any other contractor 

because (1) the contract’s specifications are erroneous; (2) the 

contract’s performance requirements can, in no event, be met; or 

(3) the contractor would be obligated to go beyond the state of the 

art to attain the requirement. 

On April 20, 2005, the Mint requested a deviation from certain 

Circular A-76 requirements to restart the standard competition, and 

OMB approved the deviation on July 14, 2005. The Mint 

re-announced the standard competition on September 16, 2005, 

but did not change its timetable for completing the standard 

competition. 
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The Mint was required to report its fiscal years 2004 and 2005 

competitive sourcing costs. The current OMB guidance8

 identifies 

10 types of information; however, only 2 types of costs – the fixed 

costs of management overhead and the incremental costs directly 

attributable to conducting a study – are required. The Mint reported 

spending approximately $1.3 million for fiscal years 2004 and 

2005 on fixed overhead management and the BAU study. The Mint 

reported just over $0.8 million in fixed overhead management costs 

and nearly $0.5 million in the BAU study.9

Finding and Recommendation 

 The Mint Did Not Properly Plan and Has Not Properly 

Implemented Its BAU Standard Competition 

We concluded that the Mint did not properly plan and has not 

properly implemented its BAU standard competition. Initially, the 

Mint intended to conduct a study, or a formal business case 

analysis, to determine whether coin blanks should be subject to an 

A-76 standard competition. However, the Mint subsequently 

decided not to do a study, but to immediately initiate a standard 

Circular A-76 competition. According to the Mint, this decision was 

driven largely by Congress’s desire to determine whether it would 

be less expensive for the Mint to buy coin blanks than to continue 

to make them in-house. As a result of not performing a formal 

business case analysis study, the Mint did not address a number of 

issues vital to successful implementation and timely completion of 

the standard competition. As of the date of this report, nearly 3 

years after the Mint initiated the standard competition; a 

performance decision is still pending. Currently, the Mint plans to 

complete the standard competition before the end of 2006, or over 

 

8

 The Consolidated Appropriations Act, Fiscal Year 2004 P.L. 108-199, established a government-wide 

requirement for each executive agency to report to Congress on its competitive sourcing efforts. OMB 

Memoranda provided specific reporting requirements for FY 2004 in M-05-01, which was issued on 

October 15, 2004 and for FY 2005 in M-06-01, which was issued on October 7, 2005. 9

 Some of the BAU contractor costs are estimates because the Mint arbitrarily split some contractors’ 

costs between the BAU standard competition and another concurrent standard competition entitled 

Power Industrial Truck. The contractors performed under one contract similar tasks for each standard 

competition and several of the tasks were performed simultaneously; therefore, we were unable to 

determine a more accurate distribution of the costs between the two standard competitions. 
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3 years after it was initiated. We do not believe the Mint will be 

able to complete the BAU competition by that date. 

The Mint reported already spending nearly $0.5 million in 

contractual work, training, travel, and employees to compete this 

standard competition. Currently, a final PWS is not posted and the 

Mint does not have an estimated completion date for the PWS so 

that bids can be received. We have little confidence that the Mint 

will be successful in the effort. 

The issues that caused delays and the issues that still need to be 

addressed are discussed in the sections that follow. 

The Contractor-Developed PWS

Was Not Used for the Solicitation

A PWS is a statement in the solicitation that identifies the 

technical, functional, and performance characteristics of an 

agency’s requirements. It should be performance-based and specify 

essential outcomes to be achieved; the agency’s required 

performance standards; and the location, units, quality, and 

timeliness of the work. 

 

Circular A-76 allows agencies to provide advisers and consultants 

in addition to government employees to assist the PWS and Most 

Efficient Organization (MEO)10 teams in performing their 

responsibilities. PWS team members may not be members of the 

MEO team and MEO team members may not be members of the 

PWS team. The Mint provided support to the teams by hiring one 

contractor to assist the PWS team and another contractor to assist 

the MEO team. 

Circular A-76 requires that the PWS team comply with the FAR and 

Circular A-76 and assist the PWS team leader with (1) developing 

the PWS, (2) determining GFP, (3) assisting the contracting 

officer’s (CO) development of the solicitation, (4) developing the 

 

10 An MEO team prepares the staffing plan of the agency tender, developed to represent the agency’s 

most efficient and cost-effective organization for performing an activity. 
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quality assurance surveillance plan (QASP),11 and (5) implementing 

the performance decision. One of the requirements placed on the 

PWS contractor was to develop the PWS and related QASP for the 

BAU function. 

The contractor that the Mint hired to assist with PWS team 

responsibilities indicated that it had more than 25 years of 

experience in consulting on Circular A-76 commercial activities 

studies, with emphasis on studies of manufacturing activities. This 

contractor developed a draft PWS that we believe contained the 

required attributes for the PWS. The Mint substantially revised the 

contractor’s draft PWS. The resultant draft PWS no longer included 

all required attributes and was internally inconsistent, most notably 

with respect to the manufacturing specifications and acceptance 

criteria for the coin blanks. The Mint-revised draft PWS was 

published on the FedBizzOpps.gov website12 on April 12, 2004, for 

comment and questions. 

We reviewed the Mint’s draft PWS and advised the Mint in May 

2004 that we had concerns about required information that 

appeared to be missing from the draft or that was misleading. Our 

concerns about the April 2004 draft PWS included the following: 

• The PWS identified “adequate” and ”satisfactory” as 

performance standards. Such vague performance standards 

did not provide an adequate level of specificity or measurable 

requirements. 

• The PWS lacked a list of definitions and many acronyms 

were undefined throughout the text of the document. 

• The PWS was clearly contradictory on certain points, 

including what GFE would be offered to potential bidders and 

the means of inspection and acceptance. 

The Mint published another draft PWS on the FedBizOpps.gov 

website on August 14, 2004, as part of its draft solicitation. This 

second draft PWS still did not contain all the information or address 

 

11 A QASP is the government’s inspection plan. It documents methods used to measure the 

performance of the service provider against PWS requirements. 

12 FedBizOpps.gov is the website where the government electronically advertises solicitations or 

requirements. 
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the comments on the April 2004 draft that we provided to Mint 

officials in May 2004. 

The Draft PWSs Contained Conflicting

Specifications for Coin Blanks 

Both the April 2004 draft PWS and the August 2004 draft PWS 

included manufacturing specifications for coin blanks that 

conflicted with inspection and acceptance specifications. In 

addition, the August 2004 draft PWS contained conflicting 

manufacturing specifications for coin blanks. If not corrected in the 

final solicitation, these deficiencies could discourage potential 

bidders because a significant number of coin blanks produced 

would be subject to rejection by the Mint. 

Specifically, we found that the April 2004 draft PWS contained 

differences between the manufacturing specifications in Technical 

Exhibit-02 and the inspection criteria for the coin blanks in 

Technical Exhibit-08. In this regard, the draft PWS contained the 

manufacturing specifications and inspection criteria for five coin 

denominations—the nickel, dime, quarter, half-dollar, and dollar. 

Our comparison of the Mint’s 20 manufacturing specifications with 

its inspection criteria for these five denominations revealed that 7 

of the 20 manufacturing specifications (35 percent) differed from 

the inspection criteria. For two coin denominations (nickel and 

quarter), no overlap existed between the manufacturing 

specifications and inspection criteria in the April 2004 PWS, which 

would effectively result in rejection of all coin blanks produced in 

those denominations. For two other coin denominations (dime and 

dollar), the discrepancies were not as significant but could still 

result in rejection of some of the coin blanks produced according to 

the manufacturing specifications. In a May 21, 2004, 

memorandum, we provided comments on the observed deficiencies 

from our review of the April 2004 draft PWS to the Mint 

Contracting Officer’s Technical Representative and CO responsible 

for the PWS. 

Our review of the Mint’s August 2004 draft PWS revealed that 

these previously noted deficiencies were not corrected, and found 

additional deficiencies in the draft. Specifically, we found that 9 of 

the 50 manufacturing specifications in the draft PWS, including the 
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7 with discrepancies noted in the April 2004 draft PWS differed 

from the inspection criteria. 

Additionally, our comparison of the manufacturing specifications 

for blanks with the fabrication specifications for strip materials – 

strips are the coiled strips of metal from which blanks are made – 

identified differences in 70 of 176 (40 percent) of the 

specifications. As in the cases of the differences we found 

between manufacturing and inspection criteria for blanks, 

inconsistencies between manufacturing specifications for blanks 

and fabrication specifications for strip materials could cause blanks 

to be rejected. On October 29, 2004, we reported these 

deficiencies in the draft PWSs in our interim audit report, 

OIG-05-002, MANUFACTURING OPERATIONS: Mint’s Standard 

A-76 Competition Study for the Preparation of Ready-to-Coin 

Planchets Is Delayed and Requires Significant Actions to Complete. 

As we noted in our interim report, the nature and extent of the 

discrepancies that we found in the two draft PWSs indicate a lack 

of appropriate quality control or supervisory review by the Mint of 

the documents before their posting on FedBizOpps.gov for 

comment and questions. 

The Mint reissued a draft PWS on September 16, 2005, and 

included certain technical exhibits for the blank production 

specifications. Based on comments, questions, and concerns it 

received, the Mint has made modifications to the PWS and posted 

the results on FedBizOpps.gov. The Mint has not issued the 

technical exhibit for the blank inspection criteria; therefore, we 

were unable to compare the current blank production specifications 

with the blank inspection criteria. 

The Mint Did Not Obtain the CSO’s Written

Approval of Its GFP Justification or Prepare a

Written Plan for Use of Potential Excess Space

Circular A-76 requires that an agency determination as to whether 

GFP is to be offered potential bidders be justified in writing and 

approved by the CSO (ASM/CFO). Circular A-76 defines GFP as 

“facilities, equipment, material, suppliers, or other services 

provided by the government for use by all prospective providers in 
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the solicitation.” In addition to the Circular A-76’s requirement, the 

Mint’s Draft Directive MD 2A-2 requires that the CSO provide this 

written approval in advance of the official announcement of a 

competitive study. 

The April and August 2004 draft PWSs stated that the Mint did not 

intend to furnish any facilities (space) to a nongovernmental service 

provider. Both draft PWSs identified certain equipment, including 

blanking presses, annealing furnaces, washers, dryers, and 

upsetting mills, which the Mint planned to excess and make 

available to potential bidders if they chose to bid on the excess 

equipment. 

We reported in October 2004 that the Mint had not prepared a 

written justification in support of its GFP decisions and, 

accordingly, had not obtained the CSO’s written approval of these 

decisions. We recommended that the Mint prepare and obtain 

written CSO approval of a memorandum justifying the Mint’s GFP 

decisions. The Mint agreed with our recommendation and indicated 

that it would provide the GFP justification to the CSO by 

November 12, 2004. In response to our recommendation, on 

November 8, 2004, the BAU PWS team leader issued a GFP 

decision memorandum to the CSO. 

The November 8, 2004, GFP memorandum did not address what 

the Mint intended to do with the space in Mint facilities dedicated 

to coin blank production if the A-76 standard competition resulted 

in an award to a contractor. BAU equipment currently occupies 

approximately one-third of the square footage of the Mint’s Denver 

and Philadelphia facilities. Mint officials informed us that they 

intend to use any excess space in the Denver and Philadelphia 

facilities for storage to reduce off-site storage needs, but they have 

not developed a written plan for converting these facilities to this – 

or any other – use. 

As noted above, the Mint expressed its intention in the November 

2004 GFP memorandum to excess its current BAU equipment. This 

intention differed from the GFP plans that the Mint had expressed 

in the April and August 2004 draft PWSs. As discussed later in this 

report, in April 2005 the Mint requested a deviation from Circular 

A-76 to restart the standard competition, and OMB granted the 
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request. As part of the deviation process, the Mint needed to 

obtain the General Services Administration’s approval to excess its 

BAU equipment rather than offer it as GFP to potential contractors. 

The Mint did not receive the General Services Administration’s 

necessary approval and now intends to allow potential contractors 

to use its current BAU equipment as GFP to produce blanks. 

However, the Mint has neither complied with Circular A-76’s 

requirement for an approved GFP memorandum nor the Mint’s 

Draft Directive MD 2A-2 requirement that the GFP memorandum be 

approved before the official announcement of the competitive 

study. Treasury’s Competitive Sourcing Manager told us that the 

CSO plans to wait until later in the process to decide whether or 

not to approve a GFP memorandum. 

By providing a written GFP justification that did not address 

disposition of excess space and failing to obtain the required CSO 

written approval of the GFP memorandum it did provide, the Mint 

has not taken adequate steps to help ensure that its GFP decisions 

are in the best interest of the government. It also evidences the 

poor planning by the Mint in undertaking the A-76 standard 

competition. 

The Draft Solicitation Lacks Information

on Security Requirements

The Mint Police provide security at all Mint facilities. Inherent in 

this protection function is the security of coin blanks, which have 

the same electro-magnetic signature as U.S. coins and may be 

recognized by vending machines as the equivalent of U.S coins. 

The Mint Police provide a single level of security for entire facilities; 

therefore, blanks are protected at the same physical security level 

as coins are. 

The Mint did not identify any security requirements for protecting 

coin blanks in the draft PWSs. According to Mint officials, security 

requirements will be included in the PWS in the formal solicitation, 

scheduled for release sometime in 2006. We believe that failure to 

include security requirements in the draft PWSs further 

demonstrates the Mint’s inadequate planning and implementation 

of the competitive sourcing process. 
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The Mint Did Not Finalize or Comply with Its

Draft Directive for Circular A-76 Competitions

The Mint showed a clear understanding of Circular A-76’s 

requirements when it developed Draft Directive MD 2A-2, 

“Performance of Commercial Activities,” dated October 2003, 

which proposed policy for implementing Circular A-76. If the Mint 

had effectively complied with all of the draft directive’s 

requirements, it should not have overlooked or mishandled several 

of Circular A-76’s requirements. 

Among the provisions of the Policy Section of the draft directive, 

are the following: 

• The Mint’s Office of Competitive Sourcing (OCS) will conduct 

study feasibility analyses to determine which activities would be 

the best candidates for competitive sourcing studies because of 

their potential for process improvements and cost savings. 

• Prior to the official announcement of a study, OCS will 

complete all preliminary planning activities as outlined in Circular 

A-76. 

In addition, Section 7 of MD 2A-2 states, all policy statements 

listed in Section (4) of this directive are considered critical 

requirements for implementing the U.S. Mint’s competitive sourcing 

program. 

While the draft directive contained many of Circular A-76’s major 

requirements, the Mint’s management has neither finalized 

MD 2A-2 nor issued replacement guidelines for conducting and 

preparing for Circular A-76 streamline and standard competition 

processes in the nearly 3 years since the BAU standard competition 

began. 

Despite a clear understanding of necessary steps to take before the 

announcement of a standard competition, as demonstrated in the 

instructions in MD 2A-2, the Mint (1) did not conduct feasibility 

analyses of the BAU activities, (2) did not complete all of the items 

required to be completed before the formal announcement of the 

standard competition, and (3) has not adequately managed the 

standard competition. 
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The Mint Requested a Deviation from Certain Circular

A-76 Requirements after the Allowed Time Period

On April 20, 2005, the Mint through the CSO proposed to OMB a 

deviation from Circular A-76’s standard competition requirements. 

Circular A-76 requires the CSO to request and obtain written 

approval from OMB for any deviations from Circular A-76. If OMB 

approves a deviation, the agency is required to include the 

approved deviation in the public announcement and solicitation for 

a standard competition. Treasury made the public announcement of 

the BAU standard competition on October 23, 2003. Treasury did 

not formally request a deviation from Circular A-76 until more than 

18 months after the public announcement, which is contrary to the 

requirement to include the approved deviation in the public 

announcement. 

The deviation would allow the Mint to solicit coin blanks as a 

supply item from private providers, instead of soliciting the service 

of converting strip into coin blanks. Among other things, this would 

mean that private providers would supply the strips used to 

produce blanks (purchasing them from private suppliers unless they 

produced strips themselves) instead of performing BAU services on 

Mint-supplied strips. The MEO proposal, however, would continue 

to be for provision of BAU services on Mint-supplied strips. The 

competition would therefore be transformed from a comparison of 

the cost of services among public-sector and private-sector service 

providers to a make-buy decision. 

In the proposed deviation request, the Mint stated that it “will 

establish a solicitation package with quality specifications, delivery 

requirements, and forecasted demand. Each potential bidder will 

submit a bid per denomination with the expectation that it will 

receive a percentage between 60% - 40% of the business based 

on price. The intent was that if the work was moved to the private 

section, two geographically separate contractors would be awarded 

contracts to provide the Mint with blanks. The agency tender will 

be valued using actual calculated overhead costs.” 

On July 14, 2005, OMB approved the deviation, with the following 

requirements: 

 
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• The Mint was to deviate from the Circular only to the extent 

necessary to conduct a comparison between the agency tender 

and combined private-sector offers. 

• The Mint was to reannounce the competition in FedBizOpps.gov 

and describe the procedures to be followed pursuant to this 

deviation. 

• The Mint was to conduct vendor outreach and publish the draft 

statement of work on FedBizOpps.gov to give prospective 

private sector bidders and the incumbent in-house provider, the 

MEO, an opportunity to comment. In this regard, OMB directed 

the Mint to do the following: 

a. At a minimum, the Mint was to hold a pre-bidders 

conference. OMB also encouraged the Mint to host a 

website to allow for posting of questions and answers. 

b. The Mint was to specifically seek feedback on its intention 

to limit any one private-sector provider’s participation to no 

more than 60 percent of the government’s needs. 

c. The Mint was to advise OMB of the general feedback to its 

draft PWS, including any concerns raised by the private 

sector that might discourage their participation in the 

competition and steps taken to address the concerns. In this 

regard, the Mint was instructed to build sufficient time into 

its competition timeline to give meaningful consideration to 

any such concerns. 

On September 16, 2005, the Mint issued a draft solicitation that 

encompassed the changes it obtained through its deviation request 

and that included the OMB requirements noted above. 

The Mint completed its analysis of the questions and comments 

received in response to the September 2005 draft solicitation and 

posted the responses on November 10, 2005. Treasury has 

advised OMB regarding the general feedback to the PWS in the 

September 2005 draft solicitation and the results of visits made by 

potential bidders to the Mint’s two production facilities. 

The Mint, however, is continuing to revise its schedule for 

completing the competition study and has not developed a written 

plan for how it will compare and evaluate the bids per 
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denomination from potential bidders with the MEO tender. We 

believe that a written plan is essential to ensure a fair competition. 

Management Response

The Mint agreed that it did not request its deviation in a timely 

manner because of difficulties in defining performance elements 

and in deciding the optimal way to treat government-furnished 

property to meet the intent of comparing the cost of buying 

planchets to the cost of producing planchets in-house. Once the 

Mint resolved these issues, it requested and received approval from 

OMB for a deviation. Since the deviation was not approved before 

the initial competition was announced, the deviation was requested 

and approved then the solicitation was re-issued, which the Mint 

believes improved the solicitation. The deviation required the Mint 

to issue a new public announcement and solicitation that included 

the OMB-approved deviation; however, the Mint believes that 

OMB’s approval of the deviation made the Mint’s non-compliance 

with Circular A-76 moot. 

OIG Comment

We agree with the Mint that it did not comply with the Circular 

A-76 requirements regarding a deviation because of difficulties it 

experienced in complying with all of the Circular A-76 

requirements. We continue to believe that if the Mint had 

adequately planned the BAU competition and timely complied with 

the Circular A-76’s requirements, the Mint would likely not have 

had to request a deviation; therefore, we believe this supports our 

conclusion that the Mint did not perform adequate initial planning. 

The Mint Did Not Obtain the CSO’s Written Approval

for Including a Performance Bond Requirement

Circular A-76 requires that the CO obtain prior written approval 

from the CSO if an agency solicitation requires a private sector 

source to acquire a performance bond. A performance bond 

provides the government an element of protection from financial 

loss from contractor nonperformance because an insurance 

company issues the performance bond that guarantees a 

contractor’s satisfactory completion of a project. 
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The Mint’s reissued draft solicitation in September 2005 included a 

requirement for a performance bond. Our review of this draft PWS 

revealed that this was a new requirement not contained in previous 

draft PWSs. As of the date of this report, the Mint has not received 

written approval from the CSO for inclusion of a performance bond 

requirement. 

Management Response

The Mint stated that OMB Circular A-76, Appendix B, para. 

D3a(10), states, “If an agency requires a private sector source to 

include a performance bond, the CO shall obtain prior written 

approval from the CSO” (emphasis added). The Mint believes that 

this issue raised by this finding is not pertinent because the Mint 

has not issued a solicitation that “requires a private sector source 

to include a performance bond” requirement; indeed, the agency 

has not yet issued any solicitation. The Mint stated further that it 

wanted industry feedback on a possible Performance Bond 

requirement before issuing a final solicitation; and believes it has 

benefited from feedback received as a result of including this 

requirement in the draft solicitation. The Mint stated that, if the 

United States Mint determines that the work “requires a private 

sector source to include a performance bond,” the agency will, of 

course, obtain the CSO’s approval before issuing a solicitation that 

includes such a requirement. 

OIG Comment

We do not agree with the Mint’s response because to date the 

Mint has only issued draft BAU documents and solicitations and in 

its draft solicitation cover document the Mint stated that it 

intended to issue a formal solicitation on October 24, 2005. This 

cover document clearly stated that it was a draft solicitation 

document, but did not state that the Mint only included the 

performance bond requirement because it wanted industry 

feedback. In our opinion, the Mint’s draft solicitation document 

informed all private sources that it was likely the Mint’s intent to 

require a performance bond; therefore, we believe the CSO’s prior 

approval should have been obtained. 
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The Mint’s Estimate of Time Required to Move BAU Equipment 

to Supply Contractors’ Facilities May Not Be Sufficient

The Mint is offering its existing BAU equipment for use by all 

potential bidders – in-house by the MEO team and outside by 

supply contractors. The Mint currently has 11 separate BAU 

production lines located at its production facilities, in Denver and 

Philadelphia. Each line consists of the BAU equipment necessary 

to convert the raw material called strip, which is supplied by strip 

manufacturers, into individual coin blanks for each denomination of 

coin. 

The Mint’s draft September 16, 2005, solicitation provided that if 

the work is awarded to the private section, the Mint would transfer 

the BAU equipment to the successful bidders in 6 months. Mint 

officials informed us that approximately 6 months would be 

required to disassemble each line, transport it to a new location, 

assemble and install it, and test it. Based on the amount of time 

necessary to move one line and the need to move only two lines at 

once in order to maintain production capacity, we estimate that it 

could take up to 3 years to relocate all current BAU production 

equipment. Therefore, the Mint’s proposed 6-month transition 

timeframe for contractors does not appear reasonable. 

Management Response

The Mint responded that the Phase-In Period will ultimately be that 

which is proposed by the successful providers of the supply or 

service. The Mint further indicated that its estimate was an 

approximation based on the information available prior to obtaining 

the feedback and, as such, the agency always had anticipated the 

need to make adjustments. With the benefit of this feedback, the 

agency agrees with the finding and, indeed, would acknowledge 

that the agency’s estimate was, in fact, not sufficient.

OIG Comment

We agree with the Mint’s comment that this feedback is beneficial 

to the Mint; however, it appears that the Mint intends to accept 

the successful providers’ estimates for the phase-in period rather 
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than determining the phase-in period that best supports the Mint’s 

mission. 

The Mint Responded to More Than 300 Questions,

Concerns, and Comments from Interested Parties

The Mint responded to more than 337 questions, concerns, and 

comments it received on the September 16, 2005, draft 

solicitation, associated technical exhibits and attachments, site 

visits, and a pre-bidders conference. The Mint reported that “the 

great majority of the questions were answered; however, a very 

small number remain works in progress.” 

The questions, concerns, and comments ranged from relatively 

simple matters to more serious concerns about issues that could 

cause further delays or protests of the final selection if not timely 

and fully addressed. We found that the items and corresponding 

responses fell into the following general categories (some items 

had multiple parts, and we counted each part as a separate item): 

• The Circular A-76 process (20) 

• Government contracting and contract performance (26) 

• GFP (105) 

• GFP utilities requirements (32) 

• Personnel needs (5) 

• Raw materials and strip (22) 

• Solicitation (113) 

• Security (6) 

• Transportation (16)

Some of the more significant issues raised involved GFP, the draft 

solicitation, and security requirements. Some sample GFP items 

were: 

• It was asked how will it be determined which company 

receives what equipment; 

• Will there be equipment provided to the companies for the 

destruction of condemned blanks; 

• What type of equipment is required to treat the waste water 

stream and will it be included in the GFE; 

• What security equipment is required; 
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• Please clarify the justification for the GFP decision in light of 

the risk of having a significant amount of wasted square 

footage in the event the contractors win; and 

• Will quality test equipment be supplied as part of the GFE? 

Some examples dealing with the draft solicitation included: 

• Changing the proposed closing date for the formal 

solicitation changed to June 30, 2006 (which represents an 

approximately 6-month extension of the previously estimated 

closing date); 

• Auditing of cost information should not be necessary in 

I.3613 because the solicitation is a competitive bid process, 

not a cost plus arrangement; what is the time-line for the 

balance of the draft solicitation; 

• Since numerous dates were offered during the site visits, is 

there an estimated time-line for the formal solicitation 

process? The Mint’s response was that it expected to make 

a performance decision in the first quarter of calendar year 

2006; and 

• The two existing strip manufacturers, both of whom have 

expressed an interest to the Mint in competing for the BAU 

work. The Mint’s September 16, 2005, draft solicitation 

requires outside vendors, if selected, to acquire metal strip 

independent of the Mint’s current strip contracts. The MEO 

would continue to use the Mint’s current strip contracts. 

Potential vendors other than the two current strip 

manufactures would therefore have to independently obtain 

metal strip. The two current strip manufacturers could price 

other potential bidders out of competition by increasing the 

cost of the strip so that only those two strip manufacturers 

could submit competitive bids. 

Some security items included: 

• What are the security requirements for: 

o Physical plant, fences, etc. 

o Inside the operations, employees, visitors, etc. 

 

13 The solicitation’s section I.36, Audit and Records, reserves the right for the CO to examine and audit 

the Contractor’s documentation to evaluate the cost or pricing data submitted and all costs claimed to 

have been incurred or anticipated to be incurred in performing this contract. 
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o Defined security plan? 

• What are the security requirements for each denomination and 

facilities? 

• Will more information regarding security be included in the final 

solicitation? 

Subsequent to the Mint answering the questions, concerns, and 

comments from the previous site visits and draft PWS, the Mint 

issued another draft PWS in December 2005. Another 139 

questions were received from potential bidders. The Mint will not 

issue a final solicitation until these additional questions are 

answered. 

Management Response

The Mint responded that the volume of questions received reflects 

both the interest by all concerned and the complexity of this 

competition. Management believes that many questions were 

excellent and helped the Mint improve the solicitation; others were 

duplicative; still others required the Mint to simply clarify a 

relatively straightforward issue. The Mint stated that it responded 

to every question and concern, posted those responses, and 

incorporated them into the body of the draft solicitation package 

that was posted. 

OIG Comment

We agree with the Mint’s comment; however, we believe that had 

the Mint preformed adequate preliminary planning many of the 

questions or areas of concern would likely not have occurred and 

the time required to be spend answering the same or similar 

questions or areas of concern would likely have been reduced. 

ATO Questions and Concerns Need Attention 

The ATO (Mint official responsible for the MEO bid to retain the 

BAU function in-house) raised the following questions and concerns 

on the approved deviation and the September 16, 2005, draft 

solicitation: 
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• The deviation provided that the Mint compete two outside 

supply contracts against the MEO as one service contract, 

“which creates many disparities and complications in the areas 

of performance measurement, quality control and production 

flexibility in meeting a supply vs. services contract.” These 

mandates could ultimately create a significant discrepancy 

between the supply contractors’ actual cost submission (which 

could be a higher amount) and the supply contractors’ 

comparison costs (which could be significantly lower due to 

adjustments made by the CO to adjust for OMB’s deviation 

approval requirements and the GFP and GFE restrictions 

mandated in the solicitation). 

• The purpose of the standard competition is to ensure that 

public-private competition is used effectively to reduce costs 

associated with the production of coin blanks. Since the supply 

contractors are prohibited from utilizing the government’s 

facilities but are being offered GFE, many of the potential supply 

contractors’ actual costs to produce coin blanks (such as 

transportation of equipment to their facilities and of coin blanks 

back to the Mint — both significant costs) might not be 

considered when their bids are compared to the Mint’s bid 

during the cost comparison. 

• With all of the references to reducing the Mint’s BAU operating 

costs, the ATO expressed concern about the preliminary 

planning to determine the baseline costs. The Mint responded 

that it would update the baseline costs. 

• While the MEO developed its agency tender nearly 2 years ago, 

the Mint’s current schedule only provides outside bidders 

11 weeks to prepare their bids. According to Mint officials’ 

responses at the pre-bidders conference, the Mint has no plans 

to extend the timeframe despite concerns raised by the 

vendors. A vendor could appeal a decision based on an 

assertion that the timeframe did not allow sufficient time to 

prepare an accurate bid. 

• Another concern among potential supply contractors could be 

the cost of moving the BAU equipment to contractors’ facilities 

and transporting the finished coin blanks from the contractors’ 

facilities to the Mint’s facilities. A potential vendor could appeal 

a decision based on an “un-level playing field” because 

contractors would bear these transportation costs while the 

MEO would not. If such costs are not considered during the 
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competition, however, the result could be exclusion of millions 

of dollars in contractor expenses to produce coin blanks. 

Management Response

The Mint responded that it considered all the ATO’s concerns and 

incorporated a number of items into the solicitation; however, 

many of the questions and concerns raised issues as to the viability 

of the OMB-approved deviation. These issues were raised, and the 

Mint claimed it analyzed and thoroughly considered in the vetting 

and approval process for the deviation. Accordingly, the Mint 

believes that, once the deviation was approved, these issues 

effectively were subsumed in, or dismissed by, the decision to 

grant the deviation. At that point, these concerns became no more 

actionable than concerns raised by interested parties during the 

public comment period prior to OMB’s promulgation of the revised 

Circular A-76. 

OIG Comment

We do not agree with the Mint’s comment because we only cited 

the ATO’s questions and concerns that were submitted during the 

comment period after the Mint had already received the OMB 

approved deviation and issued a draft solicitation that included the 

deviation. 

Conclusion

The Mint has reported spending nearly $0.5 million on the BAU 

standard competition in fiscal years 2004 and 2005 and has 

incurred additional costs in fiscal year 2006. To date the Mint has 

not received any benefits from the standard competition and does 

not have a realistic ending date established. Based on the 

significant actions needed by the Mint to address the conditions in 

this finding, we have little confidence that the Mint can bring the 

BAU A-76 standard competition, as currently designed, to a 

successful conclusion within a reasonable period of time. Many of 

the problems can be attributed to a lack of sufficient planning, as 

required by Mint Draft Directive MD 2A-2, before the standard 

competition was announced in October 2003, and planning 

continued to be problematic as the Mint shifted its approach to the 
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standard competition several times during the ensuing nearly 

3 years. 

Management Response

The Mint acknowledged to having spent over $.5 million on the 

BAU competition, but it disagrees with the report’s conclusion that 

it has not received any benefits to date. Aside from a wealth of 

knowledge gained on the process by both the MEO and PWS 

Teams, the Mint believes it solidified the need to approach this 

competition differently, which resulted in the request to OMB for a 

deviation to Circular A-76. 

OIG Comment

We do not agree with the Mint’s comment because the Mint has 

not completed the BAU standard competition, which is required to 

be completed within a year of the public announcement. Over 

3 years will have transpired between the Mint’s announcement of 

the initial BAU standard competition and its plan to complete a 

business case analysis by December 31, 2006. If the business case 

analysis indicates that the BAU competition should be completed, 

we believe it will likely take the Mint another 6 to 12 months to 

complete the standard competition or about 4 years after it 

embarked on competition. While the Mint may have gained a 

wealth of knowledge from this process, we are unsure if that will 

be enough to mitigate the fact that it required so long to complete 

the standard competition. 

Recommendation 

We recommend that the Mint Director expeditiously complete a 

formal business case analysis to determine whether the activity 

should continue to be competed. If the business case analysis 

shows that it is still warranted, the Mint should continue with the 

standard competition. If the business case analysis shows that it is 

not warranted, the Mint should work with the Department to 

cancel the BAU standard competition. 
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Management Response

The Mint agrees with our recommendation. It responded that it is 

developing a business case analysis to determine if the best course 

of action is to proceed with the BAU competition or take 

alternative action to ensure that the Mint makes or purchases 

planchets as efficiently and cost-effectively as possible. Several 

alternatives would be analyzed, and the business case analysis will 

be forwarded to the Department for feedback. Once a decision is 

made regarding how to proceed, the Mint will implement the 

results of the decision. If a decision is made to discontinue the 

competition, we will work with the Department to cancel it. If 

another decision is made, we will work with all necessary parties 

to implement the required action in an expeditious manner. Mint’s 

management is targeting December 31, 2006, for the completion 

of the business case analysis and obtaining a final determination. 

OIG Comment

The action proposed by the Mint satisfies the intent of our 

recommendation. If possible, the Mint should complete its business 

case analysis as quickly as possible and expediently implement the 

decision. If this analysis shows that the BAU competition is still 

warranted, the Mint should expediently implement the standard 

competition after completing appropriate and through planning, and 

addresses the deficiencies noted in our report. If this analysis 

shows that the BAU competition is not warranted, the Mint should 

work with the Department to expediently cancel the BAU standard 

competition. 
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* * * * * * 

We appreciate the cooperation and courtesies extended to our 

staff. If you have any questions, please contact me at 

(202) 927-5904. 

Thomas E. Byrnes 

Director, Procurement Audits 
Appendix 1 

Objective, Scope, and Methodology 

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Objectives 

The study objectives were to: (1) determine whether the Mint had 

taken corrective actions to address the five recommendations we 

made in our October 29, 2004, Interim Audit Report, OIG-05-002, 

MANUFACTURING OPERATIONS: Mint’s Standard A-76 

Competition Study for the Preparation of Ready-to-Coin Planchets 

Is Delayed and Requires Significant Actions to Complete; 

(2) determine the current status of the Mint’s BAU standard 

competition; and (3) determine whether the BAU costs reported for 

fiscal years 2004 and 2005 were accurate and complete. Although 

we did not review the Power Industrial Truck Circular A-76 

standard competition, some of its fiscal year 2004 costs were 

intertwined with BAU standard competition costs and are referred 

to, as necessary, in this report. 

Scope 

We began this phase of our study in November 2004. This report 

covers Mint activities related to BAU Circular A-76 activities 

through March 2006.

Methodology 

 

As part of our fieldwork, we visited the Mint’s Washington, D.C., 

headquarters; the Mint manufacturing facility in Denver, Colorado; 

and Treasury’s Departmental Offices. We interviewed key 

personnel involved in the Circular A-76 BAU standard competition 

and reviewed contract file and other relevant documentation. We 

also interviewed a key member of the staff of the support 

contractor hired to help Mint personnel conduct the Circular A-76 

competition. Additionally, we reviewed the Mint’s timeline and 

progress to assess whether it was meeting the required time limits 

for Circular A-76 standard competitions and the deviation approved 

by OMB. 

We conducted our audit in accordance with generally accepted 

government auditing standards.
Appendix 2 

Specific Agency A-76 Requirements 

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Circular A-76 requirements for federal agencies include the 

following: 

• Inventory all activities performed by government personnel 

as either commercial or inherently governmental. 

• Perform a public-private competition to determine if 

government personnel should perform a commercial activity. 

• Before the public announcement of a standard competition, 

complete, at a minimum, the following preliminary planning 

steps: 

1. Scope—determine the activities and full-time equivalent 

position to be competed. 

2. Grouping–conduct preliminary research to determine the 

appropriate grouping of activities as business units. 

3. Workload Data and Systems—assess the availability of 

workload data, work units, quantifiable outputs of 

activities or process, agency or industry performance 

standards, and other similar data. Establish data 

collection systems as necessary. 

4. Baseline Costs—determine the activity’s baseline costs as 

performed by incumbent service provider. 

5. Type of Competition—determine whether to use a 

streamlined14 or standard competition.15

6. Schedule—develop preliminary competition and 

completion schedules. 

7. Roles and Responsibilities of Participants—determine roles 

and responsibilities of participants in the process and 

their availability for the duration of the competition. 

8. Competition Officials—appoint competition officials. 

9. Incumbent Service Provider—inform any incumbent 

service providers of the date that the public 

announcement will be made. 

• Apply the FAR, in conjunction with Circular A-76, for 

streamlined and standard competitions and comply with 

 

14 A streamlined competition is generally used when the number of full-time equivalents is 65 or fewer. 

15 A standard competition is generally used when the aggregate number of full-time equivalents exceeds 

65. 
Appendix 2 

Specific Agency A-76 Requirements 

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procurement integrity, ethics, and standards of conduct 

rules. 

• Designate, in writing, an assistant secretary or equivalentlevel official with responsibility for implementing Circular 

A-76, hereafter referred to as the CSO. For the BAU 

competitive study, the CSO is the ASM/CFO of Treasury. 

Except as otherwise provided by Circular A-76, the CSO may 

delegate, in writing, specified responsibilities to senior-level 

officials in the agency or agency components. 

One of the CSO’s responsibilities that may not be delegated 

is the requirement to notify OMB if the agency does not 

complete the competitive study within the established 12-

month timeframe. Another responsibility that the CSO may 

not delegate is to receive prior written OMB approval to 

deviate from Circular A-76 (e.g., time limit extensions, 

procedural deviations, costing variations for a specific 

streamlined or standard competition, inventory process 

deviation). According to Circular A-76, “Agencies shall 

include any OMB approved deviations in the public 

announcement and solicitation for a streamlined or standard 

competition.” 

• Post on SHARE A-76, which is the Department of Defense 

A-76 knowledge management systems used to share 

knowledge, information, and experience about public-private 

competitions, lessons learned and best practices resulting 

from a competition process. 

Key personnel in the OMB A-76 process include the following: 

• The ATO is an inherently governmental agency official with 

decision-making authority, is responsible for the agency 

tender, leads the MEO, and represents the agency tender 

during source selection. 

• The CO is an inherently governmental agency official 

participating on the PWS team and is responsible for the 

issuance of the solicitation and the source selection 

evaluation methodology. 
Appendix 2 

Specific Agency A-76 Requirements 

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• The CSO is an inherently governmental agency official 

responsible for the implementation of Circular A-76 within 

the agency. 

• The Human Resource Advisor is an inherently governmental 

agency official and is a human resource expert to assist the 

ATO in developing the agency tender. 

• The MEO Team is a group of individuals comprising technical 

and functional experts and formed to assist the ATO in 

developing the agency tender. 

• The PWS Team, led by a team leader, is responsible for 

developing the PWS, determining whether to offer GFP, 

assisting the CO with the solicitation, developing the QASP, 

and implementing the performance decision. The PWS team 

leader makes all final management decisions regarding the 

PWS, GFP, and the QASP. 
Appendix 3 

Management Response 

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Appendix 3 

Management Response 

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Appendix 3 

Management Response 

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Appendix 3 

Management Response 

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Appendix 4 

Major Contributors To This Report 

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 Production Should Be Continued (OIG-06-036) 

Thomas E. Byrnes, Director, Procurement Audits 

John F. Lemen, Audit Manager 

Cynthia S. McKelvin, Audit Manager 

Ricardo M. Cabarrouy, Auditor-in-Charge 

Andras O. Schneider, Auditor 

Catherine S. Yi, Referencer 
Appendix 5 

Report Distribution 

MANUFACTURING OPERATIONS: The Mint Needs to Determine Page 39

 Whether Its Long-Delayed A-76 Competition for Coin Blank 

 Production Should Be Continued (OIG-06-036) 

The Department of the Treasury

Assistant Secretary for Management and Chief Financial Officer 

Office of Strategic Planning and Performance Management 

Office of Accounting and Internal Control 

United States Mint

Acting Director 

Office of Management and Budget

OIG Budget Examiner