** MANAGEMENT’S COMMENTS **


purchase of office furniture for the Chairman’s office suite, which has been vacant since
December 2006, for compliance with the Act and with federal acquisition regulations.

The OIG review focused on the FMC’s Office of Administration (OA) and the
role it plays in identifying furniture needs, addressing those needs in the procurement
process and tracking purchases against the $5,000 legal limit. We reviewed Commission
Orders 108, Personal Property Management, dated March 9, 2005, and 112,
Procurement, for internal guidance on furniture purchases. We researched furniture
purchases made in FY 2007 in the agency’s procurement files and identified all furniture
and redecorating expenses incurred by FMC Commissioners during the term of their
appointments.’ We then supplemented our understanding with interviews of FMC
procurement staff.

In addition to our document reviews, we interviewed the Commissioners and their
staff to discuss purchases made for them by the agency. We combined the interview
results with the results of our file search to construct a complete purchase history.

We interviewed staff in the Office of Financial Management (OFM) to discuss
controls in place to monitor spending on furniture by Commissioners. As a benchmark,
we contacted other small agencies in Washington, DC, to discuss how they control such
purchases.

To review the September 2007 purchase of the Chairman’s office furniture, we
identified purchase orders totaling $36,625 for new furniture in the Chairman’s private
office, conference and file rooms. We performed a walk-through of the area to verify and
match furniture ordered with the furniture received, and to ensure that we had purchase
orders for all new purchases. We discussed the furniture purchase with the Commis-
sioners, their advisors and OA finance and procurement staff. We met with officials from
GSA’s Office of Governmentwide Policy to discuss the procurement in relation to
guidance contained in GSA Bulletin FPMR D-232, Public Buildings and Space.

We conducted this compliance review from December 2007 — February 2008
using guidance contained in the 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 review
objectives. We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions.

Findings

The OIG review found that the FMC has complied with applicable laws and
regulations regarding funds expended on office space occupied or controlled by FMC
Commissioners. No Commissioner exceeded the $5,000 limitation. All Commissioners

' Atthe FMC, only Commissioners are Presidentially appointed and subject to the $5,000 limitation.
During the period of our review, there were four Commissioners at the FMC. One individual is awaiting
confirmation by the Senate for the fifth and final Commission vacancy.

-2-


identified three guidelines to consider when determining whether purchases fall under the
legislative limitation: :

L Age / Condition of Furniture — Furniture in need of replacement due to
visual condition or structural integrity OIG inspection of the furniture revealed
wear and tear. According to OA staff, much of the furniture was, with minor
exceptions, between 20 and 30 years old. One piece, the Chairman’s conference
table, was, in actuality, a dining room table (part of a table and chair set) that had
been purchased in the early 1990’s.

2 The furniture purchased is not a personal preference item The OIG
determined that no Commissioner had input into the decision to purchase the
furniture, nor did any Commissioner express preferences for style, color or any
other attribute. The OIG focused on the activities of the designated Chairman and
his influence or role in this regard. The OIG found no evidence to suggest that
the Chairman designate, a current FMC Commissioner, played any role or had
any influence, over the selection of the furniture or the decision to purchase
furniture. The decision to upgrade the Chairman’s office suite was a decision
made by OA staff. OA staff alone, working with interior designers from a GSA
vendor, designed and selected the furniture layout. Our discussions with the
design consultant verified that she worked only with OA staff.

3 The furniture will stay with the agency for its continued use. The OIG
verified that the furniture was purchased by OA with the intent that it be used for
several years by subsequent Chairmen. It would be impractical to remove large
pieces, unlike a piece of art or an accent item.

The OIG also contacted other agencies who informed us that they do not treat the
replacement of worn furnishings as items subject to the $5,000 limitation. While we do
not regard the activities of sister agencies as setting policy to be followed by the FMC,
their actions provide a useful benchmark as to how the limits are implemented elsewhere.

On the other hand, the OIG believes that OA should have informed the
Commission of its plans to purchase specific furniture for the Chairman’s office suite, to
include the price of the planned purchase. As it was, all Commissioners, who vote on the
application of unallocated funds to unmet needs, told the OIG that they were not aware
that the agency had made the furniture purchase, although all said that they were aware
that new furniture was under consideration. The OIG identified FY 2007 budget
allocation memorandums circulated to the Commission for its approval which identified
agency-wide furniture needs and plans to spend over $100,000 to address those needs,
but contained no mention of the Chairman’s office furniture.

The OIG believes that such a sensitive, potentially controversial purchase should
have been made explicit in the memoranda circulated. We do not believe that the
Director of OA violated internal guidance or Federal regulation by proceeding in the
manner he did. Commission Order 112, Procurement, delegates authority to the


the Commissioners. We attributed them to imperfect memories of events going back a
number of years. More importantly, all were under the $5,000 limit.

In one instance, one Commissioner was very close to exceeding the limitation.
One purchase order request, totaling $4,876, just $124 under the $5,000 limit, was made
in February, 2004. The following May, 2004, this Commissioner’s advisor requested a
new lamp. The OIG determined that the price of the lamp was $52, bringing the total
office furniture-related purchases to $4,928 — just $72 under the $5,000 limitation. The
advisor assured the OIG that the proximity to the $5,000 limitation was discussed with
OMS staff prior to making the purchase to avoid a violation of the limit.

The FMC has relied on the diligence and memories of staff to stay within the
$5,000 limitation. This has been a successful approach, but as the above example
illustrates, even an occasional small purchase can put the office very close to the $5,000
limitation unless meticulous records are maintained. Possible inadvertent violations are
especially likely during periods of procurement or finance staff turnover.

The OIG believes that OFM should establish a tracking system to record all
purchases subject to the $5,000 limitation. A file should be established for each
Commissioner that includes items purchased, purchase dates and amounts purchased.
The file should be maintained for the full tenure of each Commissioner.

The OIG also noted that all Commissioner office spaces were painted and
received new carpet as part of a larger agency-wide upgrade and maintenance of space.
Commissioners were provided an opportunity to make cosmetic selections, to include
paint and carpet colors. As these modifications were in keeping with routine, scheduled
maintenance for the entire agency, the agency did not include these sums in the
Commissioner totals for furniture / redecorating. The OIG concurs with this decision.

Recommendation 1. The OIG recommends that OFM develop a tracking
system to document purchases and improvements for Commissioners’ Office
spaces, including a justification for purchases that are not subject to the $5,000
limitation.

Finding 2._ The FMC’s Furniture Purchase for the Chairman’s Office did not
Violate the $5,000 Legislative Limitation

During the period of our review, the FMC operated without an appointed
Chairman. The former Chairman left the agency in December 2006. As of the issue date
of this report, the agency continues to operate without a Chairman.

Preceding our review, questions were raised to the OIG about a recent office
furniture purchase for the Chairman’s office suite. Few details were provided, although
questions were raised about the legality of the purchase, which totaled $36,625, in light


told the OIG that they were informed of the limitation on purchases by the OFM and
were thus aware of the requirement. Notwithstanding compliance, the FMC needs to do
more to track purchases occurring during the period of appointment for the agency’s
Commissioners to prevent unintended violations.

Our review of documentation indicated that the agency had violated Federal
Acquisition Regulation (FAR) 13.104, Promoting Competition, which requires soliciting
bids from at least three sources to promote competition to the maximum extent possible.
Management also violated its own policy that requires all procurement actions exceeding
$5,000 to be processed by the FMC’s contracted procurement agent in the Bureau of
Public Debt (BPD).

Finding 1. The FMC has Complied with Limits on Expenditures for Offices of
Presidential Appointees

The FMC is composed of five Commissioners appointed by the President with the
advice and consent of the Senate. Commissioners serve five-year staggered terms. The
President designates one of the Commissioners to serve as Chairman. During the period
of our review, the Commission was staffed by four-appointed Commissioners. No other
FMC employees are Presidential appointees.

The four sitting Commissioners have served for varying lengths of time at the
FMC. The longest serving Commissioner was initially appointed in 1994. The other
three Commissioners were appointed in calendar years 1999, 2002 and 2003.

In assessing compliance with the requirements of P.L. 101-136, as amended, the
OIG noted that the FMC does not maintain a tracking system to capture expenditures on
personal preference items by Presidential appointees. Consequently, we collected
information as a basis for our conclusion through discussions with the Commissioners
and with staff in the FMC’s OFM and Office of Management Services (OMS).

Without exception, the Commissioners told the OIG that they were aware of the
$5,000 limitation on purchases / renovations.” All told us that the OFM director apprised
them of this limitation soon after each arrived at the agency, coinciding with their first
purchase. Each Commissioner provided the OIG with documentation to support their
claim of adherence to the limits or described purchases in sufficient detail to enable the
OIG to create the purchase history.

To corroborate the information provided to us, the OIG’then met with OFM and
OMS staff to collect documents to support the claims and to inquire about any other
purchases that were made for these offices. The OIG noted that in some instances there
were discrepancies between what OFM/OMS provided to us and the discussions we held

2 Furniture purchases were made by three of four current FMC Commissioners during their tenures. One
current Commissioner has made no furniture or redecorating-related purchases to date.

-3-


mission-critical functions would continue. Routine needs, e.g., IT equipment purchases,
obligations for staff awards, furniture and supply purchases, were postponed unless
necessary to meet immediate agency needs.

As the fiscal year end approached, the Director, OA, held budget meetings among
office heads to identify unused funds and unmet spending needs. Unused funds were
allocated to areas within the agency with previously unaddressed needs. Fund
availability changed frequently. For example, with each passing pay period, the funds set
aside for the Chairman’s salary became available, as did funds tied to other vacant
positions within the agency. In addition, previously obligated funds for building security,
a planned staff relocation and various other unrealized travel and administrative
expenses, became available near fiscal year end to address previously unmet needs, to
include funds for staff performance awards, numerous IT-related upgrades and the
purchase of equipment and (agency-wide) furniture. It was during this period of fund
availability that the agency used $36,625 to purchase new office furniture for the
Chairman’s office.

Presidential appointees are limited to purchases totaling $5,000 over the life of
their appointment, as detailed in the following legislative provision:

During the period in which the head of any department or agency, or any other
officer or civilian employee of the Government appointed by the President of the
United States, holds office, no funds may be obligated or expended in excess of
$5,000 to furnish or redecorate the office of such department head, agency head,
officer, or employee, or to purchase furniture or make improvements for any such
office, unless advance notice of such furnishing or redecoration is expressly
approved by the Committees on Appropriations. For the purposes of this section,
the term “‘office’’ shall include the entire suite of offices assigned to the
individual, as well as any other space used primarily by the individual or the use
of which is directly controlled by the individual?

The OIG noted that the FMC did not have a Chairman during the period the
furniture was ordered (and delivered), which calls into question the applicability of the
provision that requires a presidential appointee to hold office when purchases are made.
However, because of the circumstances at the FMC, specifically (i) a current
Presidentially-appointed Commissioner, (ii) nominated to be the Chairman, (iii) was in a
position to request or influence a purchase (and thus violating the spirit of the provision),
we decided to proceed with our inquiry.

FMC guidance on Personal Property Management is contained in Commission
Order 108. This Commission Order establishes the basic policies and procedures
concerning the control and management of the agency’s personal property and sets forth
the responsibilities for management of Government-owned personal property. However,
it is silent on implementation of the $5,000 limitation. The OIG then reviewed
government-wide policy issued by GSA to assess whether a violation had occurred. GSA

3 Sec. 713 of the Consolidated Appropriations Act of 2008

=6e


Review of Expenses to Furnish,
Redecorate or Improve the Offices of
Federal Maritime Commissioners

A08-04

March 2008


Finding 4. Competitive Bidding Requirements were not Followed

Staff in the Office of Administration reviewed GSA supply catalogs to identify
and procure furniture for the Chairman’s office. Many manufacturers of goods and
materials do not offer GSA-negotiated pricing directly to Federal agencies. Rather,
agencies must go through vendors who have contracts with the manufacturers. In the
procurement of the Chairman’s furniture, the FMC selected a vendor that had prior
business relationships with the agency. The vendor then worked with the agency to
procure the desired items.

FAR 13.104, Promoting Competition, requires the federal government to seek
proposals from at least three sources when using the GSA schedule vendor list. In this
procurement, the agency sought only the assistance of one vendor, and did not obtain bids
from at least two other vendors as required by the FAR. While the price difference may
or may not have been material, the agency did not benefit from any competitive pressures
to receive services at the lowest possible price.

Recommendation 3. The OIG recommends that the Office of Management
Services ensure that FAR 13.104, Promoting Competition, is closely followed
when procuring supplies, materials, furniture and services for all procurement
actions not processed by the FMC’s procurement agent, the Bureau of Public
Debt.

Conclusion

The OIG determined that the FMC does not have procedures in place to track
furniture and decorating expenses by its Presidentially-appointed Commissioners.
Nevertheless, the agency has not violated the Congressionally-mandated limitation on
such purchases. This is due in large part to the diligence of staff in researching past
purchases by the Commissioners, a labor-intensive exercise made somewhat manageable
by the small number of procurement actions and the memories of staff. However, once
those who processed actions leave the Commission, the institutional memory will likely
leave with them, resulting in unintentional violations. At least one other agency we
spoke to has established a furniture / redecoration file which tracks all purchases in one
place. While some may argue that the absence of past violations negates the need to
establish systems, the efforts required to establish and maintain these systems are
minimal.

We also found no evidence to suggest that any Commissioner played a role in the
decision to purchase furniture for the Chairman’s Office suite or, once the decision was
made, to influence the characteristics of the purchases. We do, however, believe that the
Director, OA, should have notified the Commissioners of the furniture purchase.

Finally, the timing of the purchases — at the very end of the fiscal year, likely
facilitated the agency’s failure to seek competitive bids. Because the agency postponed
fulfilling legitimate needs throughout much of the year, it had to rush a number of


Executive Director (now the Director of Administration) to approve all purchases over
$10,000. However, the order also states that the Chairman will be assured of the efficient
discharge of procurement policies, procedures and responsibilities through conferences
with and reports from the Director of Administration and other officials with delegated
procurement authority. The OIG believes that this purchase, due to its amount and
potentially sensitive nature, should have been explicitly identified to the Commission,
acting in its capacity as the “chairman” of the FMC.

The OIG is not making a recommendation at this time to address this outcome.
Rather, we are planning to begin an audit of agency budget execution processes and
procedures within the next several weeks that will review how the agency monitors
spending.

Finding 3. | FMC did not Comply with Internal Policy Regarding Processing of
Procurement Actions

In OIG Audit Report No. A-07-02,* the OIG found that the agency issued a sole
source contract to a consultant in violation of Commission Order 109 and FAR
competitive sourcing requirements. The OIG recognized that the agency does not enter
into many large, competitive source contracts, and that it is sometimes difficult to keep
up with changing acquisition requirements. We recommended that the agency transfer
the contracting function to the BPD, the agency’s administrative service agent, to process
procurements over a predetermined amount.

In response, the agency agreed with the recommendation and, effective April 23,
2007, informed the OIG that it would send all procurements over $5,000 to the Bureau of
Public Debt for processing.

The furniture purchases made for the Chairman’s Office were detailed on four
purchase orders. Three of the four exceeded the $5,000 threshold and should have been
processed by BPD. The OIG verified that none of the purchases were processed by BPD.
Agency officials we spoke with indicated that the proximity to the end of the fiscal year
precluded transferring the procurement to BPD. BPD officials told the OIG that it
generally requires a 60-day lead time to process procurements at fiscal year end.

On the other hand, the agency is vulnerable to violating FAR regulations when
expediting procurements at year end. For example, as discussed in Finding 4. (below),
the agency did not seek competitive bids on the furniture purchase, potentially resulting
in the overpayment for services it received.

Recommendation 2. The OIG recommends that OMS establish controls to
ensure that FAR requirements are followed at year end when purchases are
made without assistance of BPD.

* Audit of Contracts FMC-05-00021 and FMC-06-00007, Procurement of Consulting Services

-8-


of the $5,000 purchase limitation. As the purchase pertained directly to the subject of
this review, the OIG chose to review the purchase in the context of the broader audit.

Based on our review of the facts surrounding the purchase, our review of other
Federal agency policies and practices and discussions with General Services
Administration personal property management policy staff, we have concluded that the
FMC did not violate the $5,000 legislative limitation on furniture purchases. We do,
however, believe that more needs to be communicated to the Commissioners when they
are asked to consider potentially controversial or high profile expenditures, as explained
below.

As a result of the absence of a Chairman, the remaining four Commissioners have
assumed responsibility as the chief executive and administrative officer of the agency.
This requires the Commission to vote on matters, including agency budgets and spending
priorities. One of the current FMC Commissioners has been nominated by the President
to be the agency’s next Chairman.

The idea to replace the furniture in the Chairman’s office originated in the Office
of Administration (OA) near the end of FY 2006. At that time the agency purchased new
furniture for the “Commissioners’ Conference Room;” space not used or controlled by
the Chairman. During this general timeframe, OA/OMS staff responsible for furniture
procurement began to discuss an “overhaul” of the Chairman’s office space to upgrade
furniture that in some instances was 20 years old or older and had never been refinished.
A visual inspection by the OIG of the furniture revealed numerous instances of wear and
tear.

During FY 2007, the FMC operated under a continuing resolution. Expenditures
were closely monitored to ensure that the agency had sufficient funds for required
spending items. Throughout the year, agency administrative staff discussed options
should unspent funds be available at fiscal year end. One of the needs identified by OA
staff was the Chairman’s office furniture.

Also during the fiscal year, one of the four sitting Commissioners (not the
Commissioner nominated to be the Chairman) approached his colleagues on the
Commission with the idea to replace the Chairman’s office furniture due to its age and
condition. He opined that the Chairman’s office is the “public face” of the agency and
therefore needs to reflect its status to visitors. No action was requested by this
Commissioner nor taken by the Commission.

According to this Commissioner, he also spoke to the OA Director about the need
to update the Chairman’s office furniture. The OA Director indicated to the
Commissioner that OA was already looking into replacing the furniture. At this point, the
Commissioner ceased his inquiries.

Since the Commission, like many Federal agencies, operated under a continuing
resolution for the entire year, the agency spent cautiously to ensure that payroll and other


Review of Expenses to Furnish, Redecorate or Improve the
Offices of Federal Maritime Commissioners

The Office of Inspector General (OIG) has completed a review of furniture
purchases and renovations pertaining to offices used or controlled by the Federal
Maritime Commission’s (FMC) Presidentially-appointed Commissioners. The review
focused on agency compliance with Section 614 of Public Law 101-136, as amended.
The law prohibits departments and agencies from obligating or expending in excess of
$5,000 for furnishing or redecorating offices for Presidential appointees during their
appointment period.

Background

General Services Administration (GSA) Bulletin, Federal Property Management
Regulation (FPMR) 215, dated August 19, 1988, prohibited agencies and departments
from spending or obligating more than $5,000 for renovating, remodeling, furnishing or
redecorating the offices of Presidential appointees. Any expenditures over this amount
required express approval by the House and Senate Appropriations Committees.

Section 614 of Public Law 101-136, dated November 3, 1989, prohibited Federal
departments and agencies from obligating or expending funds, in excess of $5,000, to
redecorate, to purchase furniture or to make improvements for the offices of Presidential
appointees. This limitation applied during the appointee’s complete term of office. The
law modified the GSA guidance in two ways: (i) it made the $5,000 limitation applicable
for the duration of each Presidential appointee’s term, and (ii) it deleted the words
“renovation” and “remodeling” from the $5,000 ceiling. The new language is contained
in the revised GSA guidance, GSA Bulletin FPMR D-232, dated December 11, 1992,
entitled Public Buildings and Space.

In 1992, Section 618 of Public Law 102-393, amended previous legislation by
defining “office” as the “entire suite of offices assigned to the appointee, as well as any
other space used primarily by the individual or the use of which is directly controlled by
the individual.” The language has appeared annually, most recently in Public Law 110-
161, the Consolidated Appropriations Act of 2008.

Objectives, Scope and Methodology

The objectives of this compliance review were to determine whether the Federal
Maritime Commission complied with applicable laws and regulations pertaining to the
$5,000 limit on redecorating by Presidential appointees and to determine whether
associated expenses are recorded and tracked during the complete term of office for each
FMC Commission member. As part of this effort, the OIG reviewed a September 2007


FEDERAL MARITIME COMMISSION
Office of Administration

Memorandum Date: March 4, 2008
To : Inspector General
From: Deputy Director of Administration

Subject : Review of Presidential Appointee Furniture Purchases

The instant review contains three recommendations. We are providing
corrective action advice concerning them herein.

Recommendation 1: The OIG recommends that OFM develop a
tracking system to document purchases and improvements for Commissioner
office spaces, including a justification for purchases that are not subject to
the $5,000 limitation.

Response: OA will establish a tracking system to record all purchases
subject to the $5,000 limitation, and will establish files for the tenure of each
Commissioner that include items purchased, purchase dates and amounts of
purchases, and will include a justification for purchases that are not subject to the
$5,000 limitation, i.e., modifications which do not involve personal preference items
such as routine agency-wide upgrades of furniture/redecorating and maintenance of
space. We have established a corrective action completion date of March 31, 2008,
for this recommendation.

Recommendation 2: The OIG recommends that OMS establish controls
to ensure that FAR requirements are followed at year end when purchases are
made without assistance of BPD.

Response: As the OIG pointed out in the review, while utilization of
BPD’s services is the preferred method of procurement for items which exceed the
$5,000 threshold, there are some limitations, given the significant lead time
requirement to effect such procurements; it is sometimes not possible to provide a
60-day lead time for such purchases, particularly at the end of a fiscal year.
Recognizing this, OMS will develop a “Simplified Acquisition Checklist” for staff to
use; the checklist will be based on one used by BPD and many other agencies to
help ensure that all appropriate steps are taken and documentation included in the


Our review of documentation indicated that the agency had violated Federal
Acquisition Regulation (FAR) 13.104, Promoting Competition, which requires soliciting
bids from at least three sources to promote competition to the maximum extent possible.
The FMC’s Office of Management Services relied on one vendor to assist the agency in
the Chairman’s Office furniture procurement. Management also violated its own policy
requiring all procurement actions exceeding $5,000 to be processed by the FMC’s
contracted procurement agent in the Bureau of Public Debt.

The OIG made three recommendations to address our concerns in these areas.
We also plan to begin an audit of budget execution to document how spending decisions
are implemented and monitored throughout the year.

We greatly appreciate the assistance of the Commission, Commissioners’ staff
and the Office of Administration for their valuable assistance and insights.


FEDERAL MARITIME COMMISSION
800 North Capitol Street, N.W.
Washington, DC 20573

March 18, 2008

Tel.: (202) 523-5863
Office of Inspector General Fax: (202) 566-0043
E-mail: oig@fme.gov

TO: Anthony Haywood, Deputy Director

Office of Administration Jf

FROM: — AdamR. Trzeciak /|
Inspector Gener: ~

SUBJECT: Transmittal of OIG Audit Report

The Office of Inspector General (OIG) has completed a review of furniture
purchases and renovations pertaining to offices used or controlled by the Federal
Maritime Commission’s (FMC) Presidentially-appointed Commissioners. The review
focused on agency compliance with Section 614 of Public Law 101-136, as amended.
The law prohibits departments and agencies from obligating or expending in excess of
$5,000 for furnishing or redecorating offices for Presidential appointees during their
appointment period.

The review found that the FMC has complied with applicable laws and
regulations regarding funds expended on office space occupied or controlled by FMC
Commissioners. No commissioner exceeded the $5,000 limitation. All Commissioners
told the OIG that they were informed of the limitation on purchases by the Office of
Financial Management and were, thus, aware of the requirement. Notwithstanding
compliance, the FMC needs to do more to track purchases occurring during the period of
appointment for the agency’s Commissioners to prevent unintended violations.

The OIG determined that a September 2007 purchase of furniture for the
Chairman’s Office suite, totaling $36,625, did not violate the $5,000 limitation. We
identified several mitigating circumstances, including our determination that no
Presidential appointee played any role in the purchase of furniture for this vacant office
suite. Rather, the agency’s Office of Administration acted to replace furniture that, in
many cases, was over 20 years old and showing signs of wear and age. On the other
hand, we believe the Office of Administration should have worked with the Commission,
to include notifying it of the planned purchase, before making this potentially sensitive
purchase.


purchases that ordinarily would have been spread out over the preceding months.
Unfortunately, the timing of agency budgets, including whether the agency receives a
budget, is beyond its control. Therefore the agency needs to establish controls to ensure
that, at a minimum, the agency follows regulations even under uncertain budgetary
conditions.

20s


procurement file. Further, the Contracting Officer will make it a practice to review
such procurement files to confirm that the checklist is used. We have established a
corrective action completion date of March 31, 2008, for this recommendation.

Recommendation 3: The OIG recommends that the Office of
Management Services ensure that FAR 13.104, Promoting Competition, is
closely followed when procuring supplies, materials, furniture and services
for all procurement actions not processed by the FMC’s procurement agent,
the Bureau of Public Debt.

Response: Please see comments relative to Recommendation 2
above. The corrective action contemplated for Recommendation 2 will achieve
corrective action for this Recommendation as well. We have established a
corrective action completion date of March 31, 2008, for this recommendation.

If you have. any questions regarding these actions, please let me know.

Anthony is Hog

cc: Directors OFM, OMS