OMB directed U.S. Mint to reopen job competition

The U.S. Mint, the Treasury Department bureau responsible for creating coins, reopened a job competition involving forklift operators after the Office of Management and Budget urged them to do so.

According to documents provided to Government Executive by the American Federation of Government Employees, in April 2005, the acting assistant secretary for management at Treasury reversed a previous decision to award the contract to the federal employee team. Jesus H. Delgado-Jenkins, who has since left the department, wrote, "Based on OMB's direction, the Mint should reopen the [competition] in order to solicit expressions of interest from local and small businesses."

The competition, which involves about 60 employees responsible for operating forklifts in Denver and Philadelphia, was first announced in October 2003. When the Mint closed the solicitation in September 2004, it had not received any private sector bids, but did receive one from a team of federal employees.

The contracting officer investigated the lack of interest from the private sector by contacting four potential vendors, and determined that none were suitable because they specialize in maintaining and renting equipment and not supplying forklift operators.

As a result, in November 2004, the contracting officer recommended that the agency accept the bid from the federal employee team. Delgado-Jenkins approved this decision in February 2005.

He rescinded his approval of that decision two months later after OMB "provided direction to the department," according to his April 2005 memo.

OMB does not typically get involved in agency decisions regarding specific job competitions or contracts. The U.S. Code regarding the Office of Federal Procurement Policy, the arm of OMB that develops procurement policy, includes a "noninterference with executive agencies" clause that specifies OFPP should not "interfere with the determination by executive agencies of specific actions in the award or administration of procurement contracts."

Diana Price, procurement specialist for AFGE, which represents employees involved in the competition, called the situation an example of OMB overstepping its authority. "Federal agencies that follow the competitive sourcing rules but don't come to OMB with plans to privatize federal jobs are being sent back to do it again," she said.

An OMB spokeswoman said the agency often is consulted when a competition doesn't attract any private sector bids. "When activities in a competition are highly commercial in nature, OMB often recommends reopening a competition if the private sector decides not to bid," said spokeswoman Sarah Hawkins.

"Ultimately, agencies decide or determine if they want to reopen a competition," she added. She said that in the past two years, job competitions involving two or more private sector bidders generated 20 to 40 percent more savings than did competitions that did not attract any private sector bids.

A Mint spokeswoman also defended OMB's involvement in the reopening of the competition. "Although neither OMB nor the Treasury Department intervenes in the procurement process of an agency, they may provide guidance on how an agency can best comply with A-76. This is essentially what happened in this particular case," she said.

Allan Burman, president of the federal arm of Jefferson Consulting Group and former OFPP chief, said it is not clear if OMB acted improperly in this case. "You always try to stay out of individual contracting actions… on the other hand, the purpose is to try to get competition," he said.

OMB's revised Circular A-76, which governs job competitions, says that if an agency receives no private sector bids, then the contracting officer must investigate the reasons and recommend that the agency either revise the solicitation or award the contract to the federal employee team.

In this case, the contracting office spoke with four potential private sector bidders to determine why they did not place bids. Those companies were Hyster Incorporated in Cleveland, Ohio; Yale Forklifts of Greenville, N.C.; Nissan Forklift Corp. in Marengo, Ill.; and Clark Material Handling Company of Lexington, Ky.

The contracting officer discovered that none of the companies were aware of FedbizOpps, the Web site through which agencies announce solicitations for bids. In addition, the contracting officer determined that none of the companies were well-suited to perform the work required.

According to a Mint employee who asked not to be identified, the agency plans to again extend the deadline for bids past the current June 17 deadline in the hopes of attracting more private sector bidders. The employee said that the Mint is preparing to place advertisements for the competition in local newspapers.