United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1998-08-28 monographic deposited born digital 128 p. GA 1.13:GGD-98-181 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-98-181 P0b002ee18038bcea f:gg98181 DGPO 2010-08-12 2011-03-23 GAOREPORTS-GGD-98-181 machine generated eng fdlp REPORT GAOREPORTS-GGD-98-181 GGD-98-181 Currency and coinage Procurement practices Printing or duplicating Federal procurement Sole source procurement Buy national policy Competitive procurement Surveys Chapter Report GGD

Pursuant to a legislative requirement, GAO provided information on the: (1) optimum circumstances for the procurement of distinctive currency paper; (2) effectiveness of the Bureau of Engraving and Printing's (BEP) efforts to encourage competition in the procurement of currency paper; (3) fairness and reasonableness of prices paid for currency paper by BEP and the quality of the paper purchased; and (4) potential for disruption to the U.S. currency paper supply from BEP's reliance on a single source.<p/>GAO noted that: (1) the optimum circumstances for the procurement of distinctive currency paper would include an active, competitive market for such paper, where a number of responsible sources would compete for BEP's requirements; (2) however, these circumstances have not existed because of the unique market for currency paper and some statutory restrictions; (3) BEP has been aware of the need to increase competition and has made some efforts recently to do so in areas under its control; (4) however, BEP must procure currency paper within the current statutory framework, which limits currency paper contracts to 4 years, prohibits currency paper production outside of the United States, and prohibits purchase of currency paper from foreign-owned or controlled entities; (5) of the 20 paper manufacturers that responded to GAO's survey, 12 said they were interested in and have the capability now, or could be made capable in the near future, of supplying at least part of BEP's currency paper needs if existing statutory requirements and some of BEP's solicitation terms were changed; (6) 7 of the 12 are domestic paper manufacturers, and 5 are located in foreign countries; (7) although the long-term relationship between BEP and Crane & Co., Inc. has historically resulted in quality currency paper, BEP was unable to determine that it had obtained fair and reasonable prices for 13 of the 17 contract actions awarded from 1988 to 1997; (8) BEP sometimes accepted prices even though it was unable to determine that they were fair and reasonable because it had no other source for currency paper; (9) GAO believes that BEP's assessments of the fairness and reasonableness of Crane's proposed prices were hampered by a number of factors, including the lack of market prices for currency paper and the limited analyses of proposed costs and prices it performed; (10) as the government's agent for acquiring currency paper, BEP is responsible for ensuring that the government's supply of paper is not disrupted; (11) although the potential for disruption in the supply of currency paper exists, there have been no such disruptions; (12) however, for many years, because BEP did not maintain a reserve inventory of paper to provide for contingencies, it was more vulnerable to adverse consequences if a disruption had occurred and was at a disadvantage in its contract negotiations because it lacked an alternative source for currency paper; and (13) BEP has recently been purchasing paper to build a 3-month reserve supply and, under the Conte Amendment, could buy paper from a foreign source if no domestic source exists. https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-98-181/html/GAOREPORTS-GGD-98-181.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-98-181/pdf/GAOREPORTS-GGD-98-181.pdf GAO/GGD-98-181 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-98-181 Chapter Report GAO/GGD-98-181; Currency Paper Procurement: Meaningful Competition Unlikely Under Current Conditions; Currency and coinage Procurement practices Printing or duplicating Federal procurement Sole source procurement Buy national policy Competitive procurement Surveys Title 31 Section 5114 Title 31 Section 5114note 31 U.S.C. 5114 31 U.S.C. 5114note Title 41 Section 10a Title 41 Section 251-266 Title 41 Section 254b 41 U.S.C. 10a 41 U.S.C. 251-266 41 U.S.C. 254b Volume 111 Page 158 111 Stat. 158 Public Law 105-18