Excessive Specifications Are Limiting Competition for IRS Special Design Tax Return Folders

GGD-82-61: Published: Mar 24, 1982. Publicly Released: Mar 24, 1982.

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GAO reviewed solicitations and contracts for the Internal Revenue Service's (IRS) procurement of special design tax return folders to identify restrictive conditions and specifications.

IRS buys significant amounts of paper folders annually and the folder specifications, which require manufacturers to use 14 point kraft paper with a minimum tear resistance of 920 grams and inward folding gussets, are more than necessary to fulfill IRS needs. The General Services Administration's (GSA) specifications for standard duty folders are much less restrictive but do conform to the standards developed by the Joint Committee on Printing (JCP). The paper industry works on a continuous basis with the JCP to establish specifications in such a way as to maximize competition on federal paper procurements. Production of folder paper with IRS specifications requires a special production run, and the high tear resistance requirement deters most companies from bidding. IRS received three responsive bids from the 30 companies solicited for the 1982 folder procurement. IRS program officials stated that the 14 point paper is necessary to ensure folder longevity and that folders with inward folding gussets are necessary because they pop open naturally when removed from the shipping carton. Both government and industry officials with whom GAO spoke agreed that IRS specifications are excessive and that the unique paper requirement contained in the specifications is unnecessary and is precluding many manufacturers from bidding. Further, officials also believe that the current gusset design is unnecessary and costly.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: IRS should evaluate its tax return folder specifications with a view toward using the less costly, standard 11 point kraft paper, which conforms to GSA and the Joint Committee on Printing guidelines. Using this paper will increase the number of bidders and enhance competition.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: Based on test results, IRS determined outward folding gussets were unsuitable and reverted to the inward folding gusset.

    Recommendation: IRS should, on a test basis, buy tax return folders with an outward folding gusset and subject these to actual work conditions to determine usability.

    Agency Affected: Department of the Treasury: Internal Revenue Service


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    GAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

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