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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


July 2003
Vol. IV, No.7

CONTENTS

Revised OMB Circular A-76 Released
Lots of Different Kinds of DFARS Changes
OMB Addresses Emergency Procurements, Software
FY 2002 Spending Increases 6.7% to $265.3 Billion
Proposed FAR Changes on Compensation, Unsolicited Proposals



Revised OMB Circular A-76 Released,
Establishes 12 Month Period for Competitions

On May 29, the Office of Management and Budget (OMB) released its long-awaited revision of its Circular No. A-76, Performance of Commercial Activities. The circular establishes 12 months as the amount of time allotted for conducting a standard competition, and institutes a new streamlined competition procedure for activities involving 65 or fewer "full-time equivalents" (FTEs) that is to be conducted within 90 days. It is expected that the revised A-76 will help the Bush administration attain its goal of competing 50% of the 850,000 positions designated by agencies as "commercial in nature."

On November 19, 2002, OMB published a proposal for major revisions to A-76 (see the December 2002 Federal Contracts Perspective article "Proposed A-76 Revision to Rely on FAR Part 15 Procedures").

More than 700 public comments were submitted to OMB (for copies of the comments on the proposed revisions, see http://www.whitehouse.gov/omb/circulars/a076/comments/a76_list.html for e-mail comments, and http://www.whitehouse.gov/omb/circulars/a076/comments/faxed.html for faxed comments). As a result of these comments, significant changes have been made to the final version of A-76 (available at http://www.whitehouse.gov/omb/circulars/a076/a76_rev2003.pdf).

The following are the significant changes between the old A-76 and the new A-76 (as well as with the proposed A-76):

In addition, the General Accounting Office (GAO) is soliciting comments on two key legal questions regarding protests under the recent major revisions to A-76: (1) do the revisions to A-76 affect the standing of an in-house entity to file a protest with GAO; and (2) who would have the representational capacity to file such a protest. Under the old A-76, GAO consistently had found that federal employees and their unions could not protest any aspect of the A-76 competition because they were not "interested parties" -- neither individual federal employees, nor the MEO, nor the employees' union representatives are offerors. However, since the new A-76 incorporates many features of FAR Part 15, GAO believes it may be justified in reaching a different conclusion.

GAO is soliciting comments from contracting agencies, other federal agencies, individual federal employees, federal employee unions, contractors, and other private-sector firms, attorneys (from all sectors), and others wishing to express a view. Comments should be submitted by July 16, 2003, by e-mail to: A76Comments@gao.gov, or by facsimile to 202-512-9749. Comments may be sent by Federal Express or United Parcel Service to: Michael R. Golden, Assistant General Counsel, General Accounting Office, 441 G Street, NW, Washington, DC 20548.



Lots of Different Kinds of DFARS Changes

The Department of Defense (DOD) was very busy during June, issuing three final Defense FAR Supplement (DFARS) rules, two proposed DFARS rules, one FAR deviation, and notice of a public meeting.



OMB Addresses Emergency Procurements, Software

During June, the Office of Management and Budget (OMB) issued guidance on "Emergency Procurement Flexibilities," and instituted the SmartBuy program to reduce cost and improve quality in purchases of commercial software.



FY 2002 Spending Increases 6.7% to $265.3 Billion

Fiscal Year (FY) 2002 spending by the federal government set another record, surpassing the FY 2001 record of $248.7 billion by $16.6 billion, setting a new record of $265.3 billion -- a 6.7% increase. Much of the increased spending is attributable to the war in Afghanistan and homeland security, but practically every agency's spending went up. (NOTE: Because the Department of Homeland Security was not established until about a third of the way through FY 2003 (January 24, 2003), it does not appear in the FY 2002 statistics.)

The following are the largest agencies' FY 2002 spending totals (in billions) and the percentage change from FY 2001:

Defense$171.4+5.4%
Energy$19.2+5.3%
General Services Administration$13.4+4.7%
National Aeronautics and Space Administration$11.7+9.3%
Veterans Affairs$10.3+6.2%
Health and Human Services$6.4+30.6%
Justice$5.2+8.3%
Agriculture$4.2-2.3%
Transportation$4.1+46.4%
Treasury$3.6+2.9%
Interior$3.1+10.7%
State$2.7+22.7%
Commerce$1.7+30.8%
Labor$1.6+14.3%
Environmental Protection Agency$1.2+9.1%
Education$1.0+5.5%
Housing and Urban Development$0.9+17.5%
Agency for International Development$0.9+12.5%
Social Security Administration$0.7+16.6%
Office of Personnel Management$0.4+19.3%
Federal Emergency Management Agency$0.3+1.2%
National Science Foundation$0.2+8.4%
Miscellaneous Agencies$1.1+5.8%

The following states received the most federal contract money in FY 2002 (in billions), with their FY 2001 rank and dollar amount change in parentheses:

1. California (1)$32.0 (+$4.6)
2. Virginia (2)$24.8 (-$1.2)
3. Texas (3)$19.2 (+$4.5)
4. Maryland (4)$12.8 (+$2.6)
5. District of Columbia (5)$10.6 (+$0.5)
6. Florida (6)$8.6 (+$0.6)
7. Arizona (13)$7.0 (+$1.9)
8. Georgia (7)$6.9 (-$0.1)
9. Pennsylvania (10)$6.6 (+$0.6)
10. New York (14)$6.0 (+$1.0)


Proposed FAR Changes on Compensation, Unsolicited Proposals

Two proposed FAR changes were published on June 3:



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