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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: May 4, 2000

FROM: Barry McVay, CPCM

SUBJECT: Technical Changes to Office of Management and Budget Circular No. A-76, Performance of Commercial Activities, Revised Supplemental Handbook

SOURCE: Federal Register, May 4, 2000, Vol. 65, No. 87, page 25966

AGENCIES: Office of Management and Budget (OMB), Executive Office of the President

ACTION: Request for Comments

SYNOPSIS: OMB is requesting comments on three proposed technical changes to the OMB Circular A-76 Revised Supplemental Handbook.

EDITOR'S NOTE: Current A-76 guidance is available on OMB's Homepage at http://www.whitehouse.gov/OMB/circulars/index.html#numerical.

DATES: Comments must be submitted no later than June 19, 2000.

ADDRESSES: Office of Federal Procurement Policy, New Executive Office Building Room 9013, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, fax: 202-395-5105.

FOR FURTHER INFORMATION CONTACT: Mr. David C. Childs, Office of Federal Procurement Policy, 202-395-6104.

SUPPLEMENTAL INFORMATION: The following is an explanation of the three changes proposed for the A-76 Revised Supplemental Handbook:

  1. The Federal Activities Inventory Reform (FAIR) Act (Public Law 105-270) requires that agencies submit an "annual list of government activities not inherently governmental in nature" ("commercial activities inventory"). It gives an interested party 30 days to challenge an agency's list, gives the agency 28 days to respond, gives the interested party 10 days to appeal an adverse decision, then gives the agency 10 days to decide the appeal. The statute does not specify whether the days are "calendar" or "working" days.

    In OMB Circular A-76 Transmittal Memorandum No. 20, dated June 14, 1999, which amended the Revised Supplemental Handbook to provide guidance on compliance with the FAIR Act, OMB stated that the statutory 30-day and 28-day challenge and challenge response periods would be "calendar" days, while the 10-day appeal and appeal decision periods would be "working" days. Interested parties have told OMB that the 30 calendar day deadline for filing challenges was very difficult to meet in 1999. Therefore, OMB is proposing to revise paragraph G.3 of Revised Supplemental Handbook Appendix 2, Commercial Activities Inventory, to provide for 30 working days for a challenge. OMB would also revise paragraph G.4 to provide for 28 working days for a challenge response.

  2. The Department of Defense has pointed out that Part 1, Policy Implementation, Chapter 3, Cost Comparisons, paragraph K.1.e., which requires appellants to "demonstrate that the items appealed (in an A-76 cost comparison) individually or in aggregate, would reverse the tentative decision," appears to conflict with the statement at Part 1, Chapter 3, paragraph K.7., that states "the procedure...does not authorize sequential appeals." Since all concerns regarding the conduct of a cost comparison should be brought forward to the appeal authority within the single appeal period, OMB is proposing to delete the language in paragraph K.1.e.

  3. In the January 12, 1999, General Accounting Office (GAO) decision B-281224, DZS/Baker LLC, GAO expressed concerns about the propriety of including on an A-76 source selection team employees whose jobs are among those being considered for contracting out (in this case, the positions of 14 of the 16 Air Force employees on the source selection team would have been contracted out if a commercial firm had been selected). OMB has decided to strengthen its longstanding policy limiting such participation, by amending Part 1, Chapter 3, paragraph H.3.b, to read as follows:

    "The Government should establish a source selection evaluation or advisory team. Individuals who hold positions in the function under study should not be members of the team, unless an exception is authorized by the head of the contracting activity. Exceptions will be authorized only in compelling circumstances and, in such cases, the head of the contracting activity shall provide a written statement of the reasons for the action."

    FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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