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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: May 4, 2000

FROM: Barry McVay, CPCM

SUBJECT: Transmittal Memorandum No. 21 Amending Office of Management and Budget Circular No. A-76, Performance of Commercial Activities

SOURCE: Federal Register, May 4, 2000, Vol. 65, No. 87, page 25967

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

ACTION: Issuance of Transmittal Memorandum No. 21

SYNOPSIS: Transmittal Memorandum No. 21 updates the annual federal pay raise assumptions and inflation factors used for computing the government's in-house personnel and non-pay costs, as provided in the president's Fiscal Year (FY) 2001 budget.

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

DATES: All changes in Transmittal Memorandum No. 21 are effective May 4, 2000, and apply to all cost comparisons in process on that date where the government's in-house cost estimate has not been publicly revealed.

FOR FURTHER INFORMATION CONTACT: Mr. David C. Childs, Office of Federal Procurement Policy, New Executive Office Building Room 9013, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, 202-395-6104.

SUPPLEMENTAL INFORMATION: The following factors supersede those in Transmittal Memorandum No. 19 and should be applied as specified in the OMB Circular A-76 Revised Supplemental Handbook; Part II, Preparing the Cost Comparison Estimates; Chapter 2, Preparing the Cost of Government Performance (as revised by Transmittal Memorandum No. 20, June 14, 1999). Note that the civilian pay raise percentages are assumed to be the same as the military's. The non-pay inflation factors are for purposes of A-76 cost comparison determinations only. They reflect the generic non-pay inflation assumptions used to develop the FY 2001 Budget baseline estimates required by law. These inflation factors should not be viewed as estimates of expected inflation rates for specific major long-term procurement items or as an estimate of inflation for any particular agency's non-pay purchases mix.

The pay rate (including geographic pay differentials) that are in effect for FY 2000 are to be included for the development of in-house personnel costs. The pay raise factors provided for FY 2001 and beyond are to be applied to all employees, with no assumption being made as to how they will be distributed between possible locality and Employment Cost Index-based increases.

EDITOR'S NOTE: Transmittal Memorandum No. 21 contains a reminder that Transmittal Memoranda 1 through 14 and 16 through 18 are canceled. Transmittal Memorandum No. 15, dated March 27, 1996, provided the Revised Supplemental Handbook and remains in effect. Transmittal Memorandum No. 19, dated March 30, 1998, is cancelled except the standard retirement cost factors for the weighted average Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) pension and federal retiree health cost numbers and the post-retirement health costs remain in effect. Transmittal Memorandum No. 20, dated June 14, 1999, which implemented the Federal Activities Inventory Reform (FAIR) Act (Public Law 105-270), remains in effect.

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

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