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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: May 5, 2000

FROM: Barry McVay, CPCM

SUBJECT: Office of Management and Budget (OMB); Year 2000 Inventory of Commercial Activities

SOURCE: Memorandum from OMB Deputy Director Sylvia M. Mathews, April 27, 2000

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

ACTION: Issuance of Guidance on Compiling Year 2000 Inventories

SYNOPSIS: The Federal Activities Inventory Reform (FAIR) Act of 1998 (Public Law 105-270) requires federal agencies to prepare and submit to OMB, by June 30th of each year, inventories of their commercial activities performed by federal employees ("commercial activities inventories"). Because of problems encountered with the first annual inventories submitted in 1999, OMB is issuing revised guidance on the preparation of the inventories.

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

For more on a General Accounting Office (GAO) report that identified many of the problems OMB is seeking to correct with this guidance, see the April 24, 2000, FEDERAL CONTRACTS DISPATCH "General Accounting Office; Limited Understandability of FAIR Act Inventories."

For more on OMB's request for comments on the amount of time for the filing of challenges to agencies' inventories, see the May 4, 2000, FEDERAL CONTRACTS DISPATCH "Technical Changes to Office of Management and Budget Circular A-76, Performance of Commercial Activities, Revised Supplemental Handbook."

DATES: This memorandum is effective for the 2000 inventories that must be submitted by June 30, 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.

SUPPLEMENTAL INFORMATION: The FAIR Act requires that agencies submit an "annual list of government activities not inherently governmental in nature," and these "commercial activities inventories" are subject to challenge by interested parties.

OMB provided guidance on compliance with the FAIR Act on June 14, 1999, with the issuance of OMB Circular A-76 Transmittal Memorandum No. 20, which revised the OMB Circular A-76 Revised Supplemental Handbook. However, since the guidance was provided only two weeks before the first inventories were due, the quality of the inventories ranged from fair to poor. GAO analyzed the inventories of five agencies, and concluded that "the clarity and understandability of the five FAIR Act inventories...was limited." GAO found that OMB's list of function codes was incomplete, the function code descriptions were inadequate, OMB allowed agencies to use an expanded list of function codes that was not included in Transmittal Memorandum No. 20 (and some agencies developed and used "unique" codes), the formats of the inventories differed from agency to agency, and some agencies would only release the inventories to those who submitted a Freedom of Information Act request. All these factors limited the usability of the inventories, contrary to the intentions of the FAIR Act.

To correct most of these deficiencies, OMB is requiring the following changes be made to the 2000 inventory submittals:

In addition, OMB mentions that it is seeking comments on changing the amount of time for interested parties to submit challenges to the inventories from 30 "calendar" days to 30 "working" days, and for agencies to respond from 28 "calendar" days to 28 "working" days. This is being proposed to provide more time for interested parties and agencies to meet the deadlines. The proposed changes would be made to the A-76 Revised Supplemental Handbook, Appendix 2, Paragraph G, FAIR Act Review and Publication of Inventories; Challenges and Appeals Regarding Such Inventories (see the May 4, 2000, FEDERAL CONTRACTS DISPATCH "Technical Changes to Office of Management and Budget Circular A-76, Performance of Commercial Activities, Revised Supplemental Handbook").

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

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