DATE: November 19, 2002

SUBJECT: Office of Management and Budget (OMB); Revision of OMB Circular No. A-76, Performance of Commercial Activities

SOURCE: Federal Register, November 19, 2002, Vol. 67, No. 223, page 69769

AGENCIES: Office of Management and Budget (OMB)

ACTION: Proposed Revision

SYNOPSIS: OMB is proposing major revisions to OMB Circular No. A-76 to expand the use of public-private competitions to all activities performed in-house and through commercial inter-service support agreements (ISSAs), and to incorporate the principles of Federal Acquisition Regulation (FAR) Part 15, Contracting by Negotiation, into the competitive sourcing process.

EDITOR'S NOTE: The changes being proposed to OMB Circular No. A-76 are very similar to those proposed by the Commercial Activities Panel in its final report, "Improving the Sourcing Decisions of the Government." The panel, which was required by Section 832 of the Fiscal Year 2001 National Defense Authorization Act (Public Law 106-398) to study the transfer of commercial activities currently performed by government employees to federal contractors, recommended that the government adopt a procedure based on the procedures in FAR Part 15. For more on the Commercial Activities Panel and its report, see the May 1, 2002, FEDERAL CONTRACT DISPATCH "General Accounting Office; Commercial Activities Panel Final Report."

DATES: Interested parties should submit comments on or before December 19, 2002.

ADDRESSES: Comments may be submitted by e-mail to: A-76comments@omb.eop.gov; by fax to 202-395-5105; or by mail to David C. Childs, Office of Federal Procurement Policy, Office of Management and Budget, 725 17th Street NW, New Executive Office Building, Room 9013, Washington, DC 20503. However, OMB "strongly encourages" respondents to avoid using mail "due to potential delays in OMB's receipt and processing of mail..."

FOR FURTHER INFORMATION CONTACT: David C. Childs, OFPP, NEOB Room 9013, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503; 202-395-6104.

Copies of the proposed revision to OMB Circular No. A-76; the current OMB Circular No A-76; the Revised Supplemental Handbook; applicable Transmittal Memoranda, Office of Federal Procurement Policy (OFPP) Policy Letter 92-1, Inherently Governmental Functions; and OMB Circular No. A-97, Provision of Specialized or Technical Services to State and Local Units of Government by Federal Agencies Under Title III of the Intergovernmental Cooperation Act of 1968, are also available on the OMB website http://www.whitehouse.gov/OMB/circulars/index.html. Paper copies of any of these documents may be obtained by calling OFPP at 202-695-7479.

SUPPLEMENTARY INFORMATION: To lower government costs and improve program performance, OMB has undertaken major revisions to the processes and practices in OMB Circular No. A-76 that govern how federal agencies determine whether commercial activities will be performed by public or private sources. This effort is closely tied to the initiative in President Bush's management agenda calling for public-private sector competition of 20% of the non-inherently governmental activities required to be compiled by Public Law 105-270, Federal Activities Inventory Reform Act of 1998 (FAIR Act) by the end of Fiscal Year 2003 (September 30, 2003). The government could not achieve this goal using the current A-76 because it is cumbersome and very time-consuming. Therefore, OMB undertook a revision of A-76 to (1) mprove and expand the use of competition in public-private sourcing decisions; (2) better insure fairness, integrity, and transparency in the decision-making process; and (3) strengthen accountability for achieving results.

In addition to making significant changes, OMB is modifying the organization of A-76 to improve clarity and ease of use. The main body of A-76 (which would be a two-page document) lays out the basic policies and responsibilities that agencies must undertake. Guidance for carrying out these responsibilities, and a detailed glossary of acronyms and definition of key terms, are in six attachments:

      Attachment A -- Inventory Process
      Attachment B -- Public-Private Competition
      Attachment C -- Direct Conversion Process
      Attachment D -- Inter-Service Support Agreements
      Attachment E -- Calculating Public-Private Competition Costs
      Attachment F -- Glossary of Acronyms and Definitions of Terms

The following are the key changes in the proposed revision to OMB Circular No. A-76:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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