DATE: August 15, 2003

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

SOURCE: Federal Register, August 15, 2003, Vol. 68, No. 158, page 48961

AGENCIES: Office of Management and Budget (OMB)

ACTION: Technical Correction

SYNOPSIS: OMB is making a technical correction to the revised OMB Circular A-76 to clarify that an interested party may challenge the inclusion or exclusion of an activity in an inventory, including the classification or reclassification of an activity.

EDITOR'S NOTE: The revised OMB Circular No. A-76 is available at http://www.whitehouse.gov/omb/circulars/a076/a76_rev2003.pdf.

For more on the revision of OMB Circular No. A-76, see the May 29, 2003, FEDERAL CONTRACTS DISPATCH "Office of Management and Budget (OMB); Revision of OMB Circular No. A-76, Performance of Commercial Activities."

EFFECTIVE DATE: August 15, 2003.

FOR FURTHER INFORMATION CONTACT: Mathew Blum, Office of Federal Procurement Policy, NEOB Room 9013, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503; 202-395-4953.

SUPPLEMENTARY INFORMATION: The Federal Activities Inventory Reform (FAIR) Act of 1998 (Public Law 105-270) requires federal agencies to prepare annual inventories of activities performed by their employees that, in the judgment of the head of the agency, are not inherently governmental. Under Section 3 of the FAIR Act, an interested party may submit to an executive agency a challenge of an omission of a particular activity from, or an inclusion of a particular activity on, an agency's inventory. The version of A-76 that was in effect prior to May 29, 2003, authorized an interested party to submit a challenge to the inclusion or exclusion of an activity from the agency's inventory (see the old A-76's Revised Supplemental Handbook, Appendix 2, Commercial Activities Inventory, Paragraph G, Inventory Review and Publication; Challenges and Appeals).

On May 29, 2003, OMB issued the revised A-76. Attachment A to A-76, Inventory Process, provides guidance regarding agencies' responsibility to prepare annual inventories that categorize all activities performed by their government personnel as either commercial or inherently governmental. Paragraph D, Inventory Challenge Process, of Attachment A describes the processes that agencies must make available to interested parties for challenging agency inventories of commercial or inherently governmental activities. Paragraph D.2 states, "The inventory challenge shall be limited to (a) the reclassification of an activity as inherently governmental or commercial, or (b) the application of reason codes."

In its notice of technical correction, OMB says, "The use of the term 'reclassification' in D.2(a) has created confusion in that it suggests that an interested party may not challenge an agency's determination that an activity is commercial or inherently governmental unless the determination has changed from prior years. Notwithstanding the wording of D.2(a), OMB did not intend to impose such a limitation. Instead, OMB intended to continue to provide that interested parties may submit challenges to an activity's classification as commercial or as inherently governmental, and such challenges would include the reasons for the interested party's belief that an activity which the agency classified as 'commercial' should be reclassified as inherently governmental or that an activity which the agency classified as 'inherently governmental' should be reclassified as commercial." To clarify this matter, OMB is changing the word "reclassification" in paragraph D.2(a) of Attachment A to "classification."

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

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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