Book Description

Office of Management and Budget (OMB) Circular A-76 provides guidance for federal agencies on how to conduct public-private competitions. The outcome of a competition determines who â€" government agency or private business â€" will perform commercial activities. (A commercial activity is a service that could be performed by the private sector.) OMB Circular A-76 was issued initially in 1966; the Circular No. A-76 Revised Supplemental Handbook was first issued in 1979. The handbook provided guidance for implementing Circular A-76 policy and included procedures for conducting A-76 cost comparisons. In 1999, the Federal Activities Inventory Reform (FAIR) Act of 1998 (P.L. 105-270) was incorporated into the circular and the handbook. The most recent A-76 revision, which was issued in 2003, is arguably the most significant change to the circular and its supplement in the documentâ€TMs history. The revision is one of several steps the Bush Administration has taken to further its competitive sourcing initiative, which is one of the components of the Presidentâ€TMs Management Agenda (PMA). Other activities include the promotion of competitive sourcing goals and the requirement that agencies submit lists of their inherently governmental activities to OMB. (An inherently governmental activity is a function that is so intimately related to the public interest that it must be performed by federal government employees, according to OMBâ€TMs Circular No. A-76 (Revised), May 29, 2003, p. A-2.) Combining the circular and the Circular No. A-76 Revised Supplemental Handbook into one document, OMB modified the definition of “inherently governmental,â€ŗ established the concept of an agency tender (which is the governmentâ€TMs response to a solicitation), and eliminated the direct conversion option. Under this option, and as long as certain conditions were met, agencies were allowed to convert a function from in-house performance to private-sector performance without conducting a cost comparison. Several of the latest changes to Circular A-76 have generated a significant amount of interest. Requirements for the preparation of commercial activities and inherently governmental inventories have changed, and the latter inventories now are subject to challenge and appeal processes. The deadline for what are now called standard competitions has been shortened, with the expectation that agencies will complete a host of planning activities prior to beginning a competition. These and other changes have raised questions about the ability of agencies to comply with the revised circular and other competitive sourcing requirements. Possible implications for the civil service system and federal employees is another area that has garnered attention. This report will be updated if there are further changes to the circular or information about implementation of the circular becomes available.