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1 [1] (June 02, 2020)

handle is hein.crs/govdaqt0001 and id is 1 raw text is: a 'a, amm, Se : k e A-76 Competitions in the Department of Defense OMBt Cik-vcuanr A-76N Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities , establishes policy for the performance of recurring commercial services by federal agencies, stating thatthe policy ofthe federal government has been to rely on the private sector for needed commercial services, and that those commercial activities should be subjectto the forces ofcompetition. In the context of federal procurement, competition indicates a marketplace condition in which two or more entities, each acting independently, attempt to obtain business by submitting bids or proposals to provide goods or services. Requiring competition may serve to motivate reduced costs and improved performance. In the context of the A-76 process, competition also indicates a formal evaluation of sources to provide commercial services that uses pre- established rules and procedures. Circular A-76 categorizes services performed by government employees as either commercial or inherently govemmental in nature. Commercial services -such as medical care or maintenance of real property - are those that could be obtained through the private sector, but could also be provided by a government employee (i.e., the public sector). Two definitions of inherently govemmental services exist in federal law and policy: a statutory and a policy- focused definition. The statutory definition (as enacted through P.L. 105-270, the FAIR Act) describes an inherently governmental activity as one so intimately related to the public interest as to require performance by Federal Government employees. The policy-focused definition (as established by Circular A-76) describes an inherently governmental activity as one so intimately related to the public interest as to mandate performance by government personnel. Inherently governmental functions may include activities such as commanding U.S. military forces or determining U.S. foreign policy. Other sources of law or policy that define inherently governmental functions do so either by referencing the FAIR Act or Circular A-76. Most notably, the Federal Acquisition Regulation incorporates by reference the definition of Circular A-76, while the Office of Federal Procurement Policy's Policy Letter I 1-01 adoptsthe FAIR Act's definition. The general concept underlying Circular A-76 began as a statement of policy - thatthe federal government will not start or carry on any commercial activity to provide a service orproductforits own useifsuch service orproduct can be procured fronf'the private sector- issued bythe Eisenhower Adminis tration-eraBureau of the Budget (later OMB). That 1955 policy provided a framework for the development ofCircular A-76, which was first is sued in 1966. Circular A-76 has been revised andamendedover time, and was last substantially amendedin 2003. T'111h, ; - .. 7 .... C,,,. ... . i o ,n,r,e, s-'s Circular A-76 outlines acomplexprocess for conducting managed competitions, sometimes referred to as A-76 competitions orpublic-privatecompetitions. Services categorized as inherently governmental in nature are not subject to A-76 competitions. Executive branch agencies, such as the DepartmentofDefense (DOD), may use the Circular's guidanceand procedures to determine whether government sources or private-sector sources should performrecurring commercial-type services (i.e., those that are required on a consistent, long-termbas is). In carrying out a public-private competition under Circular A-76, executive branch agencies are requiredto: develop a performance workstatement that defines the technical aspects of the workto be performed; then determine the most efficient organizationalstructure to performthe work using thecurrent government workforce (called the MostEfficient Organization, or MEG) through realignment of existing management structures, personnel requirements, and procedures; and finally * conduct cost comparison studies among theprivate sector, other public agencies, and the current MEO to determine the most cost effective option for work performance. Circular A-76 provides two forms of public-private competitions: astreamlinedcompetition that mustbe completed within 90 calendar days (extendable by no more than 45 calendar days) and a standardcompetition that must be completed within 12 months (extendable by no more than 6 months). Section 2461 of Title 10, United States Code (U.S.C), also specifies that DOD public-private competitions may notexceed 24 months (or 33 months, upon determination of the Secretary of Defense). In order to compare public sector and private sector personnel, materiel, and overhead costs on a relatively cons istentb asis, Circular A-76 provides anumberof standard factors to calculate public sector costs. For example, general and administrative overhead rates are calculated at a set rate of 12% of labor cos ts, with no allowance for inflation. In order to prevent conversion of commercial-type services fromthe public to the private sector for marginal estimated savings, private sectorbids are also subjectto an conversion differential calculated as the lesserof 10% of agency laborcosts or $10million. DOD may not decide in favor of the private sector unless the private sectorbid equals or exceeds the lesser of $10 million or 10% ofpublic-sectorpersonnelcosts for A A '2 Updated June 2,2020