[Federal Register Volume 64, Number 32 (Thursday, February 18, 1999)]
[Notices]
[Pages 8151-8153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3882]


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OFFICE OF MANAGEMENT AND BUDGET


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

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of proposed supplemental revisions to OMB Circular A-97.

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SUMMARY: The Office of Management and Budget (OMB) publishes a notice 
of proposed supplemental revisions to OMB Circular No. A-97, ``Rules 
and Regulations Permitting Federal Agencies to Provide Specialized or 
Technical Services to State and Local Units of Government, Under Title 
III of the Intergovernmental Cooperation Act of 1968.'' This revision 
supplements OMB's proposed revisions to the Circular published in the 
Federal Register on January 14, 1998 (63 FR 2288), by proposing 
revisions to the certification process in paragraph 7.c. of the 
Circular. The proposed new certification requirements are intended to 
further the Circular's policy of ensuring that Federal agencies do not 
provide commercial services to State and local governments that they 
can procure reasonably and expeditiously from the private sector 
through ordinary business channels.

DATES: Written comments on the proposed supplemental revisions must be 
received on or before April 19, 1999.

ADDRESSES: Comments regarding the proposed changes to OMB Circular A-97 
should be addressed to Mr. David Childs, Budget Analysis and Systems 
Division, NEOB Room 6002, Office of Management and Budget, 725 17th 
Street, N.W., Washington, D.C. 20503, FAX Number (202) 395-7230. 
Comments regarding the collection of information requirements should be 
addressed to: Mr. Edward Springer, OMB Desk Officer, Office of 
Information and Regulatory Affairs, OMB, Room 10236, New Executive 
Office Building, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: Mr. David Childs, Budget Analysis and 
Systems Division, NEOB Room 6002, Office of Management and Budget, 725 
17th Street, N.W., Washington, D.C. 20503, Telephone Number: (202) 395-
6104.

SUPPLEMENTARY INFORMATION:

Availability

    Copies of the current OMB Circular A-97 may be obtained by 
contacting the Executive Office of the President, Office of 
Administration, Publications Office, Washington, D.C. 20503, at (202) 
395-7332, along with Circular A-76 (``Performance of Commercial 
Activities'') and its March 1996 Supplemental Handbook. These Circulars 
are also accessible on the OMB Home page. The online OMB Home

[[Page 8152]]

page address (URL) is http:/ www.whitehouse.gov/WH/EOP/omb.
    On January 14, 1998, OMB published in the Federal Register (63 FR 
2288) proposed revisions to OMB Circular A-97, ``Rules and Regulations 
Permitting Federal Agencies to Provide Specialized or Technical 
Services to State and Local Units of Government, under Title III of the 
Intergovernmental Cooperation Act of 1968.
    In response to the notice of proposed revisions, comments were 
submitted to OMB by one Federal agency, two private sector 
organizations, and one congressional staff person. Included within the 
comments received were concerns regarding paragraph 7.c. of the 
Circular. This notice responds to those comments and proposes revision 
to paragraph 7.c. (As noted at the end of this notice, other comments 
were received regarding the proposal. OMB will respond to those 
comments when it takes final action on the January 1998 notice and on 
this supplemental notice.)
    Among its requirements, paragraph 7 has provided that Federal 
agencies shall not provide specialized or technical commercial services 
to State or local governments unless the Federal agency receives a 
written request to provide the service from the State or local 
government; the requesting State or local government certifies that it 
cannot reasonably and expeditiously procure such services through 
ordinary business channels; and the Federal agency is already providing 
the service for its own use in accordance with OMB Circular A-76.
    In the proposed January 1998 revisions, these requirements were 
retained. However, OMB did propose to amend paragraph 7.c. so as to 
clarify that, before a Federal agency can provide ``commercial'' 
services to a State or local government, the Federal agency must first 
have conducted a cost comparison under Circular A-76 that supports the 
determination by the Federal agency to provide the service for its own 
use (63 FR 2289). This proposed clarification would ensure that the 
Federal provider of a commercial service had itself competed with the 
private sector (with respect to providing the service for its own use) 
and that therefore the services to be provided to the State or local 
government would be by a best value offeror.
    In response to the January 1998 proposed revisions, several 
concerns were expressed by commenters regarding the certification 
requirement of paragraph 7.c. One concern was that a one-time 
certification (as currently required by the Circular) may become 
outdated over the years by changes in technology, in industry, or in 
Federal, State or local procurement systems. Another concern was that 
the Circular's certification requirement, in its current form, is not 
sufficient to ensure that the requested services cannot be reasonably 
and expeditiously procured by the State and local government through 
ordinary business channels. It was suggested that the Federal agency, 
upon receiving a State or local government request to provide a 
service, issue its own public announcement/solicitation in the 
Commercial Business Daily and the Federal Register to identify private 
sector interest. Finally, one commenter suggested that the entire OMB 
Circular A-97 certification process be included in the Federal 
Acquisition Regulations.
    These concerns have prompted OMB to conduct a further review of the 
longstanding Circular A-97 certification requirement. As a result of 
this review, OMB is supplementing its proposed revisions to the 
Circular by proposing additional changes to paragraph 7.c. Under these 
changes, State or local governments that currently obtain services from 
Federal agencies would have to submit renewed certifications by 
September 30, 2000, in order for the Federal agencies to be able to 
continue to provide such services after that date. Thereafter, the 
certifications must be renewed every five years.
    Under the supplemental proposal, the certification would also 
include additional information. In support of its certification, the 
State or local government in its submission must outline how it 
solicited private sector interest in performing the service and must 
briefly explain the basis for its determination that it cannot procure 
the service, reasonably and expeditiously, through ordinary business 
channels. Each certification, including each five-year renewal 
certification, must include updated information regarding the ability 
of the State or local government to procure the requested service 
through ordinary business channels. Finally, each Federal agency must 
maintain an inventory of the services that it is providing to State and 
local governments, and must retain copies of the certifications. The 
inventories and certifications would be publicly available upon 
request.
    OMB believes that these proposed revisions to the certification 
process will ensure that the Federal government will not provide 
commercial services to State and local governments that they can 
procure, reasonably and expeditiously, through ordinary business 
channels.
    OMB is not proposing to adopt the other suggestions that we 
received concerning the certification process. In light of the existing 
certification process and the revisions to it that are proposed in this 
notice, it would be unnecessarily burdensome to require Federal 
agencies to issue their own public solicitations and announcements 
before responding to a request by a State or local government for a 
service. Finally, it would not be appropriate to place Circular A-97 in 
the Federal Acquisition Regulations (FAR). The FAR addresses the 
procurement of goods and services by the Federal government. Under 
Circular A-97, the Federal government is not procuring a service, but 
instead is providing one.
    In response to the January 1998 Federal Register notice, OMB 
received other comments regarding Circular A-97 and the proposed 
revisions to it. OMB will be responding to those comments, and to the 
comments received in response to this notice, when it takes final 
action on the January 1998 notice and this supplemental notice.

Regulatory Flexibility Act, Unfunded Mandates Reform Act, and 
Executive Order 12866

    For purposes of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the revisions to Circular A-97 that were proposed in January 
1998, together with the supplemental revisions proposed in this notice, 
would not, if promulgated, have a significant economic impact on a 
substantial number of small entities. The proposed revisions make 
largely procedural changes to the requirements of the Circular; the 
general intent and overall policy structure of the Circular would not 
be substantively changed by the adoption of these proposed revisions. 
For purposes of the Unfunded Mandates Reform Act of 1995 (Public Law. 
104-4), as well as Executive Order No. 12866, this proposal would not 
significantly or uniquely affect small governments, and would not 
result in increased expenditures by State, local, and tribal 
governments, or by the private sector, of $100 million or more.

Paperwork Reduction Act

    This proposal contains collection of information requirements 
subject to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). In 
support of its request that a Federal agency provide a service, a State 
or local government would have to submit, on a 5-year recurring basis, 
a certification that is already required that it cannot procure the 
service, reasonably and expeditiously, through ordinary business 
channels. State or local governments that currently obtain services 
from Federal agencies would

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have to submit renewed certifications by September 30, 2000, in order 
for the Federal agencies to be able to continue to provide such 
authorized services after that date. Thereafter, the certifications 
must be renewed every five years in order for the Federal agencies to 
continue to provide the authorized services. In support of its 
certification, the State or local government, in its submission to the 
Federal agency, must outline how it solicited private sector interest 
in performing the service and must briefly explain the basis for its 
determination that it cannot procure the service, reasonably and 
expeditiously, through ordinary business channels. Each certification 
(including the certifications that are due by September 30, 2000, 
certifications for new services, and the five-year renewal 
certifications) must include up-to-date information regarding the 
ability of the State or local government to procure the requested 
service through ordinary business channels.
    OMB estimates that it would take approximately 5 hours for a State 
or local government to collect the information requested, and would 
take approximately 2 hours for the State or local government to prepare 
and submit the information. OMB estimates that there will be 1500 
submissions regarding currently-provided services to be submitted by 
September 30, 2000, and approximately 300 submissions for new services 
per year. The total burden estimate for currently provided services is 
10,500 hours and 2,100 hours annually thereafter.
    Comments are solicited concerning the proposed collection of 
information requirements to: (1) Evaluate whether the proposed 
collection of information is necessary for the proper functions of 
Circular A-97 including whether the information will have practical 
utility; (2) Evaluate the accuracy of the estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) Enhance the quality, utility, and 
clarity of the information to be collected; and (4) Minimize the burden 
on those who are to respond, such as using appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses. Comments should be sent to the persons 
specified above (see ADDRESSES).
Jacob J. Lew,
Director.
    OMB hereby proposes to further amend OMB Circular A-97, as proposed 
to be revised at 63 FR 2288, January 14, 1998, by revising paragraph 
7.c. to read as follows:
    7. Conditions Under Which Services May Be Provided
    The specialized or technical services provided under Title III of 
the Act and this Circular may be provided only under the following 
conditions:
* * * * *
    c. Such services will not be provided unless--
    1. The agency providing the services is providing similar services 
for its own use and, if commercial in nature, are being provided in 
accordance with a cost comparison conducted under the policies set 
forth in the Office of Management and Budget's Circular No. A-76, 
``Performance of Commercial Activities,'' (Revised August 3, 1983) and 
its March 1996 Revised Supplemental Handbook.
    2. The requesting State or local government has certified that the 
requested service has been offered to private sector providers and 
cannot be procured reasonably and expeditiously through ordinary 
business channels. In order for a Federal agency to continue to provide 
a current service to a State or local government after September 30, 
2000, the Federal agency must receive a renewed certification from the 
State or local government prior to that date. Thereafter, renewed 
certifications must be received every five years in order for a Federal 
agency to continue to provide the service. In support of its 
certification, the State or local government, in its submission to the 
Federal agency, must outline how it solicited private sector interest 
in performing the service and must briefly explain the basis for its 
determination that it cannot procure the service, reasonably and 
expeditiously, through ordinary business channels. Each certification 
(including the renewed certifications that are due by September 30, 
2000, certifications in support of new requests, and the subsequent 
five-year renewal certifications) must include up-to-date information 
regarding the ability of the State or local government to procure the 
requested service through ordinary business channels. Each Federal 
agency must maintain an inventory of the services that it is providing 
to State and local governments, and must retain copies of the 
certifications. The inventories and certifications shall be publicly 
available upon request.
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[FR Doc. 99-3882 Filed 2-17-99; 8:45 am]
BILLING CODE 3110-01-P