[Federal Register Volume 64, Number 60 (Tuesday, March 30, 1999)]
[Notices]
[Pages 15190-15191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7666]


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OFFICE OF MANAGEMENT AND BUDGET


Performance of Commercial Activities

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

ACTION: Issuance of Transmittal Memorandum No. 19, amending OMB 
Circular No. A-76, ``Performance of Commercial Activities.''

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SUMMARY: This Transmittal Memorandum updates the Federal pay raise 
assumptions and inflation factors used for computing the Government's 
in-house personnel and non-pay costs, as generally provided in the 
President's Budget for Fiscal Year 2000. In addition, the standard 
retirement cost factors for the weighted average CSRS/FERS pension and 
Federal retiree health cost numbers are revised.

DATES: All changes in the Transmittal Memorandum are effective 
immediately on March 30, 1999, and shall apply to all cost comparisons 
in process where the Government's in-house cost estimate has not been 
publicly revealed before this date.


[[Page 15191]]


FOR FURTHER INFORMATION CONTACT: The Budget Analysis and Systems 
Division, NEOB Room 6002, Office of Management and Budget, 725 17th 
Street, NW., Washington, DC 20503, Tel. No. (202) 395-6104, FAX No. 
(202) 395-7230.

Availability

    Copies of the current OMB Circular A-76 and the March 1996 OMB 
Circular A-76 Revised Supplemental Handbook may be obtained by 
contacting the Executive Office of the President, Office of 
Administration, Publications Office, Washington, DC 20503, at (202) 
395-7332. These documents are also accessible on the OMB Home page. The 
online OMB Home page address (URL) is http:/www.whitehouse.gov/WH/EOP/
omb.
Jacob J. Lew,
Director.

Executive Office of the President,

Office of Management and Budget, Washington, D.C. 20503

March 24, 1999.
Circular No. A-76 (Revised)
Transmittal Memorandum No. 19
To The Heads of Executive Departments and Agencies
Subject: Performance of Commercial Activities

    This Transmittal Memorandum updates the Federal pay raise 
assumptions and inflation factors used for computing the Government's 
in-house personnel and non-pay costs, as generally provided in the 
President's Budget for Fiscal Year 2000.
    The non-pay inflation factors are for purposes of A-76 cost 
comparison determinations only. They reflect the generic non-pay 
inflation assumptions used to develop the FY 2000 Budget baseline 
estimates required by law. The law requires that a specific inflation 
factor (GDP FY/FY chained price index) be used for this purpose. These 
inflation factors should not be viewed as estimates of expected 
inflation rates for major long-term procurement items or as an estimate 
of inflation for any particular agency's non-pay purchases mix.

------------------------------------------------------------------------
                                                      military/civilian
   Federal pay raise assumptions effective date           (percent)
------------------------------------------------------------------------
January 2000......................................                   4.4
January 2001......................................                   3.9
January 2002......................................                   3.9
January 2003......................................                   3.9
January 2004......................................                   3.9
------------------------------------------------------------------------

    Non-Pay Categories (Supplies and Equipment, etc.)
FY 1998--1.2%
FY 1999--1.3%
FY 2000--2.0%
FY 2001--2.1%
FY 2002--2.1%
FY 2003--2.1%
FY 2004--2.1%
    Geographic pay differentials received in 1999 shall be included 
for the development of in-house personnel costs. The above pay raise 
factors shall be applied after consideration is given to the 
geographic pay differentials. The pay raise factors provided for 
2000 and beyond shall be applied to all employees, with no 
assumption being made as to how they will be distributed between 
possible locality and ECI-based increases.
    In addition, the standard retirement cost factors for the 
weighted average CSRS FERS pension and Federal retiree health cost 
numbers are reduced from those published in the March 1996 A-76 
Supplemental Handbook. These numbers are being revised because of 
downward estimates in actuarial normal cost estimates, which more 
than offset the gradual shift toward FERS in the total. However, the 
post-retirement health cost was revised up by a full percentage 
point. The net result is that the cost factors provided at Part II, 
Chapter 2, paragraph B.6. f. 1.a., are up by 0.3 to 0.6 percentage 
points. In addition, the current benefit component for Federal 
employee insurance and health benefits at Part II, Chapter 2, 
paragraph 6. f. 1.b is revised up by 0.1 percentage points on the 
health side to 5.7 percent. The Medicare factor of 1.45 at Part II, 
Chapter 2, paragraph 6. f. 1.b and the cost of miscellaneous fringe 
benefits of 1.7 percent at Part II, Chapter 2, paragraph 6. f. 1.c 
., are unchanged.

    Current Handbook--as printed in the March 1996 Revised 
Supplemental Handbook at Part II, Chapter 2, Paragraph 6.f.1.a (page 
20):
23.7% Regular (19.6 pension + 4.1 retiree health)
32.3% Air Traffic Controllers (28.2 pension + 4.1 retiree health)
37.7% Law Enforcement (33.6 pension + 4.1 retiree health)
    Revised Handbook--as provided by this Transmittal at Part II, 
Chapter 2, Paragraph 6.f.1.a (page 20):
24.0% Regular (18.9 pension + 5.1 retiree health)
33.0% Air Traffic Controllers (27.9 pension + 5.1 retiree health)
38.2% Law Enforcement (33.1 pension + 5.1 retiree health)
    Other Current Benefits--as provided at Part II, Chapter 2, 
Paragraph 6.f.1.b (page 20):
Current Handbook (March 1996) 5.6%
Revised per this Transmittal 5.7%

    These updates are effective as follows: all changes in the 
Transmittal Memorandum are effective immediately and shall apply to 
all cost comparisons in process where the Government's in-house cost 
estimate has not been publicly revealed before this date.
    Agencies are reminded that OMB Circular No. A-76, Transmittal 
Memoranda 1 through Transmittal Memorandum 14 are canceled. 
Transmittal Memorandum No. 15 provided the Revised Supplemental 
Handbook, and is dated March 27, 1996 (Federal Register, April 1, 
1996, pages 14338-14346). Transmittal Memoranda No. 16, 17 and 18, 
which provided the last three year's OMB Circular A-76 Federal pay 
raise and inflation factor assumptions are also canceled.

      Sincerely,
Jacob J. Lew,
Director.
[FR Doc. 99-7666 Filed 3-29-99; 8:45 am]
BILLING CODE 3110-01-P