[Federal Register Volume 65, Number 87 (Thursday, May 4, 2000)]
[Notices]
[Pages 25966-25967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11155]


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OFFICE OF MANAGEMENT AND BUDGET


Request for Agency and Public Comments

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

ACTION: Request for agency and public comments.

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SUMMARY: The Office of Management and Budget (OMB) publishes a request 
for agency and public comments on three proposed technical changes to 
the OMB Circular A-76 Revised Supplemental Handbook.

DATES: Agency and public comments on the proposed changes are due to 
OMB not later than June 19, 2000.

ADDRESSES: Address all comments to the Office of Federal Procurement 
Policy, NEOB Room 9013, Office of Management and Budget, 725 17th 
Street, NW, Washington, DC 20503, FAX Number (202) 395-5105.

FOR FURTHER INFORMATION CONTACT: Mr. David C. Childs, Office of Federal 
Procurement Policy, Telephone No. (202) 395-6104.

AVAILABILITY: Copies of the OMB Circular A-76, its Revised Supplemental 
Handbook and currently applicable Transmittal Memoranda may be obtained 
at the OMB Home page. The online address (URL) is http://www.whitehouse.gov/OMB/circulars/index.html#numerical.
    Interested parties 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 dated March 27, 1996 (Federal Register, April 1, 1996, pages 
14338-14346) and remains in effect. Transmittal Memoranda No. 16, 17 
and 18, which provided previous A-76 related Federal pay raise and 
inflation factor assumptions are canceled. Transmittal Memorandum No. 
19, to the extent that it provided last year's A-76 related Federal pay 
raise and inflation factor assumptions, is canceled. The standard 
retirement cost factors for the weighted average CSRS/FERS pension and 
Federal retiree health cost numbers and the post-retirement health 
costs also provided by Transmittal Memorandum No. 19, remain in effect. 
Transmittal 20, which implemented the Federal Activities Inventory 
Reform (FAIR) Act, remains in effect.

SUPPLEMENTARY INFORMATION:
    1. In last year's Federal Activities Inventory Reform Act (FAIR) 
guidance (OMB Circular A-76 Transmittal Memorandum No. 20), OMB stated 
that the statutory 30-day and 28-day challenge and challenge response 
periods would be calendar days, while the 10-day appeal period would be 
working days. OMB is aware that the 30-day deadline for filing 
challenges was very difficult to meet in 1999. OMB therefore proposes 
to change, Appendix 2, paragraph g.3., of the Revised Supplemental 
Handbook to provide for 30-working days. It is likewise proposed that 
Appendix 2, paragraph g.4., be changed to reflect 28-working days.
    2. When asked what, if any, other changes are needed to the 
Supplemental Handbook, the Department of Defense expressed only one 
concern--that Part 1, Chapter 3, paragraph K.1.e., which requires 
appellants to ``demonstrate that the items appealed (in an A-76 cost 
comparison) individually or in aggregate, would reverse the tentative 
decision,'' appears to be in conflict with the statement at Part 1, 
Chapter 3, paragraph K.7., that provides that sequential appeals are 
not authorized. It has been suggested that these two statements create 
an inappropriate standard for the initial winner of the tentative 
decision. We agree. All concerns regarding the conduct of a cost 
comparison should be brought forward to the appeal authority within the 
single appeal period. Therefore, to ensure that all relevant concerns 
with the conduct of a cost comparison are brought forward, it is 
proposed that Part 1, Chapter 3, paragraph K.1.e. be voided.
    3. Recently, the General Accounting Office expressed concerns 
regarding the inclusion of Federal employees, whose jobs are included 
in an A-76 cost comparison study, as members of a related A-76 Source 
Selection Team. As a result, OMB has decided to strengthen its long 
standing policy limiting such participation, as a better business 
practice. Individuals who hold positions in an A-76 study should not be 
members of the Source Selection Team, unless an exception is authorized 
by the head of the contracting activity. Exceptions may be authorized 
only in compelling circumstances and, in such cases, the head of the 
contracting activity will provide a written statement of the reasons 
for the action. OMB has also been concerned that serving on a Source 
Selection Team develops certain important skills among the employees 
that the Government could be in greater risk of losing, if this 
``workforce investment'' became subject to being outsourced. OMB has, 
therefore, determined that restrictions on source selection evaluation 
or advisory team membership should be clarified. OMB proposes to revise 
Part 1, Chapter 3 paragraph H. 3.b. of the Revised Supplemental 
Handbook as follows:
    b. ``The Government should establish a source selection evaluation 
or advisory team. Individuals who hold positions in the function under 
study should not be members of the team, unless an exception is 
authorized by the head of the contracting activity. Exceptions will be 
authorized only in compelling circumstances and, in such cases, the 
head of the contracting activity shall provide a written statement of 
the reasons for the action.''

Sylvia M. Mathews,
Deputy Director.
Circular No. A-76 (Revised)
Transmittal Memorandum No. 22
To the Heads of Executive Departments and Agencies
Subject: Performance of Commercial Activities
    This Transmittal Memorandum implements changes to the OMB Circular 
A-76 Revised Supplemental Handbook in furtherance of the requirements 
of the Federal Activities Inventory Reform Act (``The FAIR Act''), 
Public Law 105-270 and to clarify other issues of concern. The March 
1996 Revised Supplemental Handbook was issued through Transmittal 
Memorandum 15, published in the April 1, 1996, Federal Register at 
pages 14338-14346. The March 1996 Revised Supplemental Handbook was 
further revised to implement the requirements of the FAIR Act on June 
14, 1999, Federal Register at pages 33927-33935.
    The Federal Activities Inventory Reform Act (FAIR) provides that 
there shall be a 30-day administrative challenge period available to 
interested parties who might wish to challenge and agency's decision to 
include or omit an activity from the list of potential commercial 
activities. As a part of OMB Circular A-76 Transmittal Memorandum No. 
20, dated June 14,

[[Page 25967]]

1999, OMB stated that the statutory 30-day and 28-day challenge and 
challenge response periods would be calendar days, while the 10-day 
appeal period would be working days. OMB is aware that the 30-day 
deadline for filing challenges was very difficult to meet in 1999. 
Appendix 2, paragraph g.3., of the Revised Supplemental Handbook is, 
therefore, revised to reflect 30-working days. Appendix 2, paragraph 
g.4., is also changed to reflect 28-working days.
    Concern has been expressed that Part 1, Chapter 3, paragraph 
K.1.e., may be in conflict with the statement at Part 1, Chapter 3, 
paragraph K.7., that provides that sequential administrative cost 
comparison appeals are not authorized. It is OMB's view that all 
concerns regarding the conduct of a cost comparison should be brought 
forward to the designated appeal authority within the single appeal 
period. Therefore, to ensure that all relevant concerns with the 
conduct of a cost comparison are brought forward, Part 1, Chapter 3, 
paragraph K.1.e. is hereby voided.
    And finally, OMB has been concerned that the use of Federal 
employees on Source Selection Teams, when those employees are subject 
to losing their jobs or otherwise being adversely affected by the award 
of the contract being reviewed by that Source Selection Team, is a poor 
business practice. OMB is also concerned that such a practice puts 
certain important skills that are developed by participating on a 
Source Selection Team at Risk. Therefore, OMB revises Part 1, Chapter 3 
paragraph H. 3.b. of the Revised Supplemental Handbook as follows:
    b. ``The Government should establish a source selection evaluation 
or advisory team. Individuals who hold positions in the function under 
study should not be members of the team, unless an exception is 
authorized by the head of the contracting activity. Exceptions will be 
authorized only in compelling circumstances and, in such cases, the 
head of the contracting activity shall provide a written statement of 
the reasons for the action. As a result, OMB has decided to strengthen 
its long standing policy limiting such participation, as a better 
business practice. Individuals who hold positions in an A-76 study 
should not be members of the Source Selection Team, unless an exception 
is authorized by the head of the contracting activity. Exceptions may 
be authorized only in compelling circumstances and, in such cases, the 
head of the contracting activity will provide a written statement of 
the reasons for the action.''
    All changes in this 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. Current A-76 guidance can be accessed at OMB's 
homepage at http://www.whitehouse.gov/OMB/circulars/index.html#numerical.

Sylvia M. Mathews,
Deputy Director.
[FR Doc. 00-11155 Filed 5-3-00; 8:45 am]
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