[Federal Register Volume 68, Number 50 (Friday, March 14, 2003)]
[Notices]
[Page 12388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6127]



[[Page 12388]]

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OFFICE OF MANAGEMENT AND BUDGET


OMB Circular No. A-76, Performance of Commercial Activities

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

ACTION: Issuance of Transmittal Memorandum No. 25, amending OMB 
Circular No. A-76, ``Performance of Commercial Activities.''

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SUMMARY: This Transmittal Memorandum updates the annual 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 2004.

DATES: All changes in the Transmittal Memorandum are effective 
immediately and shall apply to all OMB Circular A-76 cost comparisons 
in process where the government's in-house cost estimate has not been 
publicly revealed before this date.

FOR FURTHER INFORMATION CONTACT: Mr. David C. Childs, Office of Federal 
Procurement Policy, NEOB, Room 9013, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, Tel. No. (202) 395-6104.
    Availability: Copies of the OMB Circular A-76, its Revised 
Supplemental Handbook and currently applicable Transmittal Memoranda 
changes may be obtained at the online OMB Homepage address (URL): 
http://www.whitehouse.gov/omb/.

Mitchell E. Daniels, Jr.,
Director.

Circular No. A-76 (Revised), Transmittal Memorandum No. 25

To the Heads of Executive Departments and Agencies
Subject: Performance of Commercial Activities.

    This Transmittal Memorandum updates the annual 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 2004.
    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 fiscal year 2004 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.

                      Federal Pay Raise Assumptions
                              [In percent]
------------------------------------------------------------------------
                Effective date                    Civilian     Military
------------------------------------------------------------------------
January 2002..................................          4.6      \1\ 6.9
January 2003..................................          4.1          4.7
January 2004..................................          2.0          4.1
January 2005..................................          3.4          3.4
January 2006..................................          3.4          3.4
January 2007..................................          3.4          3.4
January 2008 \2\..............................          3.4         3.4
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\1\ Average of various longevity- and rank-specific increases.
\2\ Any subsequent years included in the period of performance and cost
  comparison shall continue to use the 3.4% figures, until otherwise
  revised by OMB.


            Non-Pay Categories (Supplies and Equipment, etc.)
------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
FY 2002......................................................        1.3
FY 2003......................................................        1.3
FY 2004......................................................        1.5
FY 2005......................................................        1.5
FY 2006......................................................        1.6
FY 2007......................................................        1.7
FY 2008......................................................   \1\ 1.8
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\1\ Any subsequent years included in the period of performance and cost
  comparison shall continue to use the 1.8% figure, until otherwise
  revised by OMB.

    The pay rate (including geographic pay differentials) that are 
in effect for 2003 shall be included for the development of in-house 
personnel costs. The pay raise factors provided for 2004 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.
    Agencies are reminded that OMB Circular No. A-76, Transmittal 
Memoranda 1 through Transmittal Memorandum 14 are canceled. 
Transmittal Memorandum No. 15 provides the Revised Supplemental 
Handbook, and is dated March 27, 1996 (Federal Register, April 1, 
1996, pages 14338-14346). Transmittal Memoranda No. 16, 17, 18 and 
19 (to the extent they provided Circular A-76 federal pay raise and 
inflation factors) are canceled. Transmittal Memorandum No. 20 
provided changes to the Revised Supplemental Handbook to implement 
the Federal Activities Inventory Reform Act of 1998 (Pub. L. 
105.270). Transmittal Memorandum No. 21, provided A-76 federal pay 
raise and inflation factor assumptions and is canceled. Transmittal 
Memorandum No. 22 made technical changes to the Revised Supplemental 
Handbook regarding the implementation of the FAIR Act, A-76 
administrative appeals and, the participation of directly affected 
employees on A-76 Source Selection Boards and their evaluation 
teams. Transmittal Memorandum No. 23 and Transmittal Memorandum No. 
24, which provided last year's Circular A-76 federal pay raise and 
inflation factor assumptions are canceled.

Mitchell E. Daniels, Jr.,
Director.

[FR Doc. 03-6127 Filed 3-13-03; 8:45 am]
BILLING CODE 3110-01-P