[Federal Register Volume 69, Number 94 (Friday, May 14, 2004)]
[Notices]
[Pages 26900-26901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10926]


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OFFICE OF MANAGEMENT AND BUDGET


Performance of Commercial Activities

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

ACTION: Update to Federal Pay Raise Assumptions and Inflation Factors 
Used in OMB Circular No. A-76, ``Performance of Commercial 
Activities.''

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SUMMARY: OMB is updating the annual federal pay raise assumptions and 
inflation factors used for computing the government's in-house 
personnel and non-pay costs in public-private competitions conducted 
pursuant to Office of Management and Budget (OMB) Circular A-76. These 
annual pay raise assumptions and inflation factors are based on the 
President's Budget for Fiscal Year 2005.

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

FOR FURTHER INFORMATION CONTACT: Mathew Blum, Office of Federal 
Procurement Policy (OFPP), NEOB, Room 9013, Office of Management and 
Budget, 725 17th Street, NW., Washington, DC 20503, Tel. No. 202-395-
4953.
    Availability: Copies of OMB Circular A-76 may be obtained on the 
Internet at the OMB home page at www.whitehouse.gov/omb/circulars/index.html#numerical. Paper copies of the Circular may be obtained by 
calling OFPP (tel: (202) 395-7579).

Joshua B. Bolten,
Director.

Memorandum for the Heads of Executive Departments and Agencies

    From: Joshua B. Bolten, Director.
    Subject: Update of Annual Federal Pay Raise Assumptions and 
Certain Inflation Factors Used in OMB Circular A-76, Performance of 
Commercial Activities.
    This memorandum updates the annual federal pay raise assumptions 
and inflation factors used for computing the government's in-house 
personnel and non-pay costs in public-private competitions conducted 
pursuant to Office of Management and Budget (OMB) Circular A-76. 
These annual pay raise assumptions and inflation factors are based 
on the President's Budget for Fiscal Year 2005.
    The non-pay inflation factors are for purposes of Circular A-76 
competitions only. They reflect the generic non-pay inflation 
assumptions used to develop the fiscal year 2005 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*
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                                                   Civilian    Military
                 Effective date                    (percent)   (percent)
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January 2004....................................         4.1        4.15
January 2005....................................         1.5        3.5
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* Pay raise assumptions have not been established for pay raises
  subsequent to January 2005. For January 2006 and beyond, the projected
  percentage change in the Employment Cost Index (ECI), 4 percent,
  should be used to estimate in-house personnel costs for A-76
  competitions. In future updates to A-76 guidance, as pay policy for
  years subsequent to 2005 is established, these pay raise assumptions
  will be revised.


[[Page 26901]]


            Non-Pay Categories (Supplies and Equipment, etc.)
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                                                               (percent)
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FY 2004.....................................................         1.3
FY 2005.....................................................         1.3
FY 2006.....................................................         1.5
FY 2007.....................................................         1.7
FY 2008.....................................................         1.9
FY 2009.....................................................       *2.0
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* Any subsequent years included in the period of performance and cost
  comparison shall continue to use the 2.0% figure, until otherwise
  revised by OMB.

    The pay rates (including geographic pay differentials) that are in 
effect for 2004 shall be included for the development of in-house 
personnel costs. The pay raise factors provided for 2005 and beyond 
shall be applied to all employees, with no assumption being made as to 
how they will be distributed between possible locality and base pay 
increases.

[FR Doc. 04-10926 Filed 5-13-04; 8:45 am]
BILLING CODE 3110-01-P