From FedMarket.com
Outsourcing Opportunities - Fair Act & OMB Circular A-76
By Eric Aaserud
May 19, 2005,
14:26
Twenty-two agencies, including the Department of Health and Human Services, the Treasury Department, and NASA recently announced that over 75,000 jobs are eligible to be performed by private companies under the rules of the Federal Activities Inventory Reform Act of 1998 (FAIR Act).
In addition, Army Secretary Thomas White recently approved a plan that could allow 200,000 Army jobs to be subject to private competition. These include positions listed on the Army's FAIR Act inventory of commercial jobs and others deemed "non-core."
That's a lot of jobs that could go private.
Not long ago, we visited some folks at our local Air Force base. We found that the big topic on their minds was outsourcing. They didn't like it. The whole subject made them uneasy (not surprisingly) because jobs were at stake -- their own jobs, there friends' jobs. Of course job changes will involve terminations, but more often it's about working for new private sector employers, different salaries and benefits, etc. From a government employee's perspective, it's about an unknown future, which can make anyone nervous.
That was one base, but the attitude there is no doubt a microcosm of the entire federal work force. Massive privatization will not come easily because there's built-in resistance to it. And yet the Bush Administration and top agency officials seem committed to sweeping change.
Private firms interested in competing for these jobs need to find the opportunities now. We'll talk a bit more about that later, but first let's do a brief overview of the laws and policies in this area.
FAIR Act
The FAIR Act requires all executive agencies to submit to Congress an annual inventory of activities that are not "inherently governmental," and to make this information available to the public. The Act defines an activity as inherently governmental when it is so intimately related to the public interest as to mandate performance by federal employees. All other activities performed by federal employees are deemed "commercial" and are included in the inventories. http://web.lmi.org/fairnet/Index2.html.
The FAIR Act also requires the Office of Management and Budget (OMB) to announce the availability of agency inventories of activities that are not inherently governmental.
OMB Circular A-76
OMB Circular A-76 (1983, revised 1999) established a federal policy that says, "Whenever commercial sector performance of a Government operated commercial activity is permissible . . . comparison of the cost of contracting and the cost of in-house performance shall be performed to determine who will do the work." The policy also states that the federal government "shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source." http://www.whitehouse.gov/omb/circulars/a076/a076.html.
A-76 competitions are becoming more and more common. To read one example of the process in action (in this case, performance of distribution operations at Defense Distribution Depot, San Diego), go to this Web page: http://www.dla.mil/public_info/read_news.asp?track=151
OMB has been working on a new process for competing federal jobs. Coined "one-step," the process would use the guidelines of Part 15 of the Federal Acquisition Regulation (FAR), essentially requiring that private companies and in-house personnel engage in winner-takes-all competitions for the tasks in question. These new procedures would retain some elements of the current process. In-house employees, for example, would still team up to compete for the work and rely on the A-76 procedures to estimate costs.
Locating Opportunities
Like analyzing budgets or reviewing acquisition plans, following FAIR Act/A-76 activity means tracking potential business opportunities early. That's a good thing. But identifying and quantifying such opportunities requires digging. In the process of digging, the goal is to first find in-house functions that are deemed "commercial" -- see if they match up with what your firm can do -- and then catalog the status of those activities.
Reviewing FAIR Act/A-76 inventory information can be a piecemeal effort, at least at this point, because the information is not centralized. One must look at each agency. Examples:
To find more, go to Google.com and search using these keywords:
"fair act" inventory
The research often involves reading through spreadsheets and performing code lookups. But the effort can be invaluable if your firm is in a position to take on in-house activities deemed commercial. To get a quick overview of jobs deemed commercial, go to the original OMB A-76 Circular (and scroll down to the bottom): http://www.whitehouse.gov/omb/circulars/a076/a076.html.
Another important part of the research of course is talking to key personnel. NASA, for example, lists members of its "Competitive Outsourcing" staff here: http://competitivesourcing.nasa.gov/pocs-comp-sourcing.html.
When talking to key personnel, check on the status of a particular activity area. Ask such questions as these: How many employees are involved? What exactly do they do? What are their salaries? Is there a planned date for a competition? Which firms are likely to compete? etc.
More Information
OMB Circular A-76 - Performance of Commercial Activities
http://www.whitehouse.gov/omb/circulars/index-procure.html
Secretary White memorandum on Army outsourcing initiative
http://207.27.3.29/dailyfed/1002/101002p1a.htm
Agencies report 75,000 jobs could be outsourced
http://207.27.3.29/dailyfed/1002/101702m1.htm
DOD's FAIRNET
http://web.lmi.org/fairnet/Index2.html
A-76 Competitive Sourcing Internet Library & Directory
http://www.dla.mil/J-8/A-76/A-76Main.html
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