Feds await final guidance for listing IT functions

The Office of Management and Budget is close to releasing its final guidance for complying with a law that requires agencies to list job functions that are not inherently governmental and opens a path to more outsourcing of government work.

Deidre Lee, administrator of the Office of Federal Procurement Policy and acting deputy director of management at OMB, said OMB plans to release any day the final guidance for the Federal Activities Inventory Reform (FAIR) Act, which requires agencies to compile a list of functions that are not inherently governmental and that could be contracted out to the private sector. OMB also is working with agencies to prepare the inventories, which are due for submission to OMB by June 30.

"We are right now looking at trying to make it very clear what is required in the FAIR Act, what is required in A-76 and where they do and do not intersect," said Lee, participating in a panel discussion on procurement reform at the Outlook 2000 conference held by marketing research firm Federal Sources Inc.

The OMB's A-76 circular, which was first issued in 1966 and revised most recently in 1996 in a supplemental handbook, also mandated that agencies compile inventories of their commercial activities. A primary target for outsourcing will be IT functions that agencies purchase from one another, such as data processing. Agencies bought as much as $5.6 billion worth of IT support from other federal agencies in fiscal 1999, according to Federal Sources.

Lee said OMB also plans to release a time frame so that industry and government understand what will be done with the inventories, Lee said. "We're working to try to have that scheduled because we know people are anxious," she said.

Lee said the inventories are significant for agencies' overall mission orientation, requiring them to determine what they do and how to best accomplish it.

The government will have to turn an increasing amount of its IT functions over to the private sector, according to Rep. Tom Davis (R-Va.), keynote speaker at the conference. He said the Clinton administration's policy of reducing the government work force and the trend of IT workers leaving the government in search of higher salaries in the private sector will help drive more outsourcing. "It's a long-term trend," he said. "I don't see any reversal of that."

The inventories, which will be subject to a comprehensive OMB review, should separate and categorize by type the commercial activities within the agency. "What the FAIR Act has done for the first time is it has given us a hope of getting a whole book of the commercial activities and make the department defend those in the public arena," said G. Edward DeSeve, former acting deputy director for management for OMB, who recently left OMB to become national industry director for the federal segment of KPMG LLP's public services practice.

But the inventories could reveal inconsistencies in job categorization among agencies, he said. FAIR also sets up an appeals process under which a party can appeal to an agency's secretary any decision that designates an activity as inherently governmental, but the secretary's ruling cannot be appealed.DeSeve also encouraged a continuation of the dialogue until a consensus is reached on what the definition of a commercial activity is. Without a definition, a private-sector groundswell in support of outsourcing could occur, he said.

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