OMB releases A-76 draft revisions

Proposed revisions to Circular A-76

The Office of Management and Budget on Nov. 14 released its long-awaited draft revisions to Circular A-76, the policy that outlines how the public and private sectors compete for commercial-like government functions.

The draft takes a process that people in government and industry hate and changes it to a process that contracting officers are more familiar with, said Angela Styles, administrator for OMB's Office of Federal Procurement Policy.

"We are creating an easy, fair and well-understood process," Styles said.

Following recommendations from the General Accounting Office's Commercial Activities Panel, the new process is based on the Federal Acquisition Regulation, the policy for conducting commercial acquisitions.

Increasing competition between the public and private sectors to perform government services is a key part of the President's Management Agenda, and the Bush administration often cites the statistic that competition leads to a 30 percent cost savings, no matter who wins.

By using a process that agency acquisition employees are already familiar with, OMB expects that more competitions will happen and that agencies will end up getting better value for the services they need, Styles said.

"We want to focus our agencies on the missions of our agencies...and a key management tool for doing that is through public-private competition," she said.

While the draft still allows for the low-cost evaluations that A-76 originally was designed for, it also starts to use the FAR processes to manage best-value competitions. Information technology is one of the key areas in which this process will be used, Styles said.

One important change in the draft is to make federal offerors in a best-value competition just another offeror. If a federal proposal does not measure up to proposals from the private sector, a contracting officer can leave the federal offer out of the final decision, Styles said.

It also means that a winning public-sector offeror enters into a "binding performance agreement" that functions just like a contract, with base years and option years, an overseeing contracting officer, and the possibility that the option years will not be exercised if the performance is not up to par.

"If you're not performing, you're not going to get the option year, and [the function] will go back out for competition," Styles said.

Federal employee unions and industry representatives may still have concerns, but agency officials who are working to comply with the White House's competitive sourcing goals and management score cards "have been waiting with bated breath for this," Styles said.

"There are people banging down my door most days to get this new process," she said.

The draft will be available for comment for 30 days, although OMB does not yet have a goal for when the final circular will be finished, Styles said.

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