OMB unveils draft A-76 process

A draft of the Bush administration's revamped Circular A-76, which details how agencies conduct public-private competitions for federal work, will be published Nov. 15 in the Federal Register, an administration official said Nov. 14. The new circular shortens the time frame for public-private competitions and allows for consideration of factors other than lowest cost when making a contract award.

The new A-76 will also be published on the Office of Management and Budget Web site, www.omb.gov, either Nov. 14 or 15, said Angela Styles, administrator of the Office of Federal Procurement Policy within OMB. Comments from the public will be accepted for 30 days; OMB will publish the final circular soon thereafter, Styles said.

Styles said she thinks both industry and government will embrace the new procedures outlined in the new circular.

"We've tried to make a faster, cheaper process that in the end provides a better deal for the taxpayer. We tried to create an environment where we can force more competition in commercial activities performed in the federal government and make sure the process works well for agencies, federal employees and the private sector," she said.

The new circular outlines two proposed processes for conducting public-private competitions for government work that is commercial in nature. One procedure mirrors the process by which private-sector firms compete for federal work under rules laid out in the Federal Acquisition Regulation.

This process allows for consideration of best value, not just lowest cost, when awarding a contract. Initially, the FAR-based process will be used in competitions for information technology work, for any type of new work that has never been performed by federal employees, and for any type of work that is being expanded at least 30 percent.

Agencies can ask OMB for permission to use the FAR process for other types of work, Styles said.

The second process, which is similar to the existing A-76 process, allows for contract awards based on lowest cost. Use of the first process will be limited until officials can see how it works in practice, Styles said.

Often, private-sector companies declined to compete for work put up for competition under A-76 because the process took three to four years. The new process should change that, Styles said. In the new circular, OMB calls for agencies to complete public-private competitions within a year.

"I think [industry] will be very happy with this, and I think as a result we'll get a larger base of suppliers, better service and lower cost for taxpayers," she said.

Agencies will be required to issue solicitations within eight months after announcing competitions, and will be required to make contract awards four months after the solicitations are issued, Styles said.

If agencies are conducting a competition for thousands of jobs nationwide, they may grant themselves waivers for longer time periods, but must tell OMB and the public what those time frames are, she said. If an agency without a waiver does not finalize a solicitation within seven months, officials will have to report to OMB's deputy director for management. If an agency announces a competition and then doesn't issue a solicitation, officials will have to explain why not, she said.

Other changes to the A-76 process include new requirements for government bidders. If a government bidder wins a competition, it will enter into a binding performance agreement, similar to a contract that a private-sector entity would sign, Styles said. Contracts - whether held by public- or private-sector entities - will be re-competed regularly, typically every three to five years, she said.

The new circular will eliminate exceptions that allowed agencies to provide services to each other through sole-source competitions. Agencies will have five years to hold public-private competitions for those jobs, which include payroll, accounting and financial services, Styles said.

It's unclear how the new circular will be used at the Department of Defense, which has statutory requirements for making contract awards based on lowest cost, Styles said.

Publication of the new circular comes six months after the Commercial Activities Panel, a group of government, industry, academic and federal employee union representatives, recommended sweeping changes to the A-76 process, which is widely seen as too lengthy, costly and unfair to both government and industry. Federal officials have said government workers often don't have the training necessary to compete for their jobs, while industry representatives have argued that federal agencies can't fully account for their costs, which puts the private sector at a competitive disadvantage.

Styles said the new circular mirrors the panel recommendations. The panel called for the government to replace the A-76 process with a new competitive procedure based largely on the Federal Acquisition Regulation.

About 850,000 federal jobs have never been subject to public-private competition, according to the administration. Bush administration officials have asked agencies to meet a governmentwide goal of competing 15 percent of those jobs by the end of fiscal 2003. Through the new A-76 process, "we're trying to achieve best value for the taxpayer," Styles said. "This is not a thinly veiled attempt to reduce the federal work force. This is going to make us better managers."