A. Annual Inventory Submission
In accordance with the FAIR Act, Circular A-76 and this Handbook, each agency must submit to OMB, by June 30 of each year, a detailed Commercial Activities Inventory of all commercial activities performed by in-house employees, including, at a minimum, the following:
a. Organization unit.
b. State(s).
c. Location(s).
d. FTE.
e. Activity function code.
f. Reason code.
g. Year the activity first appeared on FAIR Act Commercial Activities Inventory (initial value will be 1999).
h. Name of a Federal employee responsible for the activity or contact person from whom additional information about the activity may be obtained.
i. Year of cost comparison or conversion (if applicable).
j. CIV/FTE savings (if applicable).
k. Estimated annualized Cost Comparison dollar savings (if applicable).
l. Date of completed Post-MEO Performance Review (if applicable).
Agencies have the discretion to automate and to structure the initial submission of the detailed inventory as they believe most appropriate, so long as the inventory includes each of these data elements. Agencies must transmit an electronic version of the inventory to OMB as well as two paper copies. The electronic version should be in a commonly used software format (commercial off-the-shelf spreadsheet, database or word processing format). OMB anticipates issuing additional guidance on the structure and format of future inventory submissions, based on the experience gained from the first annual review and consultation process.
B. Reporting
The above is public information. The data may be summarized into reports for the Congress, the General Accounting Office (GAO), agency officials, OMB or the public.
C. FTE
Enter the number of authorized full-time employees or FTE (as applicable) in the commercial activity function or functions as of the date of the inventory. Employees performing inherently Governmental activities are not reported in the Commercial Activities Inventory.
D. A-76 Commercial activity functional codes
The Department of Defense has developed a comprehensive list of function codes for use in their A-76 inventory system. In applying these function codes Government-wide, the codes standardize the functional descriptions of activities and facilitate the aggregation of activities Government-wide and by agency.
E. Reason codes
The following reason codes will be used in the Commercial Activities Inventory. Agencies may add additional sub-groupings (A1, A2 for example) within any reason code, as deemed necessary.
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Code Explanation
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A Indicates that the function is performed by Federal employees and
is specifically exempt by the agency from the cost comparison
requirements of the Circular and this Supplement.
B Indicates that the activity is performed by Federal employees and
is subject to the cost comparison or direct conversion
requirements of the Circular and this Supplement.
C Indicates that the activity is performed by Federal employees,
but is has been specifically made exempt from the provisions of
the Circular and this Supplement by Congress, Executive Order or
OMB.
D Indicates that the function is currently performed by in-house
Federal employees and is in the process of being cost compared
or converted directly to contract or interservice support
agreement performance.
E Indicates that the function is retained in-house as a result of
a cost comparison.
F Indicates the function is currently being performed by Federal
employees, but a review is pending force restructuring decisions
(i.e., base closure, realignment, consolidation, etc.).
G Indicates that the function is prohibited from conversion to
contract because of legislation.
H Waiver issued.
I Indicates the function is being performed in-house as a result
of a cost comparison resulting from a decision to convert from
contract to in-house performance.
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F. Maintenance of aggregate data
Agencies should maintain aggregate program implementation data by fiscal year, to include: total number of studies, FTE and dollar savings by conversion to contract, conversion to in-house or otherwise retained in-house. Agencies should also track total FTE studied and MEO savings generated.
G. Inventory Review and Publication; Challenges and Appeals
1. Review and Publication: In accordance with Section 2 of the FAIR Act, OMB will review the agency's Commercial Activities Inventory and consult with the agency regarding its content. After this review is completed, OMB will publish a notice in the Federal Register stating that the inventory is are available to the public. Once the notice is published, the agency will transmit a copy of the detailed Commercial Activities Inventory to Congress and make the materials available to the public through its Washington, D.C. or headquarters offices.
2. Challenges and Appeals: Under Section 3 of the FAIR Act, an agency's decision to include or exclude a particular activity from the Commercial Activities Inventory is subject to administrative challenge and, then, possible appeal by an "interested party." Section 3(b) of the FAIR Act defines "interested party" as:
a. A private sector source that (A) is an actual or prospective offeror for any contract or other form of agreement to perform the activity; and (B) has a direct economic interest in performing the activity that would be adversely affected by a determination not to procure the performance of the activity from a private sector source.
b. A representative of any business or professional association that includes within its membership private sector sources referred to in a. above.
c. An officer or employee of an organization within an executive agency that is an actual or prospective offeror to perform the activity.
d. The head of any labor organization referred to in section 7103(a) (4) of title 5, United States Code that includes within its membership officers or employees of an organization referred to in c. above.
3. An interested party may submit to an executive agency an initial challenge to the inclusion or exclusion of an activity within 30 calendar days after publication of OMB's Federal Register notice stating that the inventory is available. The challenge must set forth the activity being challenged with as much specificity as possible, and the reasons for the interested party's belief that the particular activity should be reclassified as inherently Governmental (and therefore be deleted from the inventory) or as commercial (and therefore be added to the inventory) in accordance with OFPP Policy Letter 92-1 on inherently Governmental functions (see Appendix 5) or as established by precedent (such as when other agencies have contracted for the activity or undergone competitions for this or similar activities).
4. The agency head may delegate the responsibility to designate the appropriate official(s) to receive and decide the initial challenges. As mandated by the FAIR Act, the deciding official must decide the initial challenge and transmit to the interested party a written notification of the decision within 28 calendar days of receiving the challenge. The notification must include a discussion of the rationale for the decision and, if the decision is adverse, an explanation of the party's right to file an appeal.
5. An interested party may appeal an adverse decision to an initial challenge within 10 working days after receiving the written notification of the decision. The agency head may delegate the responsibility to receive and decide appeals to the official identified in paragraph 9.a of the Circular (or an equivalent senior policy official), without further delegation. Within 10 working days of receipt of the appeal, the official must decide the appeal and transmit to the interested party a written notification of the decision together with a discussion of the rationale for the decision. The agency must also transmit to OMB and the Congress a copy of any changes to the inventory that result from this process, make the changes available to the public and publish a notice of public availability in the Federal Register.
H. Agency Review and Use of Inventory
Section 2(d) of the FAIR Act requires that each agency, within a reasonable time after the publication of the notice that its inventories are publicly available, review the activities on the detailed commercial activities inventory. Agencies will report to OMB on this process as part of the Report on Agency Management of Commercial Activities required under Paragraph I, below. In addition, Section 2(d)-(e) of the FAIR Act provides that, each time the head of the executive agency considers contracting with a private-sector source for the performance of an activity included on the inventory, the agency must use a competitive process to select the source and must ensure that, when a cost comparison is used or otherwise required for the comparison of costs, all costs are considered and the costs considered are realistic and fair. In carrying out these requirements, agencies must rely on the guidance contained in Circular A-76 and this Supplemental Handbook to determine if cost comparisons are required and what competitive method is appropriate. All competitive costs of in-house and contract performance are included in the cost comparison, when such comparison is required, including the costs of quality assurance, technical monitoring, liability insurance, retirement benefits, disability benefits and overhead that may be allocated to the function under study or may otherwise be expected to change as a result of changing the method of performance.
I. Annual Report on Agency Management of Commercial Activities
As part of ongoing agency responsibility to manage their performance of commercial activities and ongoing OMB oversight, OMB will require agencies to report annually on such management. The content of the reports is likely to vary depending upon the progress made by each agency in reviewing their inventory and on the experience OMB gains from the first round of inventory submissions, review, challenges and appeals mandated by the FAIR Act. OMB anticipates issuing subsequent guidance if it determines that supplemental reports or other information is needed for future inventory submissions to assure that agencies have correctly implemented all of the provisions of the FAIR Act and taken advantage of the management information inherent in the detailed Commercial Activities Inventory.
A-76 Commercial Activition Functional Codes
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G--Social Services
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G001 Care of Remains of Deceased Personnel & Funeral Services
G008 Commissary Store Operation
G009 Clothing Sales Store Operations
G010 Recreational Library Services
G011 Morale, Welfare, and Recreation Services
G012 Community Services
G900 Chaplain Activities and Support Services
G901 Housing Administrative Services
G904 Family Services
G999 Other Social Services
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H--Health Services
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H101 Hospital Care
H102 Surgical Care
H105 Nutritional Care
H106 Pathology Services
H107 Radiology Services
H108 Pharmacy Services
H109 Physical Therapy
H110 Materiel Services
H111 Orthopedic Services
H112 Ambulance Services
H113 Dental Care
H114 Dental Laboratories
H115 Clinics and Dispensaries
H116 Veterinary Services
H117 Medical Records
H118 Nursing Services
H119 Preventive Medicine
H120 Occupational Health
H121 Drug Rehabilitation
H999 Other Health Services
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J--Intermediate, Direct or General Repair and Maintenance
of Equipment
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J501 Aircraft Maintenance
J502 Aircraft Engine Maintenance
J503 Missiles
J504 Vessels
J505 Combat Vehicles
J506 Noncombat Vehicles
J507 Electronic and Communication Equipment Maintenance
J510 Railway Equipment
J511 Special Equipment
J512 Armament
J513 Dining Facility Equipment
J514 Medical and Dental Equipment
J515 Containers, Textile, Tents, and Tarpaulins
J516 Metal Containers
J517 Training Devices and Audiovisual Equipment
J519 Industrial Plant Equipment
J520 Test, Measurement and Diagnostic Equipment
J521 Other Test, Measurement and Diagnostic Equipment
J522 Aeronautical Support Equipment
J999 Maintenance of Other Equipment
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K--Depot Repair, Maintenance, Modification,
Conversion or Overhaul of Equipment
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K531 Aircraft
K532 Aircraft Engines
K533 Missiles
K534 Vessels
K535 Combat Vehicles
K536 Noncombat Vehicles
K537 Electronic and Communication Equipment
K538 Railway Equipment
K539 Special Equipment
K540 Armament
K541 Industrial Plant Equipment
K542 Dinning and Facility Equipment
K543 Medical and Dental Equipment
K544 Containers, Textile, Tents, and Tarpaulins
K545 Metal Containers
K546 Test, Measurement and Diagnostic Equipment
K547 Other Test, Measurement and Diagnostic Equipment
K548 Aeronautical Support Equipment
K999 Other Depot Repair, Maintenance, Modification, Conversion or
Overhaul of Equipment
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P--Base Maintenance/Multifunction Contracts
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P100 Installation Operation Contracts (Multi-function)
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R--Research, Development, Test, and Evaluation (RDT&E)
Support
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R660 RDT&E Support
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S--Installation Services
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S700 Natural Resource Services
S701 Advertising and Public Relations
S702 Financial and Payroll Services
S703 Debt Collection
S706 Bus Services
S708 Laundry and Dry Cleaning
S709 Custodial Services
S710 Pest Management
S712 Refuse Collection and Disposal Services
S713 Food Services
S714 Furniture Repair
S715 Office Equipment Maintenance and Repair
S716 Motor Vehicle Operation
S717 Motor Vehicle Maintenance
S718 Fire Prevention and Protection
S719 Military Clothing
S724 Guard Service
S725 Electrical Plants and Systems Operation and Maintenance
S726 Heating Plants and Systems Operation and Maintenance
S727 Water Plants and Systems Operation and Maintenance
S728 Sewage and Waste Plants Operation and Maintenance
S729 Air Conditioning and Refrigeration Plants
S730 Other Utilities Operation and Maintenance
S731 Supply Operations
S732 Warehousing and Distribution of Publications
S740 Transportation Management Services
S750 Museum Operations
S760 Contractor-Operated Parts Stores & Civil Engineering Supply
Stores
S999 Other Installation Services
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T--Other NonManufacturing Operations
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T800 Ocean Terminal Operations
T801 Storage and Warehousing
T802 Cataloging
T803 Acceptance Testing
T804 Architect-Engineering
T805 Operation of Bulk Liquid Storage
T806 Printing and Reproduction
T807 Visual Information
T808 Mapping and Charting
T809 Administrative Telephone Services
T810 Air Transportation Services
T811 Water Transportation Services
T812 Rail Transportation Services
T813 Engineering and Technical Services
T814 Aircraft Fueling Services
T815 Scrap Metal Operation
T816 Telecommunication Centers
T817 Other Communications and Electronics Systems
T818 Systems Engineering and Installation of Communications
Systems
T819 Preparation and Disposal of Excess and Surplus Property
T820 Administrative Support Services
T821 Special Studies and Analysis
T900 Training Aids, Devices, and Simulator Support
T999 Other NonManufacturing Operations
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U--Education and Training
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U100 Recruit Training
U200 Officer Acquisition Training
U300 Specialized Skill Training
U400 Flight Training
U500 Professional Development Training
U510 Professional Military Education
U520 Graduate Education, Fully Funded, Full-time
U530 Other Full-time Education Programs
U540 Off-Duty (Voluntary) and On-Duty Education Programs
U600 Civilian Education and Training
U700 Dependent Education
U800 Training Development and Support
U999 Other Training Functions
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W--Automatic Data Processing
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W824 Data Processing Services
W825 Maintenance of ADP Equipment
W826 Systems Design, Development and Programming Services
W827 Software Services
W999 Other ADP Functions
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X--Products Manufactured and Fabricated In-House
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X931 Ordnance Equipment
X932 Products Made From Fabric or Similar Materials
X933 Container Products and Related Items
X934 Preparation of Food and Bakery Products
X935 Liquid, Gaseous and Chemical Products
X936 Rope, Cordage, and Twine Products; Chains and Metal Cable
Products
X937 Logging and Lumber Products
X938 Communications and Electronic Products
X939 Construction Products
X940 Rubber and Plastic Products
X941 Optical and Related Products
X942 Sheet Metal Products
X943 Foundry Products
X944 Machined Parts
X999 Other Products Manufactured and Fabricated In-House
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Z--Maintenance, Repair, Alteration, and Minor Construction
of Real Property
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Z991 Maintenance and Repair of Family Housing Buildings and
Structures
Z992 Maintenance and Repair of Buildings and Structures Other
Than Family Housing
Z993 Maintenance and Repair of Grounds and Surfaced Areas
Z997 Maintenance and Repair of Railroad Facilities
Z998 Maintenance and Repair of Waterways
Z999 Other Maintenance, Repair, Alteration, and Minor
Construction of Real Property
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