Revised OMB Circular A-76 has changes from the draft version

New circular says prior to public-private procurements, agencies must do 3 things

  • Determine the number and types of positions to be competed

  • Assess the availability of workload data, quantifiable outputs and performance standards

  • Determine baseline costs of jobs
  • The long-awaited final revision of OMB Circular A-76 released last week will move the arduous process of having federal employees compete with the private sector for government work closer to the best-value methodology laid out in the Federal Acquisition Regulations for other procurements.

    An industry expert said some areas of the circular are better than in the draft version the Office of Management and Budget released in November, but the draft was superior in other ways.

    'Clearly there are areas OMB made improvements in and areas they relaxed their requirements,' said Stan Soloway, president of the Professional Services Council, an Arlington, Va., trade association. 'We will have to look more closely at the details to exactly see what OMB is talking about.'

    The OMB circular outlined two new processes to compete commercial federal jobs, the timeline for agencies to complete the competition and the ability of federal workers to appeal decisions to agency heads.

    OMB sorted through more than 650 comments from agencies and industry in putting together the new circular. The revision notes in many places what employees and industry said, and how OMB took their comments'especially on the more controversial aspects'into consideration when finalizing the document.

    The revision sets up two types of competitions:
    • Streamlined, which replaces the direct conversion process

    • Standard competition, which includes the more traditional A-76 approach of writing a statement of work and competing it against the private sector.

    OMB wants agencies to use the streamlined competition for 65 or fewer positions.

    'Agencies are free to use streamlined acquisition tools such as multiple-award schedules contracts to obtain proposals from the private sector,' OMB said in the circular.

    Best-value processes

    The standard competition includes some best-value processes, such as:
    • The use of phased evaluations that would eliminate some competitors based on technical criteria, leaving a smaller field to be judged on cost and performance

    • A cost-technical trade-off process that would let the agency choose a competitor that costs more if it also offers improved performance, and

    • The use of sealed bids, in which an agency considers only competitors' best-and-final offers.

    OMB is restricting the use of these types of processes to IT positions, new requirements, positions already outsourced to the private sector, expansion of existing work and positions approved by a designated official before public announcement.

    The revision keeps a requirement that agencies finish standard A-76 competitions in 12 months, but it does allow agency officials to extend the deadline by six months without prior approval. In the draft, agencies needed OMB's consent.

    'OMB seems to have relaxed the 'mother-may-I' control and given more discretion to the agencies,' Soloway said.

    OMB said the time frame begins when an agency publicly announces a competition, not when it begins studying positions.

    'In addition to instilling confidence in the process, time limits ensure that the benefits of competition are realized,' OMB said in the circular.

    For streamlined competitions, the time frame is 90 days, with an option for a 45-extension.
    OMB also wants to make sure agencies are prepared to compete against the private sector by requiring agencies to complete a series of actions before announcing a competition.

    OMB broadened the definition of an interested party that could appeal an A-76 decision. The change opens the door for labor unions to appeal A-76 decisions on behalf of affected workers.

    'It didn't grant the union the ability to appeal by name, but basically opens the door for them to,' Soloway said. 'We always thought the agency person would get standing, but this changes decades of federal labor laws.'


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