OMB to agencies: Comply with A-76 rules

The Office of Management and Budget reminded agencies of limits Congress placed on their ability to use 'best-value trade-offs' when competing inherently commercial jobs against the private sector under OMB Circular A-76.

In a memo, acting OMB director Clay Johnson III said the administration is hoping that Congress will lift the restrictions, which he says will discourage industry from participating in public-private competitions.

Congress imposed the restrictions in the fiscal 2006 Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia and Independent Agencies appropriations bill.

The language precludes agencies from converting work performed by more than 10 employees to the private sector unless the agency proves a contractor could perform the work for an amount equal to or lesser than 10 percent of the personnel-related costs, or $10 million.

In his memo, Johnson said OMB is hoping to repeal the measure.

'OMB has concluded that the restrictions in [the bill], which requires agencies to select between the government and a private-sector provider on the basis of cost alone, would likely deter private-sector offerors from developing and submitting innovative proposals that could substantially improve the quality of agencies' activities in a cost-efficient manner,' Johnson wrote.

Johnson also referred to studies OMB released last week that also call for Congress to repeal the language.

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