Dear Competitive Sourcing/FAIR Act Inventory Coordinators,

Thank you for participation in the FAIR Act Inventory workshop August 30
-- September 1. You have established a foundation of guidance on which
the FAIR Act Inventory Handbook will be built. We both have some work to
do and challenges ahead. The CCSE will be sending out additional
information and guidance, but for now begin implementing the new
guidance we agreed to at the workshop along with the DOI '05 guidance
that really hasn't changed. We have included a summary of outcomes and
new guidance that will help Bureaus and Offices complete the Inventory
with consistency across DOI.

In order to establish OMB's requests for centralization and consistency
several objectives have been set and most of them were met during the
workshop. Now, we have to continue with the process and implement the
changes. Obtaining DOI consistency includes identifying issues, defining
a timeline, clarifying the meaning of inherently governmental (IG) and
commercial (C) activities, setting guidelines for justifying IG and C
reason code A, establishing agency wide function codes and definitions,
and establishing Mission specific Bureau / Office FC and definitions.

CCSE has agreed to host FAIR Act training in Denver in early October.
Prior to the October meeting we need to accomplish a lot of the action
items that we agreed to during the workshop as follows:

Action Items for CCSE:

-   Have draft guidance available around Oct 1,

-   Finalize 12 month Timeline of events happening with the inventory
    process,

-   Distribute FY05 and Y06 Green Plans,

-   Send list of worksheet attendees,

-   Distribute crosswalks

    -   Crosswalk of consolidated FC with fewer than 10 FTE

    -   Crosswalk of consolidated FC

    -   Crosswalk of definitions to accompany ,

-   Develop cross agency definitions,

-   Identify and assign definitions for specific Bureaus to complete,

-   and prepare materials for Oct. training.

Action items for Coordinators:

-   Identify and send a list of Acts that may determine what your bureau
    codes IG,(They may be sent to the Solicitor's Office for review and
    opinion,)

-   Populate the timeline according to your bureau or office procedures
    (for your use),

-   Participate in writing definitions and deciding additional FC
    consolidation,

-   and begin work on Bureau/Office '06 inventory using '05 guidance and
    information from the workshop.

**General Guidelines**

The following workshop summary of outcomes identifies what was achieved
and guidance to use.

The following table establishes specific milestones that we have to
meet. Since each Bureau / Office operates a little differently you can
populate the table to meet your needs.

Table 1: Timeline of Milestones

  -------------------- ---------------------- ------------------ ---------------------
  **FAIR Inventory 12                                            
  Month Timeline**                                               

  **July-September**   **October-December**   **January -        **April - June**
                                              March**            

  Refine and prepare   **Oct 1st -- Release   **Feb 28th -       CCSE reviews /
  additional guidance  DOI draft guidance**   Bureaus submit     discusses Inventories
                                              inventory**        with bureaus

  DOI discussion with  Bureaus prepare        CCSE - reviews     **May 1st - Bureaus
  bureaus on guidance  internal guidance for  Inventories during resubmit inventory
  for next year        field offices          March              after discussion with
                                                                 DOI (if needed)**

  **Sept 30th -        Field offices prepare  Bureaus review     **May - May31st
  Download Info from   inventories including  inventory at       Bureaus finalize
  FPPS**               all reviews and        bureau level for   inventory**
                       approvals at that      consistency and    
                       level                  prepare for        
                                              submission to DOI  

                                              **March 15th -     **June 30th DOI
                                              Bureaus submit     Submits to OMB**
                                              justifications to  
                                              DOI**              
  -------------------- ---------------------- ------------------ ---------------------

**\*September 30^th^ is the date you will use for the "snapshot" of your
FTE and all Bureaus and Offices are to download their information from
FPPS.**

**DOI FC Consistency**

**Less than 10 FTE**

DOI identified 110 FCs with fewer than 10 FTE. Coordinators agreed that
there were other FC available that these FTE could be assigned to;
therefore reducing the list to 13. The list is not complete. Some FCs
remain unassigned and coordinators will need to identify a new FC and
send that information to the CCSE. Based on decisions made by the
Bureaus / Office attendees during the workshop, only the FC highlighted
in green are acceptable for further use. (See the attached list of
function codes.)

**Cross agency function codes**

OMB has urged agencies to develop function code definitions and reduce
the amount of FC agencies use. We began working on the consolidation and
definitions. They will be distributed as soon as possible with a goal of
having the first draft by October 1.

**Assigning function codes**

When determining where FTE should be assigned, follow the general
guidelines:

1.  The series to FC and FC to series is a starting point. Coordinators
    should have intimate knowledge of the activities performed.
    Additional insight can come from position descriptions.

2.  Code your FTE by the activity / functions they perform (do not
    assign one function code to represent an entire division or office.)

3.  FTEs are to be evaluated based on the work actually being performed,
    rather than assumptions based on titles, position level or grade
    series alone.

4.  Use approved DOI function codes.

**Assigning IG status:**

The reputable presumption is that FTE are commercial reason code B
unless justified in writing as inherently governmental, commercial
reason code A, or unless the FTE fall under the other approved
commercial reason codes in Circular A-76.

OMB has gotten and will continue to scrutinize FTE coded as IG and C
reason code A. Therefore, justifications are required for all submitted
FTE coded as I and C reason code A. Remember a Function Code is not
automatically IG or C, you can and will have a function code that
contains both IG and C FTE.

Refer to the OMB and DOI '05 inventory guidance. Nothing has changed as
far as what is considered inherently governmental. Please note that
Bureaus/Offices should not be coding a percentage of functions as
inherently governmental to take care of supervisory FTE. Across the
board coding by percentages should be avoided.

Understanding what activities are IG is difficult. Therefore in
accordance with OMB guidance, DOI is preparing definitions that will
include acceptable IG activities. But, you will still have to write and
submit justifications. The following guidelines have been established to
assist you with assigning IG status. Specifically, in order for
activities to be assigned as IG, they must adhere to OMB and DOI
guidance. The following guidelines use key terms that will enable you to
determine differences. (DOI Definitions will be provided as soon as
possible.)

OMB specifically states an inherently governmental activity involves:

(1) Binding the United States to take or not to take some action by
    contract, policy, regulation, authorization, order, or otherwise;
    Inherently governmental functions, by definition, necessarily
    involve the exercise of substantial discretion, although not every
    exercise of discretion means that a function is inherently
    governmental.

Binding the government involves determining and providing FINAL
directives such as policies, procedures, governance, laws, and more. FTE
that perform such IG activities must have the authority to do so.

The discretion must commit the Government to a course of action when two
or more alternatives exist. Examples of inherently governmental
functions include:

-   Approving the purchase of a PC rather than a mainframe computer.

-   Hiring a statistician rather than an economist.

-   Awarding a contract to one firm rather than another.

-   Adopting one policy over another.

The following Function Code examples, in **BOLD** print are key
activities that could be considered as IG.

**Function Code: Y210 -- Management Headquarters--Operation Planning and
Control**

Activities include oversight, **direction**, and **control** of civilian
workforce, development and **issuance of policies** and guidance
**impacting a bureau's** workforce, review and evaluation of program
performance, conducting mid- and long- range planning, and **direction
and control of inherently governmental employees.**

OMB specifically states an inherently governmental activity involves:

(2) Determining, protecting, and advancing economic, political,
    territorial, property, or other interests by military or diplomatic
    action, civil or criminal judicial proceedings, contract management,
    or otherwise;

Function Code: S520 - Support Services to Law Enforcement Physical
Security and Security Guard Operations

This function includes all administrative operations, to include:

-   Passes and Registration. This includes processing, preparation, and
    issuance and/or control of identification credentials (to include
    building passes and identification cards). This also includes
    registration of privately owned vehicles and firearms and the
    administration, filing, processing, and retrieval of information
    about privately owned items that must be registered on
    installations, bases, and facilities.

-   Visitor Information Services. This includes providing information to
    installation, base or facility residents and/or visitors about
    street, agency, unit, and activity locations

-   Licensing and Certification of Security Guards. This includes
    security police on-the-job, specialized, and ground training that
    takes place at security guard facilities.

-   Storage and Inventory of Armament and Equipment. This includes the
    receipt, secure storage, inventory, inspection, and turn-in of
    assigned weapons and equipment.

-   Vehicle Impoundment. This includes removal, accountability,
    security, and processing of vehicles impounded on installations.

-   Working Dog Program. This includes administration of the Working Dog
    Program and maintenance of dog kennels and kennel areas.

**NOTE: There are no apparent IG activities in this function code.
Therefore assigning FTE that perform these activities should not be
coded as IG**

OMB specifically states an inherently governmental activity involves:

(3) Significantly affecting the life, liberty, or property of private
    persons; or property of individual members of the public...

OMB has advised that direct impact strictly means that the work
(activities) performed has a certain and absolute bearing on the Life,
Liberty or Property (natural rights) of American citizens. An example is
scientific research or processing of financial payments, they may have
the potential or tangible impact on the "quality of life" , but the
activity will not directly impact or have bearing on their natural
rights so scientific research is not by itself IG nor is processing of
financial payments IG.

[]{.mark}

A good use of OMB (3) guidance should be applied to the Research and
Development series. Currently, the R120 Science and technology function
code represents a vast amount of activities. USGS has assigned over
3,500 FTE as IG in R120, but the definition as written contains a small
portion of activities that could be considered IG or C reason code A. In
fact, R110 - Management Headquarters---Research and Development contains
more appropriate IG activities related to Science and Technology and
USGS assigned IG status to apx.230 FTE Note: Only the activities in
**BOLD** print should be considered IG.

[]{.mark}

**Function Code: R120 Science and Technology []{.mark}**

USGS Definition

R120A-Supervising and Managing---The function includes **mission science
supervision and management of the scientific fields** listed below.
District Chiefs, Science Center Directors, Team Chief Scientists, and
Program Managers should be included in R110.

B-Biology and all related scientific fields---This function includes all
duties that advise on, administer, or perform research or other
scientific work in any of the fields of science concerned with living
organisms, their distribution, characteristics, life processes, and
adaptations and relations to the environment; the soil, its properties
and distribution, and the living organisms growing in or on the soil;
and the management, conservation, or utilization thereof for particular
purposes or uses. It includes the presentation of scientific information
in various formats.

C-Geography and Cartography involved in Research and Development (R&D),
Geospatial Information Service (GIS) Applications---This function
includes the duties involved in work in the field of geography,
including the compilation, synthesis, analysis, interpretation and
presentation of information regarding the location, distribution, and
interrelationships of and processes of change affecting such natural and
human phenomena as the physical features of the earth, climate, plant
and animal life, and human settlements and institutions. It includes the
presentation of scientific information in various formats.

D-Geology and all related scientific fields---This function includes
scientific activity that applies a knowledge of the principles and
theories of geology and related sciences in the collection, measurement,
analysis, evaluation, and interpretation of geologic information
concerning the structure, composition, and history of the earth. This
includes the performance of basic research to establish fundamental
principles and hypotheses to develop a fuller knowledge and
understanding of geology, and the application of these principles and
knowledge to a variety of scientific, engineering, environmental, and
economic problems. It includes the presentation of scientific
information in various formats.

E-Hydrology and all related scientific fields---This function includes
activity that involves scientific activity in hydrology, the science
concerned with the study of water in the hydrologic cycle. The work
includes basic and applied research on water and water resources; the
collection, measurement, analysis, and interpretation of information on
water resources; the forecast of water supply and water flows; and the
development of new, improved or more economical methods, techniques, and
instruments. It includes the presentation of scientific information in
various formats.

F-All Scientific student trainees---Scientific student trainees in any
of the fields listed above.

Now look at **FC R110 and see the differences in the amount of IG
activities**

**Function Code: R110 - Management Headquarters---Research and
Development**

Activities performed by Senior Leadership at Headquarters and Regions
(e.g., Director, Deputy Director, Associate Directors, Chief Financial
Officer, Regional Directors, Regional Executives, and principal
subordinates of these positions, and District Chiefs, Science Center
Directors, Team Chief Scientists, Program Managers, and senior level
subordinates). This includes **issuing policies**; providing policy
guidance; **reviewing, analyzing, and evaluating performance**;
conducting or reviewing min- and long-range planning, programming, and
budgeting; and **allocating resources**. The position typically includes
oversight and **approval of mission analyses and resource
requirements**; analysis of the use of resources; and assessments of
those infrastructure operations that directly relate to operational
planning and control to include strategic and business planning.

This function includes the oversight, **direction, and control of
research and development programs** and subordinate organizations,
centers, and laboratories involved in research and development. This
includes conducting mid- and long-range planning, programming, and
budgeting; developing and **issuing policies**; providing policy
guidance; reviewing, analyzing, and evaluating program performance; and,
**allocating** and distributing **resources** for science and
technology.

OMB specifically states an inherently governmental activity involves:

(4) Exerting ultimate control over the acquisition, use, or disposition
    of United States property (real or personal, tangible or
    intangible), including establishing policies or procedures for the
    collection, control, or disbursement of appropriated and other
    federal funds.

Function Code Series: F - Procurement t

**Specific examples of IG contracting activities:**

-   **Participating as a voting member** on source selection boards

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-   **Approval of any contractual documents**, to include documents
    defining requirements, incentive plans, and evaluation criteria

-   **Awarding contracts**

-   Administering contracts (including ordering changes in contract
    performance or contract quantities, **taking action based on
    evaluations of contractor performance, and accepting or rejecting
    contractor products or services**)

-   **Terminating contracts**

**Assigning C reason code A status**

The reputable presumption is that FTE are commercial reason code B
unless justified in writing as inherently governmental, commercial
reason code A, or unless the FTE fall under the other approved
commercial reason codes in Circular A-76.

OMB's guidance on the use of inherently governmental classification
emphasizes that certain activities, although contributing to or
supporting an inherently governmental function do not constitute
inherently governmental classification. Therefore, reason code A
(commercial but unsuitable for competition) can be assigned to some
commercial activities to the extent that a loss of in-house performance
of the function would result in substantial risk to the agency's ability
to accomplish its unique mission. Some acceptable rationales include:

-   a sufficient number of FTE are required to provide independent,
    day-to-day oversight of core agency function

-   Function requires a sufficient number of specialized FTE with
    expertise of agency systems and procedures

-   Agency requires a sufficient number of trained and experienced FTE
    with historical knowledge to ensure continual performance of a core
    function

-   Agency requires a sufficient number of FTE within this function to
    provide an in-house cadre of suitable candidates for career growth
    in mission critical areas of the agency.

**Follow up**

The workshop group evaluated several function codes and made joint
determinations on consolidation and definitions. CCSE is in the process
of compiling a "straw man" of draft DOI Function Code Definitions. We
hope to have the document completed and sent in draft by the end of
September.

As soon as a date and meeting room location for the October meeting (in
Denver) is available we will send out an invitation. This meeting will
be between 1-2 days and will focus on explaining the FAIR Act inventory
process to inventory coordinators primarily at the field level.
Competitive Sourcing Coordinators are welcome to attend even if you
attended the September meeting in Arlington.

If you have comments or questions please call me at 202-219-0727.

Thanks,

Donna