## Change Request Number: 03-94 Date Received: 9/9/03

**Title: A-76 Implementation Guidance (T3.1.2.3)**

**Name:** James Little

**Routing Symbol:** ACA-200

**Phone:** (202) 385-7509

**Policy OR Guidance:** Guidance.

**Affected Section/Text Location:**

T3.2.1.3, formerly entitled \>Commercial/Inherently Governmental
Activities, now entitled \> Guidance for Implementing OMB Circular No.
A-76

**Summary of Change:** This change provides guidance for acquisitions
conducted under the provisions of OMB Circular No. A-76 (Revised),
Performance of Commercial Activities. It replaces existing AMS guidance
on commercial/inherently governmental activities.

**Reason for Change:** OMB Circular No. A-76 was revised, May 29, 2003,
and established federal policy for the competition of commercial
activities. Some of the Circular's requirements conflict with current
AMS policy and guidance. This change removes those conflicts and
provides guidance necessary to implement the Circular.

**Development, Review, and/or Concurrence:** The following organizations
have reviewed and concur with the proposed changes.

ACA

AGC-510

ASU-100

**Target Audience:** Affected by this change will be contracting
personnel involved in A-76 competitions, the Competitive Sourcing
Official, the Office of Competitive Sourcing Acquisition (ACA), Agency
Tender Officials, and Most Efficient Organizations included in agency
tenders.

**Potential Links within FAST for the Change:** None required.

**Attachments:** Language of change.

### Briefing Planned: No

**ASAG Responsibilities: None**

DELETE TEXT ENTIRELY AND REPLACE WITH NEW GUIDANCE

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  ----------------------- --------------------------------------------------------------
                          **Issue Date (revision): September 2003 (rev. 2)**

                          

  [Section]{.underline}   [Topics in the Section]{.underline}

                          

  A                       **Guidance for Implementing OMB Circular No. A-76**

  1                       OMB Circular A-76, Performance of Commercial Activities

  2                       Applicability of AMS

  3                       Responsibilities

  4                       Primary Phases for A-76 Competitions

  5                       Preliminary Planning

  6                       Public Announcement (Official Start Date)

  7                       Competition Procedures

  8                       Post Competition Accountability

  9                       Adversely Affected Employees

  10                      The Agency Tender

  B                       **Clauses**

  C                       **Forms**
  ----------------------- --------------------------------------------------------------

**A. T3.2.1.3 - Guidance for Implementing OMB Circular No. A-76**

**1. OMB Circular A-76, Performance of Commercial Activities**

OMB Circular No. A-76, "Performance of Commercial Activities," states
the policy of the Government to: (a) rely generally on private
commercial sources for supplies and services, if certain criteria are
met, while recognizing that some functions are inherently Governmental
and must be performed by Government personnel; and (b) consider relative
cost in deciding between Government and contractor performance. In
comparing the costs of Government and contractor performance, the
Government bases contractor\'s cost of performance on firm offers.

**2. Applicability of AMS**

a\. The FAA follows A-76 policy and procedures, except when the Circular
is inconsistent with AMS or other FAA statutory authority. The Circular
requires compliance with the Federal Acquisition Regulation (FAR), such
as when conducting standard and streamlined competitions, publicizing
competitions, when establishing certain roles or responsibilities, and
some decision-making. References to FAR, FAR-based processes or
terminology, or other Government procurement requirements in the
Circular are not applicable to FAA.

b\. Procurement procedures, except as noted in this guidance, are based
on AMS procurement policy (section 3.0) and guidance (Procurement
Toolbox). AMS is used to plan procurements; solicit, evaluate and select
sources; resolve protests and disputes; and manage contracts.

c\. Except as described in this guidance, AMS-required decisions,
mandatory planning documents, and lifecycle phase-related activities
described in AMS policy (sections 1.0 and 2.0) are not applied to
Circular A-76 competitions. AMS documentation, when applicable, is
appropriately tailored. Joint Resources Council decisions follow A-76
milestones rather than AMS phases.

**3. Responsibilities**

a\. *Service Director of the organization responsible for conducting
A-76 competitions*:

Appoints an acquisition team to lead the competition. An acquisition
team is a cross-functional, empowered team given an operating budget and
resources necessary to acquire specific services identified as
commercial in nature by a Federal Activities Inventory Reform (FAIR) Act
inventory.

b\. *Acquisition Team*

\(1\) Develops an Acquisition Strategy Paper and Integrated Program
Plan, both tailored as necessary

\(2\) Develops public announcements, evaluation criteria and plans,
screening information requests, evaluation reports, and debriefs
potential service providers.

c\. *Joint Resources Council (JRC):*

\(1\) Prior to issuance of the official start date (public
announcement):

\(a\) Baselines the cost of as-is performance;

\(b\) Approves the acquisition strategy;

\(c\) Revalidates the need for the function identified in the functional
scoping study.

\(2\) Prior to issuance of the final screening information request
(SIR):

\(a\) Establishes an activity cost baseline (independent government cost
estimate);

\(b\) Approves the Acquisition Strategy Paper, Integrated Program Plan,
and Risk Management Plan;

\(c\) Approves the Performance Work Statement (PWS) and Quality
Assurance Surveillance Plan (QASP).

\(3\) Prior to Source Selection decision:

\(a\) Approves the final cost baseline;

\(b\) Approves the recommended source selection decision.

**4. Primary Phases for A-76 Competitions**

The general process for the public-private competition within a
competitive sourcing study falls into four distinct phases: Preliminary
Planning, Public Announcements, Competition Procedures, and Post
Competition Accountability.

**5. Preliminary Planning**

a\. *Functions*. Before initiation of a competition, a FAIR Act
inventory will have already identified the function or activity as a
commercial activity suitable for competition; the existing service is
deemed to satisfy needed capabilities.

\(1\) A functional scoping study conducted during the preliminary
planning phase of a public-private competition inventories functions
that deliver "as is" services/capabilities. It also determines whether
users have continued need for all, some, or none of those services. The
functional scoping study incorporates mission need related activities
and is used to document mission requirements. Therefore, a Mission Need
Statement is not prepared.

\(2\) From the functional scoping study, an initial set of technical and
performance requirements is derived and documented in a functional
scoping summary document  (FSSD). The FSSD refines functions and
subfunctions to describe minimum, required levels of technical
performance. Functions are described in such a way as they can be
measured and evaluated. The FSSD is developed before the public
announcement and approved by the JRC.

b\. *Market Survey*. A market survey is conducted to determine if
sufficient interest and capability exists in the marketplace to perform
the service being competed. This market survey is in lieu of
AMS-prescribed investment analysis activities. A Requirements Document,
Investment Analysis Report, and Acquisition Program Baseline are not
required.

c\. *Initial Acquisition Strategy*. A high-level acquisition strategy is
developed and approved by the JRC.

d\. *As-is Cost Baseline*.

\(1\) A cost baseline is developed for the service as it is currently
provided. This cost baseline is presented to the JRC for information
before the public announcement.

\(2\) Baseline costs for the competition are calculated in accordance
with the guidance provided in Attachment C of OMB Circular A-76
(Revised).

**6. Public Announcement (Official Start Date)**

The public announcement starts the competition process. The announcement
indicates that the FAA will conduct the source selection in accordance
with AMS. The FAA uses Contract Opportunities (www.faaco.faa.gov) to
make public announcements. Information posted on Contract Opportunities
is automatically copied to FedBizOps.

**7. Competition Procedures**

a\. *Stakeholder Involvement*. A overarching goal is user and/or
customer satisfaction along with achievement of planned value and
performance levels. This requires the acquisition team to work with key
stakeholders, including affected employees and associated collective
bargaining units, to ensure that all issues necessary for success are
identified and resolved.

b\. *Notice of OMB Waivers*. Any specific deviations from the Circular
that require a waiver from the OMB will be described in the SIR and
public announcement.

c\. *AMS Planning Documents*. The detailed strategy for the overall
program is defined in an Acquisition Strategy Paper. An Integrated
Program Plan is prepared to describe program actions and activities.
Both documents, appropriately tailored, are developed prior to release
of the final SIR and are approved by the JRC.

d\. *Availability of Data*. Historical data and other information
available to the ATO or the MEO Team are made available by the
Contracting Officer (CO) to all prospective providers. However,
information related to the performance or productivity of an incumbent
MEO is not released.

e\. *Source Selection.*

\(1\) An Acquisition Strategy Paper, appropriately tailored, describes
the specific procurement approach to be used.

\(2\) The Source Selection Authority (SSA) in the Circular is synonymous
with the FAA's Source Selection Official (SSO).

\(3\) Use of AMS clauses "Notice of Cost Comparison" and "Right of First
Refusal of Employment" is mandatory. The public announcement also states
that award to a private potential service provider is contingent on
results of the cost comparison.

\(4\) Cost and pricing data is required from all potential service
providers in accordance with the Circular. Common costs will be
identified in the SIR.

\(5\) The SIR includes a requirement for potential service providers to
submit a quality control plan.

\(6\) *Special Considerations*

\(a\) Private sector offers and agency tenders are not evaluated
separately. The CO, SSO, and evaluation team ensure that all potential
service providers are treated fairly.

\(b\) Deficiencies in an offer or tender are handled by the CO in
accordance with the provisions of Attachment B of the Circular.

\(c\) To the maximum extent possible, Government property is made
available for use by service providers. The acceptance and use of such
property, however, is not mandatory.

\(7\) Within three days after contract award, the CO provides written
notice to each potential service provider remaining in the competition,
but not selected for award. This notice includes:

\(a\) The number of potential service providers solicited;

\(b\) The number of proposal received;

\(c\) The name and address of each potential service provider receiving
an award;

\(d\) The items, quantities, and any stated unit prices of each award
(The total contract price may be furnished if it is impractical at this
time to provide unit prices but the unit prices must be made available
upon request.);

\(e\) In general terms, the reasons the potential service provider's
proposal was not accepted, unless the price information reveals the
reason. In no event shall a potential service provider's cost breakdown,
profit, overhead rates, trade secrets, manufacturing process or
techniques, or other confidential business information be disclosed to
any other potential service provider.

f\. *Period of Performance.*

\(1\) Contracts awarded under the Circular are for a minimum of three
years, excluding the phase-in period. OMB approval is required for
performance periods exceeding five years, excluding the phase-in period.
Performance periods for the agency tender and for private sector
potential service providers will be identical.

\(2\) Potential service providers, including the MEO, propose a phase-in
plan to replace the incumbent service provider. The plan, intended to
minimize disruption and start-up requirements, considers recruiting,
hiring, training, security limitations, and other special
considerations. The phase-in period is considered the first performance
period of a new contract.

g\. *Contests.* The FAA will follow the FAA Dispute Resolution process
in total, which supercedes the provisions of Section B, Part F, of the
Circular. The Office of Dispute Resolution for Acquisition (ODRA) is
available to assist all parties of an A-76 acquisition, including the
MEO, when objections arise concerning the competition or source
selection decision.

h\. *No Satisfactory Response.* If no satisfactory offer or tender is
received in response to an A-76 solicitation, the CO determines the
reasons for non-responsiveness and proposes a course of action to the
Competitive Sourcing Official (CSO). The CSO then takes action in
accordance with the provisions of Attachment B to the Circular.

i\. *New Technology and Operational Processes.* There is no required
testing of existing services when they become the responsibility of a
new service provider unless new services or technologies are introduced.
The purpose of test and evaluation remains the mitigation of potential
operational risks and the verification of operational readiness for the
In-Service Decision. The Acquisition Team determines the type of
testing, if required, prior to transition to a new service provider. An
In-Service Decision is not required to deliver a set of services using
existing technology or processes. The In-Service Decision is a key
program milestone if new technology or service concepts are introduced
as a result of the competition or during the service delivery timeframe.

j\. *Lessons Learned.* The office responsible for conducting the
acquisition maintains a data base of lessons learned from each
competition to ensure a consistent competition process and development
of best practices.

k\. *Competitive Sourcing Official (CSO).* The CSO is responsible for
the implementation of the Circular within the FAA. Specific duties of
the CSO are spelled out in the Circular.

**8. Post Competition Accountability**

a\. In-Service Management begins when the new service provider initiates
phase-in. At this point an organization known as the Continuing
Government Activity (CGA) assumes responsibility for monitoring and
assessing performance of the service provider. Members of the CGA are
appointed by the responsible service director. The manager of the
acquisition team coordinates closely with the manager of the CGA to
assure a smooth transition of responsibilities.

b\. For a performance decision favoring the agency, the CO establishes
an MEO letter of obligation with the official responsible for
performance of the MEO. Appropriate portions of the solicitation and the
agency tender are incorporated into the letter of obligation which is
then distributed to appropriate individuals, including the ATO.

c\. The CGA will accomplish the post competition accountability
procedures required by the Circular and will institute the appropriate
monitoring mechanisms.

**9. Adversely Affected Employees**

a\. In accordance with the FAA Performance Management System (PMS)
Chapter 1, paragraph 14, Federal civilian employees serving competitive
or excepted service appointments in Tenure Groups I, II, or III, who are
identified for release from their competitive level by the FAA as a
direct result of a performance decision resulting from a Circular
competition are considered adversely affected employees.

b\. The new service provider must give such employees the right of first
refusal for employment openings under the contract in positions for
which they are qualified, if that employment is consistent with
post-Government employment conflict of interest standards.

c\. Within 10 days after contract award, the CO provides the new service
provider a list of all Government employees who have been or will be
adversely affected or separated as a result of the award. The new
service provider then reports, within 120 days after contract
performance begins, the names of individuals identified on the list who
were hired within 90 days after contract performance began.

**10. The Agency Tender**

a\. The Agency Tender is the FAA management plan submitted in response
to a Circular competition. It includes the MEO, a cost estimate, an MEO
quality control plan, an MEO phase-in plan and other elements required
by the Circular and the SIR. It is not required to include a labor
strike plan, a small business strategy, a subcontracting plan goal,
participation of small disadvantaged businesses, licensing or other
certifications, nor past performance information (except in unique
circumstances identified in the Circular). The date for delivery of
offers and tenders is the same.

b\. When preparing the Agency Tender the MEO Team may consider the use
of commercial contractors or teammates to help achieve performance
requirements. In such cases the MEO is required to comply with the AMS.

**B. CLAUSES**

*Click here to access applicable clauses*
[http://www.asu.faa.gov/conwrite/](javascript:pankshar('http://204.108.10.60/conwrite/'))

**C. FORMS**

None applicable.