COMPETITIVE

CONTRACTING

The Understandability

of FAIR Act

Inventories Was

Limited

United States General Accounting Office

GAO Report to the Chair, Subcommittee on

Oversight, Investigations, and

Emergency Management

House Committee on Transportation

and Infrastructure

April 2000

GAO/GGD-00-68

United States General Accounting Office General Government Division

Washington, D.C. 20548

Page 1 GAO/GGD-00-68 FAIR Act Inventories

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April 14, 2000

The Honorable Tillie Fowler, Chair

Subcommittee on Oversight, Investigations, and

 Emergency Management

Committee on Transportation and Infrastructure

House of Representatives

Dear Madam Chair:

As requested, this report describes the initial implementation of the

Federal Activities Inventory Reform (FAIR) Act of 1998 and examines

selected agencies’ inventories of noninherently governmental activities.1

These agencies are the Departments of Commerce and Transportation, the

General Services Administration (GSA), and the Environmental Protection

and Federal Emergency Management Agencies. The FAIR Act became law

on October 19, 1998, requiring executive agencies to submit each year to

the Office of Management and Budget (OMB) inventories of activities that,

in the judgment of the head of the agency, are not inherently governmental

functions. OMB’s Circular A-76, which establishes federal policy for the

executive branch’s performance of commercial activities, includes detailed

procedures for competitively determining whether commercial activities

should be performed by federal employees or the private sector. As our

October 1999 testimony discussed, implementation of the FAIR Act is in its

early stages, and continuing congressional interest in the FAIR Act is

needed to maintain serious agency attention to developing and using the

inventories.2

Our objectives were to (1) describe the overall initial implementation of

the FAIR Act, (2) analyze the clarity and understandability of the five

agencies’ FAIR Act inventories, (3) examine the extent to which these

agencies exempted commercial activities from competition, and (4)

identify supplemental information that enhanced the understandability of

agencies’ inventories.

 

1

Section 5 of the FAIR Act, Public Law No. 105-270, 112 Stat. 2382, 2384 to 2385, 31 U.S.C. § 501 note

(1998), defines an inherently governmental function as “a function that is so intimately related to the

public interest as to require performance by Federal Government employees.”

2

 Competitive Contracting: Preliminary Issues Regarding FAIR Act Implementation (GAO/T-GGD-00-34,

Oct. 28, 1999).
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The possible consideration of contracting for some of these activities

makes it important for interested parties to be able to look across

agencies’ inventories to identify differences in whether agencies consider

an activity inherently governmental, commercial and subject to

competition, or exempt from competition. In addition, reflecting the

importance of some degree of comparability across agencies, the

commercial activities listed in agencies’ FAIR Act inventories must be

understandable to interested parties. As defined by the act, interested

parties may challenge agency lists based on “an omission of a particular

activity from, or an inclusion of a particular activity on, a list.”3

 Interested

parties have 30 days after the publication of the notice of the public

availability of the FAIR Act inventory to file a challenge.4

OMB revised its Circular A-76, “Performance of Commercial Activities”

and its Circular A-76 Supplemental Handbook on June 24, 1999, to

implement the FAIR Act. This guidance contains function codes to

characterize the various types of commercial activities performed by

agency employees, for example “Health Services: Medical Records,” and

reason codes for agencies to categorize whether the commercial activities

they listed were exempt from, or could be considered for, competition.

The FAIR Act provides that when an agency considers contracting with a

private sector source for a commercial activity on its list, the agency shall

use a competitive process to select the source unless it is exempted from

doing so.

Ninety-eight executive agencies developed and published inventories of

their commercial activities under the FAIR Act’s first year of

implementation, identifying about 904,000 full-time equivalent (FTE)

employees performing commercial activities.5

 Compared to prior efforts to

 

3

 As defined in section 3 of the FAIR Act, interested parties are (1) a private sector source that is a

prospective or actual offeror for any contract who has a direct economic interest in performing the

activity and would be adversely affected by a determination not to procure the performance of the

activity from a private sector source, (2) a representative of any business or professional association

whose membership includes private sector sources described in paragraph (1) above, (3) an officer or

employee of an organization within the executive agency that is an actual or prospective offeror to

perform the activity, and (4) the head of a labor organization, referred to in 5 U.S.C. § 7103 (a)(4) that

includes members who are officers or employees within an executive agency involved in performing

the activity.

4

 We are looking at the issues raised during the challenges and appeals process at the request of the

Chairman, Subcommittee on Government Management, Information and Technology, House

Committee on Government Reform.

5

 These inventories included submissions to OMB stating that the agency has no commercial activities.

They were also made available to Congress and the public. In addition to these agency submissions, 16

Offices of Inspector General separately submitted FAIR Act inventories to OMB. The 98 agencies do

not include intelligence agencies (other than the Central Intelligence Agency) because before obtaining

a copy of their inventories appropriate security clearance and a need to know must be established.

Results in Brief
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Page 3 GAO/GGD-00-68 FAIR Act Inventories

inventory commercial activities, the initial implementation of the FAIR Act

increased the number of agencies identifying and reporting on their

commercial activities and increased the amount of information about

agencies’ commercial activities that is publicly available.

However, the clarity and understandability of the five FAIR Act inventories

we reviewed was limited. OMB’s June 1999 list of function codes used by

agencies to characterize the types of commercial activities they perform

was incomplete. Because OMB allowed agencies to use an expanded list

of function codes for their FAIR Act inventories that was not contained in

OMB’s June 1999 guidance, it may have been more difficult for interested

parties who did not have the expanded list to identify the activities

agencies are performing. Function codes on both the official and

expanded lists are vague, and OMB has not defined them. Agency officials

said that OMB’s function codes were not adequate to clearly categorize the

commercial activities that their employees perform. As outlined in its

budget procedures memorandum, the purpose of OMB’s reviews was to

seek to ensure consistency within and across the inventories; but the

formats differed, and some agencies used unique function codes to

categorize some of their activities. This limited the ability of interested

parties to identify potentially similar activities, such as automatic data

processing or administrative activities that are conducted across the

government.

The five agencies exempted a range of from 37 to 99 percent of the

commercial activities they identified from consideration for competition.6

For example, the Federal Emergency Management Agency (FEMA)

exempted 99 percent (2,302 FTEs) of its commercial activities from

competition because they perform emergency functions, according to the

agency. Interested parties may challenge the omission of a particular

activity from, or the inclusion of a particular activity on, an agency’s

inventory. However, since the FAIR Act does not require that commercial

activities be competed, it does not provide for challenges to agencies’

decisions to exempt commercial activities listed on the inventories from

competition.

 FTEs are used to measure federal civilian employment. One FTE is equal to 1 work year of 2,080

hours.

6

 Because of inconsistencies in Commerce’s inventory, we could not determine which activities they

determined would or would not be considered for competition. The 37 percent includes 12 percent

exempted and 25 percent that GSA excluded from consideration for competition until reinvention

efforts are completed.
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Finally, we found that some of the supplemental information that the five

agencies included enhanced the understandability of the FAIR Act

inventories. For example, although the FAIR Act does not require agencies

to identify their inherently governmental activities, GSA’s inventory listed

both its commercial and inherently governmental activities. Including this

information provided a fuller perspective about the range of activities that

GSA performs.

In enacting the FAIR Act, Congress made agencies’ inventories of their

commercial activities available to the public and subject to challenges and

appeals by interested parties. In order for the inventories to be

informative, however, they must be clear and understandable.

Accordingly, we recommend that the Director of OMB reexamine the

function codes in OMB’s guidance so that agencies’ identifications of the

activities they are performing are clear and understandable to Congress

and the public, including interested parties. We also recommend that the

Director of OMB reinforce the principles established in OMB’s budget

procedures memorandum for OMB staff to enhance the consistency of the

inventories within and across executive agencies.

Before the FAIR Act was passed, there had been considerable debate that

agencies, with some exceptions, were not making a serious effort under

Circular A-76 to ensure that they rely on the private sector for commercial

goods and services to the extent that it is cost effective. OMB Circular A76, issued in 1966, establishes federal policy for the government’s

performance of commercial activities. Under Circular A-76, executive

agencies are to conduct cost-comparison studies of commercial activities

performed by government personnel to determine whether it would be

more cost effective to maintain the activities in-house or contract with the

private sector for their performance. In 1979, OMB issued a supplemental

handbook to the circular to provide guidance for determining whether

agencies’ activities are inherently governmental or commercial and for

agencies to inventory their commercial activities. This supplemental

handbook includes OMB’s list of function codes for agencies to use to

identify their commercial activities.

In an attempt to devote more attention to the implementation of Circular

A-76, on May 12, 1998, OMB’s then Director, Franklin Raines, requested

agencies to submit to OMB inventories of their full- and-part-time positions

involving commercial and inherently governmental activities. Often

Background
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Page 5 GAO/GGD-00-68 FAIR Act Inventories

referred to as the “Raines lists,” agencies were to group their activities as

either

• inherently governmental;

• commercial, but specifically exempt from the cost-comparison

requirements of OMB Circular A-76;

• commercial and should be competed; or

• commercial, but must be retained in-house.

OMB requested that agencies submit their Raines lists by October 31, 1998.

An OMB official said that OMB had intended to provide agencies with

feedback on their lists but did not do so because the Raines lists were

“overtaken by events,” specifically the passage of the FAIR Act. (App. I

describes how the agencies we reviewed used their Raines lists in

developing their FAIR Act inventories.)

Our prior work has shown that savings are possible when agencies

undertake a disciplined approach, such as that called for under Circular A76, to review their operations and implement the changes to become more

efficient themselves or contract with the private sector for services.7

Agencies’ experiences with the Circular A-76 process suggests that

competition is a key to realized savings, regardless of whether functions

are eventually performed by private sector sources or retained in-house.

However, despite the federal policy on commercial activities, a minimal

amount of Circular A-76 activity occurred in the past, particularly among

civilian agencies since the late 1980s.8

 For example, in fiscal year 1997, the

Department of Defense was the only executive agency that reported to

OMB that it had completed any Circular A-76 cost-comparison studies for

federal positions.

OMB implemented the FAIR Act by revising its Circular A-76 guidance and

supplemental handbook, which included adding the new elements required

by the FAIR Act to the data elements already called for in the agencies’

Circular A-76 inventories of commercial activities. Like Circular A-76, the

FAIR Act does not require that commercial activities be competed. OMB

issued its revised guidance for the first year’s implementation of the FAIR

Act in the Federal Register on June 24, 1999, about a week before the first

 

7

 OMB Circular A-76: Oversight and Implementation Issues (GAO/T-GGD-98-146, June 4, 1998); DOD

Competitive Sourcing: Results of Recent Competitions (GAO/NSIAD-99-44, Feb. 23, 1999); and Defense

Reform Initiative: Progress, Opportunities, and Challenges (GAO/T-NSIAD-99-95, Mar. 2, 1999).

8

GAO/T-GGD-98-146, June 4, 1998.
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Page 6 GAO/GGD-00-68 FAIR Act Inventories

inventories were due to OMB for “review and consultation,” as required by

the act.

To meet its “review and consultation” responsibilities under the FAIR Act,

OMB issued budget procedures memorandum number 829 on July 12,

1999, instructing its staff to review agencies’ inventories to seek to ensure

consistency within an agency and across the Government. However,

OMB’s budget procedures memorandum states that OMB will not be

seeking to confirm, or validate, each and every element of the detailed

information contained in the agencies' inventories; that the FAIR Act

provides for such a detailed review to take place in the agencies’

development of their inventories and in the revisions that may result from

any challenges and appeals; and, in preparing its FAIR Act submission,

each agency needs to assess its operations to identify which are

commercial and which are inherently governmental.

At your request, we reviewed the initial implementation of the FAIR Act by

the Environmental Protection Agency (EPA), FEMA, GSA, the Department

of Transportation (DOT), and Commerce.9

 We selected four agencies that

are within the Subcommittee’s jurisdiction and added the Department of

Commerce to include an additional cabinet-level department with

component agencies that have broad and crosscutting responsibilities. We

collected the five agencies’ FAIR Act inventories and any related

documentation and developed databases to analyze this information. We

examined and compared the development, content, and format of these

agencies’ FAIR Act inventories and related supporting material to identify

instances that might reasonably aide or impede comprehension or use of

the inventories by Congress and the public, including interested parties.

We also interviewed the appropriate officials at each of the five agencies

about the processes they used to develop their FAIR Act inventories, the

characteristics of these inventories, and to obtain their comments on

OMB’s guidance. In addition, we interviewed OMB officials about the

guidance they provided to agencies and their responsibilities to review and

consult with agencies about the contents of their FAIR Act inventories.

We conducted our work between July 1999 and January 2000 at OMB,

EPA, FEMA, GSA, DOT, and Commerce headquarters in Washington, D.C.,

in accordance with generally accepted government auditing standards. We

provided a draft of this report for review and comment to the Directors of

 

9

 You also asked for information regarding FAIR Act implementation by the U.S. Army Corps of

Engineers. As agreed, this information will be included in our upcoming report to the Chairman of the

Military Readiness Subcommittee of the House Armed Services Committee. This report will discuss

the Department of Defense’s efforts to implement the FAIR Act.

Increased Congressional Interest Scope and

Methodology
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Page 7 GAO/GGD-00-68 FAIR Act Inventories

OMB and FEMA, the Secretaries of Transportation and Commerce, and the

Administrators of EPA and GSA. Their comments are reflected in the

agency comments section of this report.

Compared to prior efforts under Circular A-76 to inventory commercial

activities, the initial implementation of the FAIR Act has increased the

number of inventories developed by executive agencies, resulting in an

increased number of FTEs identified as performing commercial activities.

The FAIR Act has also made this information available to Congress and the

public. However, in order for the inventories to be informative, they must

be clear and understandable. The clarity and understandability of the five

agencies’ FAIR Act inventories we reviewed was limited. OMB’s June 1999

list of function codes to categorize commercial activities was incomplete,

vague in some cases, and did not adequately capture agencies’ activities.

Although OMB reviewed them, the agencies’ inventories were not always

consistent.

Information OMB published in the Federal Register for the first year’s

implementation indicates that 98 executive agencies submitted FAIR Act

inventories to OMB.10 According to an OMB official, the inventories listed

904,000 FTEs performing commercial activities, an increase over the

number of FTEs previously identified through the Circular A-76 process.

As shown in table 1, of the 5 agencies we reviewed, DOT identified the

largest number of FTEs (12,796) performing commercial activities,

representing about 13 percent of DOT’s total number of FTEs. Therefore,

it appears that DOT has determined that 86,079 FTEs (87 percent) of its

FTEs are performing inherently governmental activities.

Agency

Number (and percent)

of FTEs performing

commercial activities

Number (and percent)

of inherently

governmental FTEs

Total FTEs

Commercea 8,466 (27%) 23,112 (73%) 31,578

EPA 829 (5%) 17,160 (95%) 17,989

FEMA 2,324 (76%) 746 (24%) 3,070

GSA 7,249 (51%) 7,029 (49%) 14,278

DOT 12,796 (13%) 86,079 (87%) 98,875

a

Commerce's total number of FTEs performing commercial activities is based on our analysis.

Commerce’s summary table included in its FAIR Act submission showed 8,530 FTEs, but we found a

discrepancy within Commerce’s supporting databases, indicating that the total number of FTEs

performing commercial activities is 8,466.

 

10 Some agencies’ inventories were submissions to OMB stating that the agency had no commercial

activities.

FAIR Act Increased the

Identification of

Commercial Activities

but Understandability

Was Limited

Agencies Are Performing

Commercial Activities

Table 1: Number and Percent of FTEs

Agencies Identified as Performing

Commercial Activities
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Page 8 GAO/GGD-00-68 FAIR Act Inventories

Source: GAO analysis of selected agencies' FAIR Act inventories and interviews with agency officials.

FEMA identified the highest percentage (76 percent) of its total 3,070 FTEs

as performing commercial activities. In contrast, EPA identified the

lowest percentage (5 percent) of its total 17,989 FTEs as performing

commercial activities. EPA’s Deputy Chief Financial Officer said that he

does not expect the percentage of activities EPA identifies as commercial

to remain static. He also emphasized that EPA is already very reliant on

contractor support to fulfill its mission.

To provide public access to their inventories, both FEMA and GSA placed

their inventories on their Internet websites. The other agencies

(Commerce, EPA, and DOT) provided printed copies of their inventories to

interested parties upon request.

In order for the inventories to be informative for Congress and the public,

the inventories must be clear and understandable, but the clarity and

understandability of the agencies’ inventories we reviewed was limited.

The list of function codes included in OMB’s June 1999 guidance did not

list all of the function codes agencies used in their inventories. Some of

OMB’s codes are vague and there are no definitions available. In addition,

according to officials from some agencies, OMB’s function codes do not

adequately capture the activities their employees perform. Although OMB

reviewed them, the agencies’ inventories were not always consistent either

within an agency or across executive agencies.

OMB’s June 1999 guidance and the information available on its website do

not provide the complete list of function codes agencies used in their FAIR

Act inventories. This lack of information could make it more difficult for

interested parties to be able to understand what activities the agencies are

performing. The June 1999 guidance contains 12 major categories with 163

function codes listed in the supplemental handbook. For example, one

category is “health services” with function codes such as “dental care” and

“pharmacy services.” A prior draft of this list, which was never completed

by OMB and did not become part of its June 1999 guidance, included 21

major categories with 385 function codes. An OMB official said that they

never completed the expanded list because of the lack of time to revise the

function codes and have them cleared for use in developing the FAIR Act

inventories.

OMB’s official guidance and website do not contain 9 major categories of

activities that include 222 specific function codes, many of which agencies

used in the inventories we reviewed. For example, over half of the

The Clarity and

Understandability of the

Inventories Was Limited
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function codes used in DOT’s inventory are not included in OMB’s official

list of function codes. To understand DOT’s inventory, some interested

parties needed to contact the agency or OMB to obtain the expanded list of

function codes.

Even when agencies used OMB’s official list of function codes, in some

cases, it is still not clear what activities the agencies’ employees are

performing because some of OMB’s function codes are vague. For

example, one of OMB’s categories is “other nonmanufacturing operations.”

It is not clear exactly what the 130 FTEs DOT listed as providing

administrative support for other nonmanufacturing operations are actually

doing. Some of the other official codes are more specific. For example,

DOT listed 114 FTEs as performing “intermediate, direct or general repair

and maintenance of electronic and communication equipment.”

Codes from the expanded list are also vague in some cases. One of the

categories on the expanded list is “other selected functions.” Commerce’s

inventory lists 600 FTEs involved in providing “management support” for

“other selected functions.” As a result, the information in the inventory

alone is insufficient to determine what these activities involve. Other

codes on the expanded list are more understandable. For example,

Commerce lists 152 FTEs performing “data center operations” under the

“automatic data processing” category.

OMB has not made available any further description or elaboration of what

specific types of activities each of its function codes represent. Officials

from some agencies said that providing definitions of the function codes

would be helpful in characterizing their agency’s commercial activities.

According to an OMB official, however, creating definitions for all the

function codes would require a major commitment of time and resources,

which OMB does not have.

OMB has met with agency officials to receive their input on revising OMB’s

guidance to agencies on the preparation of the June 2000 FAIR Act

inventories. In the past, we have noted that OMB’s work with interagency

councils has been successful in tapping talents that exist within agencies,

keeping management issues in the forefront, and initiating important

improvement projects.11 We found that effective collaboration with

agencies—through such approaches as task forces and interagency

councils—has emerged as an important central leadership strategy in

 

11 Government Management: Observations on OMB’s Management Leadership Efforts (GAO/TGGD/AIMD-98-148, May 12, 1998).
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developing policies that are sensitive to implementation concerns and in

gaining consensus and consistent follow-through within the executive

branch. Therefore, one option would be for OMB to lead an agency

working group on FAIR Act issues, which could require fewer OMB

resources and enhance agencies’ involvement.

Officials from some of the agencies also said that OMB’s list of function

codes does not work well for describing civilian agencies’ commercial

activities and that it would be useful to revise these codes. A GSA official,

for example, said that OMB’s function codes are antiquated. GSA created

several new function codes to describe the policymaking activities

involving compliance reviews, the collection and analysis of data, or the

disposition of real property assets for the federal government. As a result,

GSA created 10 new function codes under a category it developed for

governmentwide management policymaking duties. GSA’s codes include

activities such as management, administrative and automated dataprocessing support. FEMA created an entirely unique set of function

codes for all of its commercial activities because it determined that all of

its functions are unique due to the nature of FEMA’s emergency

management responsibilities. Many of FEMA’s emergency management

workers are on call 24-hours a day, with duties that can change daily. A

FEMA official said that FEMA wanted to be specific and found OMB’s

function codes were vague in some cases.

According to OMB’s supplemental handbook, the function codes are

standardized to “facilitate the aggregation of activities Government-wide

and by agency.” In addition to some agencies, such as GSA and FEMA,

who created their own function codes, the agencies used different formats

for their lists, making it more difficult for interested parties to compare

potentially similar commercial activities across agencies within the 30-day

time period specified by the act to challenge the inventories. Because this

was the first effort to develop inventories under the FAIR Act, the

inventories varied in part because the agencies did not approach their

inventories from a common starting point, interpreted OMB’s guidance

differently, and adapted the codes to better meet their specific

circumstances. In the future, more consistent use of function codes and

formats would be helpful in trying to identify whether an agency’s

inventory should be challenged under the FAIR Act for including or

excluding a particular activity. However, as part of the initial

implementation of the FAIR Act, OMB’s reviews did not achieve

consistency in the use of function codes and formats across agencies’

inventories.
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Agencies exempted many of their FTEs performing commercial activities

from competition. FEMA, for example, exempted 99 percent (2,302 FTEs)

of its commercial activities from competition. The agencies do not intend

to consider competing these activities. These decisions cannot be

challenged or appealed under the FAIR Act because the act does not

require that the activities listed be competed.

OMB decided to revise its Circular A-76 guidance to implement the FAIR

Act. As called for in this guidance, agencies’ inventories are to contain

“reason codes” that characterize the status of each of their commercial

activities, as shown in table 2. Because the responsibilities of an activity

may vary among agencies and even within an agency, apparently similar

activities may be characterized with different reason codes.

Reason

Code Explanation

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

the Supplemental Handbook.

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 the

Supplemental Handbook.

C Indicates that the activity is performed by Federal employees, but has been

specifically made exempt from the provisions of the Circular and the

Supplemental Handbook 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 decision (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.

Source: Codes and explanations taken directly from appendix 2 of OMB's Circular A-76 Supplemental

Handbook.

As shown in table 3, the inventories of four of the five agencies we

reviewed listed about one-half of the commercial FTEs as reason code A,

indicating that these activities are specifically exempted by the agency

from the cost comparison requirements of the Circular A-76 process. DOT,

for example, exempted 57 percent of the FTEs performing commercial

activities from consideration for competition. The agencies exempted

Agencies’ Inventories

Lacked Clarity and

Understandability

Generic Function Codes Too

V

Aague gencies Listed Many

Commercial Activities

as Exempt From

Competition

Table 2: Reason Codes Contained in

Circular A-76 Supplemental Handbook
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from 37 to 99 percent of their commercial activities from competition, but

we could not determine how Commerce designated its commercial

activities.12 (For additional information on each of the agencies’

inventories, see app. II.)

Reason Codes

Agency A B C D E F OtheraTotal

Commerceb n/a n/a n/a n/a n/a n/a n/a n/a

EPA 775 30 24 0 0 0 0 829

FEMA 2,302 22 0 0 0 0 0 2,324

GSA 874 0 0 0 0 0 6,375 7,249

DOT 7,332 3,163 1,390 438 446 27 0 12,796

Total 11,283 3,215 1,414 438 446 27 6,375 23,198

Note: These agencies did not designate any FTEs with reason codes G, H, or I.

a

GSA created its own reason codes.

b

FTEs were not clearly designated in Commerce's FAIR Act inventory.

Source: GAO analysis of agencies' FAIR Act inventories.

OMB’s supplemental handbook states that agencies may modify existing

reason codes “as deemed necessary.” For example, Commerce created six

different modifications for reason code B. However, we could not

determine the reason code designations of Commerce’s commercial

activities because the inventory also listed its FTEs under three categories,

which were “exempt, competitive, and core.” Therefore, Commerce’s

inventory was ambiguous and sometimes contradictory. For example, the

International Trade Administration’s inventory listed 593 FTEs under the

“Exempt” column (i.e., exempt from competition) while also assigning

these FTEs reason code B (i.e., could be considered subject to

competition). In addition, Commerce did not assign any reason codes for

a substantial number of FTEs listed throughout its FAIR Act inventory, so

it is not clear how Commerce characterized these commercial activities.

OMB’s review did not correct these inconsistencies within Commerce’s

inventory before the inventory was made available to Congress and the

public.

A Commerce official said that although “sorting inconsistencies” occurred,

the agency does not plan to revise its inventory until its June 2000

submission. She said that since interested parties can only challenge

whether an activity is included on, or omitted from, the inventory,

 12 The 37 percent includes 12 percent (874 FTEs) GSA exempted from competition under reason code A

and 25 percent (1,819 FTEs) that it excluded from competition because these activities are undergoing

reinvention efforts.

Table 3: Number of Commercial FTEs

Agencies Designated by Reason Code
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clarifying the characterizations of Commerce’s commercial activities is not

necessary to comply with the act and would not affect any potential

challenges. She emphasized, however, that Commerce acknowledged

these inconsistencies and took steps to correct the problem internally.

According to Commerce officials, they have learned a lot from their initial

implementation experiences. They said that Commerce has taken steps to

ensure that a sound process is in place to effectively develop the June 2000

inventory to better comply with the spirit of the act.

GSA’s use of the reason codes also differed compared with other agencies’

FAIR Act inventories. According to a GSA official, GSA only used reason

code A from the supplemental handbook. GSA created other reason codes

based on its Raines list, the Circular A-76 process, and the FAIR Act. For

example, GSA created reason codes for commercial activities that are

undergoing reinvention efforts that may subsequently be redesignated and

for commercial activities that could be outsourced to other federal or

private sector providers.

Two agencies we reviewed provided general explanations as to why they

were using reason code A to exempt commercial activities from

consideration for competition. FEMA’s submission to OMB stated that the

agency’s mission to provide the government’s emergency response to

natural and man-made disasters justifies designating a high percentage (99

percent) of its commercial activities as exempt from competition. EPA

stated that the majority of the activities on its FAIR Act inventory

represent commercial core capabilities that should be retained in-house.

EPA exempted 775 FTEs, or 93 percent of its 829 commercial FTEs. EPA

cited its need to maintain appropriate in-house expertise to effectively

apply and enforce the nation’s environmental laws in fulfilling its mission

and meeting emergency requirements. It also pointed out that EPA has

been criticized as being too contractor dependent and noted that in the

past it has had to convert some work that was being done under contract

back to in-house operations.

Beyond the requirements of the FAIR Act, some agencies have included

supplemental information in their inventories that provides a useful

perspective about the range of activities that these agencies perform. This

additional information includes listing inherently governmental activities,

discussing how listed activities contribute to agencies’ strategic and annual

Supplemental

Information Can

Enhance the

Inventories
B-283779

Page 14 GAO/GGD-00-68 FAIR Act Inventories

performance, and describing the scope of activities currently under

contract.13

In addition to providing function codes and their commercial designation,

GSA’s FAIR Act inventory provides a fuller perspective about all of the

agency’s activities by listing both its commercial and inherently

governmental activities. Although the FAIR Act does not require agencies

to identify their inherently governmental activities, GSA’s inventory lists its

inherently governmental activities (comprising 7,029 FTEs, which is

almost 50 percent of GSA’s total of 14,278 FTEs). Information on agencies’

inherently governmental activities would be helpful for interested parties

to identify differences in how agencies classified similar activities. For

example, one agency may classify maintenance activities as inherently

governmental, while another agency may classify it as commercial. This

information could be used in determining what might be challenged.

Examining particular functions with this information provides a fuller

perspective of how the agency’s activities are carried out. GSA views

some of its activities as entirely inherently governmental, such as the 132

FTEs providing legal services. GSA’s inventory also shows that both

inherently governmental and commercial FTEs contribute to some

activities. For example, GSA designated almost 60 percent of its vehicle

acquisition and fleet management activities as commercial, with about 40

percent listed as inherently governmental.

A key part of achieving results is recognizing how an agency’s strategies

and day-to-day activities contribute to achieving an agency’s mission and

its programmatic goals. Officials at Commerce and FEMA said that their

FAIR Act inventories were being used as management tools to identify

possible efficiencies to their agencies’ programs and performance.

Relating an agency’s commercial efforts to its strategic and annual

performance plans can be useful to managers and decisionmakers in

determining how best to align agency programs and activities to achieve

results. Information linking activities to the agency’s programs also

provides useful information for interested parties who are trying to

determine what activities agency employees are currently performing.

EPA’s inventory links each of the commercial activities listed on its

inventory to 1 or more of its 10 strategic goals. For example, EPA linked

153 of the 206 FTEs performing commercial research support activities to

its goal of achieving clean and safe water.

 

13 GAO/T-GGD-00-34.

Including Inherently

Governmental Activities

Provides a Fuller

Perspective

Linking Commercial

Activities to Agency

Programs and Performance

Enhances Understandability
B-283779

Page 15 GAO/GGD-00-68 FAIR Act Inventories

Along with their FAIR Act inventories, agencies can also provide valuable

supplemental information about the role that contracting plays in acquiring

goods and services for the agency. A description of the scope of activities

that have already been contracted can provide an important perspective on

and context for the agency’s operations.

For example, EPA stated that the amount of services it obtains through

contracting is significant in relation to the agency’s in-house staffing needs.

EPA estimated that the amount of resources it contracted in July 1999

would have translated into 11,000 to 15,000 FTEs if EPA had retained the

work in-house, and it provided an enclosure listing some of the types of

services that are currently contracted. These services ranged from

activities such as elevator maintenance to environmental clean-up

activities and oversight.

Similarly, GSA’s inventory submission states that the agency functions

essentially as managers of private sector contractors. It states that nearly

94 percent of GSA’s $13 billion budget is spent for contractors who provide

direct operational support to federal agencies.

Under the first year’s implementation of the FAIR Act, 98 agencies have

identified about 904,000 FTEs that are performing commercial activities.

The number of agencies that have inventoried their activities and identified

FTEs performing commercial activities has increased compared with prior

efforts to inventory commercial activities. However, the initial

implementation of the FAIR Act indicates that there are opportunities for

agencies to make further improvements in the inventories provided to

Congress and the public.

The clarity and understandability of the five agencies’ inventories we

reviewed were limited. OMB’s guidance containing function codes for

agencies to identify their commercial activities was incomplete and vague

in some cases. Officials from some agencies said that the list of function

codes did not work well for describing some of their commercial activities.

Although OMB reviewed them, the agencies’ inventories were not always

consistent making it difficult to compare potentially similar activities

across agencies. Agencies used different formats, including unique codes

for identifying their activities. While some flexibility is important to

accurately reflect the diversity of the types of specific activities that

individual agencies perform, this needs to be balanced with the benefits to

interested parties in being able to compare common activities across

agencies. At a minimum, OMB’s list of function codes should identify all of

the codes agencies can use to identify their particular activities. More

Describing the Scope of

Current Contracting Efforts

Provides Context for the

Inventories

Conclusions
B-283779

Page 16 GAO/GGD-00-68 FAIR Act Inventories

specifically, it would be helpful if interested parties could look across

agencies’ inventories to identify what activities should or should not be

included on the inventories in order to file challenges within the 30-day

time frame provided under the FAIR Act.

The five agencies we reviewed exempted many of the FTEs performing

commercial activities from competition. As a result, although the FAIR

Act has increased the number of FTEs identified as performing

commercial activities, the actual number of FTEs that could be considered

for competition is substantially smaller than the number of commercial

FTEs listed. FEMA’s inventory, for example, shows that it exempted 99

percent of its commercial activities from competition (all but 22 of its

2,324 commercial FTEs). Designating these FTEs as exempt indicates that

FEMA does not intend to consider competing these activities. This

decision cannot be challenged or appealed under the FAIR Act, since the

act does not require activities listed by the agencies to be competed.

We also found that some of the supplemental information agencies

included in their inventories, which was not required under the FAIR Act,

was helpful. GSA included all of its activities (i.e., inherently governmental

as well as commercial) in its inventory. This provides a fuller perspective

about all of the agency’s activities. Other information included EPA’s

inventory linking its commercial activities to the agency’s strategic goals

and descriptions of the scope of activities currently under contract.

Interested parties may find it helpful to have this supplemental information

about specific agency operations available to them within the 30-day

period that the FAIR Act provides for filing challenges to agency

inventories. These types of supplemental information provide a context

for an agency’s activities and can help enhance the understandability of the

FAIR Act inventories.

In order to enhance the clarity and understandability of agencies’ FAIR Act

inventories, we recommend that the Director of OMB reexamine the

function codes appearing in appendix 2 of the Circular A-76 Supplemental

Handbook. This reexamination should include

• revising the codes to more accurately capture the activities agencies are

performing,

• defining the codes to ensure they are clearly understood, and

• ensuring that OMB’s official guidance and its website list all of the codes

that agencies are authorized to use, including codes that are specific to

individual agencies.

Recommendations
B-283779

Page 17 GAO/GGD-00-68 FAIR Act Inventories

Because OMB may lack the necessary time and resources to accomplish

this reexamination on its own, the Director of OMB may want to consider

collaborating with agencies—through such approaches as task forces and

interagency councils—as a strategy to gain consensus and consistent

follow-through on such reexamination efforts.

We also recommend that the Director of OMB reinforce the principles

established in OMB’s budget procedures memorandum for OMB staff to

enhance the consistency of the inventories within and across executive

agencies.

On March 7, 2000, we requested comments on a draft of this report from

the Secretaries of Commerce and Transportation, the Administrators of

EPA and GSA, and the Directors of FEMA and OMB. We obtained written

comments from the Director of FEMA, dated March 22, 2000. The Director

stated that the report was a fair analysis of FEMA’s first implementation of

the FAIR Act and expected that the report would have a positive effect on

the evolving process of meeting the act’s requirements. DOT had no

comments on the draft report.

Commerce, EPA, GSA, and OMB provided some clarifying and technical

comments to the draft report. We incorporated these changes into this

report where appropriate. In addition, Commerce wanted to emphasize

that they have taken steps to prevent inconsistencies in future inventories

and will develop its inventories to comply with both the spirit and

statutory requirements of the FAIR Act. EPA commented that it followed

and complied with OMB’s guidance in preparing its inventory.

We are sending copies of this report to Representative James R. Traficant,

Jr., Ranking Democratic Member, Subcommittee on Oversight,

Investigations, and Emergency Management and to Representative Bud

Shuster, Chairman, and Representative James L. Oberstar, Ranking

Democratic Member, House Committee on Transportation and

Infrastructure. We will also send copies to the Honorable Jacob J. Lew,

Director of OMB; the Honorable Rodney E. Slater, Secretary of

Transportation; the Honorable William M. Daley, Secretary of Commerce;

the Honorable David J. Barram, Administrator of GSA; the Honorable

Carol M. Browner, Administrator of EPA; and the Honorable James Lee

Witt, Director of FEMA. We will also make copies available to others on

request.

Agency Comments and

Our Evaluation
B-283779

Page 18 GAO/GGD-00-68 FAIR Act Inventories

Major contributors to this report are listed in appendix III. If you have any

questions about this report or would like to discuss it further, please

contact me or Susan Ragland, Assistant Director, on (202) 512-8676.

Sincerely yours,

J. Christopher Mihm

Associate Director

Federal Management and Workforce Issues
Page 19 GAO/GGD-00-68 FAIR Act Inventories
Page 20 GAO/GGD-00-68 FAIR Act Inventories

Contents

1 Letter

22

Commerce, DOT, and GSA Used Their Raines Lists 22

EPA and FEMA Used Components Input 22

Appendix I

Agencies Rely on

Raines Lists and Their

Components to Create

FAIR Act Inventories

24

Commerce’s Inventory Contains Contradictions 24

EPA Exempted Its Modified Function Codes From

Competition

25

FEMA Exempted Almost All FTEs From Competition 25

Majority of GSA’s Commercial FTEs Designated as

“Commercial Competitive”

26

Many of DOT’s Commercial FTEs Are Repair and

Maintenance Activities

26

Appendix II

Agencies Exempted

Many Commercial

FTEs From

Competition

Appendix III 28

GAO Contacts and

Staff

Acknowledgments

Table 1: Number and Percent of FTEs Agencies Identified

as Performing Commercial Activities

7

Table 2: Reason Codes Contained in Circular A-76

Supplemental Handbook

11

Table 3: Number of Commercial FTEs Agencies

Designated by Reason Code

12

Table II.1: Five Function Codes in Commerce’s Inventory

With the Most FTEs

25

Table II.2: Top Five Function Codes Exempted From

Competition by EPA

25

Table II.3: Top Five Function Codes Exempted From

Competition by FEMA

25

Tables

Table II.4: Top Five Function Codes Designated as

“Commercial Competitive” by GSA

26
Contents

Page 21 GAO/GGD-00-68 FAIR Act Inventories

Table II.5: Top Five Function Codes Exempted From

Competition by GSA

26

Table II.6: Top Five Function Codes Exempted From

Competition by DOT

27

Table II.7: DOT’s Top Five Function Codes That Could Be

Considered for Competition

27

Abbreviations

DOT Department of Transportation

EPA Environmental Protection Agency

FAIR Federal Activities Inventory Reform Act

FEMA Federal Emergency Management Agency

FTE full-time equivalent

GSA General Services Administration

OMB Office of Management and Budget
Appendix I

Agencies Rely on Raines Lists and Their

Components to Create FAIR Act Inventories

Page 22 GAO/GGD-00-68 FAIR Act Inventories

The five agencies we reviewed delegated much of the responsibility for

creating their FAIR Act inventories to their components. Commerce and

the Department of Transportation (DOT) instructed their components to

update their 1998 Raines lists while the General Services Administration

(GSA) used its Raines list intact. The Environmental Protection Agency

(EPA) and the Federal Emergency Management Agency (FEMA) based

their FAIR Act inventories primarily on input from their components.

To develop its FAIR Act inventory, officials from Commerce’s Office of the

Chief Financial Officer (CFO) and Assistant Secretary for Administration

instructed the department’s bureaus and offices to update their Raines

lists. According to a Commerce official, bureaus made only minor

changes.

Similar to Commerce, DOT’s CFO and Assistant Secretary for Budget and

Programs delegated the responsibility for developing FAIR Act inventories

to each of DOT’s 10 transportation modes, for example the Federal

Aviation Administration and the Coast Guard. DOT officials said that most

of the modes used the same information from their Raines lists for their

FAIR Act inventories. For example, the Coast Guard’s FAIR Act inventory

was identical to its Raines list. A few of the other modes, such as the

Federal Highway Administration (FHWA), created new inventories

because FHWA had undergone a reorganization that had changed some

activities.

GSA’s FAIR Act inventory was basically identical to its Raines list that had

been developed by an agencywide team organized by GSA’s CFO during

the summer of 1998. Team members representing the agency’s service

divisions and staff offices held discussions about what functions should be

considered commercial and those that should be considered inherently

governmental. Team members’ input into these discussions were based on

information gathered from the divisions, staff offices, and regions.

EPA’s Office of the CFO delegated the responsibility of developing the

agency’s FAIR Act inventory to EPA’s 10 regional offices and 13 program

offices. According to an official in the Office of the CFO, EPA’s CFO did

not want to dictate how to define “commercial activities” but instead

wanted the regional and program officials who were closer to the agency’s

activities to decide how these activities should be designated in the

inventory. To assist in this process, officials from EPA’s Office of the CFO

met with the regional and program officials and union representatives

about developing the inventory and provided them with advice and

material including OMB’s draft guidance. EPA officials reviewed the

Commerce, DOT, and

GSA Used Their Raines

Lists

EPA and FEMA Used

Components Input
Appendix I

Agencies Rely on Raines Lists and Their Components to Create FAIR Act Inventories

Page 23 GAO/GGD-00-68 FAIR Act Inventories

inventories for consistency and to ensure that the determinations made

were reasonable. An EPA official said that they did not use the Raines list

because when it was prepared in the fall of 1998 the agency did not have

enough time to complete a thorough analysis of its FTEs or consult with its

regional offices.

EPA officials encountered difficulties in deciding whether activities were

inherently governmental. According to EPA documentation, officials in

EPA’s regional and program offices sought guidance on how to categorize

FTEs that had duties involving both inherently governmental and

commercial activities. Because the agency was not aware of any specific

OMB guidance, EPA officials developed a general rule that if less than 50

percent of a FTE’s activities are inherently governmental, then the FTE

should be allocated between inherently governmental and commercial

activities (e.g., 30 percent inherently governmental and 70 percent

commercial). If more than 50 percent of the FTE’s duties are inherently

governmental, the FTE should be designated inherently governmental.

FEMA’s Office of Policy and Regional Operations (OPRO) developed its

FAIR Act inventory by coordinating with the agency’s 10 regions, 20

offices, union representatives, and labor-management partnership council.

FEMA hired a private contractor to provide training and assistance to

FEMA’s regions and offices to develop its FAIR Act inventory. FEMA’s

OPRO checked the region and office submissions for consistency. FEMA

officials made so many changes to its Raines list that it no longer was

comparable to the FAIR Act inventory that was eventually submitted to

OMB. Similar to EPA, FEMA officials also encountered difficulties with

dividing the activities of its staff, in particular, the duties of administrative

support staff for senior staff. FEMA officials said that, although private

sector contractors could perform these duties, these administrative

support staff need to be available on a 24-hour basis to respond to federal

emergencies and may on occasion perform inherently governmental duties

on behalf of senior staff. Therefore, FEMA exempted these FTEs from

consideration for competition.
Appendix II

Agencies Exempted Many Commercial FTEs

From Competition

Page 24 GAO/GGD-00-68 FAIR Act Inventories

Agencies exempted many of the FTEs performing commercial activities

from competition. Commerce’s inventory contained numerous

inconsistencies that prevented identifying how many FTEs were subject to

or exempted from competition. To determine the types of activities the

agencies exempted, we identified the five function codes with the most

FTEs that were exempt from competition by EPA, GSA, FEMA, and DOT.

In addition, because GSA and DOT designated a relatively large number of

FTEs as performing activities that could be considered for competition, we

also identified the five function codes with the most FTEs designated by

GSA and DOT as activities that could be considered for competition.

In many instances, Commerce’s FAIR Act inventory shows contradictory

information, preventing an understanding of whether the activity could be

subject to competition or whether Commerce considers the activity

exempt from competition. Commerce’s inventory is based on the Raines

lists produced by the 10 major bureaus, offices, and administrations within

the department. These lists placed the FTEs among three columns

representing the Raines list’s categories of “Exempt,” “Competitive,” and

“Core.” Next to these columns is a “Reason” column containing the

Circular A-76 reason codes (A, B, C, D, etc.). According to a Commerce

official, “sorting inconsistencies” occurred while updating and

consolidating these inventories. As a result, many FTEs were listed in

columns that contradicted their designated reason codes. For example, of

the 80 FTEs in the National Telecommunications Information

Administration’s inventory, 66 FTEs were listed under the “Exempt”

column (i.e., exempt from competition) while also being assigned reason

code B (i.e., could be considered subject to competition). Thus, the

information is not consistent. These contradictions appear throughout 9 of

the 10 inventories that make up Commerce’s FAIR Act submission.

A Commerce official said that the agency recognizes that its published

inventory contains contradictions and plans to correct them in its June

2000 FAIR Act submission to OMB. Despite these contradictions, we were

able to identify the five function codes having most of Commerce’s FTEs,

which are listed in table 1.

Commerce’s Inventory

Contains

Contradictions
Appendix II

Agencies Exempted Many Commercial FTEs From Competition

Page 25 GAO/GGD-00-68 FAIR Act Inventories

Function Codes FTEs

Research, Development, Test, and Evaluation Support—Applied

Research 1,891

Other Selected Functions—Administrative Support 904

Other Selected Functions—Other Functions 853

Other Selected Functions—Management Support 600

Other Selected Functions—Maritime Activities 429

Source: GAO analysis of Commerce's FAIR Act inventory.

EPA exempted 775 FTEs (or 93 percent of its FTEs performing

commercial activities) from competition. About 54 percent of these

exempted FTEs were associated with the five function codes having the

most commercial FTEs at EPA. As shown in table 2, two of these function

codes, one involving automatic data-processing activities and the other

involving environmental risk analysis activities, were created especially by

EPA.

Function Codes FTEs

Research, Development, Test, and Evaluation Support 191

Environment—Administrative Support 115

Automatic Data Processing—Information Technology/Managementa 53

Environment—Federal Insecticide, Fungicide, and Rodenticide Act/Food,

Drug, and Cosmetic Act (Risk Analysis)a

33

Finance and Accounting—Accounts Payable 29

a

 The function codes created by EPA.

Source: GAO analysis of EPA's FAIR Act inventory.

FEMA exempted 2,302 FTEs (or 99 percent of the FTEs performing

commercial activities) from competition. Sixty-six percent of these

exempted FTEs were associated with the five function codes having the

most commercial FTEs at FEMA, which are listed below in table 3.

Function CodesaFTEs

Response and Recovery Directorate—Multi-Discipline Specialist 695

Preparedness, Training and Exercises Directorate—Multi-Discipline

Specialist 258

Information Technology Services Directorate—Multi-Discipline

Specialist 233

Mitigation Directorate—Multi-Discipline Specialist 216

Response and Recovery Directorate—Management Support 124

a

Like FEMA's entire inventory, all five of these function codes are "emergency management" function

codes unique to FEMA and were used in its inventory that was released by OMB.

Source: GAO analysis of FEMA's FAIR Act inventory.

Table II.1: Five Function Codes in

Commerce’s Inventory With the Most

FTEs

EPA Exempted Its

Modified Function

Codes From

Competition

Table II.2: Top Five Function Codes

Exempted From Competition by EPA

FEMA Exempted

Almost All FTEs From

Competition

Table II.3: Top Five Function Codes

Exempted From Competition by FEMA
Appendix II

Agencies Exempted Many Commercial FTEs From Competition

Page 26 GAO/GGD-00-68 FAIR Act Inventories

Four of the 5 function codes are multidiscipline specialists involving 1,402

FTEs from 4 of FEMA’s directorates.

Unlike the three other agencies in our review that designated most of their

commercial activities as exempt from competition, GSA designated most

of its commercial FTEs (63 percent) as “commercial competitive.” Of the

4,556 FTEs designated as commercial competitive, 88 percent were

associated with the 5 function codes shown in table 4.

Function Codes FTEs

Maintenance, Repair, Alteration, and Minor Construction of Real

Property—Other Maintenance 2,115

Installation Services—Supply Operations 1,143

Installation Services—Vehicle Acquisition and Fleet Managementa 520

Personnel Management 130

Installation Services—Transportation Management Services 102

a

GSA created this function code as a modification of "installation services."

Source: GAO analysis of GSA's FAIR Act inventory.

In contrast to the other agencies that exempted a majority of their

commercial FTEs from competition, GSA exempted only12 percent (or 874

FTEs) from competition. Of the 874 FTEs exempted, 78 percent of the

FTEs were associated with 5 function codes, as shown in table 5.

Function Codes FTEs

Maintenance, Repair, Alteration, and Minor Construction of Real

Property—Other Maintenance 489

Other Selected Functions—Information and Telecommunications

Program Management 65

Investigations—Inspector General Services 50

Education and Training—Professional Development Training 48

Maintenance, Repair, Alteration, and Minor Construction of Real

Property—Management 34

Source: GAO analysis of GSA's FAIR Act inventory.

DOT exempted 7,332 FTEs (or 57 percent of its FTEs performing

commercial activities) from competition. Of these FTEs, 63 percent were

associated with five function codes, which are listed in table 6.

Majority of GSA’s

Commercial FTEs

Designated as

“Commercial

Competitive”

Table II.4: Top Five Function Codes

Designated as “Commercial

Competitive” by GSA

Table II.5: Top Five Function Codes

Exempted From Competition by GSA

Many of DOT’s

Commercial FTEs Are

Repair and

Maintenance Activities
Appendix II

Agencies Exempted Many Commercial FTEs From Competition

Page 27 GAO/GGD-00-68 FAIR Act Inventories

Function Codes FTEs

Intermediate, Direct or General Repair and Maintenance of

Equipment—Aeronautical Support Equipment 2,881

Other NonManufacturing Operations—Administrative Support 659

Depot Repair, Maintenance, Modification, Conversion or Overhaul of

Equipment—Vessels 429

Depot Repair, Maintenance, Modification, Conversion or Overhaul of

Equipment—Aircraft 351

Other Nonmanufacturing Operations—Management Support 272

Source: GAO analysis of DOT's FAIR Act inventory.

DOT also designated 3,163 FTEs (or almost 25 percent of its commercial

FTEs) as performing activities that could be considered for competition.

Of these FTEs, over half are associated with the five function codes listed

in table 7.

Function Codes FTEs

Other Nonmanufacturing Operations—Air Transportation Services 794

Intermediate, Direct or General Repair and Maintenance of

Equipment—Maintenance of Other Equipment 382

Intermediate, Direct or General Repair and Maintenance of

Equipment—Aeronautical Support Equipment 267

Intermediate, Direct or General Repair and Maintenance of

Equipment—Vessels 190

Other Selected Functions—Administrative Support 132

Source: GAO's analysis of DOT's FAIR Act inventory.

Table II.6: Top Five Function Codes

Exempted From Competition by DOT

Table II.7: DOT’s Top Five Function

Codes That Could Be Considered for

Competition
Appendix III

GAO Contacts and Staff Acknowledgments

Page 28 GAO/GGD-00-68 FAIR Act Inventories

J. Christopher Mihm or Susan Ragland, (202) 512-8676

In addition to those named above, Steven Lozano, Jerry Sandau, Tom

Beall, and Susan Michal-Smith made key contributions to this report.

GAO Contacts

Acknowledgments
Page 29 GAO/GGD-00-68 FAIR Act Inventories
Page 30 GAO/GGD-00-68 FAIR Act Inventories
Page 31 GAO/GGD-00-68 FAIR Act Inventories
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