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OMB Circular A-76, Appendix 2

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APPENDIX 2

Commercial Activities Inventory

A. Annual Inventory Submission

In accordance with the FAIR Act, Circular A-76 and this Handbook, each agency must submit to OMB, by June 30 of each year, a detailed Commercial Activities Inventory of all commercial activities performed by in-house employees, including, at a minimum, the following:

a. Organization unit.

b. State(s).

c. Location(s).

d. FTE.

e. Activity function code.

f. Reason code.

g. Year the activity first appeared on FAIR Act Commercial Activities Inventory (initial value will be 1999).

h. Name of a Federal employee responsible for the activity or contact person from whom additional information about the activity may be obtained.

i. Year of cost comparison or conversion (if applicable).

j. CIV/FTE savings (if applicable).

k. Estimated annualized Cost Comparison dollar savings (if applicable).

l. Date of completed Post-MEO Performance Review (if applicable).

Agencies have the discretion to automate and to structure the initial submission of the detailed inventory as they believe most appropriate, so long as the inventory includes each of these data elements. Agencies must transmit an electronic version of the inventory to OMB as well as two paper copies. The electronic version should be in a commonly used software format (commercial off-the-shelf spreadsheet, database or word processing format). OMB anticipates issuing additional guidance on the structure and format of future inventory submissions, based on the experience gained from the first annual review and consultation process.

B. Reporting

The above is public information. The data may be summarized into reports for the Congress, the General Accounting Office (GAO), agency officials, OMB or the public.

C. FTE

Enter the number of authorized full-time employees or FTE (as applicable) in the commercial activity function or functions as of the date of the inventory. Employees performing inherently Governmental activities are not reported in the Commercial Activities Inventory.

D. A-76 Commercial activity functional codes

The Department of Defense has developed a comprehensive list of function codes for use in their A-76 inventory system. In applying these function codes Government-wide, the codes standardize the functional descriptions of activities and facilitate the aggregation of activities Government-wide and by agency.

E. Reason codes

The following reason codes will be used in the Commercial Activities Inventory. Agencies may add additional sub-groupings (A1, A2 for example) within any reason code, as deemed necessary.


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Code                         Explanation

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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 this Supplement.



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 this Supplement.





C    Indicates that the activity is performed by Federal employees,

     but is has been specifically made exempt from the provisions of

     the Circular and this Supplement 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 decisions

     (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.



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F. Maintenance of aggregate data

Agencies should maintain aggregate program implementation data by fiscal year, to include: total number of studies, FTE and dollar savings by conversion to contract, conversion to in-house or otherwise retained in-house. Agencies should also track total FTE studied and MEO savings generated.

G. Inventory Review and Publication; Challenges and Appeals

1. Review and Publication: In accordance with Section 2 of the FAIR Act, OMB will review the agency's Commercial Activities Inventory and consult with the agency regarding its content. After this review is completed, OMB will publish a notice in the Federal Register stating that the inventory is are available to the public. Once the notice is published, the agency will transmit a copy of the detailed Commercial Activities Inventory to Congress and make the materials available to the public through its Washington, D.C. or headquarters offices.

2. Challenges and Appeals: Under Section 3 of the FAIR Act, an agency's decision to include or exclude a particular activity from the Commercial Activities Inventory is subject to administrative challenge and, then, possible appeal by an "interested party." Section 3(b) of the FAIR Act defines "interested party" as:

a. A private sector source that (A) is an actual or prospective offeror for any contract or other form of agreement to perform the activity; and (B) has a direct economic interest in performing the activity that would be adversely affected by a determination not to procure the performance of the activity from a private sector source.

b. A representative of any business or professional association that includes within its membership private sector sources referred to in a. above.

c. An officer or employee of an organization within an executive agency that is an actual or prospective offeror to perform the activity.

d. The head of any labor organization referred to in section 7103(a) (4) of title 5, United States Code that includes within its membership officers or employees of an organization referred to in c. above.

3. An interested party may submit to an executive agency an initial challenge to the inclusion or exclusion of an activity within 30 calendar days after publication of OMB's Federal Register notice stating that the inventory is available. The challenge must set forth the activity being challenged with as much specificity as possible, and the reasons for the interested party's belief that the particular activity should be reclassified as inherently Governmental (and therefore be deleted from the inventory) or as commercial (and therefore be added to the inventory) in accordance with OFPP Policy Letter 92-1 on inherently Governmental functions (see Appendix 5) or as established by precedent (such as when other agencies have contracted for the activity or undergone competitions for this or similar activities).

4. The agency head may delegate the responsibility to designate the appropriate official(s) to receive and decide the initial challenges. As mandated by the FAIR Act, the deciding official must decide the initial challenge and transmit to the interested party a written notification of the decision within 28 calendar days of receiving the challenge. The notification must include a discussion of the rationale for the decision and, if the decision is adverse, an explanation of the party's right to file an appeal.

5. An interested party may appeal an adverse decision to an initial challenge within 10 working days after receiving the written notification of the decision. The agency head may delegate the responsibility to receive and decide appeals to the official identified in paragraph 9.a of the Circular (or an equivalent senior policy official), without further delegation. Within 10 working days of receipt of the appeal, the official must decide the appeal and transmit to the interested party a written notification of the decision together with a discussion of the rationale for the decision. The agency must also transmit to OMB and the Congress a copy of any changes to the inventory that result from this process, make the changes available to the public and publish a notice of public availability in the Federal Register.

H. Agency Review and Use of Inventory

Section 2(d) of the FAIR Act requires that each agency, within a reasonable time after the publication of the notice that its inventories are publicly available, review the activities on the detailed commercial activities inventory. Agencies will report to OMB on this process as part of the Report on Agency Management of Commercial Activities required under Paragraph I, below. In addition, Section 2(d)-(e) of the FAIR Act provides that, each time the head of the executive agency considers contracting with a private-sector source for the performance of an activity included on the inventory, the agency must use a competitive process to select the source and must ensure that, when a cost comparison is used or otherwise required for the comparison of costs, all costs are considered and the costs considered are realistic and fair. In carrying out these requirements, agencies must rely on the guidance contained in Circular A-76 and this Supplemental Handbook to determine if cost comparisons are required and what competitive method is appropriate. All competitive costs of in-house and contract performance are included in the cost comparison, when such comparison is required, including the costs of quality assurance, technical monitoring, liability insurance, retirement benefits, disability benefits and overhead that may be allocated to the function under study or may otherwise be expected to change as a result of changing the method of performance.

I. Annual Report on Agency Management of Commercial Activities

As part of ongoing agency responsibility to manage their performance of commercial activities and ongoing OMB oversight, OMB will require agencies to report annually on such management. The content of the reports is likely to vary depending upon the progress made by each agency in reviewing their inventory and on the experience OMB gains from the first round of inventory submissions, review, challenges and appeals mandated by the FAIR Act. OMB anticipates issuing subsequent guidance if it determines that supplemental reports or other information is needed for future inventory submissions to assure that agencies have correctly implemented all of the provisions of the FAIR Act and taken advantage of the management information inherent in the detailed Commercial Activities Inventory.




             A-76 Commercial Activition Functional Codes





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                               G--Social Services



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G001      Care of Remains of Deceased Personnel & Funeral Services



G008      Commissary Store Operation



G009      Clothing Sales Store Operations



G010      Recreational Library Services



G011      Morale, Welfare, and Recreation Services



G012      Community Services



G900      Chaplain Activities and Support Services



G901      Housing Administrative Services



G904      Family Services



G999      Other Social Services



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                               H--Health Services



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H101      Hospital Care



H102      Surgical Care



H105      Nutritional Care



H106      Pathology Services



H107      Radiology Services



H108      Pharmacy Services



H109      Physical Therapy



H110      Materiel Services



H111      Orthopedic Services



H112      Ambulance Services



H113      Dental Care



H114      Dental Laboratories



H115      Clinics and Dispensaries



H116      Veterinary Services



H117      Medical Records



H118      Nursing Services



H119      Preventive Medicine



H120      Occupational Health



H121      Drug Rehabilitation



H999      Other Health Services



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          J--Intermediate, Direct or General Repair and Maintenance

                                    of Equipment



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J501      Aircraft Maintenance



J502      Aircraft Engine Maintenance



J503      Missiles



J504      Vessels



J505      Combat Vehicles



J506      Noncombat Vehicles



J507      Electronic and Communication Equipment Maintenance



J510      Railway Equipment



J511      Special Equipment



J512      Armament



J513      Dining Facility Equipment



J514      Medical and Dental Equipment



J515      Containers, Textile, Tents, and Tarpaulins



J516      Metal Containers



J517      Training Devices and Audiovisual Equipment



J519      Industrial Plant Equipment



J520      Test, Measurement and Diagnostic Equipment



J521      Other Test, Measurement and Diagnostic Equipment



J522      Aeronautical Support Equipment



J999      Maintenance of Other Equipment



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                   K--Depot Repair, Maintenance, Modification,

                       Conversion or Overhaul of Equipment



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K531      Aircraft



K532      Aircraft Engines



K533      Missiles



K534      Vessels



K535      Combat Vehicles



K536      Noncombat Vehicles



K537      Electronic and Communication Equipment



K538      Railway Equipment



K539      Special Equipment



K540      Armament



K541      Industrial Plant Equipment



K542      Dinning and Facility Equipment



K543      Medical and Dental Equipment



K544      Containers, Textile, Tents, and Tarpaulins



K545      Metal Containers



K546      Test, Measurement and Diagnostic Equipment



K547      Other Test, Measurement and Diagnostic Equipment



K548      Aeronautical Support Equipment



K999      Other Depot Repair, Maintenance, Modification, Conversion or

            Overhaul of Equipment



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                   P--Base Maintenance/Multifunction Contracts



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P100      Installation Operation Contracts (Multi-function)



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             R--Research, Development, Test, and Evaluation (RDT&E)

                                     Support



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R660      RDT&E Support



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                            S--Installation Services



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S700      Natural Resource Services



S701      Advertising and Public Relations



S702      Financial and Payroll Services



S703      Debt Collection



S706      Bus Services



S708      Laundry and Dry Cleaning



S709      Custodial Services



S710      Pest Management



S712      Refuse Collection and Disposal Services



S713      Food Services



S714      Furniture Repair



S715      Office Equipment Maintenance and Repair



S716      Motor Vehicle Operation



S717      Motor Vehicle Maintenance



S718      Fire Prevention and Protection



S719      Military Clothing



S724      Guard Service



S725      Electrical Plants and Systems Operation and Maintenance



S726      Heating Plants and Systems Operation and Maintenance



S727      Water Plants and Systems Operation and Maintenance



S728      Sewage and Waste Plants Operation and Maintenance



S729      Air Conditioning and Refrigeration Plants



S730      Other Utilities Operation and Maintenance



S731      Supply Operations



S732      Warehousing and Distribution of Publications



S740      Transportation Management Services



S750      Museum Operations



S760      Contractor-Operated Parts Stores & Civil Engineering Supply

            Stores



S999      Other Installation Services



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                      T--Other NonManufacturing Operations



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T800      Ocean Terminal Operations



T801      Storage and Warehousing



T802      Cataloging



T803      Acceptance Testing



T804      Architect-Engineering



T805      Operation of Bulk Liquid Storage



T806      Printing and Reproduction



T807      Visual Information



T808      Mapping and Charting



T809      Administrative Telephone Services



T810      Air Transportation Services



T811      Water Transportation Services



T812      Rail Transportation Services



T813      Engineering and Technical Services



T814      Aircraft Fueling Services



T815      Scrap Metal Operation



T816      Telecommunication Centers



T817      Other Communications and Electronics Systems



T818      Systems Engineering and Installation of Communications

            Systems



T819      Preparation and Disposal of Excess and Surplus Property



T820      Administrative Support Services



T821      Special Studies and Analysis



T900      Training Aids, Devices, and Simulator Support



T999      Other NonManufacturing Operations



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                            U--Education and Training



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U100      Recruit Training



U200      Officer Acquisition Training



U300      Specialized Skill Training



U400      Flight Training



U500      Professional Development Training



U510      Professional Military Education



U520      Graduate Education, Fully Funded, Full-time



U530      Other Full-time Education Programs



U540      Off-Duty (Voluntary) and On-Duty Education Programs



U600      Civilian Education and Training



U700      Dependent Education



U800      Training Development and Support



U999      Other Training Functions



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                          W--Automatic Data Processing



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W824      Data Processing Services



W825      Maintenance of ADP Equipment



W826      Systems Design, Development and Programming Services



W827      Software Services



W999      Other ADP Functions



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                X--Products Manufactured and Fabricated In-House



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X931      Ordnance Equipment



X932      Products Made From Fabric or Similar Materials



X933      Container Products and Related Items



X934      Preparation of Food and Bakery Products



X935      Liquid, Gaseous and Chemical Products



X936      Rope, Cordage, and Twine Products; Chains and Metal Cable

            Products



X937      Logging and Lumber Products



X938      Communications and Electronic Products



X939      Construction Products



X940      Rubber and Plastic Products



X941      Optical and Related Products



X942      Sheet Metal Products



X943      Foundry Products



X944      Machined Parts



X999      Other Products Manufactured and Fabricated In-House



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           Z--Maintenance, Repair, Alteration, and Minor Construction

                                of Real Property



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Z991      Maintenance and Repair of Family Housing Buildings and

            Structures



Z992      Maintenance and Repair of Buildings and Structures Other

            Than Family Housing



Z993      Maintenance and Repair of Grounds and Surfaced Areas



Z997      Maintenance and Repair of Railroad Facilities



Z998      Maintenance and Repair of Waterways



Z999      Other Maintenance, Repair, Alteration, and Minor

            Construction of Real Property



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