MAR 14, 2003

The Office of Management and Budget (OMB) Circular A-76, entitled “Performance of Commercial Activities”, establishes the policies and procedures for identifying commercial activities and determining whether these activities should be provided through contract with commercial service providers, by in-house government personnel, or through reimbursable fee-for-service providers under inter-service support agreements (ISSAs) with other government agencies. Government operated commercial activities which are not inherently governmental are subject to cost comparison, thereby allowing the government to achieve economies by determining whether it is less expensive to obtain the services from a contractor or other government entity, or to perform the work in-house. On an annual basis, agencies are required to identify the functions that will undergo A-76 cost comparison study. This is done through the Federal Activities Inventory Reform (FAIR) Act inventory. The FAIR Act of 1998 requires Federal agencies, on an annual basis, to prepare and submit inventories of their commercial activities performed by Federal employees to the Office of Management and Budget (OMB).

Early and throughout the A-76 cost comparison process, you will need the support of your Servicing Human Resources Office (SHRO) professionals, as they will play a major role on the study team. Although a study team is likely to include a diverse group of program experts, management analysts, contract specialists, etc., SHRO involvement is literally end-to-end, including: assisting you in the appropriate notification of employees and their unions; working with the team to develop the staffing, job classification, and compensation requirements for functions under study; assisting with formulation of government bids to retain the work in house; working with management officials to ensure that the functions under study remain operational during and after the cost-comparison process, and ensuring that placement and career transition efforts are maximized. Generally, the SHRO staff members who provide you ongoing staffing and classification services will be the individuals who provide you assistance with A-76 cost comparisons, as they are knowledgeable of your organization, mission, and workforce.

Clear and timely communication is critical to maintaining credibility with employees and unions. Information to be provided includes identification of functional areas under study, estimated numbers and types of employees affected, general procedures to be followed, and the timing of major events. The attachment, “A-76 Questions and Answers,” (Q&As) will be useful when you notify employees of functions under study.

Whether the government retains a given function in house or the work is outsourced, there is almost always some impact on employees. For example, the government’s bid to keep work in house is based on a Management Plan or Most Efficient Organization (MEO), which reflects changes in organizational structure and staffing levels - often resulting in a projected need for fewer employees. Again, the attached Q&As are a good source of information, in that they address the various ways employees may be impacted by A-76 cost comparisons.

Whatever the outcome of A-76 cost comparisons, NOAA has a strong commitment to minimizing adverse impact on our employees. Reduction in Force (RIF) will be considered as a last resort in downsizing, and used only if we have exhausted other, less drastic measures to meet any required decrease in our workforce. NOAA has demonstrated this commitment in the past, and will continue to do so, as discussed in the Q&As. Specifically, it is NOAA’s policy that every effort will be made to place employees in other jobs within their own geographic area as a first option. What this will mean is, at the point of decision for conversion to contractor or retention in-house, the SHRO will screen all recruit actions in the applicable commuting area for possible placements. Qualifications determinations for possible placements of impacted employees will be discussed with the selecting officials of the vacancies. As a second round of placement efforts, positions outside the local commuting area will be considered. Additionally, optional and discontinued service retirement will be relied on to help make required workforce reductions. If these actions don’t meet the required placement and outplacement needs, then NOAA will provide information on the use of career transition services, eligibility requirements for selection priority under Career Transition Assistance Program and Interagency Career Transition Assistance Program .

In addition to assistance from your servicing WFM Office, the Competitive Sourcing Team in the NOAA Office of Finance and Administration’s Audit, Internal Control and Information Management Office is available for consultation and strategy development for A-76 planning.

Attachments:
- Questions & Answers
- Tips for Employees
- Reemployment & Retraining Programs
- Labor Management Relations Obligations associated with Competitive Sourcing
- Sample RIF Request Letter

CC: NFA Office Directors