Breakout Session # Competitive Sourcing Cathy Garman

2. Using A-76 to achieve the best results for the taxpayer Breakout Session # Competitive Sourcing Cathy Garman Senior Vice President, Contract Services Association (703-243-2020; cathy@csa-dc.org) Date December 6, 2005 Time 11:20a.m. -12:30p.m. NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

3. A-76 – A Historical Perspective Performance of Commercial Activities • In the process of governing, the Government should not compete with its citizens • National Policy Promulgated in 1955 • OMB A-76 Circular issued in 1966 NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

4. A-76 – A Historical Perspective • Circular revised in 1967, 1979, 1983 • Major revision in 1996 • Detailed outline on how to conduct public-private competitions • Two-step process • Viewed as unfair by all parties • Mostly used at Department of Defense (though there was a moratorium on DOD use in early 90s) NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

5. A-76 – A Historical Perspective Federal Activities Inventory Reform (FAIR) Act – passed October, 1998 • Mandates Annual Agency Inventories • Statutory definition of inherently governmental • Requires review for competing agency commercial activities • Sunshine on agency commercial activities • Over 900,000 Federal positions identified as commercial in nature; jobs normally performed by the private sector NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

6. A-76 – A Historical Perspective Commercial Activities Panel Report (www.gao.gov) • The FY 01 National Defense Authorization Act created a Blue Ribbon Panel to study competitive sourcing process and related issues. Industry, government, and public sector unions represented • Unanimous agreement on 10 sourcing principles • Recommendations focused on providing best value, promoting competition, valuing people, & moving to FAR process • Provided basis for revisions to A-76 Circular NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

7. A-76 – A Historical Perspective • Latest Revisions were released on May 29, 2003. • Initial reactions were split reactions – hated by public sector unions, industry cautiously supportive (implementation is the key); same attitude today • Key Points in Revisions: • Standard competitions shall not exceed 12 months – intended to provide more reasonable time frame for conducting public-private competitions; in line with “normal” procurements • Special streamlined competition (for under 65 FTEs) not to exceed 90 days • 10% cost differential maintained for all standard competitions; eliminated for streamlined (to help small business) NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

8. A-76 – A Historical Perspective May 2003 A-76 Revisions, cont. • FAR-like process, based on best value • Provides for exclusion of government bidder if deficient • Better accountability (for both public and private sector winners) • Performance periods must be the same for the agency tender offer and the private sector offers – minimum of 3 years and a maximum of 5 years for standard competitions • If the in-house tender offer wins, the MEO must compete again at the end of the performance period, just like under a private sector contract. BUT, agency can declare MEO a high performing organization and exempt from competition for an extra time period NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

9. A-76 – A Historical Perspective • Legislative Response to Revisions • One year prohibition on A-76 studies for DOD (2004) • House approved language to prohibit funds to be expended to implement revised Circular • Further restrictions considered in annual appropriations bills • Eliminate streamlined • Mandated cost differential for all competitions NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

10. A-76 – Recent Results • Administration favors competition – no matter who wins (public or private sector) • OMB studies show significant potential savings • But will they be fully realized? • Agencies winning 90% of competitions • Industry is walking away from A-76 competitions NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

11. A-76: Why should we still care? Benefits of competitive sourcing • time savings • cost savings • project delivery guarantees • access to new skills • increased innovation (e.g., a government employee with an innovative idea facing institutional barriers to change) • allows agency to focus on core mission • best value • risk sharing NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck

12. A-76: Why should we still care? • Looking at A-76 differently: • Glenn Davidson, President, EquaTerra Public Sector; and • Tom Luedtke, Assistant Administrator for Procurement, NASA Headquarters NCMA 24th Annual Government Contract Management Conference Improving the Procurement Process: Getting the Bang for the Buck