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Circular No. A-76 -- Revised

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:

  1. Organization unit.
  2. State(s).
  3. Location(s).
  4. FTE.
  5. Activity function code.
  6. Reason code.
  7. Year the activity first appeared on FAIR Act Commercial Activities Inventory (initial value will be 1999).
  8. Name of a Federal employee responsible for the activity or contact person from whom additional information about the activity may be obtained.
  9. Year of cost comparison or conversion (if applicable).
  10. CIV/FTE savings (if applicable).
  11. Estimated annualized Cost Comparison dollar savings (if applicable).
  12. 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.


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.


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 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


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.


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

                               G--Social Services

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
                               H--Health Services

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

          J--Intermediate, Direct or General Repair and Maintenance
                                    of Equipment

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

                   K--Depot Repair, Maintenance, Modification,
                       Conversion or Overhaul of Equipment

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

                   P--Base Maintenance/Multifunction Contracts

P100      Installation Operation Contracts (Multi-function)
             R--Research, Development, Test, and Evaluation (RDT&E)
R660      RDT&E Support
                            S--Installation Services

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

S999      Other Installation Services

                      T--Other NonManufacturing Operations

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

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

                            U--Education and Training

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

                          W--Automatic Data Processing

W824      Data Processing Services

W825      Maintenance of ADP Equipment

W826      Systems Design, Development and Programming Services

W827      Software Services

W999      Other ADP Functions

                X--Products Manufactured and Fabricated In-House

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

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

           Z--Maintenance, Repair, Alteration, and Minor Construction
                              of Real Property
Z991      Maintenance and Repair of Family Housing Buildings and

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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