The Office of Management and Budget has developed this Inventory Guide to help agencies and the public understand the inventories of commercial and inherently governmental activities that agencies have developed in accordance with the Federal Activities Inventory Reform (FAIR) Act (P.L. 105-270), OMB Circular A-76, Performance of Commercial Activities, and other guidance.
To view the inventories for any specific agency, please visit that agency’s website. OMB requires all agencies to post their inventories on their websites so that interested members of the public can have quick and easy access to the inventories. For those who do not have internet access, an agency's inventory may also be obtained by contacting that agency's point of contact (who is identified in the OMB Federal Register Notifications of Availability for that year’s inventories).
If you need a paper copy of the FAIR Act, this User Guide, the OMB Circular A-76 or other related guidance, contact the Office of Federal Procurement Policy, NEOB Room 9013, Office of Management and Budget, 725 17th Street, N.W. Washington, DC 20503; call (202) 395-7579; or e-mail your request to firstname.lastname@example.org.
The FAIR Act directs Federal agencies to issue each year an inventory of all commercial activities performed by Federal employees. OMB reviews each agency's commercial activities inventory and consults with the agency regarding content. Upon the completion of this review and consultation, the agency is required to transmit a copy of the FAIR Act Inventory of Commercial Activities to the Congress and make it available to the public. The FAIR Act then establishes a limited administrative challenge and appeals process under which an interested party may challenge the omission or the inclusion of a particular activity on the inventory as a commercial activity. (See below for a discussion of the challenge and appeals process.)
In addition to meeting the FAIR Act requirements, agencies are also required by OMB Circular A-76 to issue each year an inventory of their inherently governmental activities performed by Federal employees. Attachment A of Circular A-76 provides instructions to agencies on preparing inventories of both commercial and inherently governmental activities. The full text of the Circular can be found on: www.whitehouse.gov/omb/circulars/a076/a76_incl_tech_correction.html.
The FAIR Act applies to the following executive agencies: (1) an executive department named in 5 U.S.C. Sec. 101, (2) a military department named in 5 U.S.C. Sec. 102, and (3) an independent establishment as defined in 5 U.S.C. Sec. 104. The FAIR Act does not apply to: (1) the General Accounting Office, (2) a government corporation or a government controlled corporation as defined in 5 U.S.C. Sec. 103, (3) a non-appropriated funds instrumentality if all of its employees are referred to in 5 U.S.C. Sec. 2105(c), or (4) depot-level maintenance and repair of the Department of Defense as defined in 10 U.S.C. Sec. 2460.
For purposes of the FAIR Act, there are two kinds of activities that are performed by Federal employees: those activities that are "commercial" in nature (and are, therefore, included on an agency's FAIR Act inventory) and those that are "inherently governmental." The FAIR Act requires each agency to prepare an inventory of activities that "are not inherently governmental functions" (i.e., "commercial"), and the FAIR Act defines an "inherently governmental function" as one "that is so intimately related to the public interest as to require performance by Federal Government employees." For additional information on categorizing activities, see Attachment A, paragraph B, of OMB Circular A-76.
In accordance with the FAIR Act and with OMB policy, each agency is required to submit to OMB, by June 30 of each year, inventories of their commercial and inherently governmental functions. The inventories must be submitted into the Workforce Inventories Tracking System (WITS). Submissions by other methods will not be accepted. WITS is available from the OMB MAX Homepage, which can be found at https://max.omb.gov/maxportal.
If an agency identifies no commercial activities that are performed by Federal employees, the agency is still required to submit an inventory of inherently governmental activities to OMB.
THE FAIR ACT CHALLENGE AND APPEALS PROCESS
Section 3 of the FAIR Act established a two-tiered administrative challenge and possible appeals process that permits interested parties to challenge the inclusion or the omission of an activity from the FAIR Act Commercial Activities Inventory. Under OMB Circular A-76, interested parties may also challenge the application of reason codes. Refer to Attachment A, paragraph D, of the Circular for a discussion of the challenge process.
Section 3(b) of the FAIR Act defines "interested party" as:
- A private
sector source that (1) is an actual or prospective offeror for any contract
or other form of agreement to perform the activity; and (2) 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.
- A representative
of any business or professional association that includes within its
membership private sector sources referred to in “a.” above.
- An officer
or employee of an organization within an executive agency that is an
actual or prospective offeror to perform the activity.
- 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.
If an interested party has any questions about the agency's inventories or the agency's FAIR Act challenge and appeals process (e.g., to which agency official should the interested party address its challenge), the party should contact the agency FAIR Act point of contact provided in the OMB Federal Register Notifications of Availability that an agency's inventory is publicly available.
After publication of OMB’s Federal Register notice stating that an agency’s inventories are available, an interested party shall have 30 working days to submit a written inventory challenge. The inventory challenge shall be limited to (a) the classification of an activity as inherently governmental or commercial, or (b) the application of reason codes. Function codes shall not be subject to the inventory challenge process. A written inventory challenge shall be submitted to agency inventory challenge authorities and shall specify the agency, agency component, agency organization, function(s), and location(s) for the activities being challenged. To be considered valid for purposes of the FAIR Act, a challenge must be:
- submitted in writing;
- submitted by an interested party, as defined in the FAIR Act;
- received by the agency challenge authority within 30 working days of the date that of the OMB Federal Register notice of availability and web site access;
- clear as to the activity being challenged for omission or inclusion on the inventory as specifically as possible by providing sufficient description of the activity in question to enable the agency to reasonably identify the activity being challenged;
- clear as to the activity being challenged for the reason code by providing sufficient description of the activity in question to enable the agency to reasonably identify the activity being challenged; and
- justified by providing the basis for the challenge.
Inventory challenge authorities are agency officials at the same level as, or a higher level than, the individual who prepared the inventory. Inventory challenge authorities review and respond to challenges of agency inventory decisions. Inventory appeal authorities are agency officials who are independent and at a higher level in the agency than inventory challenge authorities, and review and respond to appeals of inventory challenge decisions made by inventory challenge authorities.
Within 28 working days of receiving the inventory challenge, inventory challenge authorities shall (a) validate the commercial or inherently governmental categorization or reason code designation of the activity, in a written inventory challenge decision; and (b) transmit the inventory challenge decision, including the rationale for the decision, to the interested party. Inventory challenge authorities shall include an explanation of the interested party’s right to file an appeal in any adverse challenge decision.
Upon receipt of an adverse inventory challenge decision, an interested party shall have 10 working days to submit a written appeal of this decision to inventory appeal authorities.
Within 10 working days of receipt of the appeal, inventory appeal authorities shall issue and transmit a written inventory appeal decision to the interested party. This inventory appeal decision shall include the rationale for the decision.
When the inventory challenge process results in a change to an agency inventory, the agency shall (a) transmit a copy of the change to OMB and Congress; (b) make these changes available to the public; and (c) publish a notice of public availability in the Federal Register.