Office of Management and Budget | Print this document |
August 4, 1983
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Performance of Commercial Activities
(1)
The act of governing; i.e., the discretionary exercise
of Government authority. Examples include criminal investigations,
prosecutions and other judicial functions; management
of Government programs requiring value judgments, as in
direction of the national defense; management and direction
of the Armed Services; activities performed exclusively
by military personnel who are subject to deployment in
a combat, combat support or combat service support role;
conduct of foreign relations; selection of program priorities;
direction of Federal employees; regulation of the use
of space, oceans, navigable rivers and other natural resources;
direction of intelligence and counter-intelligence operations;
and regulation of industry and commerce, including food
and drugs.
(2)
Monetary transactions and entitlements, such as
tax collection and revenue disbursements; control of the
Treasury accounts and money supply; and the administration
of public trusts.
(1)
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.
(2)
A representative of any business or professional association
that includes within its membership private sector sources
referred to in (1) above.
(3)
An officer or employee of an organization within an executive
agency that is an actual or prospective offeror to perform
the activity.
(4)
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 (3) above.
(1)
Be applicable when contrary to law, Executive Orders, or
any treaty or international agreement;
(2)
Apply to inherently Governmental functions as defined in
paragraph 6.e.;
(3)
Apply to the Department of Defense in times of a declared
war or military mobilization;
(4)
Provide authority to enter into contracts;
(5)
Authorize contracts which establish an employer-employee
relationship between the Government and contractor employees.
An employer-employee relationship involves close, continual
supervision of individual contractor employees by Government
employees, as distinguished from general oversight of contractor
operations. However, limited and necessary interaction between
Government employees and contractor employees, particularly
during the transition period of conversion to contract,
does not establish an employer-employee relationship.
(6)
Be used to justify conversion to contract solely to avoid
personnel ceilings or salary limitations;
(7)
Apply to the conduct of research and development. However,
severable in-house commercial activities in support of research
and development, such as those listed in Attachment A, are
normally subject to this Circular and its Supplement; or
(8)
Establish and shall not be construed to create any substantive
or procedural basis for anyone to challenge any agency action
or inaction on the basis that such action or inaction was
not in accordance with this Circular, except as specifically
set forth in Part 1, Chapter 3, paragraph K of the Supplement,
"Appeals of Cost Comparison Decisions" and as
set forth in Appendix 2, Paragraph G, consistent with Section
3 of the Federal Activities Inventory Reform Act of 1998.
(1)
an executive department named in 5 USC 101,
(2)
a military department named in 5 USC 102, and
(3)
an independent establishment as defined in 5 USC 104.
(1)
the General Accounting Office,
(2)
a Government corporation or a Government controlled corporation
as defined in 5 USC 103,
(3)
a non-appropriated funds instrumentality if all of its employees
are referred to in 5 USC 2105(c), or
(4)
Depot-level maintenance and repair of the Department of
Defense as defined in 10 USC 2460.
(1)
If the finding is that no commercial source is capable
of providing the needed product or service, the efforts
made to find commercial sources must be documented and
made available to the public upon request. These efforts
shall include, in addition to consideration of preferential
procurement programs (see Part I, Chapter 1, paragraph
C of the Supplement) at least three notices describing
the requirement in the Commerce Business Daily
over a 90-day period or, in cases of bona fide
urgency, two notices over a 30-day period. Specifications
and requirements in the solicitation shall not be unduly
restrictive and shall not exceed those required of in-house
Government personnel or operations.
(2)
If the finding is that a commercial source would cause
unacceptable delay or disruption of an agency program,
a written explanation, approved by the assistant secretary
or designee in paragraph 9.a. of the Circular, must show
the specific impact on an agency mission in terms of cost
and performance. Urgency alone is not adequate reason
to continue in-house operation of a commercial activity.
Temporary disruption resulting from conversion to contract
is not sufficient support for such a finding, nor is the
possibility of a strike by contract employees. If the
commercial activity has ever been performed by contract,
an explanation of how the instant circumstances differ
must be documented. These decisions must be made available
to the public upon request.
(3)
Activities may not be justified for in-house performance
solely on the basis that the activity involves or supports
a classified program or the activity is required to perform
an agency's basic mission.
(1)
The Secretary of Defense shall establish criteria for
determining when Government performance of a commercial
activity is required for national defense reasons. Such
criteria shall be furnished to OMB, upon request.
(2)
Only the Secretary of Defense or his designee has the
authority to exempt commercial activities for national
defense reasons.
Photography
(still, movie, aerial, etc.)
Photographic processing (developing, printing, enlarging, etc.)
Film and videotape production (script writing, direction, animation,
editing, acting, etc.)
Microfilming and other microforms
Art and graphics services
Distribution of audiovisual materials
Reproduction and duplication of audiovisual products
Audiovisual facility management and operation
Maintenance of audiovisual equipment
ADP services
- batch processing, time-sharing, facility management, etc.
Programming and systems analysis, design, development, and simulation
Key punching, data entry, transmission, and teleprocessing services
Systems engineering and installation
Equipment installation, operation, and maintenance
Operation
of cafeterias, mess halls, kitchens, bakeries, dairies, and commissaries
Vending machines
Ice and water
Surgical,
medical, dental, and psychiatric care
Hospitalization, outpatient, and nursing care
Physical examinations
Eye and hearing examinations and manufacturing and fitting glasses
and hearing aids
Medical and dental laboratories
Dispensaries
Preventive medicine
Dietary services
Veterinary services
Machine,
carpentry, electrical, plumbing, painting, and other shops
Industrial gas production and recharging
Equipment and instrument fabrication, repair and calibration
Plumbing, heating, electrical, and air conditioning services,
including repair
Fire protection and prevention services
Custodial and janitorial services
Refuse collection and processing
Aircraft
and aircraft components
Ships, boats, and components
Motor vehicles
Combat vehicles
Railway systems
Electronic equipment and systems
Weapons and weapon systems
Medical and dental equipment
Office furniture and equipment
Industrial plant equipment
Photographic equipment
Space systems
Advertising
and public relations services
Financial and payroll services
Debt collection
Ordnance
equipment
Clothing and fabric products
Liquid, gaseous, and chemical products
Lumber products
Communications and electronics equipment
Rubber and plastic products
Optical and related products
Sheet metal and foundry products
Machined products
Construction materials
Test and instrumentation equipment
Library
operations
Stenographic recording and transcribing
Word processing/data entry/typing services
Mail/messenger
Translation
Management information systems, products and distribution
Financial auditing and services
Compliance auditing
Court reporting
Material management
Supply services
Laundry
and dry cleaning
Mapping and charting
Architect and engineer services
Geological surveys
Cataloging
Training -- academic, technical, vocational, and specialized Operation
of utility systems (power, gas, water steam, and sewage)
Laboratory testing services
Facility
management and operation
Printing and binding -- where the agency or department is exempted
from the provisions of Title 44 of the U.S. Code
Reproduction, copying, and duplication
Blueprinting
Design,
engineering, construction, modification, repair, and maintenance
of buildings and structures; building mechanical and electrical
equipment and systems; elevators; escalators; moving walks
Construction, alteration, repair, and maintenance of roads and
other surfaced areas
Landscaping, drainage, mowing and care of grounds
Dredging of waterways
Guard and
protective services
Systems engineering, installation, and maintenance of security
systems and individual privacy systems
Forensic laboratories
Cost benefit
analyses
Statistical analyses
Scientific data studies
Regulatory studies
Defense, education, energy studies
Legal/litigation studies
Management studies
Communications
systems - voice, message, data, radio, wire, microwave, and satellite
Missile ranges
Satellite tracking and data acquisition
Radar detection and tracking
Television systems - studio and transmission equipment, distribution
systems, receivers, antennas, etc.
Recreational areas
Bulk storage facilities
Operation
of motor pools
Bus service
Vehicle operation and maintenance
Air, water, and land transportation of people and things
Trucking and hauling