Circular No. A-76 -- Revised
Motor Vehicle Competitions
This Appendix provides joint guidance by OMB and The General Services
Administration (GSA) for use in cost comparisons involving the provision
of motor vehicle fleet management services. It apples to conversions
to or from in-house, contract or interservice support agreement (ISSA).
Agencies should consider the costs, benefits and feasibility of using
the agency's fleet management system, the GSA Interagency Fleet Management
System (IFMS), other ISSA providers and qualified commercial management
1. Cost comparisons will comply with Part I and Part II of this Supplement,
and as discussed in this Appendix.
2. Cost comparisons should distinguish between the benefits of centralized
Government vehicle acquisition and the potential benefits of fleet acquisition,
operation, maintenance, and disposal management support services. Solicitations
should permit or may require offerors to compete vehicle asset costs
separately from fleet management services.
3. In accordance with Part I, Chapter 2 of this Supplement, all Government
offerors will certify that their performance cost estimates or reimbursable
rates are calculated in accordance with this Supplement.
4. Agencies may include all of their fleet requirements, including
those currently being met by the GSA/IFMS or the private sector. Vehicles
currently provided by the GSA/IFMS may be included in the agency's in-house
cost estimate as IFMS vehicles.
C. Developing the requesting agency's in-house motor vehicle fleet
1. The requesting agency's in-house costs are calculated as provided
in Parts I and II of this Supplement and entered on Lines 1 through 7
as appropriate. Care should be taken to separate vehicle asset costs
(cost of vehicles) from vehicle acquisition and other administrative
management support costs.
D. Developing comparable motor vehicle fleet costs
1. Competitions between a requesting agency, private sector offeror,
the GSA/IFMS or another ISSA offeror may require that the requesting
agency make certain adjustments in scope and cost to ensure that the
cost comparison is equitable. These scope and cost adjustments, as discussed
--Contract Administration Costs
--One-time Conversion Costs
--Gain/Loss on Disposal/Transfer of Assets
--Federal Income Taxes
--Other Adjustment Costs
2. Contract Price (Line 9 and Line 16).--The contract price is the
price proposed by the lowest priced, fully qualified commercial offeror,
IFMS or ISSA offeror. This will be obtained by issuing a solicitation
requesting offers. The agency should be careful that the solicitation
accurately describes its fleet management needs.
3. Contract administration costs (Line 10 and Line 17).
Include costs, as appropriate from Part II Table 3-1.
4. One-time conversion costs (Line 11 and Line 18).
- One-time conversion costs may result when a contractor, IFMS
or ISSA offeror takes over the operation of the fleet. This can involve
the costs of the transfer of Government-owned supplies or temporary
labor costs incurred to facilitate the transition to a new fleet
- When items of material become available for transfer to the
contractor, IFMS or ISSA, material related conversion costs may result.
If materials consumed as a part of the requesting agency's MEO are
clearly identified in the PWS to be transferred to the contractor,
IFMS or ISSA, the value of those materials and supplies are common
costs and not considered a part of the comparison.
- If, however, those same materials are not to be provided to
the contractor, IFMS or ISSA offeror, but are instead to be transferred
to another agency location or excessed, the value of that material
should be subtracted from the contract, IFMS or ISSA offers as a
net savings to the Government resulting from the conversion.
5. Gain on disposal of assets (Line 12 and Line 19).
- If an agency requires the contractor, IFMS or ISSA to replace
existing Government (agency) owned vehicles (assets) by a specific
date, the projected fair market value of those existing assets, as
established by generally available industry guides, are subtracted
from the contractor's, IFMS or ISSA's cost estimates. These values
represent a net "savings" caused by conversion.
- Agencies may provide that vehicle replacement by the contractor,
IFMS or ISSA offeror will be in accordance with the Government's
existing or MEO replacement schedule. In this case, all parties to
the competition should assume replacement at the same rate. Values
from existing fleet to the Government apply to all alternatives equally.
- Agencies may also continue to provide vehicles for contractor,
IFMS or ISSA fleet management. No adjustments are necessary.
- Finally, agencies may require replacement by the contractor,
IFMS or ISSA offeror and may allow the IFMS or ISSA offeror to simply
assume ownership of the existing fleet as Federal agencies. In this
case, the agency, IFMS or ISSA offeror receives a gain--and a considerable
competitive advantage over the contract bid--estimated at the fair
market value of the existing fleet. An amount equal to the fair market
value of the existing fleet is added to the agency, IFMS or ISSA
offeror bid at Line 19 for cost comparison purposes.
6. Federal income tax (Line 13 and Line 20).
- Agencies should recognize the current contract support identified
in Line 6, above. Calculate the total Federal Income Tax, based
upon the contractor's offer (Line 9) and Appendix 5, Tax Rate Table.
Subtract from the contractor's estimated tax liability the Federal
taxes paid within the in- house cost estimate (estimated from the
appropriate share of Line 6 and as described in the Management
Plan) and enter the remainder.
- The same treatment may be afforded to the GSA/IFMS or ISSA
offer, if the offeror certifies the value of its contract support
contained within its overall cost estimate. This estimate must
be available to the requesting agency's Independent Review Officer
for review and concurrence.
7. Conversion differential (Line 7, Line 14 and Line 21).
The standard minimum differential, as provided in Part II of this
Supplement, shall be applied to the contract, IFMS and ISSA offers. If
the cost comparison is being conducted to determine if motor vehicle
fleet management services should be converted from contract, IFMS or
ISSA performance to in-house agency operation, the conversion differential
is added (on Line 7) to the in-house performance cost estimate. If the
cost comparison is being conducted to determine if motor vehicle fleet
management services should be converted from in-house operation to contract,
IFMS or ISSA performance, the conversion differential is added (on Line
14 and Line 21) to the contract, IFMS or ISSA performance cost estimates.
8. Other IFMS/ISSA Scope Adjustments (Line 22).
- It is not the intent of this Supplement to require the IFMS
or other potential ISSA offerors to alter their methods of operation
to provide unique or site specific services. While such services
may meet agency missions and may legitimately be included in the
solicitation, additional adjustments to the IFMS/ISSA cost estimate
may be necessary to reflect differences in the bids. Examples of
such services include: dispatching, vehicle transition, maintenance
work warranties, certain disposal services/costs, accessory installations
and removals, tire replacements, etc.
- Agencies should identify the differences between the requirements
of the solicitation (contractor bid) and the IFMS/ISSA cost estimate.
The agency determines if any item or combination of items will impact
the agency's ability to perform. If the agency's ability to perform
would be adversely impacted, the IFMS/ISSA cost estimates may be
rejected as non-responsive. If the differences will have minimal
agency performance implications, and/or can continue to be performed
by agency personnel, the IFMS/ISSA cost estimates will be adjusted
for purposes of comparison with the contractor and MEO offers, based
upon the comparable costs contained in the agency's MEO.
- A complete record of all adjustments to the contractor's, IFMS
and ISSA's cost estimates should be maintained and made available
to the public upon request.
E. Motor vehicle cost comparison
1. A Motor Vehicle Cost Comparison Form (MVCCF) has been developed.
Use of this form will help agencies move through the cost comparison
in a structured manner. The Form has been set up with five sections.
Each section relates to a different set of costs or to the evaluation
itself. Within each section, the appropriate cost elements have been
2. Each cost listed is projected for all periods of the cost comparison.
The first year will reflect current estimated costs. For each of the
following years, the inflation factors provided by this Supplement shall
be used for each element of cost that is affected by inflation. A minimum
of one year and three option years will be used for comparative purposes.
3. With the completion of the MVCCF, the agency may evaluate the alternatives.
In order to do this, the total Lines (Lines 8, 15 and 23) should be entered
on Lines 24, 25 and 26, respectively. The decision is based upon the
lowest overall cost to the Government over the minimum five-year cost
comparison period. Enter the decision as appropriate.
THE A-76/MV COST COMPARISON FORM FOR MOTOR VEHICLE FLEETS
Performance Periods (Fiscal Years)
A. DEVELOPMENT OF IN-HOUSE COSTS
Base Option Option Option Option
Year Yr 1 Yr 2 Yr 3 Yr 4 Total
----- ----- ----- ----- ----- -------
3. Other Direct
4. Cost of Capital
7. Conversion Differential
--- --- --- --- --- ----
8. Total In-house
B. DEVELOPMENT OF CONTRACT COSTS
9. Contract Price
10. Contract Administration
11. One-time Conversion
12. Gain on Disposal
13. Federal Income Taxes ( ) ( ) ( ) ( ) ( ) ( )
14. Conversion Differential
----- ----- ----- ----- ----- -------
15. Total Adjusted Contract Price
C. DEVELOPMENT OF IFMS OR ISSA COSTS
16. IFMS/ISSA cost estimate
17. Contract Administration
18. One-time Conversion
19. Gain on Disposal
20. Federal Income Taxes ( ) ( ) ( ) ( ) ( ) ( )
21. Conversion Differential
22. Other Scope Adjustments
----- ----- ----- ----- ----- ------
23. Total Adjusted IFMS or ISSA Price
D. COST COMPARISON
24. In-House --------
25. Contract --------
26. IFMS and/or ISSA --------
_____ Retain In-House
_____ Consolidate to GSA/IFMS or ISSA
_____ Convert from Contract to: In-house, IFMS or ISSA
THE A-76/MV COST COMPARISON FORM FOR MOTOR VEHICLE FLEETS
27. In-House MEO Certified By:_____________ Date: _______
Office and Title
"I certify that, to the best of my knowledge and belief, the
in-house organization reflected in this cost comparison is the
most efficient and cost effective organization that is fully
capable of performing the scope of work and tasks required by
the Performance Work Statement. I further certify that I have
obtained from the appropriate authority concurrence that the
organizational structure, as proposed, can and will be fully
implemented - subject to this cost comparison, in accordance
with all applicable Federal regulations.
28. In-House Cost Estimate Prepared By:______________ Date: _____
29. Independent Reviewer: ________________ Date: ________
Office and Title
"I certify that I have reviewed the PWS, Management Plan, In-
house, GSA/IFMS or ISSA cost estimates and supporting
documentation available prior to bid opening and, to the best
of my knowledge and ability, have determined that: (1) the
ability of the in-house MEO to perform the work contained in
the Performance Work Statement at the estimated costs included
in this cost comparison is reasonably established and, (2)
that all costs entered on the cost comparison have been
prepared in accordance with the requirements of Circular A-76
and its Supplement.
30. Cost Comparison Completed By:__________ Date: _____
31. Contracting Officer: __________ Date: _____
32. Tentative Cost Comparison
Decision Announced By: __________ Date: _____
33. Appeal Authority (if applicable): _________ Date: _____