Performance of Commercial Activities
of Management and Budget, Executive Office of the President
ACTION: Technical Correction to Office
of Management and Budget Circular No. A-76, "Performance of Commercial
SUMMARY: The Office of Management and
Budget (OMB) is making a technical correction to the coverage in Attachment
A of Circular No. A-76 addressing the submission of a challenge to an
agency’s inventory of its commercial and inherently governmental
activities. The technical correction is intended to clarify that an interested
party may challenge the inclusion or exclusion of an activity in an inventory,
including the classification or reclassification of an activity. This
action makes no other changes to the revised Circular.
DATES: Effective Date: This
technical correction to Circular A-76 is effective August 15, 2003.
FOR FURTHER INFORMATION CONTACT: Mathew
Blum, Office of Federal Procurement Policy, NEOB Room 9013, Office of
Management and Budget, 725 17th Street, NW, Washington, DC 20503 (tel:
AVAILABILITY: Copies of OMB Circular
A-76, as revised by this notice, may be obtained at the OMB home page
Paper copies of the Circular may be obtained by calling OFPP (tel: (202)
The Federal Activities Inventory Reform (FAIR) Act of
1998, P.L. 105-270 (31 U.S.C. 501 note) requires executive agencies to
prepare annual inventories of activities performed by their employees
that, in the judgment of the head of the agency, are not inherently governmental.
Under section 3 of the FAIR Act, an interested party may submit to an
executive agency a challenge of an omission of a particular activity from,
or an inclusion of a particular activity on, an agency's inventory. Consistent
with section 3, the version of Circular A-76 that was in effect prior
to May 29, 2003 authorized an interested party to submit a challenge to
the inclusion or exclusion of an activity from the agency’s inventory.
On May 29, 2003, OMB issued revisions to Circular No. A-76. See 68 FR 32134
rev2003.pdf (text of Circular). Attachment A to the Circular provides
guidance regarding agencies' responsibility to prepare annual inventories
that categorize all activities performed by their government personnel as
either commercial or inherently governmental. Paragraph D describes the
processes that agencies must make available to interested parties for challenging
agency inventories of commercial or inherently governmental activities.
Paragraph D.2. of the May 29th revision states, among other things, that
an inventory challenge shall be limited to "(a) the reclassification
of an activity as inherently governmental or commercial, or (b) the application
of reason codes."
As OMB explained in the Federal Register notice announcing the revisions
to the Circular, the purpose of this change was to authorize challenges
(that had not previously been permitted) to an agency’s application
of reason codes to commercial activities performed by the government. 68
FR 32134, 32137-38 (May 29, 2003). OMB did not intend to restrict the availability
of challenges to an agency’s classification of an activity as inherently
governmental or commercial.
The use of the term “reclassification” in clause (a) of paragraph
D.2. has created confusion in that it suggests that an interested party
may not challenge an agency’s determination that an activity is commercial
or inherently governmental unless the determination has changed from prior
years. Notwithstanding the wording of clause (a), OMB did not intend to
impose such a limitation. Instead, OMB intended to continue to provide that
interested parties may submit challenges to an activity's classification
as commercial or as inherently governmental, and such challenges would include
the reasons for the interested party's belief that an activity which the
agency classified as "commercial" should be reclassified as inherently
governmental or that an activity which the agency classified as "inherently
governmental" should be reclassified as commercial (see 64
FR 33927, 33930 (Appendix 2, Paragraph G.3) (June 24, 1999).
By this notice, OMB is issuing a technical correction to clause (a) of Paragraph
D.2. to avoid confusion and ensure the Circular's intent is clear regarding
the ability of interested parties to file challenges to any classification
of an activity as inherently governmental or commercial. This technical
correction is intended to make clear that interested parties may challenge
the inclusion or exclusion of an activity on the inventory, regardless of
whether the activity’s classification as commercial or inherently
governmental has changed from the prior year or has remained the same.
OMB believes that any confusion that may have been caused by clause (a)
of paragraph D.2, as published on May 29th, should have no impact on interested
parties in light of this correction. The time period for interested parties
to file challenges to the 2002 inventories expired prior to the issuance
of the May 29th revision and the time period for filing challenges to the
2003 inventories has not yet commenced (as the draft 2003 inventories have
only been recently submitted to OMB for review).
This technical correction notice makes no other changes to Paragraph D.2
(or any other part of the Circular). Accordingly, interested parties may
challenge the application of reason codes, as provided by the May 29th revision
to the Circular, but they may not challenge the application of function