AGENCY: Office of Management and Budget, Executive Office
of the President
ACTION: Issuance of Transmittal Memorandum No. 25, amending
OMB Circular No. A-76, “Performance of Commercial Activities."
SUMMARY: This Transmittal Memorandum updates the annual
federal pay raise assumptions and inflation factors used for computing
the government's in-house personnel and non-pay costs, as generally provided
in the President's Budget for Fiscal Year 2004.
DATES: All changes in the Transmittal Memorandum are
effective immediately and shall apply to all OMB Circular A-76 cost comparisons
in process where the government's in-house cost estimate has not been
publicly revealed before this date.
FOR FURTHER INFORMATION CONTACT: Mr. David C. Childs,
Office of Federal Procurement Policy, NEOB, Room 9013, Office of Management
and Budget, 725 17th Street, NW, Washington, DC 20503, Tel. No. (202)
395-6104.
AVAILABILITY: Copies of the OMB Circular A-76, its Revised
Supplemental Handbook and currently applicable Transmittal Memoranda changes
may be obtained at the online OMB Homepage address (URL): http:/www.whitehouse.gov/WH/EOP/omb/circulars.
Mitchell E. Daniels, Jr.
Director
Circular No. A-76 (Revised)
Transmittal Memorandum No. 25
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
SUBJECT: Performance of Commercial Activities
This Transmittal Memorandum updates the annual federal pay raise assumptions
and inflation factors used for computing the government's in-house personnel
and non-pay costs, as generally provided in the President's Budget for
Fiscal Year 2004.
The non-pay inflation factors are for purposes of A-76 cost comparison
determinations only. They reflect the generic non-pay inflation assumptions
used to develop the fiscal year 2004 budget baseline estimates required
by law. The law requires that a specific inflation factor (GDP FY/FY chained
price index) be used for this purpose. These inflation factors should
not be viewed as estimates of expected inflation rates for major long-term
procurement items or as an estimate of inflation for any particular agency’s
non-pay purchases mix.
Federal Pay Raise Assumptions |
|
Effective Date |
Civilian |
Military |
|
January 2002 |
4.6% |
6.9%* |
|
January 2003 |
4.1% |
4.7% |
|
January 2004 |
2.0% |
4.1% |
|
January 2005 |
3.4% |
3.4% |
|
January 2006 |
3.4% |
3.4% |
|
January 2007 |
3.4% |
3.4% |
|
January 2008** |
3.4% |
3.4% |
* |
Average of various longevity-and rank-specific increases
|
** |
Any subsequent years included in the period of performance
and cost comparison shall continue to use the 3.4% figure, until otherwise
revised by OMB. |
Non-Pay Categories (Supplies and Equipment,
etc.) |
|
FY 2002 |
1.3% |
|
FY 2003 |
1.3% |
|
FY 2004 |
1.5% |
|
FY 2005 |
1.5% |
|
FY 2006 |
1.6% |
|
FY 2007 |
1.7% |
|
FY 2008 |
1.8%* |
* |
Any subsequent years included in the period of performance and cost
comparison shall continue to use the 1.8% figure, until otherwise
revised by OMB. |
The pay rate (including geographic pay differentials) that are in effect
for 2003 shall be included for the development of in-house personnel costs.
The pay raise factors provided for 2004 and beyond shall be applied to
all employees, with no assumption being made as to how they will be distributed
between possible locality and ECI-based increases.
Agencies are reminded that OMB Circular No. A-76, Transmittal Memoranda
1 through Transmittal Memorandum 14 are canceled. Transmittal Memorandum
No. 15 provides the Revised Supplemental Handbook, and is dated March 27, 1996 (Federal Register, April 1, 1996, pages 14338-14346). Transmittal
Memoranda No. 16, 17, 18 and 19 (to the extent they provided Circular
A-76 federal pay raise and inflation factors) are canceled. Transmittal
Memorandum No. 20 provided changes to the Revised Supplemental Handbook
to implement the Federal Activities Inventory Reform Act of 1998 (P.L.
105.270). Transmittal Memorandum No.21, provided A-76 federal pay raise
and inflation factor assumptions and is canceled. Transmittal Memorandum
No. 22 made technical changes to the Revised Supplemental Handbook regarding
the implementation of the FAIR Act, A-76 administrative appeals and, the
participation of directly affected employees on A-76 Source Selection
Boards and their evaluation teams. Transmittal Memorandum No.23 and Transmittal
Memorandum No. 24, which provided last year’s Circular A-76 federal
pay raise and inflation factor assumptions are canceled.
Mitchell E. Daniels, Jr.
Director
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