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2003 FAIR Act Inventory
User's Guide


March 2003

Inventory Scope
Inventory Format


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 and other guidance.

To view the inventories for any specific agency, you should go to that agency’s website. OMB has required 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


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 consult 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.

As a matter of policy, OMB has also directed agencies to issue each year an inventory of their inherently governmental activities performed by federal employees. This inventory is required as a part of the OMB Circular A-76 and by OMB’s annual inventory guidance.

OMB issued FAIR Act implementation guidance through revisions to OMB Circular A-76, "Performance of Commercial Activities," its Supplemental Handbook, and OMB Circular A-76 Transmittal Memoranda Numbers 20 and 22. Copies of these documents can also be found on this website. Paper copies can be obtained from the Office of Federal Procurement Policy.


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" (e.g., "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."


In accordance with the FAIR Act, each agency is required to submit to OMB, by June 30 of each year, a Commercial Activities Inventory of all commercial activities performed by federal employees. OMB then added the requirement to submit inventories of inherently governmental activities. The inventories are provided in the spreadsheet format [118k pdf] provided on this website.

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 in the required spreadsheet format.


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. Section 3(b) of the FAIR Act defines "interested party" as:

a. 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.

b. A representative of any business or professional association that includes within its membership private sector sources referred to in “a.” above.

c. An officer or employee of an organization within an executive agency that is an actual or prospective offeror to perform the activity.

d. 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.

An initial challenge to the inclusion or omission of an activity must be filed within 30 working days after publication of OMB's Federal Register notice stating that the inventory is publicly available. The challenge must set forth the activity being challenged with as much specificity as possible, and the reasons for the interested party's belief that the particular activity should be reclassified as inherently governmental (and therefore be deleted from the inventory) or as commercial (and therefore be added to the inventory) in accordance with OFPP Policy Letter No. 92-1, “Inherently Governmental Functions” (see Appendix 5 of the March 1996 OMB Circular A-76 Revised Supplemental Handbook or its successor) or as established by precedent (such as when an agency has contracted for the activity or undergone competitions for this or similar activities).

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 organization's point of contact within 30 working days of the date that of the OMB Federal Register notice of availability and web site access. The agency's initial FAIR Act Point-of-Contact and telephone number is provided with the OMB Federal Register notification of the release of the inventory;
  • clear as to the activity being challenged for omission or inclusion on the inventory as specifically as possible," i.e., provide sufficient description of the activity in question, by organization, location, and function and the number of FTE excluded from or included on the inventory to enable the decision-maker to reasonably identify the activity being challenged, and
  • justified by providing "the reasons for the challenge."

Decisions and other communications, including rejections of challenges that do not meet the criteria above, shall be in writing. The decision-maker to the substance of a challenge must be at the same or higher level in the organization as the individual who made the determination on the original FAIR submission for the activity being challenged. Decisions should be transmitted to interested parties "within 28 working days of receiving the challenge." The notification must include a discussion of the rationale for the decision and, if the decision is adverse, an explanation of the party's right to file an appeal.

An interested party may then appeal an adverse decision to an initial challenge within 10 working days after receiving the written notification of the decision. The agency head may delegate the responsibility to receive and decide appeals to the official identified in paragraph 9.a of the Circular (or an equivalent senior policy official) without further delegation. To be considered for purposes of the FAIR Act administrative appeal process, filed in response to an agency response to a valid challenge, the appeal must be submitted:

  • in writing;
  • by a challenger(s), whose valid challenge was denied or rejected by the agency, and
  • within 10 working days of the challenger's receipt of the written decision on the challenge.

Authority to decide appeals may be delegated no lower than the Assistant Secretary or equivalent level. Decisions shall be in writing, and should be made and transmitted to the appellant within 10 working days of receipt of the appeal. Decisions on appeals must:

  • refer to the decision being appealed;
  • state whether the appeal is upheld or denied, and
  • state and discuss the reason[s] for the decision.