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, Performance of Commercial Activities, and other guidance.
the inventories for any specific agency, please visit that agency’s
website. OMB requires 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
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 consults 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. (See
below for a discussion of the challenge and appeals process.)
to meeting the FAIR Act requirements, agencies are also required by OMB
Circular A-76 to issue each year an inventory of their inherently governmental
activities performed by Federal employees. Attachment A of Circular A-76
provides instructions to agencies on preparing inventories of both commercial
and inherently governmental activities. The full text of the Circular
can be found on:
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.
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" (i.e., "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." For additional information on categorizing
activities, see Attachment A, paragraph B, of OMB Circular A-76.
In accordance with the FAIR Act and with OMB policy, each agency is required to submit to OMB, by June 30 of each year, inventories of their commercial and inherently governmental functions. The inventories must be submitted into the Workforce Inventories Tracking System (WITS). Submissions by other methods will not be accepted. WITS is available from the OMB MAX Homepage, which can be found at https://max.omb.gov/maxportal.
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.
FAIR ACT CHALLENGE AND APPEALS PROCESS
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. Under OMB Circular A-76, interested parties may
also challenge the application of reason codes. Refer to Attachment A,
paragraph D, of the Circular for a discussion of the challenge process.
3(b) of the FAIR Act defines "interested party" as:
- 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.
- A representative
of any business or professional association that includes within its
membership private sector sources referred to in “a.” above.
- An officer
or employee of an organization within an executive agency that is an
actual or prospective offeror to perform the activity.
- 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.
of OMB’s Federal Register notice stating that an agency’s
inventories are available, an interested party shall have 30 working days
to submit a written inventory challenge. The inventory challenge shall
be limited to (a) the classification of an activity as inherently governmental
or commercial, or (b) the application of reason codes. Function codes
shall not be subject to the inventory challenge process. A written inventory
challenge shall be submitted to agency inventory challenge authorities
and shall specify the agency, agency component, agency organization, function(s),
and location(s) for the activities being challenged. To be considered
valid for purposes of the FAIR Act, a challenge must be:
by an interested party, as defined in the FAIR Act;
by the agency challenge authority within 30 working days of the date
that of the OMB Federal Register notice of availability and web site
as to the activity being challenged for omission or inclusion on the
inventory as specifically as possible by providing sufficient description
of the activity in question to enable the agency to reasonably identify
the activity being challenged;
as to the activity being challenged for the reason code by providing
sufficient description of the activity in question to enable the agency
to reasonably identify the activity being challenged; and
by providing the basis for the challenge.
challenge authorities are agency officials at the same level as, or a
higher level than, the individual who prepared the inventory. Inventory
challenge authorities review and respond to challenges of agency inventory
decisions. Inventory appeal authorities are agency officials who are independent
and at a higher level in the agency than inventory challenge authorities,
and review and respond to appeals of inventory challenge decisions made
by inventory challenge authorities.
Within 28 working days of receiving the inventory challenge,
inventory challenge authorities shall (a) validate the commercial or inherently
governmental categorization or reason code designation of the activity,
in a written inventory challenge decision; and (b) transmit the inventory
challenge decision, including the rationale for the decision, to the interested
party. Inventory challenge authorities shall include an explanation of
the interested party’s right to file an appeal in any adverse challenge
Upon receipt of an adverse inventory challenge decision,
an interested party shall have 10 working days to submit a written appeal
of this decision to inventory appeal authorities.
Within 10 working days of receipt of the appeal, inventory
appeal authorities shall issue and transmit a written inventory appeal
decision to the interested party. This inventory appeal decision shall
include the rationale for the decision.
When the inventory challenge process results in a change
to an agency inventory, the agency shall (a) transmit a copy of the change
to OMB and Congress; (b) make these changes available to the public; and
(c) publish a notice of public availability in the Federal Register.