Defense Outsourcing: The OMB Circular A-76 Policy

This report provides information on the Office of Management and Budgets 0MB Circular A-76, Performance of Commercial Activities, and the impact of a related reform initiative, the Federal Activities Inventory Reform Act FAIR of 1998, within the Department of Defense DOD. The Circular defines federal policy for determining whether recurring commercial activities should be transferred to performance by the private sector, or performance by federal government employees. The FAIR Act creates statutory reporting requirements for federal executive agencies, by requiring federal executive agencies to identify activities both inherently governmental and those not inherently governmental, and to conduct managed competitions to determine who is best to performance service. Competitive sourcing, through managed competitions, was a major initiative identified by the first Bush Administrations Presidential Management Agenda, and one of five government-wide initiatives to improve the management and performance of the federal government. It is likely that competitive sourcing will continue to serve as a major initiative in the second Bush Administration.