GAO weighs in on A-76

The General Accounting Office has added its voice to those concerned about proposed changes to the Office of Management and Budget's Circular A-76, intended to increase competition between agencies and private sector companies.

Comptroller General David Walker wrote the letter on behalf of GAO. Last year, Walker chaired a panel that presented its conclusion in April that A-76 is outmoded.

A-76's primary purpose is to determine whether an activity is inherently governmental and should be performed by agency staff members, or commercial and suitable for outsourcing. A-76 as it stands is too narrowly focused on doing the work for the lowest cost rather than considering which approach brings the best value, Walker's Commercial Activities Panel said last year.

Like many of the more than 675 people who filed comments with OMB, Walker generally supported the current proposal for change, but expressed reservations about some of its provisions.

In a Jan. 16 letter to OMB director Mitchell Daniels, he outlined his disagreements.

* The revision discourages public/private partnerships and doesn't stress the importance of considering alternatives for fulfilling agency missions. Walker's panel had urged agencies to think about sourcing as a strategic issue, something that fits into a bigger overall picture, and to consider a wide range of approaches in that light.

* Walker wrote that he is concerned about "unrealistic time frames" in the proposed revision. The proposal establishes a 12-month limit to complete the competition process, and four months to select sources. That's much too short, Walker wrote. "Over the last five years, the average time to complete a cost comparison process in the Department of Defense was 25 months. Source selection alone averaged seven months," he wrote. "While these averages demonstrate the need to expedite the process, we question whether simply imposing aggressive, fixed deadlines is the answer."

* The circular requires agencies to report their savings from A-76 competitions, but offers no guidance on how to compute the savings, Walker wrote.

Overall, however, Walker said he approves of the planned changes. "The proposal should promote sourcing decisions that reflect the best overall value to the agencies rather than the lowest cost," he said. "Importantly, the proposed revision also should result in greater accountability for performance, regardless of the service provider selected."

OMB had originally planned to implement the new provisions on Jan. 1. Now it is working to implement them "as soon as possible," according to a spokesman. The public comment period closed Dec. 19, one month after the initial Federal Register publication of the proposed changes.