OMB draft plan for expanding direct conversion authority

Circular No. A-76 (Revised)
Proposed Transmittal Memorandum No. 25 TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES FROM: Mitchell E. Daniels, Jr. Director SUBJECT: Performance of Commercial Activities, Preferential Procurement Programs To clarify the definitions of preferential procurement sources and procurement preference eligible organizations and the effect that such definitions have upon the cost comparison requirements of the OMB Circular A-76 process, OMB is making the following changes to the A-76 Revised Supplemental Handbook. First, Part 1, Chapter 1, paragraph D (8) is revised to read as follows: "8. Preferential Procurement - A commercial activity of any size that is performed by Federal employees may be converted to contract performance, without cost comparison - even if it results in adverse employee actions - provided that the contract is awarded (a) to a preferential procurement source at a fair market price (b) in accordance with Federal Acquisition Regulation (FAR) Subpart 6.2 (Full and Open Competition After Exclusion of Sources), FAR Part 19 (Small Business Programs) and FAR Part 8 (Required Sources of Supplies and Services). At the agency's discretion, a cost comparison may be conducted. Second, Appendix 1 is revised by striking the definition of "Preferential procurement programs" and replacing it with the following: "Preferential procurement sources - Preferential procurement sources are HUBZone small businesses, small disadvantaged businesses, eligible contractors under the Small Business Administration's 8(a) Business Development Program, women-owned small businesses, small businesses owned by veterans, small businesses owned by service-disabled veterans, Native Alaskan and Indian owned businesses, Federal Penal and Correctional Institutions under the Federal Prison Industries Program and nonprofit agencies participating in the Javits-Wagner-O'Day Program." Appendix 1 is revised by adding a new definition as follows: "Procurement preference eligible organizations - Procurement preference eligible organizations are eligible small disadvantaged business concerns determined by the Commerce Department in accordance with FAR Subpart 19.11 and FAR section 19.201(b) and qualified HUBZone small businesses determined by the Small Business Administration in accordance with 13 CFR Part 126 and FAR Subpart 19.13." These changes are effective immediately. Current A-76 and FAIR Act implementation guidance can be accessed at OMB's homepage at: Sincerely,
Mitchell E. Daniels Jr. Director
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