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OMB officials said the revamped regulation is a key element of President Bush's "competitive sourcing" plan, which could open to competition work done by about 850,000 federal workers, whose tasks are judged to be "commercial," rather than "inherently governmental." The 850,000 positions represent almost half of the total federal work force.

An OMB official notes that A-76 applies to recurring types of work. Engineering and some types of construction services, such as maintenance, landscaping and drywall installation, would be covered by the new rule, officials say. But major federally funded construction projects--nearly all of which have long been contracted to private firms--would continue to be covered by other federal contracting regulations, an official says.

Engineering groups that filed comments on a draft version of the OMB rule emphasized that they wanted Brooks Act qualifications-based selection to be retained. Angela B. Styles, head of OMB's Office or Federal Procurement Policy, says the final rule doesn't invalidate the Brooks statute, but also says that engineering services should be subject to competition. "I didn't want engineering to be off the table," she says.

The preamble of the rule states, "No clearly commercial activity, whether A&E or any other type of service, should be sealed off from the forces of competition." It adds that the new A-76 "acknowledges that there may be a need for use of [Brooks Act-type] procedures…..OMB believes that additional thought is required regarding the specifics of how the revised circular would be applied to A&E services and the type of deviation [from A-76] that might be needed." Styles says agencies seeking to deviate from A-76 for design services should discuss the matter with OMB on a case-by-case basis.

DANIELS (Office of Management and Budget)

OMB Director Mitchell Daniels told reporters at a briefing that the A-76 rewrite "represents a radical simplification of the pre-existing process." He says it will cut the time it takes to run such competitions to no more than a year, from as much as four years now. Daniels says it will lead to "substantial savings to taxpayers and better service to the American citizens."

But the American Federation of Government Employees, blasted the new A-76. Union President Bobby Harnage said, "These changes are merely an act to give lucrative government work to contractors without any accountability to the taxpayer."

Styles says federal-private competitions so far have resulted in savings of about 30% from previous costs for those services. She says, "We're indifferent to who wins the competitions," and notes that at the Dept. of Defense federal workers and private firms each have won about half of the competitions.

Styles says OMB is emphasizing cost in its new A-76 rule. It contains four basic types of contracting techniques:

• sealed bidding (solely price-based)
• lowest price technically acceptable source selection (low bid among offers judged technically acceptable)
• phased evaluation source selection (first phase based only on technical factors, second phase uses "price and cost realism analyses")
• tradeoff source selection process.

The first three, she says, are based exclusively on cost, though some provide for negotiations with bidders. The fourth allows a "tradeoff" between cost and technical factors and is available to all agencies for information technology competitions. It could be expanded to other types of work. But even with the tradeoff option, Styles says, "We're looking for cost to be at lest 50% of that."

The preamble and revised A-76 rule are available on OMB's web page at www.whitehouse.gov/omb.

he White House has issued revised regulations governing when and how federal agencies should put work done by their workers up for competition with the private sector. The new rule, announced May 29, is a rewrite of the Office of Management and Budget's 37-year-old Circular A-76.