DOD Competitive Sourcing: Savings Are Occurring, but Actions Are Needed to Improve Accuracy of Savings Estimates
Abstract
In 1966, the Office of Management and Budget (OMB) issued Circular A-76, which established policy for acquiring commercial activities. In 1979, OMB issued a supplemental handbook to the circular that included procedures for A-76 cost comparison studies to determine whether commercial activities should be performed by the government, by another federal agency, or by the private sector. DOD currently refers to this program of A-76 cost comparison studies as competitive sourcing. In conducting an A-76 cost study, an agency develops a performance work statement to identify the work to be done, prepares a government in-house cost estimate based on the "most efficient organization" that can accomplish the work, and compares this estimate with the lowest cost or best value offer selected from the private sector. The most efficient organization generally refers to a more streamlined, smaller version of the government organization than is currently doing the work. The government activity will be converted to performance by the private sector if the successful private sector offer is either lower by an amount equal to 10 percent of direct personnel costs of the most efficient organization or is $10 million less over the length of the specified performance period than the in-house estimate. A more detailed description of the A-76 study process is contained in appendix III.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 2000
- Accession Number
- ADA380603
Entities
Organizations
- United States Government Accountability Office