Federal Manager's Daily Report

One of the bills funding federal agency operations through the remainder of the current fiscal year (HR-1158) that has now been signed into law will continue a decade-long prohibition on conducting “Circular A-76” studies that in the past have led to the conversion of many thousands of federal employee jobs to contractor performance.

Circular A-76 sets a process for comparing commercial-type activities performed by federal agencies with contractor bids, with work to be contracted out if the bid is at least 10 percent below the in-house cost. While proponents consider it good for government efficiency, opponents argue that costs of contractors that win those bids often escalate above what the government cost would have been.


The program tends to be active during Republican administrations and sidelined during Democratic ones; appropriations bill language that began late in the Bush administration and that has continued each year since.

Meanwhile, though, legislation has been introduced in Congress (S-2990 and HR-5329) to apply the so-called “Yellow Pages test” to provide private companies the opportunity to bid to perform federal functions that can be commonly procured. The bill however would not mandate the privatization of any specific federal service and would protect those activities that are inherently governmental, sponsors say.