The congressionally enacted Defense Department authorization
bill (HR-1815) continues a pattern of restrictions passed
this year on contracting out of federal jobs, by restricting
the department from breaking up functions into smaller pieces
in order to get the function under the cutoff levels used for
certain procedural requirements of Office of Management and
Budget Circular A-76.
The measure also requires DoD to allow the in-house side to form
a “most efficient organization” for functions of 10 or more
employees—in contrast to the 65-employee threshold under
A-76—and allows contracting out only if the contractor’s bid
would produce a saving of at least 10 percent or $10 million,
whichever is smaller.
The most efficient organization and 10 percent/$10 million
provisions had been written into the annual spending bills
for DoD for the last several years. In addition, in a separate
bill enacted earlier this year, comparable language was applied
for the first time to other federal agencies.