OMB has updated the standard cost factors that agencies use in the A-76 process to estimate certain costs of continued performance of a function by federal employees, including the civilian position fringe benefit cost factor, the annual federal pay raise assumptions, inflation cost factors, and tax rate information.
The fringe benefit cost factor is added to the basic pay for each full-time and part-time permanent civilian position in the agency cost estimate. It includes insurance and health benefits, standard civilian retirement benefits, Medicare benefits, and miscellaneous fringe benefits. OMB increased the factor from 32.85 percent to 36.45 percent, citing increases in insurance and health benefits and civilian retirement benefits.
OMB also said that for 2008 and beyond, agencies should use an assumed federal pay raise of 4.2 percent, which it said is the projected employment cost index increase, and that they should assume inflation of 2.2 percent in 2007-2008 and 2.1 percent afterward. OMB also noted that tax rate tables used to project the tax revenue that would be generated by private sector performance, which is subtracted from the contractor’s cost, have been updated.
The OMB memo is here: http://www.whitehouse.gov/omb/memoranda/fy2007/m07-02.pdf
