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Thursday, January 31, 2013

Circular A-76 and the Moratorium on DOD Competitions: Background and Issues for Congress

Valerie Bailey Grasso
Specialist in Defense Acquisition

This report discusses the status of the ongoing moratorium on the conduct of Department of Defense (DOD) public-private competitions under Office of Management and Budget (OMB) Circular A-76, and potential issues for Congress.

OMB Circular A-76 is a federal executive branch policy for managing public-private competitions to perform functions for the federal government. A-76 states that, whenever possible, and to achieve greater efficiency and productivity, the federal government should conduct competitions between public agencies and the private sector to determine who should perform the work.

Congress passed legislation in P.L. 110-181, the National Defense Authorization Act (NDAA) for FY2008 to suspend DOD public-private competitions under OMB Circular A-76. A governmentwide moratorium on the conduct of Circular A-76 competitions was extended through FY2012 through Section 733, Title VII (General Provisions, Government-wide Departments, Agencies and Corporations) of Division C (Financial Services and General Government Appropriations Act, 2012) of the Consolidated Appropriations Act of FY2012, P.L. 112-74. This moratorium extended through September 30, 2012. The government-wide moratorium has been in place since the passage of P.L. 111-8, the Omnibus Appropriations Act for FY2009.

There were at least two legislative amendments introduced during the 2
nd session of the 112th Congress that sought to suspend the moratorium on the conduct of future Circular A-76 competitions. Both amendments failed to pass.

Public debate over A-76 policy ignited in February 2007 as a result of a series of articles in the Washington Post on the conditions at the former Walter Reed Army Medical Center in Washington, DC. The articles led to several investigations, resignations of some senior Army officials, congressional hearings, and legislation passed by Congress to prohibit the conduct of A- 76 competitions at military medical facilities. Congress passed legislation in P.L. 110-181, the National Defense Authorization Act (NDAA) for FY2008 to suspend DOD public-private competitions under OMB Circular A-76. Congress also passed legislation in P.L. 111-8, the Omnibus Appropriations Act for FY2009, to halt the beginning of any new A-76 competitions throughout the rest of the federal government. The government-wide moratorium has continued to the present.

Congress had directed the completion of several reports before the moratorium can be lifted. The congressionally required reports were the “Section 325” report which DOD was required to submit to Congress within 30 days of the enactment of the FY2010 National Defense Authorization Act, the DOD Inspector General’s report on issues involving DOD’s conduct of A- 76 competitions, and two Government Accountability Office (GAO) reports: one on DOD’s conduct of public-private competitions, and the other on DOD’s inventory of service contracts. These reports have been completed. Still, the moratorium has not been lifted.

Some policymakers have advocated for an end to the moratorium on the conduct of DOD Circular A-76 competitions. Questions about the moratorium are largely centered around to what extent the problems identified with Circular A-76 have been corrected, and the extent to which the issues raised in the reports have been resolved to the satisfaction of Congress.

Date of Report: January 16, 2013
Number of Pages: 32
Order Number: R40854
Price: $29.95

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