A-76 provides federal policy for the government’s performance of commercial activities. In summary, Mr. Chairman, A-76 has shown itself to be an effective management tool in increasing the efficiency of the federal government and saving scarce funds. However, despite its proven track record, A-76 is seldom used in civilian agencies. OMB has not consistently sent strong messages to the agencies that A-76 is a priority management initiative. While OMB’s May 12, 1998, memorandum is an encouraging first step, thorough implementation and follow-through will be needed to get A-76 on track. In addition, agencies will need to continue their efforts to ensure both that they have the sound program cost data needed to make comparisons and that mechanisms are in place to monitor and oversee contracts. Finally, we believe that agencies’ development and Congress’ use of annual performance plans under the Results Act provide an opportunity to consider A-76 and other competition issues within the context of the most efficient means to achieve agency goals.
Why GAO Did This Study

GAO discussed: (1) the purpose and usefulness of the Office of Management and Budget's (OMB) Circular A-76 in the current federal environment; (2) why A-76 is not being used extensively by civilian agencies; (3) the effectiveness of OMB's efforts to lead the implementation of A-76, which, in GAO's view, could be enhanced; and (4) observations regarding the necessary elements of a more active A-76 program.

What GAO Found

GAO noted that: (1) OMB Circular A-76 has shown itself to be an effective management tool in increasing the efficiency of the federal government and saving scarce funds; (2) despite its proven track record, A-76 is seldom used in civilian agencies; (3) OMB has not consistently sent strong messages to the agencies that A-76 is a priority management initiative; (4) while OMB's May 12, 1998, memorandum is an encouraging first step, thorough implementation and follow-through will be needed to get A-76 on track; (5) in addition, agencies will need to continue their efforts to ensure both that they have the sound program cost data needed to make comparisons and that mechanisms are in place to monitor and oversee contracts; and (6) agencies' development and Congress' use of annual performance plans under the Government Performance and Results Act provide an opportunity to consider A-76 and other competition issues within the context of the most efficient means to achieve agency goals.