The handbook also provides an administrative appeals process. OMB has not yet released DOD’s inventory for 2001. In 1999, DOD began to augment its A-76 program with what it terms  strategic sourcing. DOD’s Ambitious Goals for Using A-76 Have Varied Over Time

After several years of limited use of Circular A-76, the deputy secretary of  defense gave renewed emphasis to the A-76 program in August 1995 when  he directed the services to make outsourcing of support activities a  priority in an effort to reduce operating costs and free up funds to meet  other priority needs. The number of positions planned for study and the timeframes for  accomplishing those studies have changed over time in response to  difficulties in identifying activities to be studied. It also planned to study  about 120,000 positions under strategic sourcing during that timeframe. To what extent the A-76 study goals are likely to change in the  future could be a function of changes in inventories of commercial  activities and continuing management emphasis on competitive sourcing. They include (1) the time required to complete the studies,  (2) cost and resources to conduct and implement the studies, (3) selecting  and grouping positions to compete, and (4) developing and maintaining  reliable estimates of projected savings expected from the competitions. Studies Took Longer to Complete Than Initially Expected

Individual A-76 studies in DOD have taken longer than initially projected. Selecting and Grouping Functions to Compete Can Be Difficult

Selecting and grouping functions and positions to compete can be difficult. Commercial Activities Panel Is Studying Sourcing Policies and Procedures

Although comprising a relatively small portion of the government’s overall  service contracting activity, competitive sourcing under Circular A-76 has  been the subject of much controversy because of concerns about the  process raised both by the public and private sectors. The Commercial Activities Panel, as it is known, is required to report its  findings and recommendations to the Congress by May 1, 2002. Subsequently, the panel held three public hearings.
What GAO Found

The Department of Defense (DOD) has been at the forefront of federal agencies in using the OMB Circular A-76 process. In 1995, DOD made it a priority to reduce operating costs and free funds for other needs. DOD has also augmented the A-76 program with what it terms strategic sourcing--a broader array of reinvention and reengineering options that may not necessarily involve A-76 competitions. The number of positions--at one point 229,000--that DOD planned to study and the time frames for the studies have varied. Current plans are to study about 183,000 positions between fiscal years 1997 and 2007. Changes in the inventory of commercial activities and the current administration's sourcing initiatives could change the number of positions studied in the future. However, GAO has not evaluated the extent to which these changes might occur. DOD's A-76 program has faced several challenges that may provide valuable lessons learned for other federal agencies. These lessons include the following: (1) studies took longer than initially projected, (2) costs and resources required for the studies were underestimated, (3) selecting and grouping functions to compete can be difficult, and (4) determining and maintaining reliable estimates of savings were difficult. The Commercial Activities Panel is studying and has held public hearings about the policies and procedures, including the A-76 process, and the transfer of commercial activities from government personnel to contractors. The panel, comprised of federal and private sector experts, is required to report its findings and recommendations to Congress by May 2002.