OMB Circular A-76

The Office of Management and Budget's Circular A-76 provides policy guidance and implementation procedures for government agencies to use in deciding whether to contract out for commercial activities--a product or service that could be obtained from a private sector source. This testimony (1) discusses the purpose and usefulness of A-76 in the current federal environment; (2) shows that A-76 is not being used extensively by civilian agencies and then examines the effectiveness of OMB's efforts to lead the implementation of A-76--efforts that, in GAO's view, could be enhanced; and (3) provides observations on the necessary elements of a more active A-76 program.

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.