Federal Workforce:

Revised Factors To Compare Government and Contractor Costs Are Appropriate

GGD-86-37: Published: Jan 24, 1986. Publicly Released: Jan 24, 1986.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the recent revisions to Office of Management and Budget (OMB) Circular A-76 to determine the appropriateness of: (1) increased cost factors for federal employee fringe benefits; (2) eliminating costs for one-time physical inventories; and (3) increased tax rates.

GAO noted that the circular requires government agencies to compare the cost of performing a function in-house to the cost of performing the work using a contractor. GAO found that: (1) in August 1985, OMB increased the cost factors for federal employee benefits from 27 percent to 36 percent; (2) the revised retirement cost factor included changes in work force demographics and updated economic assumptions about future pay raises, inflation, and interest rates; (3) the previous circular retirement factor needed to be updated to reflect changes in factors affecting the cost estimate; and (4) the new cost factor for health and life insurance reflected the increased cost of health benefits. GAO also found that: (1) the costs associated with the transfer of material to a contractor are to be included in cost comparisons; and (2) the new tax rates were developed to reflect more up-to-date data on taxes selected private industries are paying.

Sep 1, 2016

Aug 19, 2016

Jun 8, 2016

Mar 24, 2016

Jan 11, 2016

Jun 16, 2015

Apr 16, 2015

Mar 9, 2015

Jan 30, 2015

Jan 6, 2015

Looking for more? Browse all our products here