Competitive Contracting: The Understandability of FAIR Act Inventories Was Limited

GGD-00-68 Published: Apr 14, 2000. Publicly Released: Apr 14, 2000.
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Pursuant to a congressional request, GAO provided information on the implementation of the Federal Activities Inventory Reform (FAIR) Act of 1998, focusing on: (1) the overall initial implementation of the FAIR Act; (2) the clarity and understandability of five agencies' FAIR Act inventories; (3) the extent to which these agencies exempted commercial activities from competition; and (4) supplemental information that enhanced the understandability of agencies' inventories.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget In order to enhance the clarity and understandability of agencies' FAIR Act inventories, the Director, OMB, should reexamine the function codes appearing in appendix 2 of the Circular A-76 Supplemental Handbook. This reexamination should include: (1) revising the codes to more accurately capture the activities agencies are performing; (2) defining the codes to ensure they are clearly understood; and (3) ensuring that OMB's official guidance and its website list all of the codes that agencies are authorized to use, including codes that are specific to individual agencies.
Closed – Implemented
On April 27, 2000, OMB issued implementation guidance to agencies on the preparation and submission of their FAIR Act inventories. In the guidance, OMB expanded and revised the list of function codes and required that agencies use only the codes listed in the guidance unless approved in advance by OMB. The guidance and the entire list of function codes was also posted on OMB's official website.
Office of Management and Budget Because OMB may lack the necessary time and resources to accomplish this reexamination on its own, the Director, OMB, should consider collaborating with agencies--through such approaches as task forces and interagency councils--as a strategy to gain consensus and consistent follow-through on such reexamination efforts.
Closed – Implemented
An OMB official said that they had been reexamining the codes used in the FAIR inventories as part of their ongoing consultations with the Defense Department's Defense Management Council, which oversees many of the Department's efforts to improve its business practices and consolidate its activities.
Office of Management and Budget The Director, OMB, should reinforce the principles established in OMB's budget procedures memorandum for OMB staff to enhance the consistency of the inventories within and across executive agencies.
Closed – Implemented
In a letter dated May 31, 2000, OMB's Acting Deputy Director for Management instructed OMB staff to review agencies' FAIR Act inventories in accordance with the guidance contained in OMB's budget procedures memorandum originally issued on July 12, 1999. The budget procedures memorandum states that while reviewing each agency's inventory OMB staff should "seek to ensure comprehensiveness and consistency within an agency and across the government."

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