May 23, 1996
Circular No. A-76 (Revised)
Transmittal Memorandum No. 16
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
SUBJECT: Performance of Commercial Activities
This Transmittal Memorandum updates the Federal pay raise assumptions and inflation factors used for computing the Government's in-house personnel and non-pay costs, as generally provided in the President's Budget for Fiscal Year 1997. However, because the 1997 Budget did not specify 1998-2002 pay raises for civilians, for purposes of A-76 cost comparison determinations only, the civilian pay raise percentages for 1998-2002 shall be assumed to be the same as the military pay raise assumptions for the corresponding years as shown below. Similarly, the non-pay inflation factors are for purposes of A-76 cost comparison determinations only. They reflect the generic non-pay inflation assumptions used to develop the FY 1997 budget baseline estimates required by law. The law requires that a specific inflation factor (GNP fixed-weight FY/FY index) be used for this purpose. These inflation factors should not be viewed as estimates of expected inflation rates for major long-term procurement items or as an estimate of inflation for any particular agency's non-pay purchases mix.
The following factors should be applied per paragraph B, pages 19-21 of the OMB Circular A-76 Revised Supplemental Handbook (March 1996).
| Federal Pay Raise Assumptions Effective Date |
Military/Civilian |
|---|---|
| January 1997 | 3.0 |
| January 1998 | 3.1 |
| January 1999 | 3.1 |
| January 2000 | 3.1 |
| January 2001 | 3.1 |
| January 2002 | 3.1 |
| Non-Pay Categories (Supplies and Equipment, etc.) | |
|---|---|
| FY 1995 | 2.9 |
| FY 1996 | 2.6 |
| FY 1997 | 2.7 |
| FY 1998 | 2.7 |
| FY 1999 | 2.7 |
| FY 2000 | 2.7 |
| FY 2001 | 2.7 |
| FY 2002 | 2.7 |
Geographic pay differentials received in 1996 shall be included for the development of in-house personnel costs. The above pay raise factors shall be applied after consideration is given to the geographic pay differentials. The pay raise factors provided for 1997 and beyond shall be applied to all employees, with no assumption being made as to how they will be distributed between possible locality and ECI-based increases.
These updates are effective as follows: all changes in the Transmittal Memorandum are effective immediately and shall apply to all cost comparisons in process where the Government's in-house cost estimate has not been publicly revealed before this date.
Agencies are reminded that OMB Circular No. A-76, Transmittal Memorandum 1 through Transmittal Memorandum 14 are canceled. Transmittal Memorandum No. 15 provided the Revised Supplemental Handbook, dated March 1996 (Federal Register, April 1, 1996, pages 14338-14346).
Sincerely,
Alice M. Rivlin
Director
Mr. Richard Claypoole
Director, Office of the Federal Register
National Archives and Records Administration
Washington, D.C. 20408
Dear Mr. Claypoole:
Enclosed for publication in the Federal Register, under final rules, are three original copies of a "Notice of Transmittal Memorandum No. 16, to the OMB Circular No. A-76, "Performance of Commercial Activities," "Revised Supplemental Handbook."
Also enclosed is a diskette containing the Transmittal Memoranum and a copy of the annoucement. It includes five pages of WordPerfect 6.1 text (TRANS.16). I certify that the enclosed diskette is a true copy of the original.
Thank you for your consideration of our request. Please direct any questions to Mr. David Childs on (202) 395-6104.
Sincerely,
John B. Arthur
Associate Director
for Administration
Enclosures
ACTION: Issuance of Transmittal Memorandum No. 16, amending OMB Circular No. A-76, "Performance of Commercial Activities."
SUMMARY: This notice contains Transmittal No. 16, to OMB Circular No. A-76, "Performance of Commercial Activities."
This Transmittal Memorandum updates the Federal pay raise assumptions and inflation factors used for computing the Government's in-house personnel and non-pay costs for Fiscal Years 1996 through 2002. The Federal pay raise assumptions and the non-pay category rates are, generally, contained in the President's Budget for Fiscal Year 1997. The factors contained in OMB Circular No. A-76, Transmittal Memorandum No. 14 are outdated.
The revision does not require any agency to (1) create or maintain a duplicate control/monitoring/reporting system or (2) adopt any additional controls, not presently in compliance with Federal Acquisition Regulations (FAR).
Agencies are reminded that OMB Circular No. A-76, Transmittal Memoranda 1 through 14 are canceled. Transmittal Memorandum No. 15 provided the Revised Supplemental Handbook, dated March 1996 (Federal Register, April 1, 1996, pages 14338-14346).
DATES: As with previous OMB Circular A-76 Transmittals, the provisions of Transmittal Memorandum No. 16 are effective immediately and shall apply to all cost comparisons in progress that have not yet undergone bid opening or where the in-house bid has not yet otherwise been revealed.
FOR FURTHER INFORMATION CONTACT: Mr. David Childs, Budget Analysis and Systems Division, NEOB Room 6104, Office of Management and Budget, 725 17th Street, N.W., Washington, D.C. 20503, Telephone Number: (202) 395-6104, FAX Number (202) 395-7230.
Alice M. Rivlin
Director