Quantcast Commercial Activities Cost Analysis

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(b) Minor construction, alteration, repair, and maintenance of
roads and other surfaced areas.
(c) Landscaping, drainage, mowing, and care of grounds.
(d) Custodial and janitorial services.
(e) Refuse collection and processing.
(f) Transportation services.
(g) Generation, purchase, distribution, operation, maintenance,
repair, construction, and alteration of utilities.
(2) A Governmental Function is a function which is so intimately
related to the public interest as to mandate performance by government
employees.  These functions include those activities which require either the
exercise of discretion in applying government authority or the use of value
judgment in making decisions for the Government.
(3) Expansion is the modernization, replacement, upgrade, or
expansion of a government commercial activity within certain cost criteria
described in the supplement to the OMB Circular A-76.
(4) Conversion is the changeover of work from government performance
to performance under contract by a commercial source.
(5) New Requirement is a newly established need for a commercial
product or service.
(6) A Cost Comparison Procedure is the comparison of a contractor's
cost against the government's cost to determine the most economical party to
accomplish a function.  Cost comparison procedures are included in DOD
Instruction 4100.33.  The firm bid/offer procedure is entered into with the
understanding that the lowest acceptable bidder will be compared with the
government in-house costs and that the Government will contract if more
economical.
3.
COMMERCIAL ACTIVITIES COST ANALYSIS.  To evaluate the economic advantages
of utilizing government or private sector services, it is necessary to
accurately determine the cost of each.  The government costs are based on a
cost comparison which includes factors such as federal employee's retirement
and insurance benefits and other overhead costs.  The contractor cost figure
must be based on a firm bid or proposal, solicited in accordance with
pertinent procurement regulations.  All significant government costs must be
considered including cost of administering a contract.  To ensure an equitable
comparison, both cost estimates must be based on the same scope of work and
include all identifiable costs associated with the service.  OMB Circular
A-76, Supplemental No. 1, (Cost Comparison Handbook) and subsequent changes
provide the details and procedures to be used.  All cost comparisons are
reviewed by audit.  Cost comparisons greater than 10 full-time equivalents
(FTE) will be reviewed by the Naval Audit Service while cost comparisons less
than 10 FTEs will be reviewed internally at the activity.
3-2





 


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