OMB CIRCULAR A-76 RESTRICTIONS. There are several restrictions
significant to public works type operations. Activities cannot. enter into
contracts for personal services which establish an employer-employee
relationship between the Government and individual contract personnel. Also,
the regulations shall not be used to justify a conversion to contract solely
to meet personnel ceiling restrictions or to avoid salary limitations.
a. Personal Services. These services are defined as contracting for a
service so that a contractor or contractor employee are, in effect, employees
of the Government. Factors that indicate possible improper personal services
(I) Presence of contractor personnel working along side Navy (either
military or civilian) personnel in spaces furnished by the Navy.
(2) Supervision or control of contractor personnel by Navy personnel.
(3) Undue emphasis or control of the methods employed in a contract
rather than the end product itself.
(4) Use of contractor personnel to perform clerical duties directly
for Navy personnel.
(5) Use of contractor personnel interchangeably with Navy personnel.
b. Ceiling Restrictions. Contracts for commercial activities that are
justified for in-house performance based on cost comparisons will be allowed
to expire (options will not be exercised) once in-house capability is
If the required ceiling cannot be accommodated within the
agency's personnel ceiling, a request for adjustment will be submitted to OMB
in conjunction with the annual budget review.
PLANNING WORK TO BE CONTRACTED. There are two basic situations which
influence planning of work to be contracted:
a. A commercial activities cost analysis identifies that contractor
support is more economical than in-house support.
b. A commercial activities cost analysis identifies that in-house
support is more economical, but workload peaks or some other factor
necessitates contractor support. No existing personnel can be reduced under
(1) Public Works Managers, in order to plan their long-range
personnel requirements and distribution of skills, must anticipate functions
where economics or practicality dictate contractor support. Assuming that the
public works function is effectively managed and overhead requirements are
within normally accepted levels, the following factors would influence
economics and could tilt the balance in favor of contractor accomplishment:
(a) Cyclical Work - a portion or entire function is not
performed uniformly over the entire year. Therefore, it would not be
economical to retain personnel or to use personnel out of their specialty.