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 CHAPTER 3
PUBLIC WORKS CONTRACTING
1.
GENERAL. During the seventies, the trend for contracting public works
functions began to increase. Many factors influenced this trend, but the
primary ones were ceiling restrictions, economics, and requirements for
specialized services. As contracting increased, some of the early doubts
about the effectiveness of utilizing contractor support were reduced. In
several cases, new bases embraced the concept of total base operating support
by contract which includes public works functions as well as other support
services. Other shore activities are considering placing substantial portions
of the public works effort under contract. Recent high-level emphasis is
directed to utilizing commercial sources when the functions are not inherently
governmental and economics prevail. Currently, this emphasis is being
directed by the Office of Management and Budget Circular A-76. Presently, OMB
Circular A-76 does not apply to public works organizations located in foreign
countries. Increased contracting has influenced the decision making process
associated with the Facilities Management System, therefore, a general
background of contracting and the Commercial Activities (CA) program is
provided in this chapter.
2.
OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-76. The Office of
Management and Budget (OMB) Circular No. A-76 specifies policy and conditions
for determining private versus governmental operations. It reaffirms the
government's general policy of reliance on the private sector for goods and
services while recognizing that governmental functions must be performed by
government personnel, and that proper attention must be given to relative cost.
a. The policy in A-76 is based on three precepts:
Achieve economy and enhance productivity,
Retain governmental functions in-house, and
Rely on the commercial sector.
b. There are four reasons why a function may be authorized for
performance by in-house personnel:
No satisfactory commercial source available,
National defense,
Higher cost of contract, and
Function has been exempted.
c. Since the decision to contract is heavily influenced by OMB Circular
A-76, key definitions are provided to assist in the understanding of the
subject matter of this chapter.
(1) A Commercial Activity is one which is operated and managed by a
federal executive agency and provides a product or service which could be
obtained from a commercial source. Included in this definition are nearly all
public works functions. A partial list appears below.
(a) Design, engineering, construction, modification, repair, and
maintenance of buildings and structures.
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