Enclosure (1) to COMDTINST 5224.3
APPENDIX B - A-76 COMMERCIAL ACTIVITIES REASON CODES
Code
Explanation
A
Indicates the function is performed by federal employees and is specifically exempt by the
agency from the cost comparison requirements of the Circular and the Revised A-76
Supplemental Handbook.
This Reason Code is designed to permit the Agency Head to identify specific commercial
activities as those that he/she does not believe should be subject to privatization,
outsourcing, or competition. Certainly, these are core mission activities that are
commercial in nature. Many core activities may however, be achieved through contract
support and may also be found in Reason Code "B" or "C". Functions assigned Reason
Code "A" are commercial functions that the Agency Head has determined must remain in-
house.
B
Indicates the activity is performed by federal employees and is subject to the cost
comparison or direct conversion requirements of the circular and the A-76 Revised
Supplemental Handbook.
This Reason Code should be applied to any function or activity where the decision as to
who should perform the work is a quality and cost based decision and the agency would
expect that this decision would be based upon the results of a direct conversion competition
(when authorized), or a cost comparison, conducted in accordance with OMB Circular A-
76 and its Supplemental Handbook.
C
Indicates that the activity is performed by Federal employees, but is specifically made
exempt from the provisions of the Circular and the A-76 Revised Supplemental Handbook
by Congress, Executive Order or OMB.
This Reason Code should be applied to any Function/Activity where the decision as to who
should perform the work is not primarily a cost-based decision and a cost comparison
would be inappropriate. This code applies to the Supplemental Handbook's exemption from
the cost comparison requirements of the Circular, including, for example, national defense
related activities, direct patient care, core and research and development activities. Here
the decision to convert to or from in-house or contract performance is not primarily a cost-
based decision. The problem is to get the right people, the right skills, the right knowledge
at the right place and at the right time. Small functions that involve 10 or fewer FTE are
also exempt from the cost comparison requirements of the circular. These commercial
activities are currently performed by Federal employees and may be outsourced, but, they
do not enjoy the cost comparison protections afforded by the circular, cost is a secondary
consideration.
D
Indicates the function is currently performed in-house by federal employees and is in the
process of being cost compared or converted directly to contract or interservice support
agreement performance.
Employees in functions/activities listed under this code have been advised that the work
performed is undergoing formal A-76 cost comparison or the agency is preparing for the
direct conversion of work to contract or ISSA performance, in accordance with the
Supplemental Handbook.
E
Indicates the function is performed in-house as a result of a cost comparison.
F
Indicates the function is currently performed by federal employees, but a review is pending
force restructuring decisions (i.e., base closure, realignment, consolidation, etc.).
B-1
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