Enclosure (2) to COMDTINST 5224.3
an expansion, unless the total operating cost is 30 percent greater than the total of the individual
components or it requires an increase of 65 FTE or more.
Full Time Equivalent (FTE) - A position that involves the planned use of 2,087 straight time paid
hours in a fiscal year (to include authorized leave and paid time off for training); for example, two
part-time employees, working for a total of 2,087 straight time paid hours in a FY equals one FTE.
Governmental-in-Nature/Inherently Governmental - Government functions that are so intimately
related to the public interest as to mandate performance by Government employees or military
personnel. These functions include those activities that require either the exercise of discretion in
applying Government authority or the making of value judgments in making decisions for the
Government. Governmental functions normally fall into two categories: (1) the act of governing,
i.e., the discretionary exercise of Government authority, and (2) monetary transactions and
entitlements. All functions are either government in nature functions or commercial activity
functions.
Most Efficient Organization (MEO) - The MEO refers to the Government's in-house organization
to perform a commercial activity. It may include a mix of Federal employees and contract support.
It is the basis for all Government costs entered on the Cost Comparison Form. The Most Efficient
Organization (MEO) is the product of the Management Plan and is based upon the Performance
Work Statement (PWS).
New requirement - A newly established need for a commercial service.
Outsourcing - The use of the private sector to deliver certain services or functions with some degree
of government involvement.
Privatization - Privatization is the process of changing a public entity or enterprise to private
control and ownership. It does not include determinations as to whether a support service should be
obtained through public or private resources, when the Government retains full responsibility and
control over the delivery of those services.
Reasonable or competitive prices - The expected range of prices resulting from experience obtained
through the competitive free enterprise system for like or similar activities. Determinations are to
be made by the contracting officer.
Recurring commercial activity - A recurring commercial activity is one that is required by the
Government on a consistent and long-term basis. This definition does not imply an hourly, daily,
monthly or annual requirement, but must, in a general sense, be repetitive in nature, wherein the
expected workload can be reasonably estimated.
Severable expansion - A severable expansion is an expansion of currently contracted, in-house or
interservice support agreement provided work that could be provided using the current approach or
could, without severe additional administrative burden, be provided by another competitive offeror.
Economies of scale are not justification for dismissing new or expanded work as severable; these
economies will be tested through competitive offer.
B-2
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