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PERFORMANCE OF COMMERCIAL ACTIVITIES

DAO 201-41: PERFORMANCE OF COMMERCIAL ACTIVITIES
Number: DAO 201-41
Effective Date: 1984-04-24

SECTION 1. PURPOSE.

.01 This Order prescribes policies and procedures to be followed for implementation and general administration of the provisions of Office of Management and Budget (OMB) Circular No. A-76, Performance of Commercial Activities (Circular) and its Supplement (Supplement). This Order is to be treated as an amplification of subjects covered in the Circular and Supplement. The omission of any subject contained in the Circular and Supplement is not to be considered as diminishing its effect on the Department if it is otherwise applicable.

.02 This Order is revised to conform with the provisions of OMB Circular No. A-76, revised, dated August 4, 1983, and the title of the Order is changed.

SECTION 2. POLICY.

The Department of Commerce (DOC) shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source.

SECTION 3. DEFINITIONS.

.01 Commercial activity - one which is operated by a Federal executive agency and which provides a product or service which could be obtained from a commercial source. A commercial activity is not a Governmental function. A commercial activity also may be part of an organization or a type of work that is separable from other functions or activities and is suitable for performance by contract.

.02 Conversion to contract - the changeover of an activity from Government performance to performance under contract by a commercial source.

.03 Conversion to in-house - the changeover of an activity from performance under contract to Government performance.

.04 Commercial source - a business or other non-Federal activity located in the United States, its territories and possessions, the District of Columbia or the Commonwealth of Puerto Rico, which provides a commercial product or service.

.05 Governmental function - 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. Governmental functions normally fall into two categories:

a. The act of governing; i.e., the discretionary exercise of Government authority. Examples include criminal investigations, prosecutions and other judicial functions; management of Government programs requiring value judgments, as in direction of the national defense; management and direction of the Armed Services; activities performed exclusively by military personnel who are subject to deployment in a combat, combat support or combat service support role; conduct of foreign relations; selection of program priorities; direction of Federal employees; regulation of the use of space, oceans, navigable rivers and other natural resources; direction of intelligence and counter-intelligence operations; and regulation of industry and commerce, including food and drugs; and

b. Monetary transactions and entitlements, such as tax collection and revenue disbursements; control of the treasury accounts and money supply; and the administration of public trusts.

.06 Expansion - the modernization, replacement, upgrading or enlargement of a Government commercial activity involving a cost increase exceeding either 30 percent of the total capital investment or 30 percent of the annual personnel and material costs (see paragraph C.2 of Part I, Chapter 1 of the Supplement).

.07 New requirement - a newly established need for a commercial product or service (see paragraph C. 4 of Part I, Chapter 1 of the Supplement).

.08 Review - a study to determine whether a commercial activity should be performed b the Government or under contract by a commercial source, as described in Part I, page I-1 of the Supplement.

.09 Cost comparison - the process of developing an estimate of the cost of Government performance of a commercial activity and comparing is, in accordance with the requirements in Parts II, III, and IV of the Supplement, to the cost to the Government for contract performance of the activity.

.10 Directly affected parties - Federal employees and their representative organizations and bidders or offerors on the instant solicitation.

.11 Organization unit(s) - all Departmental offices and operating units.

.12 Cost comparison form (CCF) - document used to record in-house and contract cost estimates (see Exhibits 7 and 8 of this Order).

.13 Documentation - a record of information to support the entries on each line of the Cost Comparison Form (CCF) as required in Appendix B of this Order.

.14 Organization Coordinator - a DOC official as the Assistant Secretary or equivalent level who had been designated to handle implementation of the Circular and Supplement within the organization unit and to maintain liaison with the Office of the Director of Finance.

.15 Principal reviewer - a DOC employee appointed by the Organization Coordinator (or someone delegated the authority to make such an appointment) who has the responsibility for ensuring that a review is successfully completed and that all of the requirements of the Circular and Supplement and this Order are met.

.16 Independent Reviewer - a DOC employee, appointed by the Organization Coordinator, who is responsible for signing the CCF verifying the currency, reasonableness, accuracy, and completeness of a cost comparison.

SECTION 4. SCOPE.

This Order applies to all organization units. This Order does not:

a. apply to printing and binding activities which are subject to the provisions of Title 44 of the U.S. Code;

b. apply when it is contrary to law, Executive Orders, or any treaty or international agreement;

c. apply to Governmental functions as defined in paragraph 3.05 of this Order;

d. provide authority to enter into contracts;

e. authorize contracts which establish and employer-employee relationship between Government and contractor employees;

f. justify conversion to contract solely to avoid personnel ceilings or salary limitations;

g. apply to the conduct of research and development. Severable in-house commercial activities in support of research and development are normally subject to this Order; or

h. establish and shall not be construed to create any substantive or procedural basis for anyone to challenge any DOC action or inaction on the basis that such action or inaction which was not in accordance with this Order, except as specifically set forth in Section 8. of this Order.

SECTION 5. RESPONSIBILITIES.

.01 The Deputy Secretary is responsible for rendering decisions on appeals when:

a. the appeal relates to justifications to contract out activities with more than ten (10) FTEs without a cost comparison in accordance with Part I, Chapter 2, paragraph A.2 of the Supplement, or

b. the approving official on a cost comparison is at a level equal to or higher than the Assistant Secretary for Administration.

.02 The Assistant Secretary for Administration is responsible for implementation and general administration of the Circular and Supplement throughout the Department. As part of this responsibility the Assistant Secretary for Administration shall:

a. Render decisions on appeals as provided in Section 8. of this Order;

b. Review and approve waivers to convert an activity with more than ten (10) full-time equivalent employees to contract without a cost comparison.

c. Approve any variations in costing as provided in paragraph C of Part I, Chapter 2 of the Supplement.

.03 Heads of Operating Units are responsible for appointing an Organization Coordinator to handle implementation of the Circular and Supplement within the operating unit.

.04 The Office of the Director for Finance is the staff office which assists the Assistant Secretary for Administration with respect to the implementation and administration of the Circular and Supplement. Specific responsibilities of the Office of the Director for Finance include:

a. Developing and revising, as required, Departmental policy and procedures for implementing the Circular and Supplement;

b. Monitoring progress of organization units in implementing the Circular and Supplement;

c. Conducting appeal reviews;

d. Assisting organization units in their implementation of the Circular and Supplement;

e. Responding to inquiries from the public, OMB, Congress, and the White House;

f. Preparing reports required by OMB or other external agencies, including the annual update of inventories and schedules of reviews;

g. Maintaining records of all decisions made as a result of reviews of commercial activities;

h. Performing the duties of the independent reviewer for cost comparisons conducted within the Office of the Secretary; and

i. Maintaining liaison with the staff of OMB on matters concerning the Circular.

.05 The Office of Planning, Budget and Evaluation is responsible for providing, annually, the inflation guidance described in Part IV, Chapter 2, paragraph C of the Supplement.

.06 The Organization Coordinator is responsible for implementation of the Circular and Supplement within the organization unit. Among the specific responsibilities of the Organization Coordinator are to:

a. Appoint a principal reviewer for each review;

b. Certify that each in-house cost estimate is based on the most efficient and cost effective operation possible (see Appendix C of this Order);

c. Appoint an approving official at a level below assistant secretary for each cost comparison; and

d. Appoint an independent reviewer.

.07 The personnel officer is responsible for:

a. Ensuring that paragraph D of Part I, Chapter 3 of the Supplement is followed when employees are displaced as a result of a decision made in accordance with the Circular.

b. Adhering to paragraphs 7, 8, and 24 of Appendix A of this Order.

SECTION 6. GOVERNMENT PERFORMANCE OF A COMMERCIAL ACTIVITY.

Government performance of a commercial activity is authorized under any of the following conditions, as described in paragraph 8 of the Circular:

a. No satisfactory commercial source available;

b. National defense;

c. Patient care; and

d. Lower cost.

SECTION 7. GUIDANCE FOR IMPLEMENTING THE SUPPLEMENT.

.01 The Supplement shall be adhered to by anyone responsible for implementation of any part of the Circular and Supplement.

.02 The Office of the Director for Finance shall annually develop an inventory of all Government commercial activities, based on information submitted by the organization units.

a. The inventory shall be kept current and made available upon request.

b. Organization units shall notify the Office of the Director for Finance of any additions, deletions, corrections or any other changes to the inventory, in a timely manner.

c. The inventory will list separately activities of ten (10) FTEs or less and activities of more than ten (10) FETs. The following information will be included for each activity.

1. Identifier: This is an alphanumeric code which will uniquely identify the activity. It will be no more then eight (8) characters and include letters which will readily identify the organization unit.

2. Name of the activity.

3. Location of the activity.

4. Brief description of the activity that is comprehensible to anyone not technically knowledgeable about the activity.

5. Number of FTEs.

6. Date the last A-76 review was completed, i.e., the solicitation was canceled.

7. Date the next review is scheduled to begin.

8. Date the next review is schedules to end.

9. Reason for justifying continued in-house performance (see Appendix to Part I, Chapter 1 of the Supplement).

.03 Organization units shall schedule reviews of the commercial activities listed in their inventories and shall publish these schedules in the Federal Register and Commerce Business Daily, in accordance with paragraph C of Part I, Chapter 1 of the Supplement.

a. Proposed notices shall be approved by the Director for Finance before publication.

b. Notices shall be published at least thirty (30) days before the start of a review.

c. Notices shall be published to reflect any changes to previously published notices.

.04 Organization units which intend to conduct reviews of any contracted commercial activity shall submit the following information for each activity to the Office of the Director for Finance:

a. Identifier (see paragraph 7.02c.1. of this Order).

b. Name of the activity.

c. Annual cost of the contract.

d. Date the review is to begin.

e. Date the review is to end.

A notice shall be published in the Federal Register and Commerce Business Daily as explained in paragraph 7.03 of this Order.

.05 The Assistant Secretary for Administration may waive the requirement of conduct a cost comparison for an activity exceeding ten (10) FTEs if adequate written justification for why the in-house operation has no reasonable expectation of winning the competition is provided. Affected employees shall be given the right to appeal this waiver (see Section 8 of this Order).

.06 The principal reviewer will ensure that a management study is conducted in accordance with Part III of the Supplement. The Organization Coordinator will certify that the most efficient organization proposed as a result of the management study is the most efficient and cost effective organization practicable and that the in-house cost estimate is based on this proposed organization.

.07 The Performance Work Statement (PWS) will be developed in accordance with paragraph B of Part I, Chapter 2 of the Supplement.

.08 The contracting officer shall ensure that paragraph F of Part 1, Chapter 2 of the Supplement is followed when soliciting bids or offers in connection with a cost comparison study.

.09 The Organization Coordinator shall appoint an independent reviewer to verify the currency, reasonableness, accuracy, and completeness of cost comparisons conducted by the organization unit.

.10 A cost comparison is not required when an activity is contracted out under a mandatory preferential procurement program such as the Federal Prison Industries and workshops administered by the Committee for Purchase from the Blind and Other Severely Handicapped under the Wagner-O'Day Act. Additionally, a cost comparison is not required when it is determined that a non-competitive award under Section 8(a) of the Small Business Act is appropriate. These exceptions from the requirement for a cost comparison do not include other competitive preferential procurement programs such as small business or labor surplus area set-asides.

.11 The organization unit personnel officer shall ensure that paragraph D of Part I, Chapter 3 of the Supplement is followed when employees are displaced as a result of a decision made in accordance with the Circular.

.12 Organization units shall ensure that the impact of decisions made in accordance with the Circular is reflected in budget estimates in accordance with the instructions in OMB Circular No. A-11, "Preparation and Submission of Budget Estimates." Changes in the mode of performance should be timed to conform with the budget process.

.13 Reviews shall be conducted in accordance with Appendix A of this Order.

SECTION 8. APPEALS PROCEDURE.

.01 General - The purpose of the appeals procedure is to provide an administrative safeguard to ensure that organization unit decisions are fair and equitable and in accordance with procedures in the Supplement. Appeals will relate only to:

a. decisions resulting from cost comparisons, or

b. justifications to convert to contract without a cost comparison.

This appeal procedure does not apply t questions concerning the award to one contractor in preference to another or concerning Government management decisions.

.02 Determination of Appeal Period - The appeal period will begin ten (10) calendar days from the date of the letter notifying the directly affected parties of the results of the cost comparison study. This ten-day period will allow adequate time for directly affected parties to request and receive documents (see paragraph 8.03). The appeal period will be fifteen (15) working days. If a written notice of intent to appeal is received within the first eight (8) working days of the appeal period, the Assistant Secretary for Administration may grant the appellant an extension up to an additional fifteen (15) working days. If the appeal is from a decision to convert to contract without a cost comparison, the Organization Coordinator will use the time frames described immediately above. If the activity has ten (10) FTEs or less, the appeal period will begin two (2) calendar days from the date of the letter notifying employees of the decision to contract out the function and will be fifteen (15) working days.

.03 Notification of Appeal Rights - The contracting officer designated to solicit the bids or offers in connection with the cost comparison study will notify all directly affected parties of the results of the study and of their right to appeal the decision. If the appeal is from a decision to convert to contract without a cost comparison, the Organization Coordinator will notify directly affected employees. Notification will be given using the appropriate letter in Exhibits 1 to 6 of this Order.

a. To avoid delays, the contracting officer will obtain a list of the directly affected employees from the principal reviewer in advance of the final decision.

b. The detailed documentation that will be made available to directly affected parties upon request will include:

1. The completed CCF with its supporting documentation as described in Appendix B of this Order;

2. Part IV of the Supplement;

3. The name of the winning contractor or the price of the bidder whose proposal would have been most advantageous to the Government (if the decision is to perform in-house) and;

4. The management study; or

5. The complete documentation for justification for converting to contract without a cost comparison.

c. Documents should be assembled in advance, where possible. There is no document to distribute if the activity being contracted out without a cost comparison has ten (10) or fewer FTEs.

d. In consultation with the principal reviewer, the contracting officer or Organization Coordinator will determine the location from which the most expeditious distribution of documents can be made.

e. The successful contractor's proposal will be released only to DOC employees who have a need to see it. It will not be released to affected parties.

.04 Review and Disposition of Appeal -

a. The Assistant Secretary for Administration will render decisions on all appeals except when:

1. the appeal relates to justifications to contract out activities with more than ten (10) FTEs without a cost comparison in accordance with Part I, Chapter 2, paragraph A of the Supplement, or

2. the approving official on a cost comparison is as a level equal to or higher than the Assistant Secretary for Administration. In these two cases the appeal decision will be made by the Deputy Secretary.

b. The Office of the Director for Finance will conduct a review of each appeal and will prepare a report recommending action. The review will be completed in sufficient time to allow the Assistant Secretary for Administration or the Deputy Secretary to render a decision on the appeal without thirty (30) days of its receipt.

c. The affected organization unit will cooperate with the Office of the Director for Finance by providing timely responses to requests for information and documents needed for the appeal review.

d. Decisions rendered by the Assistant Secretary for Administration or the Deputy Secretary that deny appeals or that uphold appeals of (i.e., reverse) an organization unit's decision to convert to contract without a cost comparison are final.

e. Decisions rendered by the Assistant Secretary for Administration or the Deputy Secretary that uphold appeals of (i.e., reverse) an organization unit's initial decision based on its cost comparison study are final as to elements of the cost comparison study decided in the appeal decision, including any incorporated findings. Directly affected parties may appeal the resultant cost comparison study decision only on the basis of other elements of the cost comparison study. The appeal period will begin 10 calendar days from the date of the appeal decision, and this Section 8 appeals procedure shall otherwise apply to the extent appropriate.

SECTION 9. REPORTING REQUIREMENTS.

.01 Organization units will submit information as requested by the Director for Finance for the annual report required in Part I Chapter 4 of the Supplement.

.02 On the fifteenth (15th) day of the month following each quarter, Organization Coordinators will submit an updated Quarterly Milestone Report to the Director for Finance (see Exhibit 9, of this order).

SECTION 10. EFFECT ON OTHER ORDERS.

This Order supersedes Department Administrative Order 201-41 of August 6, 1980.

Signed by: Secretary of Commerce

Office of Primary Interest: Office of Finance

Index Changes:


Add:

Acquisition of Commercial or Industrial Production

Services Needed by the Department of Commerce 201-41

Commercial or Industrial Products and Services Needed By the Department of Commerce, Acquisition of 201-41

Note: Exhibits 1-9 are located in Appendices D-J. For copies of Exhibits and/or Appendices please call (202) 482-7873.

PROCEDURES FOR CONDUCTING A-76 REVIEWS IN THE DEPARTMENT OF COMMERCE

1. A notice of intent to conduct a review will be published in both the Federal Register and the Commerce Business Daily thirty (30) days prior to the start of the review, if such a notice has not already been published. A copy of the proposed notice will be submitted to the Director for Finance for approval before it is published.

2. A principal reviewer will be appointed by the Organization Coordinator (or someone delegated the authority to make such an appointment) to conduct the review. The principal reviewer (PR) will be a Government employee but will not be an employee whose job would be directly affected by the outcome of the review.

3. The PR will determine whether the activity must be retained in-house because there is no satisfactory commercial source, for reasons of national defense, or because it would be in the best interest of direct patient care. If it is determined that in-house performance is required for any one of these three reasons:

a) Complete documentation will be developed in accordance with paragraph 8 of OMB Circular No. A-76 (Circular).

b) The Organization Coordinator will sign a statement of this determination.

c) The Organization Coordinator will transmit the statement and documentation to the Assistant Secretary for Administration.

d) If the determination to retain the activity in-house is based on reasons of national defense or because it would be in the best interests of direct patient cart, the Assistant Secretary for Administration will forward the statement and documentation to either the Secretary of Defense or the agency's chief medical director for approval, if he or she concurs.

4. If no determination is made in step 3 above that the activity must be retained in-house, the PR will develop a milestone schedule for a cost comparison as described in Part I, Chapter 5 of the Supplement to the Circular (Supplement). The milestone schedule will include at least all of the milestones required by the Department's Quarterly Milestone Report (see Exhibit 9 of this Order).

5. The PR will form a Task Group to conduct the cost comparison study as described in Part I, Chapter 5 of the Supplement. The PR will serve as the chairperson of the Task Group. If separate Task Groups are formed for each phase of the study, the PR will serve as the chairperson of the group. Or, the PR will arrange for contractor assistance for any or all of the three phases. If a contract is awarded, the PR will serve as the Contracting Officer's Technical Representative (COTR).

6. The PR will submit a written request that a contracting officer (CO) be assigned to work on the procurement aspects of the cost comparison. The CO must be familiar with the Circular and Supplement.

7. The PR will notify the organization unit's personnel officer that a cost comparison study is being undertaken. The personnel officer will notify all affected employees (and their union representatives), in writing, that an A-76 review of their function will be conducted, the dates of the review, and that they will be informed quarterly of its progress. Within thirty (30) days of the end of each quarter, the personnel officer will send copies of the updated Quarterly Milestone Report (see paragraph 4 above) for their activity to all affected employees.

8. The PR will initiate the management study in accordance with the Supplement and will ensure its successful completion and approval by the Organization Coordinator. The PR will consult with the personnel officer during the study. The Organization Coordinator will certify that the proposed organization is the most efficient and cost effective organization practicable and that the in-house cost estimate is based on this proposed organization (see Appendix C of this Order).

9. Concurrently with the initiation of the management study, the PR will initiate development of the Performance Work Statement (PWS) in accordance with the Supplement and will ensure its successful completion and approval by the CO. The PR will consult with the CO during the development of the PWS.

10. When the management study and the PWS have been completed and approved, the PR will initiate the preparation of the in-house cost estimate and the costs of contract performance which are not dependent on contract price (i.e., lines 1-6 and 8-11 of the Cost Comparison Form - See Exhibits 7 and 8). The preparer of the cost estimate may be a member of the Task Force or a private contractor. The cost estimate will be prepared in accordance with the Supplement.

11. At the same time the preparation of the cost estimate is initiated, the PR will ensure that a procurement request, Form CD-45, is prepared and forwarded to the CO. The CD-45 must include an estimated funding amount. Procurement requests that are a part of the cost comparison process should be included in the organization units' procurement plan.

12. When the cost estimate (other than costs dependent on the contract price) has been completed, the "In-house Estimate Prepared By:" line on the Cost Comparison Form (CCF) will be signed and dated by the person responsible for its preparation. If the cost estimate was prepared by a Task Group or a contractor, the principal reviewer will sign this line.

13. The PR will forward the CCF and supporting documentation (See Attachment B) to the independent reviewer. The independent reviewer will review the cost estimate (or will arrange to have the review made by a private contractor) to ensure that the costs have been estimated and supported in accordance with the Supplement. If only minor discrepancies are noted, the reviewer will indicate the discrepancies, sign and date the "In-house Estimate Reviewed By:" line of the CCF, and return the CCF to the PR. If significant discrepancies are noted during the review, the discrepancies will be reported to the PR for correction and submission. Such corrections will be made before the date bids or proposals are due to the CO; if necessary, this date will be extended to allow for correction of discrepancies.

14. The PR will submit the CCF and supporting documentation to the CO in a sealed and identified envelope. This must be done by the required submission date for bids or proposals.

15 a. If an advertised procurement, the CO and the PR will open the bids (as well as the Government cost estimate) and enter the price of the apparent low bidder on the CCF.

b. If a negotiated procurement, after selection of the most advantageous proposal, the CO and the PR will open the Government cost estimate and enter the price of the proposal on the CCF. The CO will award the contract. The award will be conditional on the offer still being more economical after completion of the appeal period.

16. If the apparent low bidder or offeror is a tax-exempt organization, the contract price must be adjusted by an amount equal to the Federal, state and local income taxes that would be paid by the lowest non-tax exempt bidder or offeror, in accordance with Part IV, Chapter 3 of the Supplement.

17. Within seven (7) working days of the opening of the Government cost estimate:

a. The PR will complete the CCF in accordance with Part IV of the Supplement and sign and date the "Cost Comparison Accomplished By:" line on the CCF.

b. An official in the organization unit at a level higher than the PR will sign the "Cost Comparison Reviewed By:" line on the CCF.

c. An official in the organization unit below the assistant secretary level will sign the "Cost Comparison Decision Approved By:" line on the CCF.

18. Within one working day of the approval of the cost comparison decision (step 17.c. above), the PR will verbally notify the CO of the results of the cost comparison. The PR will submit copies of the CCF and its supporting documentation, and the management study by the most expeditious means available, to the CO and the Office of the Director for Finance (ODF).

19. Within five (5) working days of verbal notification from the PR, the CO will notify all affected parties of the decision, in accordance with Section 8 of this Order, using the appropriate sample letter found in Exhibit 1 to 6 of this Order. The CO will also send a copy of the letter to the ODF, the PR, the personnel officer, and the organization coordinator.

20. In an advertised procurement, if, after the evaluation of bids and pre-award determinations of responsiveness and responsibility, the selected bidder is other than the previously announced apparent low bidder, the CO will notify the PR.

a. If the contract price of the selected bidder is not sufficiently higher than that of the previously announced apparent low bidder to reverse the outcome of the cost comparison decision, steps 17 and 18 above will be completed again. The CO will then notify the affected parties of the change in the cost comparison due to a different bidder being selected, but will not officer them the right to appeal.

b. If the contract price of the selected bidder is sufficiently higher than that of the previously announced apparent low bidder to reverse the outcome of the cost comparison decision, steps 17, 18, and 19 above will be completed again.

21. If an appeal is received by the Assistant Secretary for Administration, the ODF will conduct a review of the appeal and will prepare a report including recommendations. The review will be completed in sufficient time to allow the Assistant Secretary for Administration to render a decision on the appeal within thirty (30) days of its receipt.

22. Within one working day of an appeal decision being rendered, the ODF will verbally notify the contracting officer of the appeal decision. The Assistant Secretary for Administration will notify, in writing, the appellant, the affected Organization Coordinator, and the CO of the decision.

23. Based on the cost comparison decision and the appeal decision, if any, the CO will: a) if an advertised procurement, award a contract or cancel the solicitation; or b) if a negotiated procurement, issue a notice to proceed or cancel the contract.

24. The personnel officer will administer the reduction in force which results from a decision to contract out, or from implementation of the most efficient organization if the decision is to retain the function in-house.

25. The ODF will update the Department's Inventory of Commercial Activities and the report entitled "A-76 Studies Conducted by the Department of Commerce" to reflect the outcome of the review.

26. Should the cost comparison result in a decision to perform the work in-house, the Organization Coordinator will ensure that implementation of the proposed organization on which the cost estimate was developed is initiated within one month after cancellation of the solicitation and completed within six (6) months.

27. The ODF will conduct a review to determine that step 25 above has been accomplished six (6) months after cancellation of the solicitation, and will report the results of the review to the Assistant Secretary for Administration.

28. If a decision is made to contract out an activity with ten (10) or less FTEs without a cost comparison, the directly affected employees will be notified by the Organization Coordinator (see Exhibit 6 of this Order). The appeal period will be determined in accordance with Section 8.02 of this Order.

29. If a decision is made to contract out an activity with more than ten (10) FTEs without a cost comparison:

a) The employees will be notified by the Organization Coordinator (See Exhibit 5 of this Order);

b) The written justification and signed waiver will be made available to all directly affected employees who request it;

c) The appeal period will be determined in accordance with Section 8.02 of this Order.



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APPENDIX B DAO 201-41
Documentation for Cost Comparisons

1. The cost comparison study must be documented to provide a record of information to support the entries for each line of the cost study. The cost elements involving common costs which are not entered on the CCF will be identified and documented. Address each line of the CCF and provide rationale for including or excluding specific costs. To the maximum extent possible, the documentation must support the cost study without further explanation. The documentation must enable a reviewer to track the computations from start to finish and verify the currentness, reasonableness, accuracy, and completeness of the cost elements on the CCF. Several worksheets are provided in the Handbook to facilitate computation and documentation.

2. On the CCF, under the column "reference," for each line of the CCF, show the page number of the attached documentation which supports that line.

3. The documentation must be typed or clearly legible. Copies made from original documents must also be easy to read.

Sample Certification Statement

I hereby certify that the proposed new organization described [in the attached document; above; below] is the result of a management study which was conducted in accordance with Part III of the Supplement. The new organization is the most efficient and cost effective operation practicable. The in-house cost estimate is based on this organization.

Attachments

DAO 201-41 Exhibits

Amendment 1, Effective 1988-03-24

PERFORMANCE OF COMMERCIAL ACTIVITIES

Department Administrative Order 201-41, dated April 24, 1984, is hereby amended as shown below. The purpose of this memorandum is to preclude the release of an entire management efficiency study.

SECTION 8. APPEALS PROCEDURES. Subparagraph .03b.4. is deleted. In pen-and-ink, renumber subparagraph .03b.5. as 4.

Signed by: Assistant Secretary for Administration

Questions and Comments

Send Questions or Comments on the Commerce Directives Management program to Directives@doc.gov.

Office of Privacy and Open Government
Office of the Chief Financial Officer and Assistant Secretary for Administration
U.S. Department of Commerce

 

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