Appendix C to Part 169a - Simplified Cost Comparison and Direct Conversion of CAs
32:1.1.1.7.56.5.44.1.41 : Appendix C
Appendix C to Part 169a - Simplified Cost Comparison and Direct
Conversion of CAs
A. This appendix provides guidance on procedures to be followed
in order to convert a commercial activity employing 45 or fewer DoD
civilian employees to contract performance without a full cost
comparison. DoD Components may directly convert functions with 10
or fewer civilian employees without conducting a simplified cost
comparison. Simplified cost comparisons may only be conducted on
activities with 45 or fewer DoD civilian employees.
B. Direct conversions with 10 or fewer DoD civilian employees
must meet the following criteria:
1. The activity is currently performed by 10 or fewer civilian
employees.
2. The direct conversion makes sense from a management or
performance standpoint.
3. The direct conversion is cost effective.
4. The installation commander should attempt to place or retrain
displaced DoD civilian employees by
a. Placing or retraining employees in available permanent vacant
positions, or
b. Assigning displaced employees to valid temporary or over-hire
positions in similar activities for gainful employment until
permanent vacancies are available. The type of employee appointment
(e.g., career, career-conditional, etc., or change from competitive
to excepted service or vice versa) must not change, or
c. Where no vacancies exist or are projected, offer employees
retraining opportunities under the Job Training Partnership Act or
similar retraining programs for transitioning into the private
sector.
5. The function to be directly converted does not include any
DoD civilian positions that were as a result of DoD Component
streamlining plans and/or were removed with buyout offers that
satisfied Section 5 of the Federal Workforce Restructuring Act
requirements.
C. The following provides general guidance for completion of a
simplified cost comparison:
1. Estimated contractor costs should be based on either the past
history of similar contracts at other installations or on the
contracting officer's best estimate of what would constitute a fair
and reasonable price.
2. For activities small in total size (45 or fewer civilian and
military personnel):
a. Estimated in-house cost generally should not include overhead
costs, as it is unlikely that they would be a factor for a small
activity.
b. Similarly, estimated contractor costs generally should not
include contract administration, on-time conversion costs, or other
contract price add-ons associated with full cost comparisons.
3. For activities large in total size (including those with a
mix of civilian and military personnel) all cost elements should be
considered for both in-house and contractor estimated costs.
4. In either case, large or small, the 10 percent conversion
differential contained in part IV of the Supplement to OMB Circular
No. A-76 should be applied.
5. Part IV of the Supplement to OMB Circular No. A-76 shall be
utilized to define the specific elements of cost to be
estimated.
6. Clearance for CA simplified cost comparison decisions are
required for Agencies without their own Legislative Affairs (LA)
and Public Affairs (PA) offices. Those Agencies shall submit their
draft decision brief to the Deputy Assistant Secretary of Defense
(Installations) room 3E813, the Pentagon, Washington, DC 20301 for
release to Congress.
7. Provide CA simplified cost comparison approvals containing a
certification of the MEO analysis, a copy of the approval to
convert, a copy of the cost comparison, with back-up data, before
conversion to the following:
a. Committee on Appropriations of the House of Representatives
and the Senate (11-45 civilian employees only).
b. Copies of the following:
(1) Assistant Secretary of Defense (LA), room 3D918, the
Pentagon, Washington, DC 20301.
(2) Assistant Secretary of Defense (PA), room 2E757, the
Pentagon, Washington, DC 20301.
(3) Office of Economic Adjustment, room 4C767, the Pentagon,
Washington, DC 20301.
(4) Deputy Assistant Secretary of Defense, (Installations), room
3E813, the Pentagon, Washington, DC 20301. (exception - no copies
required from Agencies that do not have legislative and public
affairs offices).
8. Most Efficient and Cost-Effective Analysis for Contractor
Performance of an Activity (Report Control Symbol DD-A&T(AR)
1951. The installation commander must certify that the estimated
in-house cost for activities involving 11 to 45 DoD civilian
employees are based on a completed most efficient and cost
effective organization analysis. Certification of this MEO
analysis, as required by Public Law 103-139, shall be provided to
the Committee on Appropriations of the House of Representatives and
the Senate before conversion to contract performance.
[57 FR 29212, July 1, 1992, as amended at 60 FR 67329, Dec. 29,
1995]