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Notice

Performance of Commercial Activities

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AGENCY:

Office of Management and Budget (OMB), Executive Office of the President.

ACTION:

Update to Federal Pay Raise Assumptions and Inflation Factors Used in OMB Circular No. A-76, “Performance of Commercial Activities.”

SUMMARY:

OMB is updating the annual federal pay raise assumptions and inflation factors used for computing the government's in-house personnel and non-pay costs in public-private competitions conducted pursuant to Office of Management and Budget (OMB) Circular A-76. These annual pay raise assumptions and inflation factors are based on the President's Budget for Fiscal Year 2005.

DATES:

Effective date: These changes are effective immediately and shall apply to all OMB Circular A-76 competitions in process where the government's in-house cost estimate has not been publicly revealed before this date.

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FOR FURTHER INFORMATION CONTACT:

Mathew Blum, Office of Federal Procurement Policy (OFPP), NEOB, Room 9013, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Tel. No. 202-395-4953.

Availability: Copies of OMB Circular A-76 may be obtained on the Internet at the OMB home page at www.whitehouse.gov/​omb/​circulars/​index.html#numerical. Paper copies of the Circular may be obtained by calling OFPP (tel: (202) 395-7579).

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Joshua B. Bolten,

Director.

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Memorandum for the Heads of Executive Departments and Agencies

From: Joshua B. Bolten, Director.

Subject: Update of Annual Federal Pay Raise Assumptions and Certain Inflation Factors Used in OMB Circular A-76, Performance of Commercial Activities.

This memorandum updates the annual federal pay raise assumptions and inflation factors used for computing the government's in-house personnel and non-pay costs in public-private competitions conducted pursuant to Office of Management and Budget (OMB) Circular A-76. These annual pay raise assumptions and inflation factors are based on the President's Budget for Fiscal Year 2005.

The non-pay inflation factors are for purposes of Circular A-76 competitions only. They reflect the generic non-pay inflation assumptions used to develop the fiscal year 2005 budget baseline estimates required by law. The law requires that a specific inflation factor (GDP FY/FY chained price index) be used for this purpose. These inflation factors should not be viewed as estimates of expected inflation rates for major long-term procurement items or as an estimate of inflation for any particular agency's non-pay purchases mix.

Federal Pay Raise Assumptions*

Effective dateCivilian (percent)Military (percent)
January 20044.14.15
January 20051.53.5
* Pay raise assumptions have not been established for pay raises subsequent to January 2005. For January 2006 and beyond, the projected percentage change in the Employment Cost Index (ECI), 4 percent, should be used to estimate in-house personnel costs for A-76 competitions. In future updates to A-76 guidance, as pay policy for years subsequent to 2005 is established, these pay raise assumptions will be revised.
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Non-Pay Categories (Supplies and Equipment, etc.)

(percent)
FY 20041.3
FY 20051.3
FY 20061.5
FY 20071.7
FY 20081.9
FY 2009*2.0
* Any subsequent years included in the period of performance and cost comparison shall continue to use the 2.0% figure, until otherwise revised by OMB.

The pay rates (including geographic pay differentials) that are in effect for 2004 shall be included for the development of in-house personnel costs. The pay raise factors provided for 2005 and beyond shall be applied to all employees, with no assumption being made as to how they will be distributed between possible locality and base pay increases.

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[FR Doc. 04-10926 Filed 5-13-04; 8:45 am]

BILLING CODE 3110-01-P