[Federal Register Volume 73, Number 54 (Wednesday, March 19, 2008)]
[Notices]
[Pages 14856-14858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5549]
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OFFICE OF MANAGEMENT AND BUDGET
Performance of Commercial Activities
AGENCY: Office of Management and Budget (OMB), Executive Office of the
President.
ACTION: Update to civilian position full fringe benefit cost factor,
federal pay raise assumptions, and inflation factors used in OMB
Circular No. A-76, ``Performance of Commercial Activities.''
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SUMMARY: OMB is updating the civilian position full fringe benefit cost
factor used to compute the estimated cost of government performance in
public-private competitions conducted pursuant to Office of Management
and Budget (OMB) Circular A-76. The civilian position full fringe
benefit cost factor is comprised of four separate elements: (1)
Insurance and health benefits, (2) standard civilian retirement
benefits, (3) Medicare benefits, and (4) miscellaneous fringe benefits.
OMB is updating the insurance and health benefits and standard civilian
retirement benefits cost elements based on actuarial analyses provided
by the Office of Personnel Management.
OMB is also updating the annual Federal pay raise assumptions and
inflation cost factors used for computing the government's personnel
and non-pay costs in Circular A-76 public-private competitions. These
annual pay raise assumptions and inflation factors are based on the
President's Budget for Fiscal Year 2009.
DATES: Effective date: These changes are effective immediately and
shall apply to all public-private competitions performed in accordance
with OMB Circular A-76, as revised in May 2003, where the performance
decision has not been certified by the government before this date.
FOR FURTHER INFORMATION CONTACT: Jim Daumit, 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-
1052.
Availability: Copies of OMB Circular A-76, as revised by this
notice, may be obtained at http://www.whitehouse.gov/omb/circulars/index.html. Paper copies of the Circular may be obtained by calling
OFPP (tel: (202) 395-7579).
Jim Nussle,
Director.
Attachment
Memorandum for the Heads of Executive Departments and Agencies
From: Jim Nussle, Director.
Subject: Update to Civilian Position Full Fringe Benefit Cost
Factor, Federal Pay Raise Assumptions, and Inflation Factors used in
OMB Circular No. A-76, ``Performance of Commercial Activities.''
Office of Management and Budget (OMB) Circular A-76 requires
agencies to use standard cost factors to estimate certain costs of
government performance. These cost factors ensure that specific
government costs are calculated in a standard and consistent manner to
reasonably reflect the cost of performing commercial activities with
government personnel. This memorandum updates the civilian position
full fringe benefit cost factor, the annual federal pay raise
assumptions, and inflation cost factors. The update to the civilian
position full fringe benefit cost factor is based on actuarial analyses
provided by the Office of Personnel Management (OPM). The revised pay
raise assumptions and inflation cost factors are based on the
President's Budget for Fiscal Year 2009.
Civilian Position Full Fringe Benefit Cost Factor
The Circular requires agencies to add the civilian position full
fringe benefit cost factor to the basic pay for each full-time and
part-time permanent civilian position in the agency cost estimate. This
factor is comprised of four separate elements: (1) Insurance and health
benefits, (2) standard civilian retirement benefits, (3) Medicare
benefits, and (4) miscellaneous fringe benefits. OMB has determined,
based on information provided by OPM, that the civilian position full
fringe benefit cost factor needs to be adjusted downward, from 36.45
percent to 36.25 percent. This adjustment reflects a decrease in
civilian retirement benefits that is slightly greater than an increase
in insurance and health benefits. The Medicare benefits and
miscellaneous fringe benefits elements remain unchanged at this time.
The revised cost elements of the civilian position full fringe benefit
cost factor are summarized in the table below.
[[Page 14857]]
Table.--Elements of the Civilian Position Full Fringe Benefit Cost
Factor
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Previous Updated cost
Element cost factor factor
percent percent
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Insurance and Health Benefit \a\............ 6.7 7.0
Standard Civilian Retirement Benefit \b\.... 26.6 26.1
Medicare Benefit............................ 1.45 1.45
Miscellaneous Fringe Benefit................ 1.7 1.7
Total Civilian Position Full Fringe 36.45 36.25
Benefits...............................
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\a\ This factor is based on actuarial estimates for the costs of the
government-paid portion of health insurance under the Federal
Employees Health Benefits (FEHB) Program and the Federal Employees
Government Life Insurance (FEGLI) Program and excludes the employee-
paid portion of health insurance. This figure is multiplied by the
average participation rates in these programs and divided by the
average civilian employee's salary (as identified in the President's
budget) to derive a factor as a percentage of basic pay. This factor
is based only on costs borne by the government (not enrollee premiums)
and only on behalf of active federal employees (not retirees).
Increases in government costs for retirees are reflected in the
standard civilian retirement benefit cost factor.
\b\ The standard civilian retirement benefit cost factor includes the
government's accruing cost for pension benefits (Social Security,
Thrift Savings Plan, Federal Employees or Civil Service Retirement
Systems) and the accruing cost for post-retirement health benefits. It
excludes the employee-paid portion of retirement.
The master tables for COMPARE (the costing software that
incorporates the costing procedures of the circular) have been updated
to reflect these changes. The updates are available at
www.compareA76.com. Agencies shall use the updated COMPARE master
tables to calculate and document public and private sector costs in
competitions where a performance decision has not been certified by the
government by the effective date identified in the Federal Register
notice accompanying the publication of this memorandum.
Accordingly, the following changes are made to OMB Circular A-76.
1. Subparagraphs B.2.f.(1)(a) and (b) of Attachment C are revised
to read as follows:
(1) Full-time and Part-time Permanent Civilian Positions. Full-time
and part-time permanent civilian positions receive the civilian
position full fringe benefit cost factor of 36.25 percent of the
position's basic pay. The 36.25 percent civilian position full fringe
benefit cost factor is the sum of the standard civilian position
retirement benefit cost factor (26.1 percent), insurance and health
benefit cost factor (7.0 percent), Medicare benefit cost factor (1.45
percent), and miscellaneous fringe benefit cost factor (1.7 percent).
(a) Retirement Benefit Cost Factors. The standard civilian
retirement benefit cost factor represents the cost of the weighted
Civil Service Retirement System/Federal Employees Retirement System to
the government, based upon the full dynamic normal cost of the
retirement systems, the normal cost of accruing retiree health benefits
based on average participation rates, social security, and Thrift
Savings Plan contributions. The standard civilian retirement benefit
cost factor for civilian positions is 26.1 percent of the position's
basic pay (21.0 percent retirement pension plus 5.1 percent for retiree
health). The retirement cost factors for special class civilian
positions are: 38.5 percent of basic pay for air traffic controllers
(33.4 percent retirement pension plus 5.1 percent for retiree health)
and 40.4 percent of basic pay for law enforcement and fire protection
(35.3 percent retirement pension plus 5.1 percent for retiree health).
(b) Insurance and Health Benefit Cost Factor. The insurance and
health benefit cost factor for civilian positions, based on actual
cost, is 7.0 percent of the position's basic pay (0.2 percent for life
insurance benefits and 6.8 percent for health benefits).
2. The following standard cost factors and footnote no. 1 in Figure
C.1 of Attachment C, ``Table of Standard A-76 Costing Factors,'' are
revised as set forth below:
Table of Standard A-76 Costing Factors
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Factor \1\
Title Originating source Category of cost (percent)
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Civilian Position Full Fringe Benefit OMB Transmittal Memoranda.. Pay........................ 36.25
Cost Factor.
Insurance and Health Benefit Cost Factor. OMB Transmittal Memoranda.. Pay........................ 7.0
Special Class Retirement Cost Factor(Law OMB Transmittal Memoranda.. Pay........................ 40.4
Enforcement & Fire Protection).
Special Class Retirement Cost Factor (Air OMB Transmittal Memoranda.. Pay........................ 38.5
Traffic Control).
Standard Civilian Retirement Benefit Cost OMB Transmittal Memoranda.. Pay........................ 26.1
Factor.
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\1\ The factors listed in this column are factors in effect on February 2008. Agencies should refer to the
COMPARE Web site at www.compareA76.com. for the updated COMPARE master tables and other updated information.
Federal Pay Raise Assumptions
The following federal pay raise assumptions (including geographic
pay differentials) that are in effect for 2008 shall be used for the
development of government personnel costs. The pay raise factors
provided for 2009 and beyond shall be applied to all government
personnel with no assumption being made as to how they will be
distributed between possible locality and base pay increases.
Federal Pay Raise Assumptions*
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Civilian Military
Effective date (percent) (percent)
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January 2008...................................... 3.5 3.5
[[Page 14858]]
January 2009...................................... 2.9 3.4
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* Pay raise assumptions have not been established for pay raises
subsequent to January 2009. For January 2010, the projected percentage
change in the Employment Cost Index (ECI), adjusted, 3.2 percent,
should be used to estimate in-house personnel costs for A-76
competitions. For January 2011 through January 2018, the projected
change in the ECI of 3.4 percent should be used. In future updates to
A-76 guidance, as pay policy for years subsequent to 2009 is
established, these pay raise assumptions will be revised.
Inflation Factors
The following non-pay inflation cost factors are provided for
purposes of public-private competitions conducted pursuant to Circular
A-76 only. They reflect the generic non-pay inflation assumptions used
to develop the fiscal year 2009 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.
Non-Pay Categories
[Supplies, Equipment, etc.]
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Percent
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FY 2009...................................................... 2.0
FY 2010...................................................... 2.0
FY 2012...................................................... 2.0
FY 2013...................................................... 2.0
FY 2014...................................................... 2.0
FY 2015...................................................... 2.0
FY 2016...................................................... 2.0
FY 2017...................................................... 2.0
FY 2018...................................................... * 2.0
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* Any subsequent years included in the period of performance shall use a
2.0% figure, until otherwise revised by OMB.
[FR Doc. E8-5549 Filed 3-18-08; 8:45 am]
BILLING CODE 3110-01-P