Answer: Competitive Sourcing is a process to determine the most cost effective method of obtaining services that are available in the commercial market. The process is defined in OMB Circular A-76.

Answer: Outsourcing, a term used during 1995-1998, implies that current in-house workload will be contracted out after a study is completed. Competitive sourcing more accurately describes the process that identifies the most efficient provider of a service.

Answer: Privatization occurs when the government relinquishes ownership and control of an operation by divesting itself of the commercial activity, including the associated real property, and becomes a customer that purchases goods and services from a commercial source.

Answer: Competitive Sourcing retains ownership and control of an operation whether government employees or contractors provide the service. Privatization divests the government of ownership and control of the activity.

Answer: Army Regulations are AR 5-20 (CA Program) and DA Pam 5-20 (CA Study Guide. (OMB, OSD and Army Guidance can be obtained from the ACSIM Competitive sourcing web site, www.army.mil/acsimweb/ca/ca1.htm.)

Answer: After a study is announced, the government and commercial firms develop their most efficient organizations and the cost of performing the functions identified in the performance work statement. The bids are opened by the contracting office and recorded on a standard cost comparison form. If the government bid is lower than the selected commercial bid (lowest or best value) the workload remains in-house. If the commercial bid plus the lesser of 10% of personnel costs (line1 from the Cost Comparison form) or $10M over the performance period is less than the government bid the work will convert to contract.

Answer: A Direct Conversion is a conversion to contract without a formal cost competition study. Specific conditions must be met to use direct conversion.

Answer: The direct conversion criteria are in paragraph 4-2 of AR 5-20. Generally, a cost competition study is not required if:

10 or fewer civilian employees (and any number of military) are affected;

11-50 civilian employees are all placed;

A small contract is converted to in-house with 10 or fewer FTE;

A Preferential Procurement Program is used;

The installation is scheduled to close within 180 days;

Or any of six other direct conversion criteria are met.

Answer: Preferential Procurement Programs, also known as required source of supplies, and services include: (1) Federal Prison Industries and (2) the workshops administered by the Committee for the Purchase from the Blind and Other Severely Handicapped under the Javits-Wagner-O’Day Act. These sources are specified in FAR Part 8.

Answer: A streamlined cost comparison study is a process that uses the current cost of in-house work force performance for comparison to not less than four existing comparable service contract offers in the cost comparison in order to determine whether to change the method of performance. Unlike a full cost competition the solicitation is not issued until after the cost comparison, and only if the cost comparison results in contract decision. Specific conditions must be met to use a streamlined study.

Answer: Yes. See paragraph 4-4, AR 5-20.

Answer: The MEO refers to the Government’s streamlined in-house organization to compete with contractors to perform a commercial activity. It may include a mix of Federal employees and contract support. The MEO is the product of the Management study and is based on the PWS. The MEO is the basis for the in-house cost estimate ("in-house bid").

Answer: A PWS is a statement of technical, functional, and performance characteristics of work to be performed, identifies essential functions to be performed, determines performance factors, including the location of work, units of work, the quantity of work units, and the quality and timeliness of work units. It serves as the scope of work and is the basis for all cost entered on the cost comparison form (DA Form 7376).

Answer: The Residual Organization includes functions within the organization under study that will not be competed with contractors. These functions will be retained in-house no matter if the function under study is retained in-house or is contracted. It includes GIN functions and functions that the Army has exempted from competition.

Answer: While the Commercial Activities Proposed Action Summary (CPAS) will identify CA and GIN/exempt spaces based on the FAIR Inventory, the cost competition study will identify which functions are CA and which are GIN/exempt. The study determines the most efficient organizations to perform the CA functions—the MEO—as well as the most efficient organization to perform the GIN/exempt functions—the Residual Efficient Organization (REO). Because many positions perform both CA and GIN/exempt functions, the study will consolidate GIN/exempt functions into the REO. As in any reorganization, it may be difficult to determine whether a given position became part of the MEO or part of the REO. Example: three positions each perform GIN functions half the time and CA functions half the time, and the study determines that one position in the REO can perform the GIN functions and one position in the MEO can perform the CA functions.