Ban on A-76

This month's site is for fun; yet could be useful savings for your business. Does your company need a tractor? Okay, maybe not a tractor, but if you go to your state surplus sale site, you may find a copier, shelves, filing cabinets or even a solar panel. It could be an item that your business needs but cannot afford. Take a look, who knows, you may be in need of a buffalo chopper. (Yes, it is available on the Oklahoma online auction website.)

The General Services Administration's SmartPay purchase cards in fiscal 2010 contributed to $6 billion in transactions with small businesses. Daniel Gordon, administrator for Federal Procurement Policy, stated in a memorandum on December 19, 2011 that the Office of Management and Budget (OMB) and Small Business Administration are working with agencies to increase micro-purchases with SmartPay. The Federal Acquisition Regulation (FAR) states that use of the government-wide purchase card is the preferred method for small purchases. OMB and SBA are working to increase small business acceptance of purchase cards. A few things to know:

  • Micro-purchases are items $3,000 or less.
  • If your business tries to enter the transaction with the purchase card at the end of the day, and the card is declined, wait until morning.
  • Many purchase cards have a daily limit, which may have been reached by the end of the day.

If you have questions regarding purchase cards, contact the GSA's Office of Charge Card Management at

President Eisenhower's administration originated competitive sourcing in 1955. The policy was introduced as a way to determine if federal agencies' commercial activities could be more efficiently performed by the private sector. This policy was expanded by Presidents Carter and Clinton during their administrations. Competitive sourcing is now commonly referred to as A-76, the Office of Management and Budget (OMB) circular number.

In 2003, President George W. Bush's administration set-forth a federal government policy to study competitive outsourcing within federal agencies. And, in 2005, the IRS reported that two major studies found that A-76 saved taxpayers more than $185 million.

The OMB stated that A-76 was an efficient way to determine the most cost-effective results. The studies also informed tax-payers that only better-quality performance with lower cost would be determined for commercial services.

President Barack Obama has since signed a ban on A-76 studies, citing it pits federal employees against contractors. In December, Congress passed the 2012 Financial Services Appropriations bill that included language to continue a prohibition of A-76 studies.

Senator Barbara Mikulski (D-MD) disagreed with the OMB and was a major supporter of the ban. Mikulski said, "I'm proud of the work that we've done for our federal employees, but the job isn’t over. Continuing efforts to prevent outsourcing and contracting out is important both for American taxpayers and our federal employees."

Acceptance and Your Rights

he main question that the Government Business Group receives is on the topic of acceptance. If you’ve ever had an invoice unpaid because of acceptance, the importance of knowing the FAR rules becomes clear. Listed below are the three main FAR regulations that explain your rights. Make sure you keep a copy of the rules available for easy access.

FAR 46.501 General
Acceptance constitutes acknowledgment that the supplies or services conform with applicable contract quality and quantity requirements, except as provided in this subpart and subject to other terms and conditions of the contract. Acceptance may take place before delivery, at the time of delivery, or after delivery, depending on the provisions of the terms and conditions of the contract. Supplies or services shall ordinarily not be accepted before completion of the government contract quality assurance actions (however, see 46.504). Acceptance shall ordinarily be evidenced by execution of an acceptance certificate on an inspection or receiving a report form or commercial shipping document/packing list.

FAR 46.502 Responsibility for Acceptance
Acceptance of supplies or services is the responsibility of the contracting officer. When this responsibility is assigned to a cognizant contract administration office or to another agency (see 42.202(g)), acceptance by that office or agency is binding on the Government.

FAR 46.503 Place of Acceptance
Each contract shall specify place of acceptance. Contracts that provide for government contract quality assurance at source shall ordinarily provide for acceptance at source. Contracts that provide for government contract quality assurance at destination shall ordinarily provide for acceptance at destination. (For transportation terms, see Subpart 47.3.) Supplies accepted at a place other than destination shall not be reinspected at destination for acceptance purposes, but should be examined at destination for quantity, damage in transit and possible substitution or fraud.

National Association
of Credit Management

8840 Columbia 100 Pkwy.
Columbia, MD 21045
Phone: 410-740-5560
Fax: 410-740-5574

Let's Get Social!

NACM's Preferred
Software Providers

Discover More About NACM

Credit Congress
NACM's Annual Conference

Our History
Over 100 Years of History