The Federal Activities Inventory Reform (FAIR) Act of 1998 was signed into law on October 12, 1998 (P.L. 105-270). The FAIR Act directs Federal agencies to submit each year an inventory of all activities performed by Federal employees that are not inherently governmental in nature (i.e., commercial in nature). The agency must transmit a copy of the inventory to Congress and make it available to the public. In passing the FAIR Act, Congress did not displace longstanding Executive Branch policy regarding the performance of commercial activities. The FAIR Act inventory does not represent a policy decision on the part of the agency on which activities it may consider for competition.
The Federal government seeks to achieve economy and enhance productivity and quality through competition to obtain the best service at the least cost to the American taxpayer. Federal policy regarding the performance of commercial activities is outlined in Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities. Specific guidance regarding the implementation of this policy is provided by the March 1996 Revised Supplemental Handbook to the circular and by agency consultation with OMB. The FAIR Act codified some of that guidance into law.
SSA’s mission involves the responsibility of administering over $600 billion in annual benefits to almost 60 million people. The Social Security and Supplemental Security Income programs SSA administers combined represent the largest government program – nearly one in six Americans receives benefits from these programs. Much of SSA’s workforce is dedicated to providing service to the public on a day-to-day basis. Our public service employees regularly exercise discretion in applying Government authority and make value judgments in decisions regarding entitlement of individuals to monetary benefits from the Social Security trust funds and general revenues appropriated by Congress. These employees also evaluate evidence and take actions that serve to protect the integrity of these funds (i.e., fraud investigations).
Most of these positions are considered to be inherently governmental as they have the authority and responsibility to make a variety of entitlement and payment decisions that commit the Government to a course of action and are intimately related to the public interest. These positions include activities such as:
- In over 1,300 local offices, taking claims for benefits, making determinations of entitlement and benefit amount, processing payment and post entitlement actions, interpreting complex laws and administrative guidelines, etc.;
- In teleservice centers, responding to claims-related inquiries from the public, processing payments and post-entitlement actions, etc.;
- In processing centers, adjudicating claims, processing payments and post-entitlement actions, posting earnings to individual records, etc.;
- In hearings and appeals offices, holding hearings and making determinations of entitlement.
Other SSA activities that are more likely to be classified as commercial in nature include systems operations and programming functions, mailroom operations, facilities, publications, security, clerical and debt management functions, etc.
SSA compiled its FY 2007 FAIR Act inventory based on the efforts of an SSA-wide workgroup, whose representatives examined each component’s activities and made an assessment of those that are commercial in nature. About 10,417 SSA positions (16.5 percent of the Agency total) are being reported in one of the commercial activity reason codes. In an effort to ensure an accurate inventory and consistent treatment of all activities, workgroup representatives reevaluated many of the commercial positions included on prior inventories. The Commissioner, SSA, performed a final review of the inventory and approved those activities determined to be commercial in nature. Consistent with Office of Management and Budget (OMB) guidance, the inventory includes inherently governmental positions.
Under Section 3 of the FAIR Act, SSA’s decision to include or exclude a particular activity on or from the inventory is subject to administrative challenge and appeal by “interested parties” as defined by Section 3 (b) of the Act. An interested party is defined as:
- A private sector source that (A) is an actual or prospective offeror for any contract or other form of agreement to perform the activity; and (B) has a direct economic interest in performing the activity that would be adversely affected by a determination not to procure the performance of the activity from any private source;
- A representative of any business or professional association that includes within its membership private sector sources referred to in 1. above;
- An officer or employee of an organization within an executive agency that is an actual or prospective offeror to perform the activity; or
- The head of any labor organization referred to in Section 7103 (a) (4) of title V, United States Code that includes within its membership officers or employees of an organization referred to in 3. above.
Submission of an Inventory Challenge. After publication of OMB’s Federal Register notice stating that SSA’s inventories are available, an interested party shall have 30 working days to submit a written challenge. The inventory challenge shall be limited to (a) the classification of an activity as inherently governmental or commercial, or (b) the application of reason codes. Function codes shall not be subject to the inventory challenge process. A written inventory challenge shall be submitted to agency inventory challenge authorities and shall specify the agency, agency component, agency organization, function(s) and location(s) for the activities being challenged.
Inventory Challenge Decision. Within 28 working days of receiving the inventory challenge, the inventory challenge authority shall (a) validate the commercial or inherently governmental categorization or reason code of the activity, in a written inventory challenge decision; and (b) transmit the inventory challenge decision, including the rationale for the decision, to the interested party. Inventory challenge authorities shall include an explanation of the interested party’s right to file an appeal in any adverse challenge decision.
Submission of an Appeal of an Inventory Challenge Decision. Upon receipt of an inventory challenge decision an interested party shall have 10 working days to submit a written appeal of this decision to inventory appeal authorities.
Inventory Appeal Decision. Within 10 working days of receipt of the appeal, inventory appeal authorities shall issue and transmit a written inventory appeal decision to the interested party. The inventory appeal decision shall include the rationale for the decision.
Inventory Changes. When the inventory challenge process results in a change to SSA’s inventory, the Agency shall (a) transmit a copy of the change to OMB and Congress; (b) make these changes available to the public; and (c) publish a notice of public availability in the Federal Register.
Questions regarding the content of the inventories should be emailed to Mary Jo Mullin or call her at (410) 966-7718.