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Scenario: DoD Branch (let's say Navy) entered into a competitive CPFF Task Order under an ID/IQ MAC award. The base plus 5 one year option Task Order is funded my multiple Navy customers (e.g., Army, Air Force, US Coast Guard, etc.) A couple months into performance of the Task Order, the Coast Guard decides to pull its current and future funding from the Navy, and of course, impacts the Task Order. 

Navy re-arranges the Task Order such that instead of the Navy losing a number of its personnel that oversaw the Coast Guard work, Navy decides to pull funding from the Contractor not only on Coast Guard work, but also on another program that's viable, and divert (de-obligates) the funds of the viable program back to the Navy so that Navy personnel (civilian) can perform the same or comparable work as what the Contractor was performing under the viable program. As a result, the Contractor lays off a portion of its work force due to the Navy pulling funds in-house from a viable program so that Govt personnel are not laid off. 

Question 1 - is this possible?

Question 2 - under what authority (if any) would the Navy be acting under?

Question 3 - if A-76 was still around, would an A-76 Public/Private Competition (or its equivalent today?) have to be done before the Navy could bring that work in-house?

I've read the Asst Sec of Defense 2016 Memo (enclosed). Uncertain if it addresses these issues or not. 

Update_on_OMB_Circular_A-76_Public-Private_Competition_Prohibitions-FY2016 (1).pdf

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49 minutes ago, Guest108830 said:

Question 3 - if A-76 was still around, would an A-76 Public/Private Competition (or its equivalent today?) have to be done before the Navy could bring that work in-house?

Insourcing and outsourcing are different.  The prohibition on outsourcing remains in place.  See the FY19 Update here.  Authorities related to insourcing include 10 USC 2463 & DFARS 237.102-79.

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On the cost analysis requirements surrounding insourcing, see DoDI 7041.04.

To support my conclusion above that insourcing and outsourcing are different, you'll see that the linked memo references Pub. L. 111-84, NDAA'10, sec. 325.  Subsec. (a) of that section reads:

Quote

During the period beginning on the date of the enactment of this Act and ending on the date that is 30 days after the date on which the Secretary of Defense submits to the congressional defense committees the certification required under subsection (d), no study or competition regarding a public-private competition for the conversion to performance by a contractor for any function performed by Department of Defense civilian employees may be begun or announced pursuant to 2461 of title 10, United States Code, or otherwise pursuant to Office of Management and Budget Circular A-76.

(emphasis added).

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