WASHINGTON, D.C. 20410-8000






Ms. Carolyn Federoff

AFGE Council of HUD Locals, 222

P.O. Box 5961

Boston, MA 02114

Subject:            Challenge to the inclusion of the following positions on the Assistant Secretary for Housing-Federal Housing Commissioner A-76/Federal Activities Inventory Reform (FAIR) Act:

                        D000 Administrative Support

D606 Asset Appraisal and Valuation D708 Application Receipt/Processing D709 Mortgage Underwriting

T804 Architect-Engineering

Dear Ms. Federoff:

This is in response to your letter dated November 27, 2002, and your challenge to functions classified as commercial activities on our OMB A-76 2002 FAIR Act Inventory. The functions cited above are located in the office of the Assistant Secretary for Housing - Federal Housing Commissioner, Deputy Assistant Secretary for Multifamily Housing Programs.

As you stated in your letter, the Office of Federal Procurement Policy (OFPP) Policy Letter 92-1, dated September 23, 1992, in part, defines an inherently governmental function as ". . . a function that is so intimately related to the public interest as to mandate performance by Government employees. These functions include those activities that require either the exercise of discretion in applying government authority or the making of value judgments in making decisions for the Government."

The subject functions are of critical value to the Department's core multifamily insurance operations but they are not inherently governmental. The performance oŁ these functions requires the application of a body of technical knowledge and expertise within the parameters of established governmental policy. Such performance does not constitute applying government authority or making value judgments for the Government.

In addition, with the exception of Function Code C408 (which is not in the Department's inventory), the subject functions were classified as commercial in the Department's 2002 OMB A-76 submission. The classification of these functions as commercial is consistent with OMB's guidance concerning the determination of commercial and inherently governmental activities.


Finally, you expressed concern that the classification of the subject functions as commercial activities could result in the release of confidential business information to contractors. However, OMB procurement policy guidance (OFPP Policy Letter 92-1, Appendix B, Item 1-1.) specifically states that "Contractors working in any situation that permits or might permit them to gain access to confidential business information, and/or any other sensitive information . . . " does not constitute an inherently governmental function.


In accordance with FAIR Act provisions, please be advised that you have the right to appeal this determination. Appeals should be addressed to:


U.S. Department of Housing and Urban Development

Office of the Chief Financial Officer

451 7th Street, S.W., Rm. 2214

Washington, DC 20410

Attn: Janice W. Blake-Green





Michael F. Hill
Deputy Assistant Secretary Operations