FAR 52.207-2—Notice of Streamlined Competition.
Plain-English Summary
FAR 52.207-2 is the solicitation provision used when the Government is conducting a streamlined competition under OMB Circular A-76 to decide whether a commercial activity should be performed by a private contractor or by Government personnel. The provision tells offerors that the solicitation is part of that A-76 process, explains that the Government will compare the cost of private-sector performance against Agency or public reimbursable performance, and ties the evaluation method to the solicitation and the Circular. It also explains what happens after the performance decision is made: the decision will be publicly announced, and if private-sector performance wins, the Contracting Officer must either award a contract or issue a competitive solicitation for private-sector offers. If Government performance wins, the Agency must implement the result through either a letter of obligation or a fee-for-service agreement, depending on the type of Government performance selected under the Circular. In practice, this provision matters because it alerts contractors that the competition is not a normal procurement only, but part of a formal sourcing decision with special cost-comparison rules and post-decision implementation requirements. It also helps contracting personnel ensure the solicitation, evaluation, and follow-on actions align with the Circular and the streamlined competition framework.
Key Rules
A-76 streamlined competition notice
The solicitation must state that it is part of a streamlined competition under OMB Circular A-76. This tells offerors that the purpose is to decide whether the work will be done by contract or by Government performance, not simply to buy a service in the ordinary way.
Cost comparison governs decision
The Government will evaluate the cost of private-sector performance and Agency or public reimbursable performance using the solicitation and the Circular. The decision is based on the prescribed A-76 cost-comparison framework, not just on technical merit or price alone.
Public announcement required
The resulting performance decision must be publicly announced in accordance with the Circular. This creates transparency and ensures the outcome is communicated through the process required by A-76.
If private sector wins
If the decision favors private-sector performance, the Contracting Officer must either award a contract or issue a competitive solicitation for private-sector offers. The provision does not itself award the contract; it directs the next procurement step.
If Government performance wins
If the decision favors Agency or public reimbursable performance, the Agency must implement that result through either a letter of obligation or a fee-for-service agreement, as defined in the Circular. The implementation mechanism depends on the type of Government performance selected.
Circular controls definitions and process
Key terms and procedures are controlled by OMB Circular A-76, including what counts as Agency performance, public reimbursable performance, letter of obligation, and fee-for-service agreement. Users must read the provision together with the Circular and the solicitation instructions.
Responsibilities
Contracting Officer
Include this provision in the solicitation when required by FAR 7.305(b); conduct the streamlined competition in accordance with the solicitation and OMB Circular A-76; and if private-sector performance is selected, either award the contract or issue a competitive solicitation for private-sector offers.
Agency
If the performance decision favors Agency or public reimbursable performance, implement the decision by establishing the required letter of obligation or fee-for-service agreement, as defined in the Circular.
Offerors / Private Sector
Compete under the streamlined competition framework and submit offers or cost information as required by the solicitation and the Circular, understanding that the Government will compare private-sector and Government performance costs.
Government evaluators / competition officials
Apply the cost-comparison rules in the solicitation and the Circular, determine the performance decision, and ensure the result is publicly announced in the manner required by A-76.
Practical Implications
This provision signals that the procurement is part of a sourcing decision, so contractors should pay close attention to the A-76 rules rather than treating it like a standard best-value competition.
The biggest pitfall is assuming the solicitation alone controls the process; in reality, the Circular supplies critical definitions, evaluation rules, and implementation steps.
Contracting officers must be careful not to skip the post-decision action: a private-sector win requires either contract award or a new competitive solicitation, while a Government win requires the proper internal agreement mechanism.
Because the decision must be publicly announced, agencies should plan for transparency and documentation from the start.
Offerors should watch for how the solicitation defines the cost comparison inputs, since small differences in assumptions can affect the outcome under A-76.
Official Regulatory Text
As prescribed in 7.305 (b) , insert the following provision: Notice of Streamlined Competition (May 2006) (a) This solicitation is part of a streamlined competition under Office of Management and Budget Circular No. A-76 (Revised), Performance of Commercial Activities, dated May 29, 2003 (hereafter "the Circular"), to determine whether to accomplish the specified work under contract or by Government performance. (b) The Government will evaluate the cost of private sector and Agency or public reimbursable performance, as provided in this solicitation and the Circular. (c) A performance decision resulting from this streamlined competition will be publicly announced in accordance with the Circular. If the performance decision favors private sector performance, the Contracting Officer shall either award a contract or issue a competitive solicitation for private sector offers. If the performance decision favors Agency or public reimbursable performance, the Agency shall establish, respectively, either a letter of obligation or a fee-for-service agreement, as those terms are defined in the Circular. (End of provision)