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The Department of Defense (DoD) has determined that Outsourcing and Privatization is key to reducing operating costs and subsequently providing the fiscal dollars necessary to modernize the U.S. Armed Forces. In an effort to achieve this goal, the DoD has mandated that the Air Force stud y at least 5% of its manning positions for possible conversion to contract (A-76 Contracting, 2001). This mandate effects over 200,000 positions throughout the department. Office of Management and Budget (OMB) Circular, Number A-76, Performance Of Commercial Activities dictates the process used to study the appropriateness of these conversions. This thesis explores the usefulness and applicability of this process, commonly referred to as "A-76". More specifically, this researcher's goal is to determine if the current process is the most effective and efficient way to accomplish the goals of reducing the Department of Defense operating costs. This thesis explores recent A-76 studies and other strategic and competitive sourcing issues to determine how to drive down cost most effectively.