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FEDERAL ACTIVITIES INVENTORY REFORM ACT OF 1998

\[\[Page 112 STAT. 2382\]\]

Public Law 105-270

105th Congress

An Act

To provide a process for identifying the functions of the Federal

Government that are not inherently governmental functions, and for other

purposes. \<\<NOTE: Oct. 19, 1998 - \[S. 314\]\>\>

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled, \<\<NOTE: Federal

Activities Inventory Reform Act of 1998. 31 USC 501 note.\>\>

SECTION 1. SHORT TITLE.

This Act may be cited as the \`\`Federal Activities Inventory Reform

Act of 1998\'\'.

SEC. 2. \<\<NOTE: Records.\>\> ANNUAL LISTS OF GOVERNMENT ACTIVITIES

NOT INHERENTLY GOVERNMENTAL IN NATURE.

\(a\) \<\<NOTE: Deadline.\>\> Lists Required.\--Not later than the end
of

the third quarter of each fiscal year, the head of each executive agency

shall submit to the Director of the Office of Management and Budget a

list of activities performed by Federal Government sources for the

executive agency that, in the judgment of the head of the executive

agency, are not inherently governmental functions. The entry for an

activity on the list shall include the following:

\(1\) The fiscal year for which the activity first appeared on

a list prepared under this section.

\(2\) The number of full-time employees (or its equivalent)

that are necessary for the performance of the activity by a

Federal Government source.

\(3\) The name of a Federal Government employee responsible

for the activity from whom additional information about the

activity may be obtained.

\(b\) OMB Review and Consultation.\--The Director of the Office of

Management and Budget shall review the executive agency\'s list for a

fiscal year and consult with the head of the executive agency regarding

the content of the final list for that fiscal year.

\(c\) Public Availability of Lists.\--

\(1\) Publication.\--Upon the completion of the review and

consultation regarding a list of an executive agency\--

\(A\) the head of the executive agency shall promptly

transmit a copy of the list to Congress and make the

list available to the public; and

\(B\) \<\<NOTE: Federal Register, Publication.\>\> the

Director of the Office of Management and Budget shall

promptly publish in the Federal Register a notice that

the list is available to the public.

\(2\) Changes.\--If the list changes after the publication of

the notice as a result of the resolution of a challenge under

section 3, the head of the executive agency shall promptly\--

\(A\) make each such change available to the public

and transmit a copy of the change to Congress; and

\[\[Page 112 STAT. 2383\]\]

\(B\) \<\<NOTE: Federal Register, Publication.\>\> publish

in the Federal Register a notice that the change is

available to the public.

\(d\) Competition Required.\--Within a reasonable time after the date

on which a notice of the public availability of a list is published

under subsection (c), the head of the executive agency concerned shall

review the activities on the list. Each time that the head of the

executive agency considers contracting with a private sector source for

the performance of such an activity, the head of the executive agency

shall use a competitive process to select the source (except as may

otherwise be provided in a law other than this Act, an Executive order,

regulations, or any executive branch circular setting forth requirements

or guidance that is issued by competent executive authority). The

Director of the Office of Management and Budget shall issue guidance for

the administration of this subsection.

\(e\) Realistic and Fair Cost Comparisons.\--For the purpose of

determining whether to contract with a source in the private sector for

the performance of an executive agency activity on the list on the basis

of a comparison of the costs of procuring services from such a source

with the costs of performing that activity by the executive agency, the

head of the executive agency shall ensure that all costs (including the

costs of quality assurance, technical monitoring of the performance of

such function, liability insurance, employee retirement and disability

benefits, and all other overhead costs) are considered and that the

costs considered are realistic and fair.

SEC. 3. CHALLENGES TO THE LIST.

\(a\) Challenge Authorized.\--An interested party may submit to an

executive agency a challenge of an omission of a particular activity

from, or an inclusion of a particular activity on, a list for which a

notice of public availability has been published under section 2.

\(b\) Interested Party Defined.\--For the purposes of this section, the

term \`\`interested party\'\', with respect to an activity referred to
in

subsection (a), means the following:

\(1\) 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 a private sector source.

\(2\) A representative of any business or professional

association that includes within its membership private sector

sources referred to in paragraph (1).

\(3\) An officer or employee of an organization within an

executive agency that is an actual or prospective offeror to

perform the activity.

\(4\) The head of any labor organization referred to in

section 7103(a)(4) of title 5, United States Code, that includes

within its membership officers or employees of an organization

referred to in paragraph (3).

\(c\) Time for Submission.\--A challenge to a list shall be submitted

to the executive agency concerned within 30 days after the publication

of the notice of the public availability of the list under section 2.

\[\[Page 112 STAT. 2384\]\]

\(d\) \<\<NOTE: Deadline.\>\> Initial Decision.\--Within 28 days after
an

executive agency receives a challenge, an official designated by the

head of the executive agency shall\--

\(1\) decide the challenge; and

\(2\) transmit to the party submitting the challenge a written

notification of the decision together with a discussion of the

rationale for the decision and an explanation of the party\'s

right to appeal under subsection (e).

\(e\) Appeal.\--

\(1\) \<\<NOTE: Deadline.\>\> Authorization of appeal.\--An

interested party may appeal an adverse decision of the official

to the head of the executive agency within 10 days after

receiving a notification of the decision under subsection (d).

\(2\) Decision on appeal.\--Within 10 days after the head of an

executive agency receives an appeal of a decision under

paragraph (1), the head of the executive agency shall decide the

appeal and transmit to the party submitting the appeal a written

notification of the decision together with a discussion of the

rationale for the decision.

SEC. 4. APPLICABILITY.

\(a\) Executive Agencies Covered.\--Except as provided in subsection

(b), this Act applies to the following executive agencies:

\(1\) Executive department.\--An executive department named in

section 101 of title 5, United States Code.

\(2\) Military department.\--A military department named in

section 102 of title 5, United States Code.

\(3\) Independent establishment.\--An independent

establishment, as defined in section 104 of title 5, United

States Code.

\(b\) Exceptions.\--This Act does not apply to or with respect to the

following:

\(1\) General accounting office.\--The General Accounting

Office.

\(2\) Government corporation.\--A Government corporation or a

Government controlled corporation, as those terms are defined in

section 103 of title 5, United States Code.

\(3\) Nonappropriated funds instrumentality.\--A part of a

department or agency if all of the employees of that part of the

department or agency are employees referred to in section

2105(c) of title 5, United States Code.

\(4\) Certain depot-level maintenance and repair.\--Depot-level

maintenance and repair of the Department of Defense (as defined

in section 2460 of title 10, United States Code).

SEC. 5. DEFINITIONS.

In this Act:

\(1\) Federal government source.\--The term \`\`Federal

Government source\'\', with respect to performance of an activity,

means any organization within an executive agency that uses

Federal Government employees to perform the activity.

\(2\) Inherently governmental function.\--

\(A\) Definition.\--The term \`\`inherently governmental

function\'\' means a function that is so intimately

related to the public interest as to require performance

by Federal Government employees.

\[\[Page 112 STAT. 2385\]\]

\(B\) Functions included.\--The term includes

activities that require either the exercise of

discretion in applying Federal Government authority or

the making of value judgments in making decisions for

the Federal Government, including judgments relating to

monetary transactions and entitlements. An inherently

governmental function involves, among other things, the

interpretation and execution of the laws of the United

States so as\--

\(i\) to bind the United States to take or not

to take some action by contract, policy,

regulation, authorization, order, or otherwise;

\(ii\) to determine, protect, and advance United

States economic, political, territorial, property,

or other interests by military or diplomatic

action, civil or criminal judicial proceedings,

contract management, or otherwise;

\(iii\) to significantly affect the life,

liberty, or property of private persons;

\(iv\) to commission, appoint, direct, or

control officers or employees of the United

States; or

\(v\) to exert ultimate control over the

acquisition, use, or disposition of the property,

real or personal, tangible or intangible, of the

United States, including the collection, control,

or disbursement of appropriated and other Federal

funds.

\(C\) Functions excluded.\--The term does not normally

include\--

\(i\) gathering information for or providing

advice, opinions, recommendations, or ideas to

Federal Government officials; or

\(ii\) any function that is primarily

ministerial and internal in nature (such as

building security, mail operations, operation of

cafeterias, housekeeping, facilities operations

and maintenance, warehouse operations, motor

vehicle fleet management operations, or other

routine electrical or mechanical services).

SEC. 6. EFFECTIVE DATE.

This Act shall take effect on October 1, 1998.

Approved October 19, 1998.

LEGISLATIVE HISTORY\--S. 314:

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

SENATE REPORTS: No. 105-269 (Comm. on Governmental Affairs).

CONGRESSIONAL RECORD, Vol. 144 (1998):

July 30, considered and passed Senate.

Oct. 5, considered and passed House.

\<all\>