SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Freedom from Government Competition 
Act of 1996''.

SEC. 2. FINDINGS.

    Congress finds and declares that--
            (1) private sector business concerns, which are free to 
        respond to the private or public demands of the marketplace, 
        constitute the strength of the American economic system;
            (2) competitive private enterprises are the most 
        productive, efficient, and effective sources of goods and 
        services;
            (3) Government competition with the private sector of the 
        economy is detrimental to the American economic system;
            (4) Government competition with the private sector of the 
        economy is at an unacceptably high level, both in scope and in 
        dollar volume;
            (5) current law and policy have failed to address 
        adequately the problem of Government competition with the 
        private sector of the economy; and
            (6) it is in the public interest that the Government 
        establish a consistent policy to rely on the private sector of 
        the economy to provide goods and services necessary for or 
        beneficial to the operation and management of Government 
        agencies and to avoid Government competition with the private 
        sector of the economy.

SEC. 3. PROCUREMENT FROM PRIVATE SOURCES.

    (a) General Rule.--Notwithstanding any other provision of law, 
except as provided in subsection (b), each agency shall obtain all 
goods and services necessary for or beneficial to the accomplishment of 
its authorized functions by procurement from private sources.
    (b) Exceptions.--Subsection (a) does not apply to the following 
goods and services required by an agency:
            (1) Goods or services that are required by a law enacted 
        after the date of the enactment of this Act to be produced or 
        performed, respectively, by the agency.
            (2) Any goods or services for which the head of the agency 
        determines and certifies to Congress in accordance with 
        regulations promulgated by the Director of the Office of 
        Management and Budget that--
                    (A) it is necessary in the interests of national 
                security that the Government produce, manufacture, or 
                provide the goods or services;
                    (B) the goods or services are so inherently 
                governmental in nature that it is in the public 
                interest to require production or performance, 
                respectively, by Government employees; or
                    (C) commercial practices are not sufficient to 
                satisfy unique requirements of the agency for the goods 
                or services.

SEC. 4. PROCUREMENTS FROM STATE AND LOCAL GOVERNMENTS.

    In any case in which the head of an agency determines that goods or 
services required by the agency are so inherently governmental in 
nature that it is in the public interest to require production or 
performance, respectively, by Government employees, the head of the 
agency shall determine whether the requirements of the agency for such 
goods or services can be satisfied by a State or local government and, 
if so, shall attempt to procure the goods or services from that source.

SEC. 5. ADMINISTRATIVE PROVISIONS.

    (a) Regulations.--
            (1) In general.--The Director of the Office of Management 
        and Budget shall promulgate such regulations as the Director 
        considers necessary to carry out sections 3 and 4.
            (2) Emphasis on procurement from private sources.--The 
        regulations shall emphasize the preference set forth in section 
        3 for procuring goods and services from private sources.
    (b) Oversight.--The Director of the Office of Management and Budget 
and the heads of agencies shall vigorously monitor the compliance of 
agencies with the requirements of this Act and report to Congress any 
significant failure of an agency to comply with any such requirement.

SEC. 6. STUDY AND REPORT.

    (a) Study.--The Director of the Office of Management and Budget 
shall carry out a study to identify all activities of agencies that are 
inconsistent with the requirements of section 3.
    (b) Report.--
            (1) Requirement.--The Director shall transmit a report on 
        the study to Congress within one year after the date of 
        enactment of this Act.
            (2) Content.--The report shall include a list of all 
        procurement activities identified by the study and a schedule 
        for the transfer of such activities to the private sector of 
        the economy. The schedule included in the report shall provide 
        for the completion of the transfer within five years after the 
        date on which such report is transmitted to Congress.
    (c) Coordination With Comptroller General.--The Director--
            (1) shall coordinate the study under subsection (a) and the 
        preparation and transmittal of the report under subsection (b) 
        with the Comptroller General of the United States; and
            (2) in preparing the study, shall obtain representative 
        views of the private sector.

SEC. 7. DEFINITIONS.

    (a) Agency.--As used in this Act, the term ``agency'' means--
            (1) an executive department as defined by section 101 of 
        title 5, United States Code;
            (2) a military department as defined by section 102 of such 
        title; and
            (3) an independent establishment as defined by section 
        104(l) of such title.
    (b) Inherently Governmental Services.--(1) For the purposes of 
section 3(b)(2)(B), services constituting the performance of an 
inherently governmental function shall be considered inherently 
governmental services.
    (2)(A) For the purposes of paragraph (1), a function shall be 
considered an inherently governmental function if the function is so 
intimately related to the public interest as to mandate performance by 
Government employees. Such functions include activities that require 
either the exercise of discretion in applying Government authority or 
the making of value judgments in making decisions for the 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 
to--
            (i) bind the United States to take or not to take some 
        action by contract, policy, regulation, authorization, order, 
        or otherwise;
            (ii) determine, protect, and advance its economic, 
        political, territorial, property, or other interests by 
        military or diplomatic action, civil or criminal judicial 
        proceedings, contract management, or otherwise;
            (iii) significantly affect the life, liberty, or property 
        of private persons;
            (iv) commission, appoint, direct, or control officers or 
        employees of the United States; or
            (v) exert ultimate control over the acquisition, use, or 
        disposition of the property, real or personal, tangible or 
        intangible, of the United States, including the control or 
        disbursement of appropriated and other Federal funds.
    (B) For the purposes of paragraph (1), inherently governmental 
functions do not normally include--
            (i) gathering information for or providing advice, 
        opinions, recommendations, or ideas to Government officials; or
            (ii) any function that is primarily ministerial or internal 
        in nature (such as building security, mail operations, 
        operation of cafeterias, housekeeping, facilities operations 
        and maintenance, warehouse operations, motor vehicle fleet 
        management and operations, or other routine electrical or 
        mechanical services).
Freedom from Government Competition Act of 1996 - Requires Federal agencies to obtain all goods and services necessary for or beneficial to the accomplishment of their authorized functions by procurement from private sources, except as specified. 
Provides for a study and report.
Freedom from Government Competition Act of 1996