Department of Defense Privatization and Outsourcing Moratorium Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Department of Defense Privatization 
and Outsourcing Moratorium Act''.

SEC. 2. MORATORIUM ON PRIVATIZATION AND OUTSOURCING OF DEPARTMENT OF 
              DEFENSE FUNCTIONS.

    (a) Findings.--Congress finds the following:
            (1) There is conflicting evidence that the current 
        privatization and outsourcing efforts of the Department of 
        Defense, including the Departments of the Army, Navy, and Air 
        Force, are reducing the cost of support functions within the 
        Department.
            (2) Typically, these privatization and outsourcing efforts 
        result in contractors simply replacing civilian employees of 
        the Department at lower initial costs, but higher longer-term 
        costs, while stagnating organizational improvements that would 
        otherwise result in greater efficiencies and effectiveness.
            (3) Recent and current privatization and outsourcing 
        efforts in some cases appear to have created serious oversight 
        and accountability problems for the Department.
            (4) The Department, as a general practice, has adjusted the 
        operating budgets of the Armed Forces and specific military 
        installations to reflect savings anticipated as a result of 
        Office of Management and Budget Circular A-76 studies and 
        subsequent privatization and outsourcing activities.
            (5) The massive drawdowns in the size of the Armed Forces 
        during the 1990's and the restructuring of military 
        installations through the base closure process have created a 
        climate in which making accurate decisions concerning 
        privatization and outsourcing are further complicated due to 
        the dynamic nature of the civilian workforce of the Department.
            (6) The Department should pursue alternatives to the 
        privatization and outsourcing approach conducted under the A-76 
        process, such as ``Strategic Sourcing'', to find its most 
        efficient organization to perform commercial or industrial type 
        functions.
    (b) Moratorium.--(1) Chapter 146 of title 10, United States Code, 
is amended by adding at the end the following new section:
``Sec. 2475. Moratorium on privatization and outsourcing
    ``(a) Moratorium.--(1) During the period specified in subsection 
(b), any commercial or industrial type function of the Department of 
Defense that, as of the date of the enactment of this section, is being 
performed by Department of Defense civilian employees may not be 
changed to performance by the private sector.
    ``(2) The moratorium applies to a function even though, as of the 
date of the enactment of this section, the function--
            ``(A) is the subject of a study or report under section 
        2461 of this title for conversion to contractor performance; or
            ``(B) is being considered for such conversion under the 
        procedures and requirements of Office of Management and Budget 
        Circular A-76.
    ``(3) As part of the moratorium, the Secretary of Defense shall 
order the suspension of any study being conducted under section 2461 of 
this title or Office of Management and Budget Circular A-76 regarding a 
commercial or industrial type function of the Department. New studies 
regarding such a function at a military installation may not be 
commenced under such section or circular during the period of the 
moratorium.
    ``(b) Duration of Moratorium.--The moratorium imposed under 
subsection (a) begins on the date of the enactment of this section and 
shall continue until the end of the five-year period beginning on the 
date the Secretary of Defense certifies to Congress that all actions 
necessary to carry out the 1995 round of base closures and realignments 
have been completed under the Defense Base Closure and Realignment Act 
of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 
note).
    ``(c) Exception.--The moratorium imposed under subsection (a) does 
not apply to a commercial or industrial type function of the Department 
of Defense that is being converted, or is being considered for 
conversion, to performance by the private sector under a Strategic 
Sourcing or Business Process and Re-engineering plan of the Department.
    ``(d) Report Evaluating Conversion to Contractor Performance.--(1) 
Not later than 18 months after the date of the enactment of this 
section, the Secretary of Defense shall submit to Congress a report 
evaluating--
            ``(A) each conversion of a commercial or industrial type 
        function of the Department of Defense to contractor performance 
        that was carried out, in whole or in part, since October 1, 
        1996; and
            ``(B) each commercial or industrial type function of the 
        Department that was considered, since that date, for conversion 
        to contractor performance under section 2461 of this title or 
        Office of Management and Budget Circular A-76, but that was not 
        converted.
    ``(2) At a minimum, the report shall contain the following 
information for each function covered by the report:
            ``(A) The code, title, and actual functions performed by 
        civilian employees of the Department.
            ``(B) The cost to study the function for possible 
        conversion.
            ``(C) The number of civilian employees affected.
            ``(D) The personnel cost of the conversion, including costs 
        resulting from reduction in force, retirement, retraining and 
        other movement and separation costs.
            ``(E) The cost and identity of materials, equipment and 
        facilities provided contractors in conversion to contractor 
        performance.
            ``(F) The cost of the initial contract, the number of 
        employees expected to perform the function, and variants in 
        each thereafter.
    ``(3) The report shall also contain the following aggregate 
information for the functions covered by the report:
            ``(A) The average annual costs or savings associated with 
        all Department conversions to contractor performance.
            ``(B) The overall average annual costs or savings resulting 
        from efficiencies achieved in Department functions described in 
        paragraph (1)(B).
    ``(e) Effect of Moratorium on Operating Budgets.--On account of the 
moratorium imposed under subsection (a), the Secretary of Defense shall 
provide for an adjustment in the operating budgets of the armed forces 
and military installations to compensate for the fact that the 
operating budgets of the armed forces and many military installations 
were reduced, before the start of the moratorium, to reflect future 
savings anticipated as a result of completing the A-76 competitive 
study process and converting to contractor performance those commercial 
and industrial type functions of the Department of Defense that are now 
subject to the moratorium.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``2475. Moratorium on privatization and outsourcing.''.

Summary: Requires the Secretary to report to Congress evaluating: (1) each conversion that was carried out since October 1, 1996. And (2) each function that was considered for conversion since such date, but not converted. Directs the Secretary, on account of such moratorium, to provide for an adjustment in the operating budgets of the armed forces and military installations to compensate for the fact that such budgets were previously reduced to reflect savings anticipated from the conversion of such functions to private sector performance.