I

106TH CONGRESS

2D SESSION H. R. 4722

To impose a temporary moratorium on the privatization and outsourcing

of Department of Defense functions that are currently being performed

by Department of Defense civilian employees.

IN THE HOUSE OF REPRESENTATIVES

JUNE 22, 2000

Mr. SAXTON (for himself and Mr. HOSTETTLER) introduced the following bill;

which was referred to the Committee on Armed Services

A BILL

To impose a temporary moratorium on the privatization and

outsourcing of Department of Defense functions that

are currently being performed by Department of Defense

civilian employees.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Department of Defense

5 Privatization and Outsourcing Moratorium Act’’.
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1 SEC. 2. MORATORIUM ON PRIVATIZATION AND

2 OUTSOURCING OF DEPARTMENT OF DE3 FENSE FUNCTIONS.

4 (a) FINDINGS.—Congress finds the following:

5 (1) There is conflicting evidence that the cur6 rent privatization and outsourcing efforts of the De7 partment of Defense, including the Departments of

8 the Army, Navy, and Air Force, are reducing the

9 cost of support functions within the Department.

10 (2) Typically, these privatization and

11 outsourcing efforts result in contractors simply re12 placing civilian employees of the Department at

13 lower initial costs, but higher longer-term costs,

14 while stagnating organizational improvements that

15 would otherwise result in greater efficiencies and ef16 fectiveness.

17 (3) Recent and current privatization and

18 outsourcing efforts in some cases appear to have cre19 ated serious oversight and accountability problems

20 for the Department.

21 (4) The Department, as a general practice, has

22 adjusted the operating budgets of the Armed Forces

23 and specific military installations to reflect savings

24 anticipated as a result of Office of Management and

25 Budget Circular A–76 studies and subsequent pri26 vatization and outsourcing activities.
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1 (5) The massive drawdowns in the size of the

2 Armed Forces during the 1990’s and the restruc3 turing of military installations through the base clo4 sure process have created a climate in which making

5 accurate decisions concerning privatization and

6 outsourcing are further complicated due to the dy7 namic nature of the civilian workforce of the Depart8 ment.

9 (6) The Department should pursue alternatives

10 to the privatization and outsourcing approach con11 ducted under the A–76 process, such as ‘‘Strategic

12 Sourcing’’, to find its most efficient organization to

13 perform commercial or industrial type functions.

14 (b) MORATORIUM.—(1) Chapter 146 of title 10,

15 United States Code, is amended by adding at the end the

16 following new section:

17 ‘‘§ 2475. Moratorium on privatization and outsourcing

18 ‘‘(a) MORATORIUM.—(1) During the period specified

19 in subsection (b), any commercial or industrial type func20 tion of the Department of Defense that, as of the date

21 of the enactment of this section, is being performed by

22 Department of Defense civilian employees may not be

23 changed to performance by the private sector.
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1 ‘‘(2) The moratorium applies to a function even

2 though, as of the date of the enactment of this section,

3 the function—

4 ‘‘(A) is the subject of a study or report under

5 section 2461 of this title for conversion to contractor

6 performance; or

7 ‘‘(B) is being considered for such conversion

8 under the procedures and requirements of Office of

9 Management and Budget Circular A–76.

10 ‘‘(3) As part of the moratorium, the Secretary of De11 fense shall order the suspension of any study being con12 ducted under section 2461 of this title or Office of Man13 agement and Budget Circular A–76 regarding a commer14 cial or industrial type function of the Department. New

15 studies regarding such a function at a military installation

16 may not be commenced under such section or circular dur17 ing the period of the moratorium.

18 ‘‘(b) DURATION OF MORATORIUM.—The moratorium

19 imposed under subsection (a) begins on the date of the

20 enactment of this section and shall continue until the end

21 of the five-year period beginning on the date the Secretary

22 of Defense certifies to Congress that all actions necessary

23 to carry out the 1995 round of base closures and realign24 ments have been completed under the Defense Base Clo-
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1 sure and Realignment Act of 1990 (part A of title XXIX

2 of Public Law 101–510; 10 U.S.C. 2687 note).

3 ‘‘(c) EXCEPTION.—The moratorium imposed under

4 subsection (a) does not apply to a commercial or industrial

5 type function of the Department of Defense that is being

6 converted, or is being considered for conversion, to per7 formance by the private sector under a Strategic Sourcing

8 or Business Process and Re-engineering plan of the De9 partment.

10 ‘‘(d) REPORT EVALUATING CONVERSION TO CON11 TRACTOR PERFORMANCE.—(1) Not later than 18 months

12 after the date of the enactment of this section, the Sec13 retary of Defense shall submit to Congress a report

14 evaluating—

15 ‘‘(A) each conversion of a commercial or indus16 trial type function of the Department of Defense to

17 contractor performance that was carried out, in

18 whole or in part, since October 1, 1996; and

19 ‘‘(B) each commercial or industrial type func20 tion of the Department that was considered, since

21 that date, for conversion to contractor performance

22 under section 2461 of this title or Office of Manage23 ment and Budget Circular A–76, but that was not

24 converted.
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1 ‘‘(2) At a minimum, the report shall contain the fol2 lowing information for each function covered by the re3 port:

4 ‘‘(A) The code, title, and actual functions per5 formed by civilian employees of the Department.

6 ‘‘(B) The cost to study the function for possible

7 conversion.

8 ‘‘(C) The number of civilian employees affected.

9 ‘‘(D) The personnel cost of the conversion, in10 cluding costs resulting from reduction in force, re11 tirement, retraining and other movement and sepa12 ration costs.

13 ‘‘(E) The cost and identity of materials, equip14 ment and facilities provided contractors in conver15 sion to contractor performance.

16 ‘‘(F) The cost of the initial contract, the num17 ber of employees expected to perform the function,

18 and variants in each thereafter.

19 ‘‘(3) The report shall also contain the following ag20 gregate information for the functions covered by the re21 port:

22 ‘‘(A) The average annual costs or savings asso23 ciated with all Department conversions to contractor

24 performance.
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1 ‘‘(B) The overall average annual costs or sav2 ings resulting from efficiencies achieved in Depart3 ment functions described in paragraph (1)(B).

4 ‘‘(e) EFFECT OF MORATORIUM ON OPERATING

5 BUDGETS.—On account of the moratorium imposed under

6 subsection (a), the Secretary of Defense shall provide for

7 an adjustment in the operating budgets of the armed

8 forces and military installations to compensate for the fact

9 that the operating budgets of the armed forces and many

10 military installations were reduced, before the start of the

11 moratorium, to reflect future savings anticipated as a re12 sult of completing the A–76 competitive study process and

13 converting to contractor performance those commercial

14 and industrial type functions of the Department of De15 fense that are now subject to the moratorium.’’.

16 (2) The table of sections at the beginning of such

17 chapter is amended by adding at the end the following

18 new item:

‘‘2475. Moratorium on privatization and outsourcing.’’.

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