II

104TH CONGRESS

2D SESSION S. 1724

To require that the Federal Government procure from the private sector

the goods and services necessary for the operations and management

of certain Government agencies, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 2, 1996

Mr. THOMAS introduced the following bill; which was read twice and referred

to the Committee on Governmental Affairs

A BILL

To require that the Federal Government procure from the

private sector the goods and services necessary for the

operations and management of certain Government agencies, and for other purposes.

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 ‘‘Freedom from Govern5 ment Competition Act of 1996’’.

6 SEC. 2. FINDINGS.

7 Congress finds and declares that—
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1 (1) private sector business concerns, which are

2 free to respond to the private or public demands of

3 the marketplace, constitute the strength of the

4 American economic system;

5 (2) competitive private enterprises are the most

6 productive, efficient, and effective sources of goods

7 and services;

8 (3) Government competition with the private

9 sector of the economy is detrimental to the American

10 economic system;

11 (4) Government competition with the private

12 sector of the economy is at an unacceptably high

13 level, both in scope and in dollar volume;

14 (5) current law and policy have failed to ad15 dress adequately the problem of Government com16 petition with the private sector of the economy; and

17 (6) it is in the public interest that the Govern18 ment establish a consistent policy to rely on the pri19 vate sector of the economy to provide goods and

20 services necessary for or beneficial to the operation

21 and management of Government agencies and to

22 avoid Government competition with the private sec23 tor of the economy.
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1 SEC. 3. PROCUREMENT FROM PRIVATE SOURCES.

2 (a) GENERAL RULE.—Notwithstanding any other

3 provision of law, except as provided in subsection (b), each

4 agency shall obtain all goods and services necessary for

5 or beneficial to the accomplishment of its authorized func6 tions by procurement from private sources.

7 (b) EXCEPTIONS.—Subsection (a) does not apply to

8 the following goods and services required by an agency:

9 (1) Goods or services that are required by a law

10 enacted after the date of the enactment of this Act

11 to be produced or performed, respectively, by the

12 agency.

13 (2) Any goods or services for which the head of

14 the agency determines and certifies to Congress in

15 accordance with regulations promulgated by the Di16 rector of the Office of Management and Budget

17 that—

18 (A) it is necessary in the interests of na19 tional security that the Government produce,

20 manufacture, or provide the goods or services;

21 (B) the goods or services are so inherently

22 governmental in nature that it is in the public

23 interest to require production or performance,

24 respectively, by Government employees; or
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1 (C) commercial practices are not sufficient

2 to satisfy unique requirements of the agency for

3 the goods or services.

4 SEC. 4. PROCUREMENTS FROM STATE AND LOCAL GOVERN5 MENTS.

6 In any case in which the head of an agency deter7 mines that goods or services required by the agency are

8 so inherently governmental in nature that it is in the pub9 lic interest to require production or performance, respec10 tively, by Government employees, the head of the agency

11 shall determine whether the requirements of the agency

12 for such goods or services can be satisfied by a State or

13 local government and, if so, shall attempt to procure the

14 goods or services from that source.

15 SEC. 5. ADMINISTRATIVE PROVISIONS.

16 (a) REGULATIONS.—

17 (1) IN GENERAL.—The Director of the Office of

18 Management and Budget shall promulgate such reg19 ulations as the Director considers necessary to carry

20 out sections 3 and 4.

21 (2) EMPHASIS ON PROCUREMENT FROM PRI22 VATE SOURCES.—The regulations shall emphasize

23 the preference set forth in section 3 for procuring

24 goods and services from private sources.
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1 (b) OVERSIGHT.—The Director of the Office of Man2 agement and Budget and the heads of agencies shall vigor3 ously monitor the compliance of agencies with the require4 ments of this Act and report to Congress any significant

5 failure of an agency to comply with any such requirement.

6 SEC. 6. STUDY AND REPORT.

7 (a) STUDY.—The Director of the Office of Manage8 ment and Budget shall carry out a study to identify all

9 activities of agencies that are inconsistent with the re10 quirements of section 3.

11 (b) REPORT.—

12 (1) REQUIREMENT.—The Director shall trans13 mit a report on the study to Congress within one

14 year after the date of enactment of this Act.

15 (2) CONTENT.—The report shall include a list

16 of all procurement activities identified by the study

17 and a schedule for the transfer of such activities to

18 the private sector of the economy. The schedule in19 cluded in the report shall provide for the completion

20 of the transfer within five years after the date on

21 which such report is transmitted to Congress.

22 (c) COORDINATION WITH COMPTROLLER GEN23 ERAL.—The Director—

24 (1) shall coordinate the study under subsection

25 (a) and the preparation and transmittal of the re-
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1 port under subsection (b) with the Comptroller Gen2 eral of the United States; and

3 (2) in preparing the study, shall obtain rep4 resentative views of the private sector.

5 SEC. 7. DEFINITIONS.

6 (a) AGENCY.—As used in this Act, the term ‘‘agency’’

7 means—

8 (1) an executive department as defined by sec9 tion 101 of title 5, United States Code;

10 (2) a military department as defined by section

11 102 of such title; and

12 (3) an independent establishment as defined by

13 section 104(l) of such title.

14 (b) INHERENTLY GOVERNMENTAL SERVICES.—(1)

15 For the purposes of section 3(b)(2)(B), services constitut16 ing the performance of an inherently governmental func17 tion shall be considered inherently governmental services.

18 (2)(A) For the purposes of paragraph (1), a function

19 shall be considered an inherently governmental function

20 if the function is so intimately related to the public inter21 est as to mandate performance by Government employees.

22 Such functions include activities that require either the ex23 ercise of discretion in applying Government authority or

24 the making of value judgments in making decisions for

25 the Government, including judgments relating to monetary
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1 transactions and entitlements. An inherently governmental

2 function involves, among other things, the interpretation

3 and execution of the laws of the United States so as to—

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

5 some action by contract, policy, regulation, author6 ization, order, or otherwise;

7 (ii) determine, protect, and advance its eco8 nomic, political, territorial, property, or other inter9 ests by military or diplomatic action, civil or crimi10 nal judicial proceedings, contract management, or

11 otherwise;

12 (iii) significantly affect the life, liberty, or prop13 erty of private persons;

14 (iv) commission, appoint, direct, or control offi15 cers or employees of the United States; or

16 (v) exert ultimate control over the acquisition,

17 use, or disposition of the property, real or personal,

18 tangible or intangible, of the United States, includ19 ing the control or disbursement of appropriated and

20 other Federal funds.

21 (B) For the purposes of paragraph (1), inherently

22 governmental functions do not normally include—

23 (i) gathering information for or providing ad24 vice, opinions, recommendations, or ideas to Govern25 ment officials; or
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1 (ii) any function that is primarily ministerial or

2 internal in nature (such as building security, mail

3 operations, operation of cafeterias, housekeeping, fa4 cilities operations and maintenance, warehouse oper5 ations, motor vehicle fleet management and oper6 ations, or other routine electrical or mechanical serv7 ices).

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