II

106TH CONGRESS

2D SESSION S. 2242

To amend the Federal Activities Inventory Reform Act of 1998 to improve

the process for identifying the functions of the Federal Government

that are not inherently governmental functions, for determining the appropriate organizations for the performance of such functions on the

basis of competition, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 9, 2000

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

to the Committee on Governmental Affairs

A BILL

To amend the Federal Activities Inventory Reform Act of

1998 to improve the process for identifying the functions

of the Federal Government that are not inherently governmental functions, for determining the appropriate organizations for the performance of such functions on

the basis of competition, 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,
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1 SECTION 1. SHORT TITLE; REFERENCES TO FAIR ACT OF

2 1998.

3 (a) SHORT TITLE.—This Act may be cited as the

4 ‘‘Federal Activities Inventory Reform Act Amendments of

5 2000’’.

6 (b) REFERENCES.—Except as otherwise expressly

7 provided, whenever in this Act an amendment or repeal

8 is expressed in terms of an amendment to, or repeal of,

9 a section or other provision, the reference shall be consid10 ered to be made to a section or other provision of the Fed11 eral Activities Inventory Reform Act of 1998 (Public Law

12 105–270; 112 Stat. 2382; 31 U.S.C. 501 note).

13 SEC. 2. ANNUAL LISTS OF GOVERNMENT ACTIVITIES.

14 (a) LISTS TO INCLUDE INHERENTLY GOVERN15 MENTAL ACTIVITIES.—Subsection (a) of section 2 is

16 amended by inserting before the period at the end of the

17 first sentence the following: ‘‘and those activities per18 formed by Federal Government sources for the executive

19 agency that, in that official’s judgment, are inherently

20 governmental functions’’.

21 (b) DESCRIPTIVE AND EXPLANATORY MATTERS TO

22 BE INCLUDED.—Such subsection is further amended—

23 (1) by redesignating paragraph (3) as para24 graph (5);

25 (2) by inserting after paragraph (2) the fol26 lowing new paragraphs (3) and (4):
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1 ‘‘(3) A description of the activity, including—

2 ‘‘(A) a narrative description of the activity;

3 ‘‘(B) the product or service code, if any,

4 that would be assigned to the activity under the

5 Federal Procurement Data System if the activ6 ity were performed in the private sector; and

7 ‘‘(C) the Standard Industrial Classification

8 code, if any, that would be assigned to the ac9 tivity if the activity were performed in the pri10 vate sector.

11 ‘‘(4) The organization within the executive

12 agency that is performing the activity, or for which

13 the activity is performed, and the location of that or14 ganization.’’; and

15 (3) by adding at the end the following:

16 ‘‘(6) The identity of any provision of law or

17 other authority that, except for subsection (f), would

18 expressly or impliedly exempt the executive agency

19 from the requirements of this section or of Office of

20 Management and Budget Circular A–76 with respect

21 to any activity that is not an inherently govern22 mental activity, together with a discussion of the ra23 tionale for that exemption.’’.

24 (c) DEADLINES FOR PUBLICATION OF LISTS AND

25 CHANGES.—Subsection (c) of such section is amended—
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1 (1) in paragraph (1)(B), by striking ‘‘promptly’’

2 and inserting ‘‘, not later than 30 working days

3 after receiving the list,’’; and

4 (2) in paragraph (2)(B), by inserting after

5 ‘‘(B)’’ the following: ‘‘not later than 30 working

6 days after the date of the final decision to make the

7 change,’’.

8 SEC. 3. NOTIFICATION OF AFFECTED EMPLOYEES.

9 Section 2 is further amended by adding at the end

10 the following:

11 ‘‘(f) NOTIFICATION OF AFFECTED EMPLOYEES.—At

12 the same time that the Director of the Office of Manage13 ment and Budget publishes a notice of the availability of

14 a list of an executive agency under subsection (c)(1), the

15 head of the executive agency shall notify each employee

16 of the executive agency employed in an activity listed as

17 not being an inherently governmental function that the ac18 tivity may be converted to performance by a private sector

19 source.’’.

20 SEC. 4. COMPETITION REQUIREMENTS.

21 (a) USE OF COMPETITIVE PROCEDURES.—

22 (1) REQUIREMENT.—The second sentence of

23 section 2(d) is amended by striking ‘‘use a competi24 tive process’’ and all that follows and inserting ‘‘se-
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1 lect the source using competitive procedures applica2 ble to the executive agency’s procurements.’’

3 (2) COMPETITIVE PROCEDURES DEFINED.—

4 Section 5 is amended by adding at the end the fol5 lowing:

6 ‘‘(3) COMPETITIVE PROCEDURES.—The term

7 ‘competitive procedures’ has the meaning given that

8 term in section 2302(2) of title 10, United States

9 Code, and section 309(b) of the Federal Property

10 and Administrative Services Act of 1949 (41 U.S.C.

11 259(b)).’’.

12 (b) COST COMPARISONS.—Section 2(e) is amended to

13 read as follows:

14 ‘‘(e) COST COMPARISONS.—

15 ‘‘(1) REALISTIC AND FAIR COST COMPARI16 SONS.—Before determining to contract with a pri17 vate sector source for the performance of an execu18 tive agency activity on the basis of a comparison of

19 the costs of procuring services from such a source

20 with the cost of performing that activity by the exec21 utive agency, the head of the executive agency shall

22 ensure that—

23 ‘‘(A) the cost comparison was conducted in

24 accordance with—
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1 ‘‘(i) Office of Management and Budg2 et Circular A–76; and

3 ‘‘(ii) any provision of law that is ap4 plicable to the cost comparison, including

5 (if applicable) title IX of the Federal Prop6 erty and Administrative Services Act of

7 1949 (40 U.S.C. 541 et seq.) relating to

8 architectural and engineering services (in9 cluding surveying and mapping services);

10 ‘‘(B) all costs have been considered, includ11 ing the costs of quality assurance, technical

12 monitoring of the performance of such activity,

13 liability insurance, employee retirement and dis14 ability benefits, and all other overhead costs;

15 and

16 ‘‘(C) the costs considered are realistic and

17 fair.

18 ‘‘(2) EXEMPTION.—Notwithstanding any other

19 provision of law, the performance of an activity that

20 is not an inherently governmental function may be

21 converted to performance by a private sector source

22 without a cost comparison if the activity is per23 formed by fewer than 10 full-time employees of the

24 United States (or the equivalent in part-time em-
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1 ployees or in a combination of full-time and part2 time employees).’’.

3 SEC. 5. INAPPLICABILITY OF EXEMPTIONS IN OTHER LAWS.

4 Section 2 is amended by adding at the end the fol5 lowing:

6 ‘‘(f) EXEMPTIONS INAPPLICABLE.—The head of each

7 executive agency shall carry out this Act notwithstanding

8 any other provision of law that expressly or impliedly ex9 empts that executive agency from developing an inventory

10 of activities that are not inherently governmental func11 tions and are performed by the executive agency or by

12 Federal Government sources for the executive agency. The

13 head of the executive agency shall include in the annual

14 list prepared under subsection (a) a notation of each such

15 exemption that, except for the preceding sentence, would

16 otherwise apply to the executive agency or any such func17 tion.’’.

18 SEC. 6. PERFORMANCE FOR OTHER GOVERNMENTAL OR19 GANIZATIONS.

20 (a) LIMITATIONS.—Section 2, as amended by section

21 5, is further amended by adding at the end the following:

22 ‘‘(g) LIMITATIONS ON PERFORMANCE FOR OTHER

23 GOVERNMENTAL ORGANIZATIONS.—

24 ‘‘(1) FEDERAL AGENCIES.—An activity that is

25 not an inherently governmental function may not be
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1 performed for an executive agency by another Fed2 eral Government source under section 1535 of title

3 31, United States Code, unless, within three years

4 before the order for that activity is placed with the

5 other Federal Government source under that section,

6 performance of that activity by the executive agency

7 has been justified pursuant to a competition carried

8 out under Office of Management and Budget Cir9 cular A–76.

10 ‘‘(2) STATE AND LOCAL GOVERNMENTS.—The

11 head of an executive agency may not take any action

12 under section 6505 of title 31, United State Code,

13 to perform for the benefit of an agency of a State

14 or a political subdivision of a State an activity that

15 is not an inherently governmental function unless

16 the head of the executive agency has first—

17 ‘‘(A) solicited offers for the performance of

18 that activity in accordance with section 18 of

19 the Office of Federal Procurement Policy Act

20 (41 U.S.C. 416) and section 8(e) of the Small

21 Business Act (15 U.S.C. 637(e)); and

22 ‘‘(B) determined on the basis of the re23 sponse to the solicitation that no responsible

24 private sector source is available to meet the
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1 needs of the executive agency for the perform2 ance of that activity for the executive agency.’’.

3 (b) STATE DEFINED.—Section 5, as amended by sec4 tion 4(a)(2) of this Act, is further amended by adding at

5 the end the following:

6 ‘‘(4) STATE.—The term ‘State’, includes the

7 District of Columbia, the Commonwealth of Puerto

8 Rico, and the United States Virgin Islands.’’.

9 SEC. 7. CHALLENGES TO THE LIST.

10 (a) MATTERS SUBJECT TO CHALLENGE.—Section

11 3(a) is amended by striking ‘‘or an inclusion of a par12 ticular activity on,’’ and inserting ‘‘an inclusion of a par13 ticular activity on, or the classification of any activity on’’.

14 (b) REVISION OF DEADLINES.—Section 3 is

15 amended—

16 (1) in subsection (c), by striking ‘‘30 days’’ and

17 inserting ‘‘90 working days’’;

18 (2) in subsection (d), by striking ‘‘28 days’’ and

19 inserting ‘‘28 working days’’; and

20 (3) in subsection (e)(2), by striking ‘‘10 days’’

21 and inserting ‘‘10 working days’’.

22 (c) PUBLICATION OF RESOLUTION OF CHAL23 LENGES.—Section 3 is amended by adding at the end the

24 following:
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1 ‘‘(f) PUBLICATION OF RESOLUTION OF CHAL2 LENGES.—Not later than 30 working days after the head

3 of an executive agency makes a decision on an appeal

4 under subsection (e), the head of the executive agency

5 shall publish in the Federal Register the following:

6 ‘‘(1) FINAL LIST.—A final version of the list

7 that was challenged.

8 ‘‘(2) SCHEDULE FOR REVIEW OF LIST.—A

9 schedule for the review to be conducted of such list

10 under section 2(d), together with a description of the

11 intended review.’’.

12 (d) WORKING DAYS DEFINED.—Section 5, as amend13 ed by section 6(b) of this Act, is further amended by add14 ing at the end the following:

15 ‘‘(5) WORKING DAY.—The term ‘working day’,

16 in the administration of sections 2 and 3 with re17 spect to a list of an executive agency, means a day

18 on which the headquarters of the executive agency is

19 open for the conduct of the executive agency’s busi20 ness.’’.

21 SEC. 8. PROHIBITION ON CONVERSION TO PERFORMANCE

22 BY FEDERAL PRISON INDUSTRIES.

23 Section 4 is amended by adding at the end the fol24 lowing:
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1 ‘‘(c) PROHIBITED CONVERSION.—The performance

2 of an activity of an executive agency that is not an inher3 ently government function may not be converted to per4 formance by a government corporation provided for under

5 chapter 307 of title 18, United States Code.’’.

6 SEC. 9. INHERENTLY GOVERNMENTAL FUNCTION NOT TO

7 INCLUDE RESEARCH AND DEVELOPMENT.

8 Section 5(2)(C) is amended—

9 (1) by striking ‘‘or’’ at the end of clause (i);

10 (2) by striking the period at the end of clause

11 (ii) and inserting ‘‘; or’’; and

12 (3) by adding at the end the following:

13 ‘‘(iii) the conduct of research and de14 velopment.’’.

15 SEC. 10. PRIVATE SECTOR SOURCE DEFINED.

16 Section 5, as amended by section 7(d) of this Act,

17 is further amended by adding at the end the following:

18 ‘‘(6) PRIVATE SECTOR SOURCE.—The term ‘pri19 vate sector source’ means a person lawfully engaged

20 in business for profit in the United States.’’.

21 SEC. 11. REPORT ON PORTABILITY OF FEDERAL PENSION

22 BENEFITS.

23 (a) REQUIREMENT.—Not later than 180 days after

24 the date of the enactment of this Act, the Director of the

25 Office of Management and Budget shall submit to Con-
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1 gress a report on the portability of Federal pension bene2 fits. The report shall contain—

3 (1) an evaluation of current Federal law, poli4 cies, and procedures relating to the conversion by

5 Federal Government employees of their Federal pen6 sion benefits to private sector pension plans upon

7 the transition of such employees from Federal Gov8 ernment employment to private sector employment;

9 (2) a discussion of any impediments to the con10 version of Federal pension benefits as described in

11 paragraph (1);

12 (3) an analysis of the scoring, under the Con13 gressional Budget Act of 1974, of the conversion of

14 Federal pension benefits as so described; and

15 (4) recommendations of the Director for any

16 legislation required to permit the ready conversion of

17 Federal pension benefits as so described.

18 (b) CONSULTATION.—The Director of the Office of

19 Management and Budget shall consult with the Director

20 of the Office of Personnel Management and other appro21 priate interested parties in preparing the report required

22 by subsection (a).

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