1 

DCMA Administrative Record for FY 2013 Furlough Appeals 

TABLE OF CONTENTS

Part 3

Location

(tab)

Agency 

File Part

Date Document Source

24 Part 3 of 5 2/27/2013 EO President, Agency Responsibilities For 

Implementation of Potential Joint Committee 

Sequestration

Agency

25 2/21/2013 OASD, “Total Force Management and Budgetary 

Uncertainty”

Agency

26 2/20/2013 SDEF Preparation for Potential Sequestration 

Agency On March 1 and Furlough Notifications 

Agency 

27 1/14/2013 OMB Memo, “Planning for Uncertainty with 

Respect to Fiscal Year 2013 Budgetary Resources”

Agency 

28 1/10/2013 DSD, “Handling Budgetary Uncertainty in FY 

2013” 

Agency 

29 1/2/2013 “American Taxpayer Relief Act of 2012” Agency 

30 12/20/2012 SECDEF “Implications of Ongoing Fiscal Cliff 

Negotiations”

Agency 

31 9/25/2012 Guidance on FY 2013 Joint Committee 

Sequestration

Agency 

32 7/31/2012 Issues Raised by Potential Sequestration Pursuant to 

Section 251A of the Balanced Budget and 

Emergency Deficit Control Act of 1985 

Agency 

33 6/3/2012 DSD “Guidance for Limitations on Aggregate 

Amount Available for Contracted Services”

Agency

34 3/2/2012 USD “Guidance Related to the Utilization of 

Agency Military Manpower to Perform Certain 

Functions”

Agency

35 3/1/2012 Organization Chart of the DOD SECDEF Agency

36 12/1/2011 USD, “Prohibition on converting Certain Functions 

to Contract Performance”

Agency

37 8/2/2011 “Budget Control Act of 2011” Agency

38 4/12/2010 DODI “Policy and Procedures for Determining

Workforce Mix”

Agency
EXECLITIVE OFFICE OF THE: PRESIDENT 

OFFICE OF MANAGEMENT AND BUDGET 

·WASHINGTON, D.C. 20503 

Febt1181:Y 27, 2013 

M-13-05 

MEMORANDUM FOR Tiffi HEADS 0 

FROM: Danny Werfel AJ 

Controller r i 

SUBJECT: Agency Responsibilities for lmplementation of Potential Joint Commitlee 

Sequestration 

Unless Congress acts to· amend current law, the President is required to issue a 

sequestration order on March 1, 2013, canceling $85 billion in budgetary resolli'Ces across the 

Federal Oovemment Because these CU:ts mtist be achieved over the remaining seven months of 

the fisoal year, the Office ofMaoagement and Budget (OMB) estimates that the effective 

percentage reductions are a:pproxlmately 9 percent fur nondofense programs and 13 percent for 

defi:nse programs. These reductions will result in significant and harmful impaots to national 

seow:ity and domestic priorities. 

The President has been clear that sequestration is bad policy that was never intended to 

be implemented, and the Administration remains hopeful that Congress will aet to avoid it 

through an agneement on balanced deficit reduction. f!owevc:r1 b~e legislation may not be 

enacted to avoid sequestration before the current deadline of MarCb. 1, 2013, executive 

da:partraents and agencies (agencies) with sequestrable acccunts have been engaged in planning 

activities to operate at the lower, post-sequestration funding levels should it be necessary. 

This guidance builds on prior communi call em with agencies about the implementation of 

sequestration, and addresses questions that have been raised aa to certain categories ofplanning 

activities. 

Agency PloDDing Activities 

OMB Memorandum 13-03, Plmmingfor UIWertalntywlth Respect to Fiscal Year 2013 

Budgetary Resources, directed agencies to begin planning activities to operate with reduced 

budgetary resources in the evei:rt that sequestration ooours. Agencies' pla.nning efforta must be 

guided by the principle of protecting the ogency's mission to servo the public to the greatest 

extent practicable. Plonning effurts ahould be done with sufficient detail and clarity to determine 

the specific actions that will be taken to operate under the lower level of budgetary resouroes 

1 

177 DCMA Administrative Record for FY 2013 Furlough Appeals
required by sequestration. For example, agencies should identify any m!\lor contraclB that they 

plan to cancel, te·scope or delay as well as any grants that they plan to cancel, delay, or for 

whioh they plan to change the payment amonnt. Similarly, agencies should identify the number 

of employeea who will be furloughed, the length of expected furloughs, the timing of when 

furlough notices will be issued, and the manner in which furloughs will be administered. In 

some cases, agencies may not be shle to ascertain all ofthis Information prior to March I. 

However, agencies should .continue to engago in intense and thorough planning activities to 

determine all specific actions that will be taken as soon as praeticable. 

Communications 

To the extent permitted by law, agencies should inform their Vllrious partners and 

stakeholders in a timely and complete manner of the Impact of sequestration so that third parties 

are able to adjust their operations and plans as appropriate. Accordingly, at this time, agencies 

should be actively and continuously communicating with affected stakeholders--including 

Stales, localities, tribal governments, Federal contractors, Federal grsnt recipientll, and Federal 

employees-regarding elementll of the agency's planning that have a direct impact on these 

&roups. These communications will vary greatly by agency and by stakeholder, but agencies 

should be as specific as possible in order to provide sufficient detail to be helpful to these 

stakeholders in understanding the implications of the reduoed budget authority resulting from 

sequesll:ation. · 

With regand to any planned per•onnel actions to reduce Federal civilian workforce costs, 

consistent with Section 3(aXii) of Executive Order 13522, agencies must allow employees' 

exclusive representatives to have pre--decisional involvement in these matters to the fullest extent 

practicable and permitted nnder tho law. In particular, in instanoes whare agencies are 

considering JXllential furloughs, agencies have a duty to notify their exclusive representatives 

and, upon request, bargain over any negotisble lmpacl and implementation piDJXlsals the uoion 

may submi~ unless the mutter of furloughs is already covered hy a collective bargaining 

agreement Agencies should ensure that they are fully aware of and in compliance with any aod 

all collective bargaining requirements, end should consult with their General Connael or 

spproprio;te labor relationa office for questions reganding these requirements and appropriate 

interaction with employees and unions on these matters. 

Acquisition 

Due to the Goveroment's large aoquiBition footprint, sequestration will inevitably affect 

agency contracting activities and require agencies to !educe contracting costs where appropriate. 

As with all actions taken as a result of sequestratinn, agencies should ensure that any contract 

actions are both cost~cffective and minhnize negative impact on the agency's mission to the 

extent practicable. 

Program, acquisition, financial/budget managemeu~ information technology, and legal 

personnel should work together to make determinations reganding contracts in light of 

sequeStration. As a general matter, agencies should only enter into new contracts or exercise 

options when they oupport high-priority initiatives or where failure to do so would expose the 

2 

178 DCMA Administrative Record for FY 2013 Furlough Appeals
government to significantly greater costs in the future. Agencies may also coll8idet de-seeping or 

terminating for convenience contracts that are no longer affordable within the funds available for 

Fiscal Year 2013, should no other optiollB exist to reduce contracting costs in these instances. 

Should such steps be necessary, agencies must evaluate the _assoclated costs and benefits of such 

actions, and appropriately lnfunil and negotiate with contractors. Finally, agencies should take 

all appropriate steps to minimize to the extent practicable the' impact on small businesses of 

reduced contracting activities. · 

Financial Assistance 

Given the widespresd use of grants, loans and other Fedexal finsncial assistance to non· 

fuderal entitles (e.g., State, local and tribal governments, non-profit organizatiollB, and 

companies), sequestration will impact the funding of these activities. 

A1l a general malier, agencies should enirure that any new finsnoialassistance obligations 

or :funding increases under existing agreements are consistent with the need to protect the 

agency's mission at the post-sequastmtion level. In light of sequestration, ogencies may also 

consider delaying awarding ofnew financial assistance obllgatiollB, reducing levels of oontinued 

funding, and renegotialiug or reducing the CU!'rent scope of assistance. Agencies may be forced 

to reduce the lovol of assistance provided through formula funds or block grants. Shnuld any 

such steps be necessary, agencies should evaluate the associated ooats and benefits of such 

actioll8 and I!Jlpropriately engage and infunn recipient(s) as esrly as possible. 

Increased Scmttny of Certain Arttvitles 

· In detennining the I!JlPropriata manoer to achi<We funding reductions, ogency heeds must 

also ensure that their agencies have risk management strstegies and internal controls in place that 

provide heightened serutiny of certsin types of activities funded from sequestered accQ1Ulls. To 

the extent these accounts remain at the post-sequestrstinn funding love~ incressed scrotiny 

should apply to: 

• hiring new personnel;1 

• issuing disct-etionary monetary awards to employees, which should occur nuly if legally 

required untilthrther notice; and 

• in&urring obligalioll8 for new training, conferences, and travel (incluiling agency-paid 

travel for non-agency P,ersonnel). 

In light of the reduced budgetary resources available due to sequestration, expending 

funds on these activities at this time would In many circumstsnces not be tho most effective way 

to protect agency mission to the extent practicable. Therefore. ogency leedership should review 

processes and controls around these activities,.and ensure that these activities are conducted only 

1 Agendes must also ensure that appropriate controls are In place to prevent the increased use of contractors. 

to perfonn work due to any restrictions on hiring. Agendes should bear fn mind the statutory restrictions 

contained In 10 U.S. C. 2461 and 41 U.S. C. 1710 on the conversion of functions from performance by Federal 

employees to performance by contractors. 

179 DCMA Administrative Record for FY 2013 Furlough Appeals
to tho extent they are the most cost-effective way to mainlllin critical agency mission operations 

under sequestration. 

Please contact your OMB Resource Managemect Office (RMO) if you hove any 

questions about or need assistance with this guidance. 

4 

180 DCMA Administrative Record for FY 2013 Furlough Appeals
READINESS ANO 

FORCE MANAOEMEHT 

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE 

4DOO DEFENSE PI:NTAGON 

WASHINGTON, O.c. ~1-4000 

MEMORANDUM FOR: SEE DISTRiliUTION FEB 2 I 2013 

SUBJECT: Total Force Management and Budgetazy Uncertainty 

Reference: (a) Deputy Secretary of Defense Memorandum, "Handling Budget Uncertainty in Fiscal 

Year 2013", dated 10 January 2013 

(b) Under Secretazy of Defense of Personnel & Readiness Memorandwn, ''Prohibition on 

Converting Certain F\Ulctions to Contract Pezformance", dated I December 2011 

(c) Deputy Secretary of Defense Memorandum, "Guidance for LlmillltiOn on Aggregate 

Annual Amount Available for Contracted Services", dated 3 June 201.2 

(d) Under SecretaryofDefenseofPerso-1 & Readiness .Memorandum, "Guidance 

Related to !11-e Utilization of Militazy Ma.npower to Perform Certain Functions", dated 

2 Mareh2012 

(e) DoD Instruction 1100.22, "Guidance for Determining.Workforce Mix", dated 12 

April2010 

This memorandum provides guidance for the managemeot of the Total Force (active and 

reserve militazy, government civiliaos, and contracted support) during this time of continued budget 

uncertainty. The Department must maintain the viability oftlie All-Volunteer Force and sustain its 

operational readiness in the most costo.:COnscious manner. To do so, the Department mll$t also maintain 

a properly sized, higbly capable civilian workforce that is aligned to mission and workload; 

complements aod delivers support to the military; supports the well-being of the war:fighters aod their 

families; and recognizes evolving critical demands. while guarding against an erosion of organic skills 

and an overreliance on contracted services. Finally, the use of contracted services must continue to be 

reviewed to ensure the most appropriate, cost effective, end efficleot support aligned to mission. 

As DoD Components begin to take actions consistent with reference (a)- including the 

implementation of civilian hiring freezes, the release of term or temporary civilian employees, and 

other personnel related actions- they must be mindful of the Department's obligations to manage the 

Total Force consistent with Title 10 statutory requiremeots and references {b) through (e). These 

considerations are required in planning for the potential reduction or unavailability of fiscal year 2013 

f\Ulds {with the exception of f\Ulds for military personnel) associated with sequester or the continuing 

resolution. 

Consistent with section 2461 of title 10, United States Code, and reference (b), the conversion 

of functions or work performed by, or designated for perfonnance by, civilian employees to contract 

pezfonnaoce without a public-private coropetition is expressly prohibited. Currently such coropetitions 

are prohibited under section 325 of the National Defense Authorization Act for Fiscal Year 2010 

(Public Law 111-84). Workload currenliy perfurmed by, or desigoated for performance by, civilian 

employees may not be traosferred or assumed by contractors pezforming ag~ prior year obligations, 

Most importantly, contractors may not perform inherently govemmental work, aod seotion 2464 of 

title I 0, United States Code expressly prohibits contracting of certain functions (enclosure I). DoD 

181 DCMA Administrative Record for FY 2013 Furlough Appeals
Component heads, as well as field commanders and line managers, are urged to be particularly vigilant 

to prevent the inappropriate conversion of work to contract performance. 

Additionally,limits on contracted support spending enacted in section 808 of the National 

Defense Authorization Act for Fiscal Year 2012, Public Law I 12-81, and implemented via reference 

(c) still apply. The statutory obligations in section 2330a oftitle 10, United States Code, to minimize 

reliance on contract performance of work closely associated with inherently governmental functions 

(see illustrative examples at enclosure 2) remain in force. Moreover, the guidance in reference (c) to 

achieve reductions of such reliance, as well as in staff augmentation contract support, remains in effect. 

Planniilg for budgetary uncertainty does not relieve DoD Components from compliance with these 

mandates. 

As we continue planning during this period of budgetary uncertainty, the Department must also 

ensure military personnel are not inappropriately utilized, particularly in a manner that may degrade 

readiness or result in unnecessary costs to the Department. Consistent with references (d) and (e), 

except in extraordinary, and typically temporary, circumstances, individual military personnel or units 

should not perform-functions or work that is not military essential (see illustrative examples in 

enclosure 3). The use of"borrowed" or "repurposed" military can harm readiness and operational 

capabilities by diverting service members from training or performance of military essential functions, 

particularly when military members are required to work outside of their occupational specialties. In 

addition to the risk of hollowing the force, this practice could adversely impact the All-Volunteer 

Force and have negative effects on the recruitment, retentio~ and career progression of individual 

members. During this period of budgetary uncertainty, military units may perform work previously 

performed by civilian employees or contracted support as part of a rotation base for an operational 

capability (if this has been reflected in Operational Orders), provided this is done on a limited and 

temporary basis. In the event of sequestration, where military personnel accounts are exempted, there 

may be instances where military personnel can be used on a short-term, emergency basis to satisfy a 

demand that is of mission critical importance. 

Plea§e ensure maximum distribution of this memorandum throughout your organization, 

particularly to your manpower, personnel, and resourcing communities. Questions regarding 

application and implementation of this memorandum should be addressed to the following points of 

contact within the Office of Total Force Planoing & Requirements: Mr. Thomas Hessel 

(thomas.hessel@osd.mil or 703-697-3402), and Ms. Amy Parker (arny.parker@osd.mil or 703-697-

1735). Thank you for your support in the mitigating risks from budgetary uncertainty that could 

adversely affect the sustainability and readiness of the All Volunteer Force. 

Enclosures: As stated 

Frederick Vollrath 

Principal Deputy Assistant Secretary of Defense for 

Readiness and Force Management 

Performing the Duties of the Assistant Secretary of 

Defense for Readiness and Force Management 

182 DCMA Administrative Record for FY 2013 Furlough Appeals
DISTRlBUTION: 

SECRETARIES OF TifE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOJNT CHIEFS OF STAFF 

UNDER SECRETARIES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFICER 

CO~ERSOFTHECOMBATANTCO~S 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

INSPECTOR GENERAL OF TifE DEPARTMENT OF DEFENSE 

ASSISTANT SECRETARlES OF DEFENSE 

DEPARTMENT OF DEFENSE CHIEF INFORMATION OFFICER 

ASSISTANTS TO THE SECRETARY OF DEFENSE 

DIRECTOR, ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMBNT 

DIRECTORS OF THE DEFENSE AGENCIJiS 

DIRECTORS OF TifE DOD FIELD ACTIVITIES 

183 DCMA Administrative Record for FY 2013 Furlough Appeals
Enclosure I 

Non-Exhaustive Examples of Inherently Governmental Functions 

(Extract from Office of Federal Procurement Policy Letter 11-1 (September 12, 2011) 

I. The direct conduct of criminal investigation. 

2. The control of prosecutions and performance of adjudicatory functions (other than those 

relating to arbitration or other methods of alternative dispute resolution). 

3. The command of military forces. 

4. Combat. 

5. Security provided under any of the circumstances set out below. This provision should 

not be interpreted to preclude contractors taking action in self-defense or defense of 

others against the imminent threat of death or serious injury. (a) Security operations 

performed in direct support of combat as part of a larger integrated armed force. (b) 

Security operations performed in environments where, in the judgment of the responsible 

Federal official, there is significant potential for the security operations to evolve into 

combat. (c) Security that entails augmenting or reinforcing others (whether private 

security contractors, civilians, or military units) that have become engaged in combat. 

6. The conduct of foreign relations and the determination of foreign policy. 

7. The determination of agency policy, such as determining the content and application of 

regulations. 

8. The determination of budget policy, guidance, and strategy. 

9. The determination of Federal program priorities or budget requests. 

10. The selection or non-selection of individuals for Federal Government employment, 

including the interviewing of individuals for employment. 

11. The direction and control of Federal employees. 

12. The direction and control of intelligence and counter-intelligence operations. 

U. The approval of position descriptions and performance standards for Federal employees. 

14. The determination of what government property is to be disposed of and on what terms 

(although an agency may give contractors authority to dispose of property at prices with 

specified ranges and subject to other reasonable conditions deemed appropriate by the 

agency). 

15. In Federal procurement activities with respect to prime contracts: 

(a) determining what supplies or services are to be acquired by the government 

(b) participating as a voting member on any source selection boards; 

(c) approving of any contractual documents, including documents defining requirements, 

incentive plans and evaluation criteria; 

(d) determining that prices are fair and reasonable; 

(e) awarding contracts; 

(f) administering contracts (including ordering changers in contact performance or 

contact quantities, making final determinations about a contractor's performance, 

including approving award fee determinations or past performance evaluations and 

taking action based on those evaluations, and accepting or rejecting contractor 

products or services); 

(g) terminating contracts 

(h) determining whether contact costs are reasonable, allocable, and allowable; 

(i) And participating as a voting member on performance evaluation boards. 

184 DCMA Administrative Record for FY 2013 Furlough Appeals
Enclosure 1 

16. The selection of grant and cOoperative agreement recipients including: (a) approval of 

agreement activities; (b) negotiating the scope of work to be conducted under 

grants/cooperative agreements; (c) approval of modifications to grant/cooperative 

agreement budgets and activities; and (d) performance monitoring. 

17. The approval of agency responses to Freedom of Information Act requests (other than 

routine responses that, because of statute, regulation, or agency policy, do not require the 

exercise of judgment in determining whether documents are to be released or withheld), 

and the approval of agency response to the administrative appeals of denials of Freedom 

oflnformation Act requests. 

18. The conduct of administrative hearings to determine the eligibility of any person for a 

security clearance, or involving actions that affect matters of personal reputation or 

eligibility to participate in government programs. 

19. The approval of Federal licensing actions and inspections. 

20. The collection, control, and disbursement of fees, royalties, duties, fines, taxes and other 

public funds, unless authorized by statute, such as title 31 Untied States Code section 952 

(relating to private collection contmctors) and title 31 United States Code section 3718 

(Relating to private attorney collection services), but not including (a) collection of fees, 

fines, penalties, costs or other charges form visitors to or patrons of mess halls, post or 

base exchange concessions, national parks, and similar entities or activities, or from other 

persons, where the amount to be collected is predetermined or can be readily calculated 

and the funds collected can be readily controlled using standard cash management 

techniques; and (b) routine voucher and invoice examination. 

21. The control of the Treasury accounts. 

22. The administration of public trusts. 

23. The drafting of official agency proposals for legislation, Congressional testimony 

responses to Congressional correspondence, or responses to audit reports from an 

inspector general, the Government Accountability Office, or other Federal audit entity. 

24. Representation of the government before administrative and judicial tribunals, unless 

statute expressly authorizes the use of attorney whose services are procured through 

contract. 

Statutory Restrictions on Contracting 

(Title 10 United States Code Section 2465) 

(a) Except as provided in subsection (b), funds appropriated to Department of Defense may 

not be obligated or expended for the purpose of entering into a contract for the 

performance of fire-fighting or security-guard functions at any military installation or 

facility. 

(b) The prohibition in subsection (a) does not apply to tbe following contracts: 

(I) A contract to be carried out at a location outside the United States (including its 

commonwealths, territories, and possessions) at which members of the armed forces 

would have to be used for the performance of a function described in subsection (a) at 

the expense of unit readiness. 

(2) (2) A contract to be carried out on a Govenunent-owned but privately operated 

installation. 

185 DCMA Administrative Record for FY 2013 Furlough Appeals
Enclosure 1 

(3) A contract (or the renewal of a contract) for the performance of a function under 

contract on September 24, 1983. 

( 4) A contract for the performance of firefighting functions if the contract is-

( A) for a period of one year or less; and 

(B) covers only the performance offirefighting functions that, in the absence of 

the contract, would have to be perfonned by members of the anned forces 

who are not readily available to perfonn such functions by reason of a 

deployment. 

186 DCMA Administrative Record for FY 2013 Furlough Appeals
Enclosure 2 

Non-Exhaustive Examples of Closely Associated With Inherently Governmental Functions 

(Extract from Office.ofFederal Procurement Policy Letter 11-1 (September 12, 2011) 

1. Services in support of inherently governmental functions, including, but not limited to the 

following: 

a. Performing budget preparation activities, such as workload modeling, fact 

finding, efficiency studies, and should-cost analysis. 

b. Undertaking activities to support agency planning and reorganization. 

c. Providing support for developing policies, including drafting documents, and 

conducting .analyses, feasibility studies~ and strategy options. 

d. Providing services to support the development of regulations and legislative 

proposals pursuant to specific policy direction. 

e. Supporting acquisition, including in the areas of: 

1. Acquisition planning, such as by conducting market research; developing 

inputs for government cost estimates, and drafting statements of work and 

other pre-award documents. 

n. Source selection, such as by preparing a technical evaluation and 

associated documentation; participating as a technical advisor to a source 

selection board or as a nonvoting member of a source selection evaluation 

board; and drafting the price negotiations memorandum. 

iii. Contract management, such as by assisting in the evaluation of a 

contractor's performance (e.g. by collecting information performing an 

analysis, or making a recommendation for a proposed performance rating), 

and providing support for assessing contract claims and preparing 

termination settlement documents. 

f Preparation of responses to Freedom of Information Act requests. 

2. Work in a situation that permits or might permit access to confidential business 

information or other sensitive information (other than situations covered by the National 

Industrial Security Program described in Federal Acquisition Regulation 4.402(b)). 

3. Dissemination of information regarding agency policies or regulationS, such as 

conducting community relations campaigns, or conducting agency training courses. 

4. Participation in a situation where it might be assumed that participants are agency 

employees or representatives, such as attending conferences on behalf of an agency. 

5. Services as arbitrators or provision of alternative dispute resolution (ADR) services. 

6. Construction of buildings or structures intended to be secure form electronic 

eavesdropping or other penetration by foreign governments. 

7. Provision of inspection services. 

8. Provision of legal advice and interpretations of regulations and statutes to government 

officials. 

9. Provision of non-law enforcement security activities that do not directly involve criminal 

investigations, such as prisoner detention or transport and non-military national security 

details. 

187 DCMA Administrative Record for FY 2013 Furlough Appeals
Examples of Military Essential Functions 

(summarized from DoD ln•truction 1100.22) 

Enclosure 3 

1. Missions involving operational risks and combatant status under the Law of War. 

2. Specialized collective and individual training requiring military unique knowledge and 

skills based on recent operational experience 

3. Independent advice to senior civilian leadership in Department requiring military unique 

knowledge and skills based on recent operational experience 

4. Command and control arrangements best performed within the Uniform Code of Military 

Justice. 

5. Rotation base for an operational capability. 

6. Career progression. 

7. Esprit de corps (such as military recruiters, military bands) 

188 DCMA Administrative Record for FY 2013 Furlough Appeals
.· .. 

.. ~ 

SECRETARY OF DEFENSE 

1000 DEFENSE PENTAGON 

WASHINGTON, DC 2.0301 ·1 000 

FEB 2 Q 2013 

MEMORANDUM FOR DEPARTMENT OF DEFENSE CMLIANEMPLoYEES. 

SUBJECT: Preparations for Potential Sequestration on March I and Fl!rlough Notifications 

For more than a year and a half, the President, the Joint Chiefs of Staff, and I have 

repeatedly voiced our deep conoerns over the haifa trillion dollars in automatic across•the-board 

cuts that would be imposed uoder seques!miion and the severe damage that it would do to both 

this Deportment and our national defense. 

The Administration continues to viodc with Congress to reach agreement on a balanced 

deficit reduction plan to avoid these cuts. Meanwhile, because another trigger for sequestration 

is approaching on March 1", the Departmept'sleadetship has begun extensive planning on how 

to implement the reqnil'ed apending reductions. These cuts will be magnified because the 

Deportment has been forced to operate uoder a six-month continuing resolution that has already 

compelled ns to take. steps to redude spending. · 

In the event of sequestration, we will do everything we can to contiuue to perfom1 our 

core mission of providing for the security of \he United States, but there is no mlstaldng !hat the 

rigid nature and.scale of the cuts forced upon this Department will result in a seriow erosion of 

readiness across the force. · 

l have also been deeply concemed about the potential direct impact of sequestration on 

you and your. fiunilies. We are doing everything possible to limit the worst effects on DoD 

personnel- but l regret that our flexibility within the law is extramely limited. The President has 

used his legal authority to exempt mllitacy personnel funding.from sequestration. but we have no 

legal authority to exempt civilian personnel funding from reductions. As a resul~ should 

sequestration occw: and continUe for a substantial period, DoD will be forced to place the. vast 

majority of its civilian workforce on edmioistrative furlough. 

Today, I notified Congress that furloughs could occur uoder sequestration. I can assure 

you that, if we have to implement furloughs, all affected employees will be provided at least 30 · 

. days' notice prior to executing a furlough and your benefits will be protected to the maximum 

extent possible. We will worl<: to ensure that furloughs are executed in a eonsistent and 

appropriate manner, and we will also continue to engage in discussions with employee unions as 

epproprlate. More information and answers to frequently asked questions regarding furloughs 

can be foUnd at www.op~gov/fiulough, under the "administrative furlough" section. 

0 

080001644-13 

189 DCMA Administrative Record for FY 2013 Furlough Appeals
Working with your component heads and supeiVisors, the Depertment's leeders will 

continue to keep you infonned. As we deal with these difficult issues, I want to thank you fur 

your patience, ~ard work, and continued dedication to our mission of protecting the country. 

Our inost important asset in the Depertment is our world-class personnel. You are 

fighting every day to keep our country strong and secure, and rest assured that the leaders of this 

Depertment will continue to fight wiih you and for you. 

2· 

190 DCMA Administrative Record for FY 2013 Furlough Appeals
M-13-03 

EXECUTIVE OFFICE OF THE PRESIDENT 

OFFICE OF MANAGEMENT AND 6UDGET 

WASHINGTON, O,C, 20!503 

January 14,2013 

MEMORANDUM FOR TilE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 

FROM: Jeffrey D. Zients t:...fJ'J{j Deputy Directorf\Jr-Manogemont 

SUBJECT: Plwming for Uncertainty with Respect to Fiscal Year 2013 Budgetary Resources 

In the coming months, executive departments and agencies (agencies) will confront 

significant uncertainty regarding the amount of bUdgetary resources available for the remainder 

of the fiscal year. In particular, unless Congress acts to amend current law, the President is 

required to issue a sequestration order on March 1, 2013. canceling approximately $85 billion in 

budgetary resources across the Federal Government. Further uncertainty is created by the 

expiration of the Continuing Appropriations Resoluti9il, 2013 (CR) on March 27, 2013. This 

memorandwn directs agencies to take certain stepS to plan for and manage this budgetary 

Wlcertainty. 

lhe Administration continues to urge Congress to take prompt action to address the 

current budg~tary uncertainty, including thmugh the enactment of balanced deficlt reduction to 

avoid sequestratiOn. Should Congress fail to act to avoid sequestration, there will be signlfi.cant 

and harmful impacts on a wide variety of Government services and operations. For example, 

should sequestration remain in place for an extended period of time, hundreds of thousands of 

families will lose critical education and wellncss services through Head Start and nutrition 

assistance programs._ The Department of Defense will :face deep cuts that will reduce readiness 

of non~deployed units, delay nee.ded jnvestments in equipment and facilities, and cut services for 

military fumilies. And Federal agencies will likely need to furlough hundreds of thousands of 

employees and reduce essential services such as food inspections, air travel safety, prison 

security, border patrols, and other mission~critical activities. 

At this time, agencies do not bave clarity regarding the manner in whlch Congress will 

address.these issues or the amount of budgetary resources that will be available through the 

remainder of the fiscal year. Until Congress acts, agencies must continue to prepare for the 

possibility t}tat tp.ey will need to operate with reduced budgetary resoUrCes. 

1 

191 DCMA Administrative Record for FY 2013 Furlough Appeals
Prior· to passage of the American Taxpayer Relief Act of2012 (ATRA), the President 

wda required to issue a sequestration order on January 2, 2013. Although the ATRA postponed 

this date by two months, agencies had already engaged in extensive planning for operations 

under post-sequestration funding levels before this poStponement was effected. In light of 

persistent budgetary uncertainty, all agencies should continue these planning activi1les, in 

coordination with the Office of Management and Budget (OMB), and should intensifY efforts to 

identifY actions that may he .required should sequestration. occur. 

Agencies s~ould generally adhere to the following guiding principles, to the extent 

practicable and appropriate, in preparing plans to opeiate with reduced budgetary resources in 

the ~vent that sequestration occurs: 

• use any available flexibility to reduce operational risks and minimize impacts on the 

age11cy's core mission in service oftbe American people; . 

• identifY and address operational challenges that could potentially have a significant· 

deleterious effect on the agency's mission or otherwise raise life, safety, or health 

concerns~ 

• identify the most appropriate means to reduce civilian workforce costs where necessarythis may include imposing hiring freezes, releasing temporary employees or not renewing 

term or contract hires, authorizing voluntary separation incentives and voluntary early 

retirements, or implementing administrative furloughs (appropriate guidance fur 

administrative furloughs can be folUld on the OPM website .t:rumll); consistent with 

Section 3(aXii) of Executive Order 13522, allow employees' exclusive representatives to 

have pre-decisional involvement in these matters to the fullest extent practicable; 

• review grants and contract3 to detennine where cost savings may be achieved in a manner 

that is consistent with the applicable terms and conditions,.rema:ining mindful of the 

manner in which individual contracts or grants advance the core mission of the agency; 

• take into account funding flex:ibilities. including the availability of reprognunming and 

transfer e.uthority; and, 

• be cognizant of the requirements of the Worker Adjustment and Retraining Notification 

(WARN) Act, 29 U.S.C. §§ 2101-2109. 

While agency plans should reflect intensified efforts to prepare for operations under a 

potential sequestration. actions that would implement reductions specificalJ.y designed as a 

response to sequestration should generally not be taken at this time. In some cases, however, the 

overall budgetary uncertainty and operational constraints may require that certain actions be 

taken in the immediate- or near-term, Agencies presented with these circumstances should 

continue to act in a prudent manner to ensure that operational risks are avoided and adequate 

funding is available for the remainder of the fiscal year to meet the agency's core requirements 

and mission. Should circumstances require an agency to take actions that would constitute a 

change from normal practice and result ln a reduction of normal spending and operations in the 

2 

192 DCMA Administrative Record for FY 2013 Furlough Appeals
immediatew or near-term1 the agency mmt coordinate cl~soly with its OMB Resource 

Mnn~gen_1ent Office (R,MO) before laking any such actions. · 

All agencies should work with their QMB RMO on the appropriate timing to submit draft 

contingency plans for operating under sequestra!ion for review. Furthennore, should Congress 

take action that affects the current budgetary uncertainty, OMB will provide agencies with 

additional guidance as appropriate. · 

3 

193 DCMA Administrative Record for FY 2013 Furlough Appeals
DEPUTY SECRETARY OF DEFENSE 

1010 DEFJ;:NBE PENTAGON 

WASHINGTON, CC 20301·1010 JAN I 0 2013 

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CHIEFS OF STAFF 

UNDER SECRETARJES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFICER 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

GENERAL COUNSEL OF TilE DEPARTMENT OF DEFENSE 

INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE 

ASSIST ANT SECRETARIES OF DEFENSE 

DEPARTMENT OF DEFENSE CHIEF INFORMATION OFFICER 

ASSISTANTS TO THE SECRETARY OF DEFENSE 

DIRECTOR, ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSE AGENCIES 

DIRECTORS OF THE DOD FIELD ACTIVITIES 

SUBJECT: Handling Budgetary Uncertainty in FiiiCal Year 2013 

Two soun:es oftmcerlainty are creating budgetary challenges for the Deparllnent of Defense 

(DoD) ln 2013. The first is the tact that the Deplirtm.ent is operating under a Continuing Resolution 

(CR)throughatieast March 27,2013. Because most operating funding was pllliU!ed to inerease 

from Fiscal Year (FY) 2012 to FY 2013, but is instead being held atFY 20121evels under the CR, 

funds will rtm short at current rates of expenditure if the CR continues through the' end of the fiiiCal 

year in its current form .. The Secretary will continue to urge the Congress to enact appropriations 

bills for FY 2013. But if the CR were to be extended tbroughthe end of the fiscal year, it would 

hinder our ability to maintain a ready force, 

The second source ofuncerlainty is the potential sequestration recently deferred from 

January 2, 2013 to March I, 2013 by the American Taxpayer Relief Act of2012. The possibility of 

sequestration occurring as late as the beginning of the sixth month of tho fiscal year creates 

significant edditional uncertainty for the management of the Department 

Either of these problems, in isolation, would present serio~ budget execution challenges to 

the Deparllnen4 negatively impacting readiness and resulting in other undesirable outcomes. This 

situation would be made even more challenging by the need to protect fi.mds for wartime operations. 

194 DCMA Administrative Record for FY 2013 Furlough Appeals
Near~ Term Actions 

Given the ovemll budgelary uncertainty faced by the Departmen~ and in particular the 

immediate opmtional issues presented by the CR, it is prudent to take. certain steps now in order to 

help avoid serious future problems. I therefore authorize all Defense Components to begin 

implementing measures that will help mitigate our budget execution rim. For now, and to the 

extent possible, any actions taken must be reversible at a later date in the event that Congress acts to 

remove the risks I have described. The actions should be structured to minintize harmful effects on 

our people and on operations and unit readiness. 

Categories of approved actions ore identified in Table 1. The authority to implement these 

actions shall remain in effect until they ore revoked in a subsequent memorandum from my office. 

If Components believe they must take actions that go beyond the categories listed in Table 1, they 

should present the options for my review and approval prior to their implementation. 

·Intensified Planning for Lonw-Tenn Budgetary Uncertl!jnty 

Given the added challenge of a potential sequestration in March, we must also intensify 

efforts to plan future actions that might be required should that happen. This planoing does not 

assume these unfortunate events will occur, only that we must be ready. 

As they formulate draft plans, Components should follow the guidance that directs the 

Department to take all possible steps to mitigate harmful effects associated with this budgetary 

uncertainty and to maintain a strong delllnse. The details of the guidance ore snmmarized below: 

• For the opmting portions ofthe DoD budget: 

o Exempt all militaiy per!ionnel funding from sequestration reductions, in accordance 

with the decision made by the President in July 2012. 

o Fully protect funding for wartime operations. 

o Fully protect Wounded Wanior programs. 

o To the extent feasible, protect programs most closely associated with the new 

defense strategy. 

o ROOuce civilian workforce costs using the following actions (all subject to missioncritical exemptions, and appropriate consultation with union representatives 

consistent with Executive Onler 13522): 

• Rele~ temporary employees and do not renew term hires. 

• hnpose hiring freezes. 

• Authorize vuluntaiy separation incentives and vuluntaiy early retirements to the 

extent feasible. 

• Consider the possibility of furloughs of up to 30 calendar days or 22 

discontinuous workdays. 

o To the extent feasible, protect family programs. 

2 

195 DCMA Administrative Record for FY 2013 Furlough Appeals
o To tho extent feasible, protect funding most directly associated with readiness; focus 

the necessary cuts onlater deploying units. 

• ·For tho investment portions of the DoD budget (procurement, RDT &E, col181ruction): 

o Protect investments funded in OvelSeas Contingency Operations if IIBSOciated with 

urgent operational needs. 

o To the extent feasible, protect programs mostly closely associated with the new 

defense -tegy. 

o Take prudent steps to minimize disruption and added costs (e.g., avoid penalties 

associated with potential contract cancellations where feasible; prudently manage 

construction projects funded with priol'-yesr monies). 

While we are hopeful of avoiding budgetary problems, draft Component plans should reflect 

the possibility thst we may have to operste under a yesr-long CR and thst sequestration Iukes place. 

Table 2 shows the types of information that should be included in the plans. Components should . 

submit these dmftplans to the Under Secretary ofDefense (Comptroller) .byFebnuay I, 2013. The 

Under Secretary of Defense (Comptroller) will work with the Components to adjust this schudule if 

·changes are required due to the deadlines for tho preperation of the FY 2014 President's Budget 

submission. 

I appreciate your patience as we work through these difficult budgetary times. The 

Department will continue to do its best to .resolve these lrudgetsry uncertsinties in a manner that 

permits us to support our current defense strstegy and maintain a strong defense. 

If addressees have questions about this memorandum, they should direct tliem to the Under 

Secretary of Defense (Comptroller). 

Attachments: 

As stated 

3 

196 DCMA Administrative Record for FY 2013 Furlough Appeals
Table t. Catogorl., of Approved Near-Term Actions 

• Freeze civilian hiring (with exceptions fur mission-critical activities•). 

• Provide authority to terminate employment of temporary hires and to notify term employees 

that their contmcts will not be renewed (with eXceptions for mission~critical activities and 

when appropriate In terms of personnel timing•). 

• Reduce base operating funding. 

• Curtail travel, training, and conferences (all with exceptions for mission-critical activities• 

including those required to malotain professional licensure or equivalent certifications). 

• Curtail facilities malotenance or Facilities Sustainment, Restoration, and Modernization 

(FSRM) (with exceptions for mission-critical activities*). 

o lfnecessnry, services/agencies are authorized to fund FSRM at levels below current 

guidance. 

• CUrtail administrative expenses such as supply purchases, business IT, ceremonies, etc. 

(with exceptions for mission--critical activities•). 

• Review_ contracts and studies for possible cost-savings. 

• Cancel3"' and 4" quarter ship maintenance av!lilabilities and aviation and gronnd depotlevel malotenance activities. Take this action no earlier than February 15, 20 13. 

• Clear all R&D and production cnntracts and contract modifications that obligate more than 

$500 million with the USD(AT&L) prior to award. 

• For Science and Technology acconnts, provide tho USD(AT&L) and the Assistant Secretary 

of Defense (Research & Engineering) with an assessment of the impact that budgetary 

nncertainty may have on meeting Departmental research priorities. 

• Approvals will be granted by Component heads or by seuior officials designated by tho 

Component head. 

Components with personnel serving Combatant Commanders (COCOMs) must consult with the 

COCOMs before implementing actions the! .met them. Disputes will be brought to the attention 

ofthe Chairman of the Joint ChiefS of Staff for further resolution. 

Components receiving reimbursements should coordinate with customer before taking actions that 

would affect the customer's mission 

197 DCMA Administrative Record for FY 2013 Furlough Appeals
Table 2. Information to Be Included In Draft Implementation Plans 

The following Information should bo provided at the Component level. Information by commands 

and bases/inBtallations is not required. 

• For ope!ating accounts, idennzy major actions to include, at a minimum: 

o Extent of civilian hiring freezes; expected.nutnber of temjl5/tenns released; el<pected 

number, duration, and nature of furloughs. 

o Reductions in flying hours, steaming days, vehicle miles, and other 

operations/training/support activities !hat affect force readiness. 

o Areas ofbudgets experiencing disproportionate cuts. 

• For investment accounts: 

o Plans for large programs (ACAT lD and I C. and MAlS programs). 

• Include major changes in wtit buys, delays, ete; 

o Significant changes in all joint programs. 

• Identify and prioritize any essential reprogramming actions with offsets. 

198 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 1

UNITED STATES PUBLIC LAWS 

112th Congress 2nd Session 

(c) 2013, LEXIS-NEXIS, A DIVISION OF REED ELSEVIER INC. AND REED ELSEVIER PROPERTIES INC. 

PUBLIC LAW 112-240 [H.R. 8] 

JAN. 02, 2013 

AMERICAN TAXPAYER RELIEF ACT OF 2012 

112 P.L. 240; 126 Stat. 2313; 2013 Enacted H.R. 8; 112 Enacted H.R. 8 

BILL TRACKING REPORT: 112 Bill Tracking H.R. 8 

FULL TEXT VERSION(S) OF BILL: 112 H.R. 8 

CIS LEGIS. HISTORY DOCUMENT: 112 CIS Legis. Hist. P.L. 240 

 An Act 

Entitled the "American Taxpayer Relief Act of 2012". 

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

 [*1] SECTION 1. <26 USC 1 note> SHORT TITLE, ETC.

(a) Short Title.--This Act may be cited as the "American Taxpayer Relief Act of 2012". 

(b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or 

repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. 

(c) Table of Contents.--The table of contents for this Act is as follows: 

 Sec. 1. Short title, etc. 

 

TITLE I--GENERAL EXTENSIONS 

 Sec. 101. Permanent extension and modification of 2001 tax relief. 

 Sec. 102. Permanent extension and modification of 2003 tax relief. 

 Sec. 103. Extension of 2009 tax relief. 

 Sec. 104. Permanent alternative minimum tax relief. 

 

TITLE II--INDIVIDUAL TAX EXTENDERS 

 Sec. 201. Extension of deduction for certain expenses of elementary and secondary school teachers. 

 Sec. 202. Extension of exclusion from gross income of discharge of qualified principal residence indebtedness.

 Sec. 203. Extension of parity for exclusion from income for employer-provided mass transit and parking benefits. 

 Sec. 204. Extension of mortgage insurance premiums treated as qualified residence interest. 

 Sec. 205. Extension of deduction of State and local general sales taxes. 

 Sec. 206. Extension of special rule for contributions of capital gain real property made for conservation purposes. 

 Sec. 207. Extension of above-the-line deduction for qualified tuition and related expenses. 

 Sec. 208. Extension of tax-free distributions from individual retirement plans for charitable purposes. 

 Sec. 209. Improve and make permanent the provision authorizing the Internal Revenue Service to disclose certain 

return and return information to certain prison officials. 

 

TITLE III--BUSINESS TAX EXTENDERS 

 Sec. 301. Extension and modification of research credit. 

199 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 2

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 Sec. 302. Extension of temporary minimum low-income tax credit rate for non-federally subsidized new buildings. 

 Sec. 303. Extension of housing allowance exclusion for determining area median gross income for qualified residential rental project exempt facility bonds. 

 Sec. 304. Extension of Indian employment tax credit. 

 [**2314] Sec. 305. Extension of new markets tax credit. 

 Sec. 306. Extension of railroad track maintenance credit. 

 Sec. 307. Extension of mine rescue team training credit. 

 Sec. 308. Extension of employer wage credit for employees who are active duty members of the uniformed services. 

 Sec. 309. Extension of work opportunity tax credit. 

 Sec. 310. Extension of qualified zone academy bonds. 

 Sec. 311. Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant 

buildings and improvements, and qualified retail improvements. 

 Sec. 312. Extension of 7-year recovery period for motorsports entertainment complexes. 

 Sec. 313. Extension of accelerated depreciation for business property on an Indian reservation. 

 Sec. 314. Extension of enhanced charitable deduction for contributions of food inventory. 

 Sec. 315. Extension of increased expensing limitations and treatment of certain real property as section 179 property. 

 Sec. 316. Extension of election to expense mine safety equipment. 

 Sec. 317. Extension of special expensing rules for certain film and television productions. 

 Sec. 318. Extension of deduction allowable with respect to income attributable to domestic production activities in 

Puerto Rico. 

 Sec. 319. Extension of modification of tax treatment of certain payments to controlling exempt organizations. 

 Sec. 320. Extension of treatment of certain dividends of regulated investment companies. 

 Sec. 321. Extension of RIC qualified investment entity treatment under FIRPTA. 

 Sec. 322. Extension of subpart F exception for active financing income. 

 Sec. 323. Extension of look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules. 

 Sec. 324. Extension of temporary exclusion of 100 percent of gain on certain small business stock. 

 Sec. 325. Extension of basis adjustment to stock of S corporations making charitable contributions of property. 

 Sec. 326. Extension of reduction in S-corporation recognition period for built-in gains tax. 

 Sec. 327. Extension of empowerment zone tax incentives. 

 Sec. 328. Extension of tax-exempt financing for New York Liberty Zone. 

 Sec. 329. Extension of temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin 

Islands. 

 Sec. 330. Modification and extension of American Samoa economic development credit. 

 Sec. 331. Extension and modification of bonus depreciation. 

 

TITLE IV--ENERGY TAX EXTENDERS 

 Sec. 401. Extension of credit for energy-efficient existing homes. 

 Sec. 402. Extension of credit for alternative fuel vehicle refueling property. 

 Sec. 403. Extension of credit for 2- or 3-wheeled plug-in electric vehicles. 

 Sec. 404. Extension and modification of cellulosic biofuel producer credit. 

 Sec. 405. Extension of incentives for biodiesel and renewable diesel. 

 Sec. 406. Extension of production credit for Indian coal facilities placed in service before 2009. 

 Sec. 407. Extension and modification of credits with respect to facilities producing energy from certain renewable 

resources. 

 Sec. 408. Extension of credit for energy-efficient new homes. 

 Sec. 409. Extension of credit for energy-efficient appliances. 

 Sec. 410. Extension and modification of special allowance for cellulosic biofuel plant property. 

 Sec. 411. Extension of special rule for sales or dispositions to implement FERC or State electric restructuring policy 

for qualified electric utilities. 

 Sec. 412. Extension of alternative fuels excise tax credits. 

 

TITLE V--UNEMPLOYMENT 

 Sec. 501. Extension of emergency unemployment compensation program. 

 Sec. 502. Temporary extension of extended benefit provisions. 

200 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 3

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 Sec. 503. Extension of funding for reemployment services and reemployment and eligibility assessment activities. 

 Sec. 504. Additional extended unemployment benefits under the Railroad Unemployment Insurance Act. 

 

TITLE VI--MEDICARE AND OTHER HEALTH EXTENSIONS 

Subtitle A--Medicare Extensions 

 Sec. 601. Medicare physician payment update. 

 [**2315] Sec. 602. Work geographic adjustment. 

 Sec. 603. Payment for outpatient therapy services. 

 Sec. 604. Ambulance add-on payments. 

 Sec. 605. Extension of Medicare inpatient hospital payment adjustment for low-volume hospitals. 

 Sec. 606. Extension of the Medicare-dependent hospital (MDH) program. 

 Sec. 607. Extension for specialized Medicare Advantage plans for special needs individuals. 

 Sec. 608. Extension of Medicare reasonable cost contracts. 

 Sec. 609. Performance improvement. 

 Sec. 610. Extension of funding outreach and assistance for low-income programs. 

 

Subtitle B--Other Health Extensions 

 Sec. 621. Extension of the qualifying individual (QI) program. 

 Sec. 622. Extension of Transitional Medical Assistance (TMA). 

 Sec. 623. Extension of Medicaid and CHIP Express Lane option. 

 Sec. 624. Extension of family-to-family health information centers. 

 Sec. 625. Extension of Special Diabetes Program for Type I diabetes and for Indians. 

 

Subtitle C--Other Health Provisions 

 Sec. 631. IPPS documentation and coding adjustment for implementation of MS-DRGs. 

 Sec. 632. Revisions to the Medicare ESRD bundled payment system to reflect findings in the GAO report. 

 Sec. 633. Treatment of multiple service payment policies for therapy services. 

 Sec. 634. Payment for certain radiology services furnished under the Medicare hospital outpatient department prospective payment system. 

 Sec. 635. Adjustment of equipment utilization rate for advanced imaging services. 

 Sec. 636. Medicare payment of competitive prices for diabetic supplies and elimination of overpayment for diabetic 

supplies. 

 Sec. 637. Medicare payment adjustment for non-emergency ambulance transports for ESRD beneficiaries. 

 Sec. 638. Removing obstacles to collection of overpayments. 

 Sec. 639. Medicare advantage coding intensity adjustment. 

 Sec. 640. Elimination of all funding for the Medicare Improvement Fund. 

 Sec. 641. Rebasing of State DSH allotments. 

 Sec. 642. Repeal of CLASS program. 

 Sec. 643. Commission on Long-Term Care. 

 Sec. 644. Consumer Operated and Oriented Plan program contingency fund. 

 

TITLE VII--EXTENSION OF AGRICULTURAL PROGRAMS 

 Sec. 701. 1-year extension of agricultural programs. 

 Sec. 702. Supplemental agricultural disaster assistance. 

 

TITLE VIII--MISCELLANEOUS PROVISIONS 

 Sec. 801. Strategic delivery systems. 

 Sec. 802. No cost of living adjustment in pay of members of congress. 

 

TITLE IX--BUDGET PROVISIONS 

Subtitle A--Modifications of Sequestration 

 Sec. 901. Treatment of sequester. 

 Sec. 902. Amounts in applicable retirement plans may be transferred to designated Roth accounts without distribution. 

 

201 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 4

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

Subtitle B--Budgetary Effects 

 Sec. 911. Budgetary effects. 

 

 TITLE I--GENERAL EXTENSIONS 

 [*101] Sec. 101. PERMANENT EXTENSION AND MODIFICATION OF 2001 TAX RELIEF. 

(a) Permanent Extension.--

 (1) <26 USC 1 note> In general.-- The Economic Growth and Tax Relief Reconciliation Act of 2001 is amended 

by striking title IX. 

 (2) <26 USC 121 note> Conforming amendment.-- The Tax Relief, Unemployment Insurance Reauthorization, 

and Job Creation Act of 2010 is amended by striking section 304. 

 [**2316] (3) <26 USC 1 note> Effective date.-- The amendments made by this subsection shall apply to taxable, plan, or limitation years beginning after December 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after December 31, 2012. 

(b) Application of Income Tax to Certain High-Income Taxpayers.--

 (1) Income tax rates.---- 

 (A) <26 USC 1> Treatment of 25-, 28-, and 33-percent rate brackets.--Paragraph (2) of section 1(i) is amended 

to read as follows: 

 "(2) 25-, 28-, and 33-percent rate brackets.--The tables under subsections (a), (b), (c), (d), and (e) shall be applied--

 "(A) by substituting '25%' for '28%' each place it appears (before the application of subparagraph (B)), 

 "(B) by substituting '28%' for '31%' each place it appears, and 

 "(C) by substituting '33%' for '36%' each place it appears.". 

 (B) 35-percent rate bracket.--Subsection (i) of section 1 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: 

 "(3) Modifications to income tax brackets for high-income taxpayers.---- 

 "(A) 35-percent rate bracket.--In the case of taxable years beginning after December 31, 2012--

 "(i) the rate of tax under subsections (a), (b), (c), and (d) on a taxpayer's taxable income in the highest rate 

bracket shall be 35 percent to the extent such income does not exceed an amount equal to the excess of--

 "(I) the applicable threshold, over 

 "(II) the dollar amount at which such bracket begins, and 

 "(ii) the 39.6 percent rate of tax under such subsections shall apply only to the taxpayer's taxable income in 

such bracket in excess of the amount to which clause (i) applies. 

 "(B) Applicable threshold.--For purposes of this paragraph, the term 'applicable threshold' means--

 "(i) $ 450,000 in the case of subsection (a), 

 "(ii) $ 425,000 in the case of subsection (b), 

 "(iii) $ 400,000 in the case of subsection (c), and 

 "(iv) 1/2 the amount applicable under clause (i) (after adjustment, if any, under subparagraph (C)) in the case 

of subsection (d). 

 "(C) Inflation adjustment.--For purposes of this paragraph, with respect to taxable years beginning in calendar 

years after 2013, each of the dollar amounts under clauses (i), (ii), and (iii) of subparagraph (B) shall be adjusted in the 

same manner as under paragraph (1)(C)(i), except that subsection (f)(3)(B) shall be applied by substituting '2012' for 

'1992'.". 

202 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 5

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (2) Phaseout of personal exemptions and itemized deductions.----

 [**2317] <26 USC 68> (A) Overall limitation on itemized deductions.--Section 68 is amended--

 (i) by striking subsection (b) and inserting the following: 

"(b) Applicable Amount.--

 "(1) In general.-- For purposes of this section, the term 'applicable amount' means--

 "(A) $ 300,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)), 

 "(B) $ 275,000 in the case of a head of household (as defined in section 2(b)), 

 "(C) $ 250,000 in the case of an individual who is not married and who is not a surviving spouse or head of 

household, and 

 "(D) 1/2 the amount applicable under subparagraph (A) (after adjustment, if any, under paragraph (2)) in the 

case of a married individual filing a separate return. 

For purposes of this paragraph, marital status shall be determined under section 7703. 

 "(2) Inflation adjustment.-- In the case of any taxable year beginning in calendar years after 2013, each of the 

dollar amounts under subparagraphs (A), (B), and (C) of paragraph (1) shall be shall be increased by an amount equal 

to--

 "(A) such dollar amount, multiplied by 

 "(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable 

year begins, except that section 1(f)(3)(B) shall be applied by substituting '2012' for '1992'. 

If any amount after adjustment under the preceding sentence is not a multiple of $ 50, such amount shall be rounded to the next lowest multiple of $ 50.", and 

 (ii) by striking subsections (f) and (g). 

 (B) Phaseout of deductions for personal exemptions.--

 (i) In general.--Paragraph (3) of section 151(d) is amended--

 (I) by striking "the threshold amount" in subparagraphs (A) and (B) and inserting "the applicable amount 

in effect under section 68(b)", 

 (II) by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C), and 

 (III) by striking subparagraphs (E) and (F). 

 (ii) Conforming amendments.--Paragraph (4) of section 151(d) is amended--

 (I) by striking subparagraph (B), 

 (II) by redesignating clauses (i) and (ii) of subparagraph (A) as subparagraphs (A) and (B), respectively, 

and by indenting such subparagraphs (as so redesignated) accordingly, and 

 (III) by striking all that precedes "in a calendar year after 1989," and inserting the following: 

 "(4) Inflation adjustment.-- In the case of any taxable year beginning". 

 (3) <26 USC 1 note> Effective date.-- The amendments made by this subsection shall apply to taxable years beginning after December 31, 2012. 

(c) Modifications of Estate Tax.--

 [**2318] (1) Maximum estate tax rate equal to 40 percent.-- The table contained in subsection (c) of section 

2001, as amended by section 302(a)(2) of the Tax Relief, Unemployment <26 USC 2001> Insurance Reauthorization, 

and Job Creation Act of 2010, is amended by striking "Over $ 500,000" and all that follows and inserting the following: 

"Over [dollar]500,000 but $ 155,800, plus 37 percent of the 

 not over [dollar]750,000. excess of such amount over 

203 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 6

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 $ 500,000. 

Over $ 750,000 but not over 

 $ 1,000,000. $ 248,300, plus 39 percent of the 

 excess of such amount over 

 $ 750,000. 

Over [dollar]1,000,000 $ 345,800, plus 40 percent of the 

 excess of such amount over 

 $ 1,000,000.". 

 (2) Technical correction.-- Clause (i) of section 2010(c)(4)(B) is amended by striking "basic exclusion amount" 

and inserting "applicable exclusion amount". 

 (3) <26 USC 2001 note> Effective dates.---- 

 (A) In general.--Except as otherwise provided by in this paragraph, the amendments made by this subsection 

shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after December 31, 2012. 

 (B) Technical correction.--The amendment made by paragraph (2) shall take effect as if included in the 

amendments made by section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 

2010.

 [*102] Sec. 102. PERMANENT EXTENSION AND MODIFICATION OF 2003 TAX RELIEF. 

(a) <26 USC 1 note> Permanent Extension.--The Jobs and Growth Tax Relief Reconciliation Act of 2003 is 

amended by striking section 303. 

(b) 20-Percent Capital Gains Rate for Certain High Income Individuals.--

 (1) In general.-- Paragraph (1) of section 1(h) is amended by striking subparagraph (C), by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F) and by inserting after subparagraph (B) the following new subparagraphs: 

 "(C) 15 percent of the lesser of--

 "(i) so much of the adjusted net capital gain (or, if less, taxable income) as exceeds the amount on which a 

tax is determined under subparagraph (B), or 

 "(ii) the excess of--

 "(I) the amount of taxable income which would (without regard to this paragraph) be taxed at a rate below 

39.6 percent, over 

 "(II) the sum of the amounts on which a tax is determined under subparagraphs (A) and (B), 

 "(D) 20 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the sum of the 

amounts on which tax is determined under subparagraphs (B) and (C),". 

 [**2319] (2) <26 USC 55> Minimum tax.-- Paragraph (3) of section 55(b) is amended by striking subparagraph (C), by redesignating subparagraph (D) as subparagraph (E), and by inserting after subparagraph (B) the following new subparagraphs: 

 "(C) 15 percent of the lesser of--

 "(i) so much of the adjusted net capital gain (or, if less, taxable excess) as exceeds the amount on which tax 

is determined under subparagraph (B), or 

 "(ii) the excess described in section 1(h)(1)(C)(ii), plus 

 "(D) 20 percent of the adjusted net capital gain (or, if less, taxable excess) in excess of the sum of the amounts 

on which tax is determined under subparagraphs (B) and (C), plus". 

(c) Conforming Amendments.--

 (1) The following provisions are each amended by striking "15 percent" and inserting "20 percent": 

 (A) Section 531. 

204 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 7

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (B) Section 541. 

 (C) Section 1445(e)(1). 

 (D) The second sentence of section 7518(g)(6)(A). 

 (E) Section 53511(f)(2) of title 46, United States Code. 

 (2) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by striking "5 percent (0 percent in the case of taxable 

years beginning after 2007)" and inserting "0 percent". 

 (3) Section 1445(e)(6) is amended by striking "15 percent (20 percent in the case of taxable years beginning after December 31, 2010)" and inserting "20 percent". 

(d) Effective Dates.--

 (1) <26 USC 1 note> In general.-- Except as otherwise provided, the amendments made by subsections (b) and 

(c) shall apply to taxable years beginning after December 31, 2012. 

 (2) Withholding.-- The amendments made by paragraphs (1)(C) and (3) of subsection (c) shall apply to amounts 

paid on or after January 1, 2013. 

 [*103] Sec. 103. EXTENSION OF 2009 TAX RELIEF. 

(a) 5-year Extension of American Opportunity Tax Credit.--

 (1) In general.-- Section 25A(i) is amended by striking "in 2009, 2010, 2011, or 2012" and inserting "after 2008 

and before 2018". 

 (2) Treatment of possessions.-- Section 1004(c)(1) of division B of the American Recovery and Reinvestment 

Tax Act of 2009 is amended by striking "in 2009, 2010, 2011, and 2012" <26 USC 25A note> each place it appears and 

inserting "after 2008 and before 2018". 

(b) 5-year Extension of Child Tax Credit.--Section 24(d)(4) is amended--

 (1) by striking "2009, 2010, 2011, and 2012" in the heading and inserting "for certain years", and 

 (2) by striking "in 2009, 2010, 2011, or 2012" and inserting "after 2008 and before 2018". 

(c) 5-year Extension of Earned Income Tax Credit.--Section 32(b)(3) is amended--

 (1) by striking "2009, 2010, 2011, and 2012" in the heading and inserting "for certain years", and 

 [**2320] (2) by striking "in 2009, 2010, 2011, or 2012" and inserting "after 2008 and before 2018". 

(d) <26 USC 6409> Permanent Extension of Rule Disregarding Refunds in the Administration of Federal Programs 

and Federally Assisted Programs.--Section 6409 is amended to read as follows: 

"Sec. 6409. REFUNDS DISREGARDED IN THE ADMINISTRATION OF FEDERAL PROGRAMS AND 

FEDERALLY ASSISTED PROGRAMS. 

"Notwithstanding any other provision of law, any refund (or advance payment with respect to a refundable credit) 

made to any individual under this title shall not be taken into account as income, and shall not be taken into account as 

resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any 

other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program 

or under any State or local program financed in whole or in part with Federal funds.". 

(e) Effective Dates.--

 (1) <26 USC 24 note> In general.-- Except as provided in paragraph (2), the amendments made by this section 

shall apply to taxable years beginning after December 31, 2012. 

 (2) Rule regarding disregard of refunds.-- The amendment made by subsection (d) shall apply to amounts received after December 31, 2012. 

 [*104] Sec. 104. PERMANENT ALTERNATIVE MINIMUM TAX RELIEF. 

(a) 2012 Exemption Amounts Made Permanent.--

205 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 8

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) In general.-- Paragraph (1) of section 55(d) is amended--

 (A) by striking "$ 45,000" and all that follows through "2011)" in subparagraph (A) and inserting "$ 78,750", 

 (B) by striking "$ 33,750" and all that follows through "2011)" in subparagraph (B) and inserting "$ 50,600", 

and 

 (C) by striking "paragraph (1)(A)" in subparagraph (C) and inserting "subparagraph (A)". 

(b) Exemption Amounts Indexed for Inflation.--

 (1) In general.-- Subsection (d) of section 55 is amended by adding at the end the following new paragraph: 

 "(4) Inflation adjustment.----

 "(A) In general.--In the case of any taxable year beginning in a calendar year after 2012, the amounts described in subparagraph (B) shall each be increased by an amount equal to--

 "(i) such dollar amount, multiplied by 

 "(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable 

year begins, determined by substituting 'calendar year 2011' for 'calendar year 1992' in subparagraph (B) thereof. 

 "(B) Amounts described.--The amounts described in this subparagraph are--

 "(i) each of the dollar amounts contained in subsection (b)(1)(A)(i), 

 "(ii) each of the dollar amounts contained in paragraph (1), and 

 "(iii) each of the dollar amounts in subparagraphs (A) and (B) of paragraph (3). 

 [**2321] "(C) Rounding.--Any increase determined under subparagraph (A) shall be rounded to the nearest 

multiple of $ 100.". 

 (2) Conforming amendments.---- 

 (A) <26 USC 55> Clause (iii) of section 55(b)(1)(A) is amended by striking "by substituting" and all that follows through "appears." and inserting "by substituting 50 percent of the dollar amount otherwise applicable under subclause (I) and subclause (II) thereof.". 

 (B) Paragraph (3) of section 55(d) is amended--

 (i) by striking "or (2)" in subparagraph (A), 

 (ii) by striking "and" at the end of subparagraph (B), and 

 (iii) by striking subparagraph (C) and inserting the following new subparagraphs: 

 "(C) 50 percent of the dollar amount applicable under subparagraph (A) in the case of a taxpayer described in 

subparagraph (C) or (D) of paragraph (1), and 

 "(D) $ 150,000 in the case of a taxpayer described in paragraph (2).". 

(c) Alternative Minimum Tax Relief for Nonrefundable Credits.--

 (1) In general.-- Subsection (a) of section 26 is amended to read as follows: 

"(a) Limitation Based on Amount of Tax.--The aggregate amount of credits allowed by this subpart for the taxable 

year shall not exceed the sum of--

 "(1) the taxpayer's regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27(a), and 

 "(2) the tax imposed by section 55(a) for the taxable year.". 

 (2) Conforming amendments.---- 

 (A) Adoption credit.--

 (i) Section 23(b) is amended by striking paragraph (4). 

206 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 9

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (ii) Section 23(c) is amended by striking paragraphs (1) and (2) and inserting the following: 

 "(1) In general.-- If the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed 

by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this 

section and sections 25D and 1400C), such excess shall be carried to the succeeding taxable year and added to the credit 

allowable under subsection (a) for such taxable year.". 

 (iii) Section 23(c) is amended by redesignating paragraph (3) as paragraph (2). 

 (B) Child tax credit.--

 (i) Section 24(b) is amended by striking paragraph (3). 

 (ii) Section 24(d)(1) is amended--

 (I) by striking "section 26(a)(2) or subsection (b)(3), as the case may be," each place it appears in subparagraphs (A) and (B) and inserting "section 26(a)", and 

 (II) by striking "section 26(a)(2) or subsection (b)(3), as the case may be" in the second last sentence and 

inserting "section 26(a)". 

 [**2322] (C) Credit for interest on certain home mortgages.--Section 25(e)(1)(C) is amended to read as follows: 

 "(C) <26 USC 25> Applicable tax limit.--For purposes of this paragraph, the term 'applicable tax limit' means 

the limitation imposed by section 26(a) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23, 25D, and 1400C).". 

 (D) Hope and lifetime learning credits.--Section 25A(i) is amended--

 (i) by striking paragraph (5) and by redesignating paragraphs (6) and (7) as paragraphs (5) and (6), respectively, and 

 (ii) by striking "section 26(a)(2) or paragraph (5), as the case may be" in paragraph (5), as redesignated by 

clause (i), and inserting "section 26(a)". 

 (E) Savers' credit.--Section 25B is amended by striking subsection (g). 

 (F) Residential energy efficient property.--Section 25D(c) is amended to read as follows: 

"(c) Carryforward of Unused Credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by 

section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) 

for such succeeding taxable year.". 

 (G) Certain plug-in electric vehicles.--Section 30(c)(2) is amended to read as follows: 

 "(2) Personal credit.-- For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable 

year.". 

 (H) Alternative motor vehicle credit.--Section 30B(g)(2) is amended to read as follows: 

 "(2) Personal credit.-- For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable 

year.". 

 (I) New qualified plug-in electric vehicle credit.--Section 30D(c)(2) is amended to read as follows: 

 "(2) Personal credit.-- For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable 

year.". 

 (J) Cross references.--Section 55(c)(3) is amended by striking "26(a), 30C(d)(2)," and inserting "30C(d)(2)". 

207 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 10

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (K) Foreign tax credit.--Section 904 is amended by striking subsection (i) and by redesignating subsections (j), 

(k), and (l) as subsections (i), (j), and (k), respectively. 

 (L) First-time home buyer credit for the District of Columbia.--Section 1400C(d) is amended to read as follows: 

"(d) Carryforward of Unused Credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by 

section 26(a) for such taxable year reduced by the sum of the credits allowable under subpart A of part IV of subchapter 

A (other than this section and section 25D), such excess shall be carried to the [**2323] succeeding taxable year and 

added to the credit allowable under subsection (a) for such taxable year.". 

(d) <26 USC 23 note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 

 TITLE II--INDIVIDUAL TAX EXTENDERS 

 [*201] Sec. 201. EXTENSION OF DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 

SECONDARY SCHOOL TEACHERS. 

(a) <26 USC 62> In General.--Subparagraph (D) of section 62(a)(2) is amended by striking "or 2011" and inserting 

"2011, 2012, or 2013". 

(b) <26 USC 62 note> Effective Date.--The amendment made by this section shall apply to taxable years beginning 

after December 31, 2011. 

 [*202] Sec. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF QUALIFIED 

PRINCIPAL RESIDENCE INDEBTEDNESS. 

(a) In General.--Subparagraph (E) of section 108(a)(1) is amended by striking "January 1, 2013" and inserting 

"January 1, 2014". 

(b) <26 USC 108 note> Effective Date.--The amendment made by this section shall apply to indebtedness discharged after December 31, 2012. 

 [*203] Sec. 203. EXTENSION OF PARITY FOR EXCLUSION FROM INCOME FOR EMPLOYER-PROVIDED MASS TRANSIT AND PARKING BENEFITS. 

(a) In General.--Paragraph (2) of section 132(f) is amended by striking "January 1, 2012" and inserting "January 1, 

2014". 

(b) <26 USC 132 note> Effective Date.--The amendment made by this section shall apply to months after December 31, 2011. 

 [*204] Sec. 204. EXTENSION OF MORTGAGE INSURANCE PREMIUMS TREATED AS QUALIFIED 

RESIDENCE INTEREST. 

(a) In General.--Subclause (I) of section 163(h)(3)(E)(iv) is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) Technical Amendments.--Clause (i) of section 163(h)(4)(E) is amended--

 (1) by striking "Veterans Administration" and inserting "Department of Veterans Affairs", and 

 (2) by striking "Rural Housing Administration" and inserting "Rural Housing Service".

(c) <26 USC 163 note> Effective Date.--The amendments made by this section shall apply to amounts paid or accrued after December 31, 2011. 

 [*205] Sec. 205. EXTENSION OF DEDUCTION OF STATE AND LOCAL GENERAL SALES TAXES. 

(a) In General.--Subparagraph (I) of section 164(b)(5) is amended by striking "January 1, 2012" and inserting 

"January 1, 2014". 

(b) <26 USC 164 note> Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2011. 

208 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 11

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [*206] [**2324] Sec. 206. EXTENSION OF SPECIAL RULE FOR CONTRIBUTIONS OF CAPITAL GAIN 

REAL PROPERTY MADE FOR CONSERVATION PURPOSES. 

(a) <26 USC 170> In General.--Clause (vi) of section 170(b)(1)(E) is amended by striking "December 31, 2011" 

and inserting "December 31, 2013".

(b) Contributions by Certain Corporate Farmers and Ranchers.--Clause (iii) of section 170(b)(2)(B) is amended by 

striking "December 31, 2011" and inserting "December 31, 2013". 

(c) <26 USC 170 note> Effective Date.--The amendments made by this section shall apply to contributions made in 

taxable years beginning after December 31, 2011. 

 [*207] Sec. 207. EXTENSION OF ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION AND 

RELATED EXPENSES. 

(a) In General.--Subsection (e) of section 222 is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 222 note> Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*208] Sec. 208. EXTENSION OF TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 

PLANS FOR CHARITABLE PURPOSES. 

(a) In General.--Subparagraph (F) of section 408(d)(8) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

(b) <26 USC 408 note> Effective Date; Special Rule.--

 (1) Effective date.-- The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2011. 

 (2) Special rules.-- For purposes of subsections (a)(6), (b)(3), and (d)(8) of section 408 of the Internal Revenue 

Code of 1986, at the election of the taxpayer (at such time and in such manner as prescribed by the Secretary of the 

Treasury)--

 (A) any qualified charitable distribution made after December 31, 2012, and before February 1, 2013, shall be 

deemed to have been made on December 31, 2012, and 

 (B) any portion of a distribution from an individual retirement account to the taxpayer after November 30, 

2012, and before January 1, 2013, may be treated as a qualified charitable distribution to the extent that--

 (i) such portion is transferred in cash after the distribution to an organization described in section 

408(d)(8)(B)(i) before February 1, 2013, and 

 (ii) such portion is part of a distribution that would meet the requirements of section 408(d)(8) but for the 

fact that the distribution was not transferred directly to an organization described in section 408(d)(8)(B)(i). 

 [*209] Sec. 209. IMPROVE AND MAKE PERMANENT THE PROVISION AUTHORIZING THE INTERNAL REVENUE SERVICE TO DISCLOSE CERTAIN RETURN AND RETURN INFORMATION TO CERTAIN 

PRISON OFFICIALS. 

(a) In General.--Paragraph (10) of section 6103(k) is amended to read as follows: 

 "(10) Disclosure of certain returns and return information to certain prison officials.---- 

 [**2325] "(A) In general.--Under such procedures as the Secretary may prescribe, the Secretary may disclose to officers and employees of the Federal Bureau of Prisons and of any State agency charged with the responsibility 

for administration of prisons any returns or return information with respect to individuals incarcerated in Federal or 

State prison systems whom the Secretary has determined may have filed or facilitated the filing of a false or fraudulent 

return to the extent that the Secretary determines that such disclosure is necessary to permit effective Federal tax administration. 

209 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 12

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(B) Disclosure to contractor-run prisons.--Under such procedures as the Secretary may prescribe, the disclosures authorized by subparagraph (A) may be made to contractors responsible for the operation of a Federal or State 

prison on behalf of such Bureau or agency. 

 "(C) Restrictions on use of disclosed information.--Any return or return information received under this paragraph shall be used only for the purposes of and to the extent necessary in taking administrative action to prevent the 

filing of false and fraudulent returns, including administrative actions to address possible violations of administrative 

rules and regulations of the prison facility and in administrative and judicial proceedings arising from such administrative actions. 

 "(D) Restrictions on redisclosure and disclosure to legal representatives.--Notwithstanding subsection (h)--

 "(i) Restrictions on redisclosure.--Except as provided in clause (ii), any officer, employee, or contractor of 

the Federal Bureau of Prisons or of any State agency charged with the responsibility for administration of prisons shall 

not disclose any information obtained under this paragraph to any person other than an officer or employee or contractor 

of such Bureau or agency personally and directly engaged in the administration of prison facilities on behalf of such 

Bureau or agency. 

 "(ii) Disclosure to legal representatives.--The returns and return information disclosed under this paragraph 

may be disclosed to the duly authorized legal representative of the Federal Bureau of Prisons, State agency, or contractor charged with the responsibility for administration of prisons, or of the incarcerated individual accused of filing the 

false or fraudulent return who is a party to an action or proceeding described in subparagraph (C), solely in preparation 

for, or for use in, such action or proceeding.". 

(b) Conforming Amendments.--

 (1) Paragraph (3) of section 6103(a) is amended by inserting "subsection (k)(10)," after "subsection 

(e)(1)(D)(iii),". 

 (2) Paragraph (4) of section 6103(p) is amended--

 (A) by inserting "subsection (k)(10)," before "subsection (l)(10)," in the matter preceding subparagraph (A), 

 (B) in subparagraph (F)(i)--

 (i) by inserting "(k)(10)," before "or (l)(6),", and 

 [**2326] (ii) by inserting "subsection (k)(10) or" before "subsection (l)(10),", and 

 (C) by inserting "subsection (k)(10) or" before "subsection (l)(10)," both places it appears in the matter following subparagraph (F)(iii). 

 (3) <26 USC 7213> Paragraph (2) of section 7213(a) is amended by inserting "(k)(10)," before "(l)(6),". 

(c) <26 USC 6103 note> Effective Date.--The amendments made by this section shall take effect on the date of the 

enactment of this Act. 

 

 TITLE III--BUSINESS TAX EXTENDERS 

 [*301] Sec. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT. 

(a) Extension.--

 (1) In general.-- Subparagraph (B) of section 41(h)(1) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

 (2) Conforming amendment.-- Subparagraph (D) of section 45C(b)(1) is amended by striking "December 31, 

2011" and inserting "December 31, 2013". 

(b) Inclusion of Qualified Research Expenses and Gross Receipts of an Acquired Person.--

 (1) Partial inclusion of pre-acquisition qualified research expenses and gross receipts.-- Subparagraph (A) of 

section 41(f)(3) is amended to read as follows: 

 "(A) Acquisitions.--

210 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 13

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(i) In general.--If a person acquires the major portion of either a trade or business or a separate unit of a 

trade or business (hereinafter in this paragraph referred to as the 'acquired business') of another person (hereinafter in 

this paragraph referred to as the 'predecessor'), then the amount of qualified research expenses paid or incurred by the 

acquiring person during the measurement period shall be increased by the amount determined under clause (ii), and the 

gross receipts of the acquiring person for such period shall be increased by the amount determined under clause (iii). 

 "(ii) Amount determined with respect to qualified research expenses.--The amount determined under this 

clause is--

 "(I) for purposes of applying this section for the taxable year in which such acquisition is made, the acquisition year amount, and 

 "(II) for purposes of applying this section for any taxable year after the taxable year in which such acquisition is made, the qualified research expenses paid or incurred by the predecessor with respect to the acquired business 

during the measurement period. 

 "(iii) Amount determined with respect to gross receipts.--The amount determined under this clause is the 

amount which would be determined under clause (ii) if 'the gross receipts of' were substituted for 'the qualified research 

expenses paid or incurred by' each place it appears in clauses (ii) and (iv). 

 [**2327] "(iv) Acquisition year amount.--For purposes of clause (ii), the acquisition year amount is the 

amount equal to the product of--

 "(I) the qualified research expenses paid or incurred by the predecessor with respect to the acquired business during the measurement period, and 

 "(II) the number of days in the period beginning on the date of the acquisition and ending on the last day 

of the taxable year in which the acquisition is made, divided by the number of days in the acquiring person's taxable 

year. 

 "(v) Special rules for coordinating taxable years.--In the case of an acquiring person and a predecessor 

whose taxable years do not begin on the same date--

 "(I) each reference to a taxable year in clauses (ii) and (iv) shall refer to the appropriate taxable year of the 

acquiring person, 

 "(II) the qualified research expenses paid or incurred by the predecessor, and the gross receipts of the predecessor, during each taxable year of the predecessor any portion of which is part of the measurement period shall be 

allocated equally among the days of such taxable year, 

 "(III) the amount of such qualified research expenses taken into account under clauses (ii) and (iv) with 

respect to a taxable year of the acquiring person shall be equal to the total of the expenses attributable under subclause 

(II) to the days occurring during such taxable year, and 

 "(IV) the amount of such gross receipts taken into account under clause (iii) with respect to a taxable year 

of the acquiring person shall be equal to the total of the gross receipts attributable under subclause (II) to the days occurring during such taxable year. 

 "(vi) Measurement period.--For purposes of this subparagraph, the term 'measurement period' means, with 

respect to the taxable year of the acquiring person for which the credit is determined, any period of the acquiring person 

preceding such taxable year which is taken into account for purposes of determining the credit for such year.". 

 (2) <26 USC 41> Expenses and gross receipts of a predecessor.-- Subparagraph (B) of section 41(f)(3) is 

amended to read as follows: 

 "(B) Dispositions.--If the predecessor furnished to the acquiring person such information as is necessary for 

the application of subparagraph (A), then, for purposes of applying this section for any taxable year ending after such 

disposition, the amount of qualified research expenses paid or incurred by, and the gross receipts of, the predecessor 

during the measurement period (as defined in [**2328] subparagraph (A)(vi), determined by substituting 'predecessor' 

for 'acquiring person' each place it appears) shall be reduced by--

 "(i) in the case of the taxable year in which such disposition is made, an amount equal to the product of--

211 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 14

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(I) the qualified research expenses paid or incurred by, or gross receipts of, the predecessor with respect 

to the acquired business during the measurement period (as so defined and so determined), and 

 "(II) the number of days in the period beginning on the date of acquisition (as determined for purposes of 

subparagraph (A)(iv)(II)) and ending on the last day of the taxable year of the predecessor in which the disposition is 

made, divided by the number of days in the taxable year of the predecessor, and 

 "(ii) in the case of any taxable year ending after the taxable year in which such disposition is made, the 

amount described in clause (i)(I).". 

(c) <26 USC 41> Aggregation of Expenditures.--Paragraph (1) of section 41(f) is amended--

 (1) by striking "shall be its proportionate shares of the qualified research expenses, basic research payments, and 

amounts paid or incurred to energy research consortiums, giving rise to the credit" in subparagraph (A)(ii) and inserting 

"shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by such controlled 

group for purposes of this section", and 

 (2) by striking "shall be its proportionate shares of the qualified research expenses, basic research payments, and 

amounts paid or incurred to energy research consortiums, giving rise to the credit" in subparagraph (B)(ii) and inserting 

"shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by all such persons 

under common control for purposes of this section". 

(d) <26 USC 41 note> Effective Date.--

 (1) Extension.-- The amendments made by subsection (a) shall apply to amounts paid or incurred after December 31, 2011. 

 (2) Modifications.-- The amendments made by subsections (b) and (c) shall apply to taxable years beginning after December 31, 2011. 

 [*302] Sec. 302. EXTENSION OF TEMPORARY MINIMUM LOW-INCOME TAX CREDIT RATE FOR 

NON-FEDERALLY SUBSIDIZED NEW BUILDINGS. 

(a) In General.--Subparagraph (A) of section 42(b)(2) is amended by striking "and before December 31, 2013" and 

inserting "with respect to housing credit dollar amount allocations made before January 1, 2014". 

 [**2329] (b) <26 USC 42 note> Effective Date.--The amendment made by this section shall take effect on the 

date of the enactment of this Act. 

 [*303] Sec. 303. EXTENSION OF HOUSING ALLOWANCE EXCLUSION FOR DETERMINING AREA 

MEDIAN GROSS INCOME FOR QUALIFIED RESIDENTIAL RENTAL PROJECT EXEMPT FACILITY BONDS. 

(a) In General.--Subsection (b) of section 3005 of the Housing Assistance Tax Act of 2008 is amended by striking 

"January 1, 2012" <26 USC 142 note> each place it appears and inserting "January 1, 2014". 

(b) <26 USC 142 note> Effective Date.--The amendment made by this section shall take effect as if included in the 

enactment of section 3005 of the Housing Assistance Tax Act of 2008. 

 [*304] Sec. 304. EXTENSION OF INDIAN EMPLOYMENT TAX CREDIT. 

(a) <26 USC 45A> In General.--Subsection (f) of section 45A is amended by striking "December 31, 2011" and 

inserting "December 31, 2013". 

(b) <26 USC 45A note> Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*305] Sec. 305. EXTENSION OF NEW MARKETS TAX CREDIT. 

(a) In General.--Subparagraph (G) of section 45D(f)(1) is amended by striking "2010 and 2011" and inserting 

"2010, 2011, 2012, and 2013". 

(b) Carryover of Unused Limitation.--Paragraph (3) of section 45D(f) is amended by striking "2016" and inserting 

"2018". 

212 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 15

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(c) <26 USC 45D note> Effective Date.--The amendments made by this section shall apply to calendar years beginning after December 31, 2011. 

 [*306] Sec. 306. EXTENSION OF RAILROAD TRACK MAINTENANCE CREDIT. 

(a) In General.--Subsection (f) of section 45G is amended by striking "January 1, 2012" and inserting "January 1, 

2014". 

(b) <26 USC 45G note> Effective Date.--The amendment made by this section shall apply to expenditures paid or 

incurred in taxable years beginning after December 31, 2011. 

 [*307] Sec. 307. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT. 

(a) In General.--Subsection (e) of section 45N is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 45N note> Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*308] Sec. 308. EXTENSION OF EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE 

DUTY MEMBERS OF THE UNIFORMED SERVICES. 

(a) In General.--Subsection (f) of section 45P is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 45P note> Effective Date.--The amendment made by this section shall apply to payments made after 

December 31, 2011. 

 [*309] Sec. 309. EXTENSION OF WORK OPPORTUNITY TAX CREDIT. 

(a) In General.--Subparagraph (B) of section 51(c)(4) is amended by striking "after" and all that follows and inserting "after December 31, 2013". 

(b) <26 USC 51 note> Effective Date.--The amendment made by this section shall apply to individuals who begin 

work for the employer after December 31, 2011. 

 [*310] [**2330] Sec. 310. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS. 

(a) <26 USC 54E> In General.--Paragraph (1) of section 54E(c) is amended by inserting ", 2012, and 2013" after 

"for 2011". 

(b) <26 USC 54E note> Effective Date.--The amendments made by this section shall apply to obligations issued 

after December 31, 2011. 

 [*311] Sec. 311. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 

LEASEHOLD IMPROVEMENTS, QUALIFIED RESTAURANT BUILDINGS AND IMPROVEMENTS, AND 

QUALIFIED RETAIL IMPROVEMENTS. 

(a) In General.--Clauses (iv), (v), and (ix) of section 168(e)(3)(E) are each amended by striking "January 1, 2012" 

and inserting "January 1, 2014". 

(b) <26 USC 168 note> Effective Date.--The amendments made by this section shall apply to property placed in 

service after December 31, 2011. 

 [*312] Sec. 312. EXTENSION OF 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS ENTERTAINMENT COMPLEXES. 

(a) In General.--Subparagraph (D) of section 168(i)(15) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

(b) <26 USC 168 note> Effective Date.--The amendment made by this section shall apply to property placed in 

service after December 31, 2011. 

 [*313] Sec. 313. EXTENSION OF ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON AN 

INDIAN RESERVATION. 

213 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 16

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(a) In General.--Paragraph (8) of section 168(j) is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 168 note> Effective Date.--The amendment made by this section shall apply to property placed in 

service after December 31, 2011. 

 [*314] Sec. 314. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 

FOOD INVENTORY. 

(a) In General.--Clause (iv) of section 170(e)(3)(C) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

(b) <26 USC 170 note> Effective Date.--The amendment made by this section shall apply to contributions made 

after December 31, 2011. 

 [*315] Sec. 315. EXTENSION OF INCREASED EXPENSING LIMITATIONS AND TREATMENT OF 

CERTAIN REAL PROPERTY AS SECTION 179 PROPERTY. 

(a) In General.--

 (1) Dollar limitation.-- Section 179(b)(1) is amended--

 (A) by striking "2010 or 2011," in subparagraph (B) and inserting "2010, 2011, 2012, or 2013, and", 

 (B) by striking subparagraph (C), 

 (C) by redesignating subparagraph (D) as subparagraph (C), and 

 (D) in subparagraph (C), as so redesignated, by striking "2012" and inserting "2013". 

 (2) Reduction in limitation.-- Section 179(b)(2) is amended--

 (A) by striking "2010 or 2011," in subparagraph (B) and inserting "2010, 2011, 2012, or 2013, and", 

 (B) by striking subparagraph (C), 

 (C) by redesignating subparagraph (D) as subparagraph (C), and 

 [**2331] (D) in subparagraph (C), as so redesignated, by striking "2012" and inserting "2013". 

 (3) Conforming amendment.-- Subsection (b) of section 179 is amended by striking paragraph (6). 

(b) <26 USC 179> Computer Software.--Section 179(d)(1)(A)(ii) is amended by striking "2013" and inserting 

"2014". 

(c) Election.--Section 179(c)(2) is amended by striking "2013" and inserting "2014". 

(d) Special Rules for Treatment of Qualified Real Property.--

 (1) In general.-- Section 179(f)(1) is amended by striking "2010 or 2011" and inserting "2010, 2011, 2012, or 

2013". 

 (2) Carryover limitation.---- 

 (A) In general.--Section 179(f)(4) is amended by striking "2011" each place it appears and inserting "2013". 

 (B) Conforming amendment.--Subparagraph (C) of section 179(f)(4) is amended--

 (i) in the heading, by striking "2010" and inserting "2010, 2011 and 2012", and 

 (ii) by adding at the end the following: "For the last taxable year beginning in 2013, the amount determined 

under subsection (b)(3)(A) for such taxable year shall be determined without regard to this paragraph.". 

(e) <26 USC 179 note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*316] Sec. 316. EXTENSION OF ELECTION TO EXPENSE MINE SAFETY EQUIPMENT. 

214 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 17

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(a) In General.--Subsection (g) of section 179E is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 179E note> Effective Date.--The amendment made by this section shall apply to property placed in 

service after December 31, 2011. 

 [*317] Sec. 317. EXTENSION OF SPECIAL EXPENSING RULES FOR CERTAIN FILM AND TELEVISION 

PRODUCTIONS. 

(a) In General.--Subsection (f) of section 181 is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 181 note> Effective Date.--The amendment made by this section shall apply to productions commencing after December 31, 2011. 

 [*318] Sec. 318. EXTENSION OF DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO. 

(a) In General.--Subparagraph (C) of section 199(d)(8) is amended--

 (1) by striking "first 6 taxable years" and inserting "first 8 taxable years", and 

 (2) by striking "January 1, 2012" and inserting "January 1, 2014". 

(b) <26 USC 199 note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*319] Sec. 319. EXTENSION OF MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO 

CONTROLLING EXEMPT ORGANIZATIONS. 

(a) In General.--Clause (iv) of section 512(b)(13)(E) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

 [**2332] (b) <26 USC 512 note> Effective Date.--The amendment made by this section shall apply to payments 

received or accrued after December 31, 2011. 

 [*320] Sec. 320. EXTENSION OF TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT COMPANIES. 

(a) <26 USC 871> In General.--Paragraphs (1)(C)(v) and (2)(C)(v) of section 871(k) are each amended by striking 

"December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 871 note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*321] Sec. 321. EXTENSION OF RIC QUALIFIED INVESTMENT ENTITY TREATMENT UNDER FIRPTA. 

(a) In General.--Clause (ii) of section 897(h)(4)(A) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

(b) <26 USC 897 note> Effective Date.--

 (1) In general.-- The amendment made by subsection (a) shall take effect on January 1, 2012. Notwithstanding 

the preceding sentence, such amendment shall not apply with respect to the withholding requirement under section 1445 

of the Internal Revenue Code of 1986 for any payment made before the date of the enactment of this Act. 

 (2) Amounts withheld on or before date of enactment.-- In the case of a regulated investment company--

 (A) which makes a distribution after December 31, 2011, and before the date of the enactment of this Act; and 

 (B) which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to 

such distribution under section 1445 of such Code, 

such investment company shall not be liable to any person to whom such distribution was made for any amount so 

withheld and paid over to the Secretary of the Treasury. 

215 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 18

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [*322] Sec. 322. EXTENSION OF SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME. 

(a) Exempt Insurance Income.--Paragraph (10) of section 953(e) is amended--

 (1) by striking "January 1, 2012" and inserting "January 1, 2014", and 

 (2) by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) Special Rule for Income Derived in the Active Conduct of Banking, Financing, or Similar Businesses.--Paragraph (9) of section 954(h) is amended by striking "January 1, 2012" and inserting "January 1, 2014". 

(c) <26 USC 953 note> Effective Date.--The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2011, and to taxable years of United States shareholders with or within 

which any such taxable year of such foreign corporation ends. 

 [*323] [**2333] Sec. 323. EXTENSION OF LOOK-THRU TREATMENT OF PAYMENTS BETWEEN 

RELATED CONTROLLED FOREIGN CORPORATIONS UNDER FOREIGN PERSONAL HOLDING COMPANY 

RULES. 

(a) <26 USC 954> In General.--Subparagraph (C) of section 954(c)(6) is amended by striking "January 1, 2012" 

and inserting "January 1, 2014". 

(b) <26 USC 954 note> Effective Date.--The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2011, and to taxable years of United States shareholders with or within 

which such taxable years of foreign corporations end. 

 [*324] Sec. 324. EXTENSION OF TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CERTAIN 

SMALL BUSINESS STOCK. 

(a) In General.--Paragraph (4) of section 1202(a) is amended--

 (1) by striking "January 1, 2012" and inserting "January 1, 2014", and 

 (2) by striking "and 2011" and inserting ", 2011, 2012, and 2013" in the heading thereof. 

(b) Technical Amendments.--

 (1) Special rule for 2009 and certain period in 2010.-- Paragraph (3) of section 1202(a) is amended by adding at 

the end the following new flush sentence: 

"In the case of any stock which would be described in the preceding sentence (but for this sentence), the acquisition 

date for purposes of this subsection shall be the first day on which such stock was held by the taxpayer determined after 

the application of section 1223.". 

 (2) 100 percent exclusion.-- Paragraph (4) of section 1202(a) is amended by adding at the end the following new 

flush sentence: 

"In the case of any stock which would be described in the preceding sentence (but for this sentence), the acquisition 

date for purposes of this subsection shall be the first day on which such stock was held by the taxpayer determined after 

the application of section 1223.". 

(c) <26 USC 1202 note> Effective Dates.--

 (1) In general.-- The amendments made by subsection (a) shall apply to stock acquired after December 31, 2011. 

 (2) Subsection (b)(1).-- The amendment made by subsection (b)(1) shall take effect as if included in section 

1241(a) of division B of the American Recovery and Reinvestment Act of 2009. 

 (3) Subsection (b)(2).-- The amendment made by subsection (b)(2) shall take effect as if included in section 

2011(a) of the Creating Small Business Jobs Act of 2010. 

 [*325] Sec. 325. EXTENSION OF BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 

CHARITABLE CONTRIBUTIONS OF PROPERTY. 

(a) In General.--Paragraph (2) of section 1367(a) is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

216 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 19

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(b) <26 USC 1367 note> Effective Date.--The amendment made by this section shall apply to contributions made 

in taxable years beginning after December 31, 2011. 

 [*326] [**2334] Sec. 326. EXTENSION OF REDUCTION IN S-CORPORATION RECOGNITION PERIOD 

FOR BUILT-IN GAINS TAX. 

(a) <26 USC 1374> In General.--Paragraph (7) of section 1374(d) is amended--

 (1) by redesignating subparagraph (C) as subparagraph (D), and 

 (2) by inserting after subparagraph (B) the following new subparagraph: 

 "(C) Special rule for 2012 and 2013.--For purposes of determining the net recognized built-in gain for taxable 

years beginning in 2012 or 2013, subparagraphs (A) and (D) shall be applied by substituting '5-year' for '10-year'.", and 

 (3) by adding at the end the following new subparagraph: 

 "(E) Installment sales.--If an S corporation sells an asset and reports the income from the sale using the installment method under section 453, the treatment of all payments received shall be governed by the provisions of this 

paragraph applicable to the taxable year in which such sale was made.". 

(b) Technical Amendment.--Subparagraph (B) of section 1374(d)(2) is amended by inserting "described in subparagraph (A)" after ", for any taxable year". 

(c) <26 USC 1374 note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*327] Sec. 327. EXTENSION OF EMPOWERMENT ZONE TAX INCENTIVES. 

(a) In General.--Clause (i) of section 1391(d)(1)(A) is amended by striking "December 31, 2011" and inserting 

"December 31, 2013". 

(b) Increased Exclusion of Gain on Stock of Empowerment Zone Businesses.--Subparagraph (C) of section 

1202(a)(2) is amended--

 (1) by striking "December 31, 2016" and inserting "December 31, 2018"; and 

 (2) by striking "2016" in the heading and inserting "2018". 

(c) <26 USC 1391 note> Treatment of Certain Termination Dates Specified in Nominations.--In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with 

the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before 

the enactment of this Act), subparagraph (B) of such section shall not apply with respect to such designation if, after the 

date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a 

new termination date in such manner as the Secretary of the Treasury (or the Secretary's designee) may provide. 

(d) <26 USC 1202 note> Effective Date.--The amendments made by this section shall apply to periods after December 31, 2011. 

 [*328] Sec. 328. EXTENSION OF TAX-EXEMPT FINANCING FOR NEW YORK LIBERTY ZONE. 

(a) In General.--Subparagraph (D) of section 1400L(d)(2) is amended by striking "January 1, 2012" and inserting 

"January 1, 2014". 

(b) <26 USC 1400L note> Effective Date.--The amendment made by this section shall apply to bonds issued after 

December 31, 2011. 

 [*329] [**2335] Sec. 329. EXTENSION OF TEMPORARY INCREASE IN LIMIT ON COVER OVER OF 

RUM EXCISE TAXES TO PUERTO RICO AND THE VIRGIN ISLANDS. 

(a) <26 USC 7652> In General.--Paragraph (1) of section 7652(f) is amended by striking "January 1, 2012" and inserting "January 1, 2014". 

(b) <26 USC 7652 note> Effective Date.--The amendment made by this section shall apply to distilled spirits 

brought into the United States after December 31, 2011. 

217 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 20

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [*330] Sec. 330. MODIFICATION AND EXTENSION OF AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT. 

(a) Modification.--

 (1) In general.-- Subsection (a) of section 119 of division A of the Tax Relief and Health Care Act of 2006 is 

amended <26 USC 30A note> by striking "if such corporation" and all that follows and inserting "if--

 "(1) in the case of a taxable year beginning before January 1, 2012, such corporation--

 "(A) is an existing credit claimant with respect to American Samoa, and 

 "(B) elected the application of section 936 of the Internal Revenue Code of 1986 for its last taxable year beginning before January 1, 2006, and 

 "(2) in the case of a taxable year beginning after December 31, 2011, such corporation meets the requirements of 

subsection (e).". 

 (2) Requirements.-- Section 119 of division A of such Act is amended by adding at the end the following new 

subsection: 

"(e) Qualified Production Activities Income Requirement.--A corporation meets the requirement of this subsection 

if such corporation has qualified production activities income, as defined in subsection (c) of section 199 of the Internal 

Revenue Code of 1986, determined by substituting 'American Samoa' for 'the United States' each place it appears in 

paragraphs (3), (4), and (6) of such subsection (c), for the taxable year.". 

(b) Extension.--Subsection (d) of section 119 of division A of the Tax Relief and Health Care Act of 2006 is 

amended by striking "shall apply" and all that follows and inserting "shall apply--

 "(1) in the case of a corporation that meets the requirements of subparagraphs (A) and (B) of subsection (a)(1), 

to the first 8 taxable years of such corporation which begin after December 31, 2006, and before January 1, 2014, and 

 "(2) in the case of a corporation that does not meet the requirements of subparagraphs (A) and (B) of subsection 

(a)(1), to the first 2 taxable years of such corporation which begin after December 31, 2011, and before January 1, 

2014.". 

(c) <26 USC 30A note> Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2011. 

 [*331] Sec. 331. EXTENSION AND MODIFICATION OF BONUS DEPRECIATION. 

(a) In General.--Paragraph (2) of section 168(k) is amended--

 (1) by striking "January 1, 2014" in subparagraph (A)(iv) and inserting "January 1, 2015", and 

 (2) by striking "January 1, 2013" each place it appears and inserting "January 1, 2014". 

 [**2336] (b) <26 USC 460> Special Rule for Federal Long-Term Contracts.--Clause (ii) of section 460(c)(6)(B) 

is amended by inserting ", or after December 31, 2012, and before January 1, 2014 (January 1, 2015, in the case of 

property described in section 168(k)(2)(B))" before the period. 

(c) Extension of Election To Accelerate the AMT Credit in Lieu of Bonus Depreciation.--

 (1) In general.-- Subclause (II) of section 168(k)(4)(D)(iii) is amended by striking "2013" and inserting "2014". 

 (2) Round 3 extension property.-- Paragraph (4) of section 168(k) is amended by adding at the end the following 

new subparagraph: 

 "(J) Special rules for round 3 extension property.--

 "(i) In general.--In the case of round 3 extension property, this paragraph shall be applied without regard to--

 "(I) the limitation described in subparagraph (B)(i) thereof, and 

 "(II) the business credit increase amount under subparagraph (E)(iii) thereof. 

218 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 21

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(ii) Taxpayers previously electing acceleration.--In the case of a taxpayer who made the election under 

subparagraph (A) for its first taxable year ending after March 31, 2008, a taxpayer who made the election under subparagraph (H)(ii) for its first taxable year ending after December 31, 2008, or a taxpayer who made the election under 

subparagraph (I)(iii) for its first taxable year ending after December 31, 2010--

 "(I) the taxpayer may elect not to have this paragraph apply to round 3 extension property, but 

 "(II) if the taxpayer does not make the election under subclause (I), in applying this paragraph to the taxpayer the bonus depreciation amount, maximum amount, and maximum increase amount shall be computed and applied 

to eligible qualified property which is round 3 extension property. The amounts described in subclause (II) shall be 

computed separately from any amounts computed with respect to eligible qualified property which is not round 3 extension property. 

 "(iii) Taxpayers not previously electing acceleration.--In the case of a taxpayer who neither made the election under subparagraph (A) for its first taxable year ending after March 31, 2008, nor made the election under subparagraph (H)(ii) for its first taxable year ending after December 31, 2008, nor made the election under subparagraph (I)(iii) 

for any taxable year ending after December 31, 2010--

 "(I) the taxpayer may elect to have this paragraph apply to its first taxable year ending after December 31, 

2012, and each subsequent taxable year, and 

 "(II) if the taxpayer makes the election under subclause (I), this paragraph shall only apply to [**2337] 

eligible qualified property which is round 3 extension property. 

 "(iv) Round 3 extension property.--For purposes of this subparagraph, the term 'round 3 extension property' 

means property which is eligible qualified property solely by reason of the extension of the application of the special 

allowance under paragraph (1) pursuant to the amendments made by section 331(a) of the American Taxpayer Relief 

Act of 2012 (and the application of such extension to this paragraph pursuant to the amendment made by section 

331(c)(1) of such Act).". 

(d) Normalization Rules Amendment.--Clause (ii) of section 168(i)(9)(A) is amended by inserting "(respecting all 

elections made <26 USC 168> by the taxpayer under this section)" after "such property". 

(e) Conforming Amendments.--

 (1) The heading for subsection (k) of section 168 is amended by striking " January 1, 2013" and inserting " January 1, 2014". 

 (2) The heading for clause (ii) of section 168(k)(2)(B) is amended by striking "pre-January 1, 2013" and inserting "pre-January 1, 2014". 

 (3) Subparagraph (C) of section 168(n)(2) is amended by striking "January 1, 2013" and inserting "January 1, 

2014". 

 (4) Subparagraph (D) of section 1400L(b)(2) is amended by striking "January 1, 2013" and inserting "January 1, 

2014". 

 (5) Subparagraph (B) of section 1400N(d)(3) is amended by striking "January 1, 2013" and inserting "January 1, 

2014". 

(f) <26 USC 168 note> Effective Date.--The amendments made by this section shall apply to property placed in 

service after December 31, 2012, in taxable years ending after such date. 

 

 TITLE IV--ENERGY TAX EXTENDERS 

 [*401] Sec. 401. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT EXISTING HOMES. 

(a) In General.--Paragraph (2) of section 25C(g) is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) <26 USC 25C note> Effective Date.--The amendment made by this section shall apply to property placed in 

service after December 31, 2011. 

219 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 22

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [*402] Sec. 402. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY. 

(a) In General.--Paragraph (2) of section 30C(g) is amended by striking "December 31, 2011." and inserting "December 31, 2013". 

(b) <26 USC 30C note> Effective Date.--The amendment made by this section shall apply to property placed in 

service after December 31, 2011. 

 [*403] Sec. 403. EXTENSION OF CREDIT FOR 2- OR 3-WHEELED PLUG-IN ELECTRIC VEHICLES. 

(a) In General.--Section 30D is amended by adding at the end the following new subsection: 

"(g) Credit Allowed for 2- and 3-wheeled Plug-in Electric Vehicles.--

 "(1) In general.-- In the case of a qualified 2- or 3-wheeled plug-in electric vehicle--

 "(A) there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount 

equal to the sum of the applicable amount with respect [**2338] to each such qualified 2- or 3-wheeled plug-in electric 

vehicle placed in service by the taxpayer during the taxable year, and 

 "(B) the amount of the credit allowed under subparagraph (A) shall be treated as a credit allowed under subsection (a). 

 "(2) Applicable amount.-- For purposes of paragraph (1), the applicable amount is an amount equal to the lesser 

of--

 "(A) 10 percent of the cost of the qualified 2- or 3-wheeled plug-in electric vehicle, or 

 "(B) $ 2,500. 

 "(3) Qualified 2- or 3-wheeled plug-in electric vehicle.-- The term 'qualified 2- or 3-wheeled plug-in electric vehicle' means any vehicle which--

 "(A) has 2 or 3 wheels, 

 "(B) meets the requirements of subparagraphs (A), (B), (C), (E), and (F) of subsection (d)(1) (determined by 

substituting '2.5 kilowatt hours' for '4 kilowatt hours' in subparagraph (F)(i)), 

 "(C) is manufactured primarily for use on public streets, roads, and highways, 

 "(D) is capable of achieving a speed of 45 miles per hour or greater, and 

 "(E) is acquired after December 31, 2011, and before January 1, 2014.". 

(b) Conforming Amendments.--

 (1) No double benefit.-- Paragraph (2) of section 30D(f) is amended-- 

 (A) by striking "new qualified plug-in electric drive motor vehicle" and inserting "vehicle for which a credit is 

allowable under subsection (a)", and 

 (B) by striking "allowed under subsection (a)" and inserting "allowed under such subsection". 

 (2) <26 USC 30D> Air quality and safety standards.-- Section 30D(f)(7) is amended by striking "motor vehicle" 

and inserting "vehicle". 

(c) <26 USC 30D note> Effective Date.--The amendments made by this section shall apply to vehicles acquired after December 31, 2011. 

 [*404] Sec. 404. EXTENSION AND MODIFICATION OF CELLULOSIC BIOFUEL PRODUCER CREDIT. 

(a) Extension.--

 (1) In general.-- Subparagraph (H) of section 40(b)(6) is amended to read as follows: 

 "(H) Application of paragraph.--

220 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 23

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(i) In general.--This paragraph shall apply with respect to qualified cellulosic biofuel production after December 31, 2008, and before January 1, 2014. 

 "(ii) No carryover to certain years after expiration.--If this paragraph ceases to apply for any period by reason of clause (i), rules similar to the rules of subsection (e)(2) shall apply.". 

 (2) Conforming amendment.-- Paragraph (2) of section 40(e) is amended by striking "or subsection (b)(6)(H)". 

 (3) <26 USC 40 note> Effective date.-- The amendments made by this subsection shall take effect as if included 

in section 15321(b) of the Heartland, Habitat, and Horticulture Act of 2008. 

(b) Algae Treated as a Qualified Feedstock.--

 [**2339] (1) <26 USC 40> In general.-- Subclause (I) of section 40(b)(6)(E)(i) is amended to read as follows: 

 "(I) is derived by, or from, qualified feedstocks, and". 

 (2) Qualified feedstock; special rules for algae.-- Paragraph (6) of section 40(b) is amended by redesignating 

subparagraphs (F), (G), and (H), as amended by this Act, as subparagraphs (H), (I), and (J), respectively, and by inserting after subparagraph (E) the following new subparagraphs: 

 "(F) Qualified feedstock.--For purposes of this paragraph, the term 'qualified feedstock' means--

 "(i) any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, and 

 "(ii) any cultivated algae, cyanobacteria, or lemna. 

 "(G) Special rules for algae.--In the case of fuel which is derived by, or from, feedstock described in subparagraph (F)(ii) and which is sold by the taxpayer to another person for refining by such other person into a fuel which 

meets the requirements of subparagraph (E)(i)(II) and the refined fuel is not excluded under subparagraph (E)(iii)--

 "(i) such sale shall be treated as described in subparagraph (C)(i), 

 "(ii) such fuel shall be treated as meeting the requirements of subparagraph (E)(i)(II) and as not being excluded under subparagraph (E)(iii) in the hands of such taxpayer, and 

 "(iii) except as provided in this subparagraph, such fuel (and any fuel derived from such fuel) shall not be 

taken into account under subparagraph (C) with respect to the taxpayer or any other person.". 

 (3) Conforming amendments.---- 

 (A) Section 40, as amended by paragraph (2), is amended--

 (i) by striking "cellulosic biofuel" each place it appears in the text thereof and inserting "second generation 

biofuel", 

 (ii) by striking "Cellulosic" in the headings of subsections (b)(6), (b)(6)(E), and (d)(3)(D) and inserting 

"Second generation", and 

 (iii) by striking "cellulosic" in the headings of subsections (b)(6)(C), (b)(6)(D), (b)(6)(H), (d)(6), and (e)(3) 

and inserting "second generation". 

 (B) Clause (ii) of section 40(b)(6)(E) is amended by striking "Such term shall not" and inserting "The term 

'second generation biofuel' shall not". 

 (C) Paragraph (1) of section 4101(a) is amended by striking "cellulosic biofuel" and inserting "second generation biofuel".

 (4) <26 USC 40 note> Effective date.-- The amendments made by this subsection shall apply to fuels sold or 

used after the date of the enactment of this Act. 

 [*405] [**2340] Sec. 405. EXTENSION OF INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL. 

(a) Credits for Biodiesel and Renewable Diesel Used as Fuel.--Subsection (g) of section 40A <26 USC 40A> is 

amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) Excise Tax Credits and Outlay Payments for Biodiesel and Renewable Diesel Fuel Mixtures.--

221 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 24

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) Paragraph (6) of section 6426(c) is amended by striking "December 31, 2011" and inserting "December 31, 

2013". 

 (2) Subparagraph (B) of section 6427(e)(6) is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(c) <26 USC 40A note> Effective Date.--The amendments made by this section shall apply to fuel sold or used after December 31, 2011. 

 [*406] Sec. 406. EXTENSION OF PRODUCTION CREDIT FOR INDIAN COAL FACILITIES PLACED IN 

SERVICE BEFORE 2009. 

(a) In General.--Subparagraph (A) of section 45(e)(10) is amended by striking "7-year period" each place it appears 

and inserting "8-year period". 

(b) <26 USC 45 note> Effective Date.--The amendment made by this section shall apply to coal produced after 

December 31, 2012. 

 [*407] Sec. 407. EXTENSION AND MODIFICATION OF CREDITS WITH RESPECT TO FACILITIES 

PRODUCING ENERGY FROM CERTAIN RENEWABLE RESOURCES. 

(a) Production Tax Credit.--

 (1) Extension for wind facilities.-- Paragraph (1) of section 45(d) is amended by striking "January 1, 2013" and 

inserting "January 1, 2014". 

 (2) Exclusion of paper which is commonly recycled from definition of municipal solid waste.-- Section 45(c)(6) 

is amended by inserting ", except that such term does not include paper which is commonly recycled and which has 

been segregated from other solid waste (as so defined)" after "(42 U.S.C. 6903)". 

 (3) Modification to definition of qualified facility.---- 

 (A) In general.--The following provisions of section 45(d), as amended by paragraph (1), are each amended by 

striking "before January 1, 2014" and inserting "the construction of which begins before January 1, 2014": 

 (i) Paragraph (1). 

 (ii) Paragraph (2)(A)(i). 

 (iii) Paragraph (3)(A)(i)(I). 

 (iv) Paragraph (6). 

 (v) Paragraph (7). 

 (vi) Paragraph (9)(B). 

 (vii) Paragraph (11)(B). 

 (B) Certain closed-loop biomass facilities.--Subparagraph (A) of section 45(d)(2) is amended by adding at the 

end the following new flush sentence: 

"For purposes of clause (ii), a facility shall be treated as modified before January 1, 2014, if the construction of 

such modification begins before such date.". 

 [**2341] (C) Certain open-loop biomass facilities.--Clause (ii) of section 45(d)(3)(A) <26 USC 45> is 

amended by striking "is originally placed in service" and inserting "the construction of which begins". 

 (D) Geothermal facilities.--

 (i) In general.--Paragraph (4) of section 45(d) is amended by striking "and before January 1, 2014" and all 

that follows and inserting "and which--

 "(A) in the case of a facility using solar energy, is placed in service before January 1, 2006, or 

 "(B) in the case of a facility using geothermal energy, the construction of which begins before January 1, 2014. 

222 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 25

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by 

the taxpayer for purposes of determining the energy credit under section 48.". 

 (E) Incremental hydropower production.--Paragraph (9) of section 45(d) is amended--

 (i) by redesignating subparagraphs (A) and (B), as amended by subparagraph (A), as clauses (i) and (ii), respectively, and by moving such clauses (as so redesignated) 2 ems to the right, 

 (ii) by striking "In the case of a facility" and inserting the following: 

 "(A) In general.--In the case of a facility", 

 (iii) by redesignating subparagraph (C) as subparagraph (B), and 

 (iv) by adding at the end the following new subparagraph: 

 "(C) Special rule.--For purposes of subparagraph (A)(i), an efficiency improvement or addition to capacity 

shall be treated as placed in service before January 1, 2014, if the construction of such improvement or addition begins 

before such date.". 

(b) Extension of Election to Treat Qualified Facilities as Energy Property.--Subparagraph (C) of section 48(a)(5) is 

amended to read as follows: 

 "(C) Qualified investment credit facility.--For purposes of this paragraph, the term 'qualified investment credit 

facility' means any facility--

 "(i) which is a qualified facility (within the meaning of section 45) described in paragraph (1), (2), (3), (4), 

(6), (7), (9), or (11) of section 45(d), 

 "(ii) which is placed in service after 2008 and the construction of which begins before January 1, 2014, and 

 "(iii) with respect to which--

 "(I) no credit has been allowed under section 45, and 

 "(II) the taxpayer makes an irrevocable election to have this paragraph apply.". 

(c) Technical Corrections.--

 (1) Subparagraph (D) of section 48(a)(5) is amended--

 (A) by striking "and" at the end of clause (i)(II), 

 (B) by striking the period at the end of clause (ii) and inserting a comma, and 

 (C) by adding at the end the following new clauses: 

 [**2342] "(iii) which is constructed, reconstructed, erected, or acquired by the taxpayer, and 

 "(iv) the original use of which commences with the taxpayer.". 

 (2) Paragraphs (1) and (2) of subsection (a) of section 1603 of division B of the American Recovery and Reinvestment Act of 2009 <26 USC 48 note> are each amended by striking "placed in service" and inserting "originally 

placed in service by such person". 

(d) <26 USC 45 note> Effective Dates.--

 (1) In general.-- Except as provided in paragraphs (2) and (3), the amendments made by this section shall take 

effect on the date of the enactment of this Act. 

 (2) Modification to definition of municipal solid waste.-- The amendments made by subsection (a)(2) shall apply 

to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date. 

 (3) Technical corrections.-- The amendments made by subsection (c) shall apply as if included in the enactment 

of the provisions of the American Recovery and Reinvestment Act of 2009 to which they relate. 

 [*408] Sec. 408. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT NEW HOMES. 

223 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 26

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(a) <26 USC 45L> In General.--Subsection (g) of section 45L is amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) Energy Savings Requirements.--Clause (i) of section 45L(c)(1)(A) is amended by striking "2003 International 

Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section"and inserting "2006 International Energy Conservation Code, as such Code (including supplements) is in effect on 

January 1, 2006". 

(c) <26 USC 45L note> Effective Date.--The amendments made by this section shall apply to homes acquired after 

December 31, 2011. 

 [*409] Sec. 409. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT APPLIANCES. 

(a) In General.--Section 45M(b) is amended by striking "2011" each place it appears other than in the provisions 

specified in subsection (b) and inserting "2011, 2012, or 2013". 

(b) Provisions Specified.--The provisions of section 45M(b) specified in this subsection are subparagraph (C) of 

paragraph (1) and subparagraph (E) of paragraph (2). 

(c) <26 USC 45M note> Effective Date.--The amendments made by this section shall apply to appliances produced 

after December 31, 2011. 

 [*410] Sec. 410. EXTENSION AND MODIFICATION OF SPECIAL ALLOWANCE FOR CELLULOSIC 

BIOFUEL PLANT PROPERTY. 

(a) Extension.--

 (1) In general.-- Subparagraph (D) of section 168(l)(2) is amended by striking "January 1, 2013" and inserting 

"January 1, 2014". 

 (2) <26 USC 168 note> Effective date.-- The amendment made by this subsection shall apply to property placed 

in service after December 31, 2012. 

(b) Algae Treated as a Qualified Feedstock for Purposes of Bonus Depreciation for Biofuel Plant Property.--

 (1) In general.-- Subparagraph (A) of section 168(l)(2) is amended by striking "solely to produce cellulosic biofuel" and [**2343] inserting "solely to produce second generation biofuel (as defined in section 40(b)(6)(E))". 

 (2) <26 USC 168> Conforming amendments.-- Subsection (l) of section 168, as amended by subsection (a), is 

amended--

 (A) by striking "cellulosic biofuel" each place it appears in the text thereof and inserting "second generation 

biofuel", 

 (B) by striking paragraph (3) and redesignating paragraphs (4) through (8) as paragraphs (3) through (7), respectively, 

 (C) by striking " Cellulosic" in the heading of such subsection and inserting " Second Generation", and 

 (D) by striking "cellulosic" in the heading of paragraph (2) and inserting "second generation". 

 (3) <26 USC 168 note> Effective date.-- The amendments made by this subsection shall apply to property 

placed in service after the date of the enactment of this Act. 

 [*411] Sec. 411. EXTENSION OF SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT 

FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR QUALIFIED ELECTRIC UTILITIES. 

(a) In General.--Paragraph (3) of section 451(i) is amended by striking "January 1, 2012" and inserting "January 1, 

2014". 

(b) <26 USC 451 note> Effective Date.--The amendment made by this section shall apply to dispositions after December 31, 2011. 

 [*412] Sec. 412. EXTENSION OF ALTERNATIVE FUELS EXCISE TAX CREDITS. 

224 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 27

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(a) In General.--Sections 6426(d)(5) and 6426(e)(3) are each amended by striking "December 31, 2011" and inserting "December 31, 2013". 

(b) Outlay Payments for Alternative Fuels.--Paragraph (6) of section 6427(e) is amended--

 (1) in subparagraph (C)--

 (A) by striking "or alternative fuel mixture (as defined in subsection (d)(2) or (e)(3) of section 6426)" and inserting "(as defined in section 6426(d)(2))", and 

 (B) by striking "December 31, 2011, and" and inserting "December 31, 2013,", 

 (2) in subparagraph (D)--

 (A) by striking "or alternative fuel mixture", and 

 (B) by striking the period at the end and inserting ", and", and 

 (3) by adding at the end the following new subparagraph: 

 "(E) any alternative fuel mixture (as defined in section 6426(e)(2)) sold or used after December 31, 2011.". 

(c) <26 USC 6426 note> Effective Date.--The amendments made by this section shall apply to fuel sold or used after December 31, 2011. 

 

 TITLE V--UNEMPLOYMENT 

 [*501] Sec. 501. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM. 

(a) Extension.--Section 4007(a)(2) of the Supplemental Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 

3304 note) is amended by striking "January 2, 2013" and inserting "January 1, 2014". 

 [**2344] (b) Funding.--Section 4004(e)(1) of the Supplemental Appropriations Act, 2008 (Public Law 110-252; 

26 U.S.C. 3304 note) is amended--

 (1) in subparagraph (H), by striking "and" at the end; and 

 (2) by inserting after subparagraph (I) the following: 

 "(J) the amendments made by section 501(a) of the American Taxpayer Relief Act of 2012;". 

(c) <26 USC 3304 note> Effective Date.--The amendments made by this section shall take effect as if included in 

the enactment of the Unemployment Benefits Extension Act of 2012 (Public Law 112-96)

 [*502] Sec. 502. TEMPORARY EXTENSION OF EXTENDED BENEFIT PROVISIONS. 

(a) In General.--Section 2005 of the Assistance for Unemployed Workers and Struggling Families Act, as contained 

in Public Law 111-5 (26 U.S.C. 3304 note), is amended--

 (1) by striking "December 31, 2012" each place it appears and inserting "December 31, 2013"; and 

 (2) in subsection (c), by striking "June 30, 2013" and inserting "June 30, 2014". 

(b) Extension of Matching for States With No Waiting Week.--Section 5 of the Unemployment Compensation Extension Act of 2008 (Public Law 110-449; 26 U.S.C. 3304 note) is amended by striking "June 30, 2013" and inserting 

"June 30, 2014". 

(c) Extension of Modification of Indicators Under the Extended Benefit Program.--Section 203 of the Federal-State 

Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is amended--

 (1) in subsection (d), by striking "December 31, 2012" and inserting "December 31, 2013"; and 

 (2) in subsection (f)(2), by striking "December 31, 2012" and inserting "December 31, 2013". 

(d) <26 USC 3304 note> Effective Date.--The amendments made by this section shall take effect as if included in 

the enactment of the Unemployment Benefits Extension Act of 2012 (Public Law 112-96). 

225 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 28

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [*503] Sec. 503. EXTENSION OF FUNDING FOR REEMPLOYMENT SERVICES AND REEMPLOYMENT 

AND ELIGIBILITY ASSESSMENT ACTIVITIES. 

(a) In General.--Section 4004(c)(2)(A) of the Supplemental Appropriations Act, 2008 (Public Law 110-252; 26 

U.S.C. 3304 note) is amended by striking "through fiscal year 2013" and inserting "through fiscal year 2014". 

(b) <26 USC 3304 note> Effective Date.--The amendments made by this section shall take effect as if included in 

the enactment of the Unemployment Benefits Extension Act of 2012 (Public Law 112-96). 

 [*504] Sec. 504. ADDITIONAL EXTENDED UNEMPLOYMENT BENEFITS UNDER THE RAILROAD 

UNEMPLOYMENT INSURANCE ACT. 

(a) Extension.--Section 2(c)(2)(D)(iii) of the Railroad Unemployment Insurance Act, as added by section 2006 of 

the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and as amended by section 9 of the Worker, 

Homeownership, and Business Assistance Act of 2009 (Public Law 111-92), section 505 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312), section 202 of the Temporary 

Payroll Tax Cut Continuation Act of 2011 (Public [**2345] Law 112-78), and section 2124 of the Unemployment 

Benefits Extension Act of 2012 (Public Law 112-96), is amended-- <45 USC 352> 

 (1) by striking "June 30, 2012" and inserting "June 30, 2013"; and 

 (2) by striking "December 31, 2012" and inserting "December 31, 2013". 

(b) <45 USC 352 note> Clarification on Authority to Use Funds.--Funds appropriated under either the first or second sentence of clause (iv) of section 2(c)(2)(D) of the Railroad Unemployment Insurance Act shall be available to 

cover the cost of additional extended unemployment benefits provided under such section 2(c)(2)(D) by reason of the 

amendments made by subsection (a) as well as to cover the cost of such benefits provided under such section 

2(c)(2)(D), as in effect on the day before the date of enactment of this Act. 

(c) Funding for Administration.--Out of any funds in the Treasury not otherwise appropriated, there are appropriated to the Railroad Retirement Board $ 250,000 for administrative expenses associated with the payment of additional 

extended unemployment benefits provided under section 2(c)(2)(D) of the Railroad Unemployment Insurance Act by 

reason of the amendments made by subsection (a), to remain available until expended. 

 

 TITLE VI--MEDICARE AND OTHER HEALTH EXTENSIONS 

 

 Subtitle A--Medicare Extensions 

 [*601] Sec. 601. MEDICARE PHYSICIAN PAYMENT UPDATE. 

(a) In General.--Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the 

end the following new paragraph: 

 "(14) Update for 2013.---- 

 "(A) In general.--Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), and (13)(B), in lieu of 

the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2013, the update to the single conversion factor for such year shall be zero percent. 

 "(B) No effect on computation of conversion factor for 2014 and subsequent years.--The conversion factor 

under this subsection shall be computed under paragraph (1)(A) for 2014 and subsequent years as if subparagraph (A) 

had never applied.". 

(b) Advancement of Clinical Data Registries To Improve the Quality of Health Care.--

 (1) In general.-- Section 1848(m)(3) of the Social Security Act (42 U.S.C. 1395w-4(m)(3)) is amended--

 (A) by redesignating subparagraph (D) as subparagraph (F); and 

 (B) by inserting after subparagraph (C) the following new subparagraphs: 

 "(D) Satisfactory reporting measures through participation in a qualified clinical data registry.--For 2014 and 

subsequent years, the Secretary shall treat [**2346] an eligible professional as satisfactorily submitting data on quality 

measures under subparagraph (A) if, in lieu of reporting measures under subsection (k)(2)(C), the eligible professional 

226 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 29

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

is satisfactorily participating, as determined by the Secretary, in a qualified clinical data registry (as described in subparagraph (E)) for the year. 

 "(E) Qualified clinical data registry.--

 "(i) In general.--The Secretary shall establish requirements for an entity to be considered a qualified clinical 

data registry. Such requirements shall include a requirement that the entity provide the Secretary with such information, 

at such times, and in such manner, as the Secretary determines necessary to carry out this subsection. 

 "(ii) Considerations.--In establishing the requirements under clause (i), the Secretary shall consider whether 

an entity--

 "(I) has in place mechanisms for the transparency of data elements and specifications, risk models, and 

measures; 

 "(II) requires the submission of data from participants with respect to multiple payers; 

 "(III) provides timely performance reports to participants at the individual participant level; and 

 "(IV) supports quality improvement initiatives for participants. 

 "(iii) Measures.--With respect to measures used by a qualified clinical data registry--

 "(I) sections 1890(b)(7) and 1890A(a) shall not apply; and 

 "(II) measures endorsed by the entity with a contract with the Secretary under section 1890(a) may be 

used. 

 "(iv) Consultation.--In carrying out this subparagraph, the Secretary shall consult with interested parties. 

 "(v) Determination.--The Secretary shall establish a process to determine whether or not an entity meets the 

requirements established under clause (i). Such process may involve one or both of the following: 

 "(I) A determination by the Secretary. 

 "(II) A designation by the Secretary of one or more independent organizations to make such determination.". 

 (2) GAO study and report on incorporating registry data into the Medicare program in order to improve quality 

and efficiency.---- 

 (A) Study.--The Comptroller General of the United States shall conduct a study on the potential of clinical data registries to improve the quality and efficiency of care in the Medicare program, including through payment system 

incentives. Such study shall include an analysis of the role of health information technology in facilitating clinical data 

registries and the use of data from such registries among private health insurers as well as other entities the Comptroller 

General determines appropriate. 

 [**2347] (B) Report.--Not later than November 15, 2013, the Comptroller General of the United States shall 

submit to Congress a report on the study conducted under subparagraph (A), together with recommendations for such 

legislation and administrative action as the Comptroller General determines appropriate. 

 [*602] Sec. 602. WORK GEOGRAPHIC ADJUSTMENT. 

Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-4(e)(1)(E)) is amended by striking "before January 1, 2013" and inserting "before January 1, 2014". 

 [*603] Sec. 603. PAYMENT FOR OUTPATIENT THERAPY SERVICES. 

(a) Extension.--Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is amended--

 (1) in paragraph (5)(A), in the first sentence, by striking "December 31, 2012" and inserting "December 31, 

2013"; and 

 (2) in paragraph (6)--

 (A) by striking "December 31, 2012" and inserting "December 31, 2013"; and 

227 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 30

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (B) by inserting "or 2013" after "during 2012". 

(b) Application of Therapy Cap to Therapy Furnished as Part of Outpatient Critical Access Hospital Services.--Section 1833(g)(6) of the Social Security Act (42 U.S.C. 1395l(g)(6)), as amended by subsection (a), is amended--

 (1) by striking "In applying" and inserting " (A) In applying"; and 

 (2) by adding at the end the following new subparagraph: 

"(B) (i) With respect to outpatient therapy services furnished beginning on or after January 1, 2013, and before 

January 1, 2014, for which payment is made under section 1834(g), the Secretary shall count toward the uniform dollar 

limitations described in paragraphs (1) and (3) and the threshold described in paragraph (5)(C) the amount that would be 

payable under this part if such services were paid under section 1834(k)(1)(B) instead of being paid under section 

1834(g). 

"(ii) Nothing in clause (i) shall be construed as changing the method of payment for outpatient therapy services under section 1834(g).". 

(c) Beneficiary Protections.--Section 1833(g)(5) of the Social Security Act (42 U.S.C. 1395l(g)(5)) is amended by 

adding at the end the following new subparagraph: 

"(D) With respect to services furnished on or after January 1, 2013, where payment may not be made as a result of 

application of paragraphs (1) and (3), section 1879 shall apply in the same manner as such section applies to a denial 

that is made by reason of section 1862(a)(1).". 

(d) <42 USC 1395l note> Implementation.--Notwithstanding any other provision of law, the Secretary of Health 

and Human Services may implement the provisions of, and the amendments made by, this section by program instruction or otherwise. 

 [*604] Sec. 604. AMBULANCE ADD-ON PAYMENTS. 

(a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)) is 

amended--

 (1) in the matter preceding clause (i), by striking "January 1, 2013" and inserting "January 1, 2014"; and 

 [**2348] (2) in each of clauses (i) and (ii), by striking "January 1, 2013" and inserting "January 1, 2014" each 

place it appears. 

(b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110-275), as amended by sections 3105(b) and 10311(b) of the Patient Protection and Affordable Care Act 

(Public Law 111-148), section 106(b) of the Medicare and Medicaid Extenders Act of 2010 (Public Law 111-309), section 306(b) of the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), and section 3007(b) of 

the Middle Class Tax Relief and Job Creation Act of <42 USC 1395m note> 2012 (Public Law 112-96), is amended by 

striking "December 31, 2012" and inserting "June 30, 2013". 

(c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is 

amended in the first sentence by striking "January 1, 2013" and inserting "January 1, 2014". 

(d) Studies of Ambulance Costs.--

 (1) In general.-- The Secretary of Health and Health and Human Services (in this subsection referred to as the 

"Secretary") shall conduct a study of each of the following: 

 (A) A study that analyzes data on existing cost reports for ambulance services furnished by hospitals and critical access hospitals, including variation by characteristics of such providers of services. 

 (B) A study of the feasibility of obtaining cost data on a periodic basis from all ambulance providers of services and suppliers for potential use in examining the appropriateness of the Medicare add-on payments for ground 

ambulance services furnished under the fee schedule under section 1834(l) of the Social Security Act (42 U.S.C. 

1395m(l)) and in preparing for future reform of such payment system. 

 (2) Components of one of the studies.-- In conducting the study under paragraph (1)(B), the Secretary shall--

228 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 31

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (A) consult with industry on the design of such cost collection efforts; 

 (B) explore use of cost surveys and cost reports to collect appropriate cost data and the periodicity of such cost 

data collection; 

 (C) examine the feasibility of development of a standard cost reporting tool for providers of services and suppliers of ground ambulance services; and 

 (D) examine the ability to furnish such cost data by various types of ambulance providers of services and suppliers, especially by rural and super-rural providers of services and suppliers. 

 (3) Reports.---- 

 (A) Existing cost reports.--Not later than October 1, 2013, the Secretary shall submit a report to Congress on 

the study conducted under paragraph (1)(A), together with recommendations for such legislation and administrative 

action as the Secretary determines appropriate. 

 (B) Obtaining cost data.--Not later than July 1, 2014, the Secretary shall submit a report to Congress on the 

study conducted under paragraph (1)(B), together with recommendations for such legislation and administrative action 

as the Secretary determines appropriate. 

 [*605] [**2349] Sec. 605. EXTENSION OF MEDICARE INPATIENT HOSPITAL PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS. 

Section 1886(d)(12) of the Social Security Act (42 U.S.C. 1395ww(d)(12)) is amended--

 (1) in subparagraph (B), in the matter preceding clause (i), by striking "2013" and inserting "2014"; 

 (2) in subparagraph (C)(i), by striking "and 2012" each place it appears and inserting ", 2012, and 2013"; and 

 (3) in subparagraph (D), by striking "and 2012" and inserting ", 2012, and 2013". 

 [*606] Sec. 606. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM. 

(a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the Social Security Act (42 U.S.C. 

1395ww(d)(5)(G)) is amended--

 (1) in clause (i), by striking "October 1, 2012" and inserting "October 1, 2013"; and 

 (2) in clause (ii)(II), by striking "October 1, 2012" and inserting "October 1, 2013". 

(b) Conforming Amendments.--

 (1) Extension of target amount.-- Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 

1395ww(b)(3)(D)) is amended--

 (A) in the matter preceding clause (i), by striking "October 1, 2012" and inserting "October 1, 2013"; and 

 (B) in clause (iv), by striking "through fiscal year 2012" and inserting "through fiscal year 2013". 

 (2) Permitting hospitals to decline reclassification.-- Section 13501(e)(2) of the Omnibus Budget Reconciliation 

Act of 1993 (42 U.S.C. 1395ww note) is amended by striking "through fiscal year 2012" and inserting "through fiscal 

year 2013". 

 [*607] Sec. 607. EXTENSION FOR SPECIALIZED MEDICARE ADVANTAGE PLANS FOR SPECIAL 

NEEDS INDIVIDUALS. 

Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-28(f)(1)) is amended by striking "2014" and inserting "2015". 

 [*608] Sec. 608. EXTENSION OF MEDICARE REASONABLE COST CONTRACTS. 

Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) is amended, in the matter 

preceding subclause (I), by striking "January 1, 2013" and inserting "January 1, 2014". 

 [*609] Sec. 609. PERFORMANCE IMPROVEMENT. 

(a) Extension of Funding for Contract With Consensus-based Entity Regarding Performance Measurement.--

229 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 32

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) In general.-- Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) is amended by striking "fiscal years 2009 through 2012" and inserting "fiscal years 2009 through 2013". 

 (2) Revision to duties.-- Section 1890(b) of the Social Security Act (42 U.S.C. 1395aaa(b)) is amended by striking paragraph (4). 

(b) Providing Data for Performance Improvement in a Timely Manner.--

 (1) In general.-- The Secretary of Health and Human Services (in this subsection referred to as the "Secretary") 

shall [**2350] develop a strategy to provide data for performance improvement in a timely manner to applicable providers under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), including with 

respect to the provision of the following: 

 (A) Utilization data, including such data for items and services under parts A, B, and D of the Medicare program. 

 (B) Feedback on quality data submitted by the applicable provider under the Medicare program. 

 (2) Considerations.-- In developing the strategy under paragraph (1), the Secretary shall consider--

 (A) the type of applicable provider receiving the data; 

 (B) the frequency of providing the data so that it can be the most relevant in improving provider performance; 

 (C) risk adjustment methods; 

 (D) presentation of the data in a meaningful manner and easily understandable format; 

 (E) with respect to utilization data, the provision of data that the Secretary determines would be useful to improve the performance of the type of applicable provider involved; and 

 (F) administrative costs involved with providing data. 

 (3) Submission and availability of initial strategy.-- Not later than 1 year after the date of the enactment of this 

Act, the Secretary shall--

 (A) submit to the relevant committees of Congress the strategy described in paragraph (1); and 

 (B) post such strategy on the website of the Centers for Medicare & Medicaid Services. 

 (4) Strategy update.---- 

 (A) Feedback from stakeholders.--The Secretary shall seek feedback from stakeholders on the initial strategy 

submitted under paragraph (3). 

 (B) Strategy update.--The Secretary shall--

 (i) update the strategy described in paragraph (1) based on the feedback submitted under subparagraph (A); 

and 

 (ii) not later than 18 months after the date of the enactment of this Act--

 (I) submit such updated strategy to the relevant committees of Congress; and 

 (II) post such updated strategy on the website of the Centers for Medicare & Medicaid Services. 

 (5) GAO study and report on private sector information sharing activities.---- 

 (A) Study.--The Comptroller General of the United States (in this paragraph referred to as the "Comptroller 

General") shall conduct a study on information sharing activities. Such study shall include an analysis of--

 (i) how private sector entities share timely data with hospitals, physicians, and other providers and what lessons can be learned from those activities; 

 (ii) how the Medicare program currently shares data with providers, including what data is provided and to 

which providers, and what divisions within the Centers for Medicare & Medicaid Services oversee those efforts; 

230 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 33

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 [**2351] (iii) what, if any, differences there are between the private sector and the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) in terms of sharing data; and 

 (iv) what, if any, barriers there are for the Centers for Medicare & Medicaid Services to sharing timely data 

with applicable providers and recommendations to eliminate or reduce such barriers. 

 (B) Report.--Not later than 8 months after the date of the enactment of this Act, the Comptroller General shall 

submit to the relevant committees of Congress a report containing the results of the study conducted under subparagraph 

(A), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 

 (6) Definitions.-- In this subsection: 

 (A) Applicable provider.--The term "applicable provider" means the following: 

 (i) A critical access hospital (as defined in section 1861(mm)(1) of the Social Security Act (42 U.S.C. 

1395xx(mm)(1))). 

 (ii) A hospital (as defined in section 1861(e) of such Act (42 U.S.C. 1395x(e))). 

 (iii) A physician (as defined in section 1861(r) of such Act (42 U.S.C. 1395x(r))). 

 (iv) Any other provider the Secretary determines should receive the information described in subsection (a). 

 (B) Performance improvement.--The term "performance improvement" means improvements in quality, reducing per capita costs, and other criteria the Secretary determines appropriate. 

 [*610] Sec. 610. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME PROGRAMS. 

(a) Additional Funding for State Health Insurance Programs.--Subsection (a)(1)(B) of section 119 of the Medicare 

Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note), as amended by section 3306 of the Patient Protection and Affordable Care Act Public Law 111-148), is amended--

 (1) in clause (i), by striking "and" at the end; 

 (2) in clause (ii), by striking the period at the end and inserting "; and"; and 

 (3) by inserting after clause (ii) the following new clause: 

 "(iii) for fiscal year 2013, of $ 7,500,000.". 

(b) Additional Funding for Area Agencies on Aging.--Subsection (b)(1)(B) of such section 119, as so amended, is 

amended--

 (1) in clause (i), by striking "and" at the end; 

 (2) in clause (ii), by striking the period at the end and inserting "; and"; and 

 (3) by inserting after clause (ii) the following new clause: 

 "(iii) for fiscal year 2013, of $ 7,500,000.". 

(c) Additional Funding for Aging and Disability Resource Centers.--Subsection (c)(1)(B) of such section 119, as so 

amended, is amended--

 (1) in clause (i), by striking "and" at the end; 

 [**2352] (2) in clause (ii), by striking the period at the end and inserting "; and"; and 

 (3) by inserting after clause (ii) the following new clause: 

 "(iii) for fiscal year 2013, of $ 5,000,000.". 

(d) Additional Funding for Contract With the National Center for Benefits and Outreach Enrollment.--Subsection 

(d)(2) of such section 119, as so amended, is amended--

 (1) in clause (i), by striking "and" at the end; 

231 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 34

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (2) in clause (ii), by striking the period at the end and inserting "; and"; and 

 (3) by inserting after clause (ii) the following new clause: 

 "(iii) for fiscal year 2013, of $ 5,000,000.". 

 

 Subtitle B--Other Health Extensions 

 [*621] Sec. 621. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) PROGRAM. 

(a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended 

by striking "2012" and inserting "2013". 

(b) Extending Total Amount Available for Allocation.--Section 1933(g) of such Act (42 U.S.C. 1396u-3(g)) is 

amended--

 (1) in paragraph (2)--

 (A) in subparagraph (Q), by striking "and" after the semicolon; 

 (B) in subparagraph (R), by striking the period at the end and inserting a semicolon; and 

 (C) by adding at the end the following new subparagraphs: 

 "(S) for the period that begins on January 1, 2013, and ends on September 30, 2013, the total allocation 

amount is $ 485,000,000; and 

 "(T) for the period that begins on October 1, 2013, and ends on December 31, 2013, the total allocation 

amount is $ 300,000,000."; and 

 (2) in paragraph (3), in the matter preceding subparagraph (A), by striking "or (R)" and inserting "(R), or (T)". 

 [*622] Sec. 622. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA). 

Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each 

amended by striking "2012" and inserting "2013". 

 [*623] Sec. 623. EXTENSION OF MEDICAID AND CHIP EXPRESS LANE OPTION. 

Section 1902(e)(13)(I) of the Social Security Act (42 U.S.C. 1396a(e)(13)(I)) is amended by striking "2013" and 

inserting "2014". 

 [*624] Sec. 624. EXTENSION OF FAMILY-TO-FAMILY HEALTH INFORMATION CENTERS. 

Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C. 701(c)(1)(A)(iii)) is amended by striking "2012" and 

inserting "2013". 

 [*625] Sec. 625. EXTENSION OF SPECIAL DIABETES PROGRAM FOR TYPE I DIABETES AND FOR 

INDIANS. 

(a) Special Diabetes Programs for Type I Diabetes.--Section 330B(b)(2)(C) of the Public Health Service Act (42 

U.S.C. 254c-2(b)(2)(C)) is amended by striking "2013" and inserting "2014". 

 [**2353] (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) of the Public Health Service Act (42 

U.S.C. 254c-3(c)(2)(C)) is amended by striking "2013" and inserting "2014". 

 

 Subtitle C--Other Health Provisions 

 [*631] Sec. 631. IPPS DOCUMENTATION AND CODING ADJUSTMENT FOR IMPLEMENTATION OF 

MS-DRGS. 

(a) Rule of Construction and Clarification.--

 (1) Rule of construction.-- Nothing in the amendments made by subsection (b) shall be construed as changing 

the existing authority under section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) to make prospective 

documentation and coding adjustments to the standardized amounts under such section 1886(d) to correct for changes in 

the coding or classification of discharges that do not reflect real changes in case mix. 

232 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 35

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (2) Clarification.-- Effective on the date of the enactment of this section, except as provided in section 

7(b)(1)(B)(ii) of the TMA, Abstinence Education, and QI Programs Extension Act of 2007, as added by subsection 

(b)(2)(A)(ii)(IV) of this section, the Secretary of Health and Human Services shall not have authority to fully recoup 

past overpayments related to documentation and coding changes from fiscal years 2008 and 2009. 

(b) Adjustment.--Section 7 of the TMA, Abstinence Education, and QI Programs Extension Act of 2007 (Public 

Law 110-90; 121 Stat. 986) is amended--

 (1) in the heading, by striking "limitation" and all that follows through "adjustment" and inserting "documentation and coding adjustments"; and 

 (2) in subsection (b)--

 (A) in paragraph (1)--

 (i) in the matter before subparagraph (A)--

 (I) by striking "or 2009" and inserting ", 2009, or 2010"; and 

 (II) by inserting "or otherwise applied for such year" after "applied under subsection (a)"; and 

 (ii) in subparagraph (B)--

 (I) by inserting "(i)" after "(B)"; 

 (II) by striking "or decrease"; 

 (III) by striking the period at the end and inserting "; and"; and 

 (IV) by adding at the end the following: 

 "(ii) make an additional adjustment to the standardized amounts under such section 1886(d) based upon the 

Secretary's estimates for discharges occurring only during fiscal years 2014, 2015, 2016, and 2017 to fully offset $ 

11,000,000,000 (which represents the amount of the increase in aggregate payments from fiscal years 2008 through 

2013 for which an adjustment was not previously applied)."; and 

 (B) in paragraph (3)--

 (i) in subparagraph (A), by inserting before the semicolon the following: "or affecting the Secretary's authority under such paragraph to apply a prospective [**2354] adjustment to offset aggregate additional payments related to 

documentation and coding improvements made with respect to discharges during fiscal year 2010"; and 

 (ii) in subparagraph (B), by striking "and 2012" and inserting "2012, 2014, 2015, 2016, and 2017". 

 [*632] Sec. 632. REVISIONS TO THE MEDICARE ESRD BUNDLED PAYMENT SYSTEM TO REFLECT 

FINDINGS IN THE GAO REPORT. 

(a) Adjustment to ESRD Bundled Payment Rate To Account for Changes in the Utilization of Certain Drugs and 

Biologicals.--Section 1881(b)(14) of the Social Security Act (42 U.S.C. 1395rr(b)(14)) is amended by adding at the end 

the following new subparagraph: 

"(I) For services furnished on or after January 1, 2014, the Secretary shall, by comparing per patient utilization data 

from 2007 with such data from 2012, make reductions to the single payment that would otherwise apply under this paragraph for renal dialysis services to reflect the Secretary's estimate of the change in the utilization of drugs and biologicals described in clauses (ii), (iii), and (iv) of subparagraph (B) (other than oral-only ESRD-related drugs, as such term 

is used in the final rule promulgated by the Secretary in the Federal Register on August 12, 2010 (75 Fed. Reg. 49030)). 

In making reductions under the preceding sentence, the Secretary shall take into account the most recently available 

data on average sales prices and changes in prices for drugs and biological reflected in the ESRD market basket percentage increase factor under subparagraph (F).". 

(b) <42 USC 1395rr note> Two-year Delay of Implementation of Oral-Only ESRD-Related Drugs in the ESRD 

Prospective Payment System; Monitoring.--

233 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 36

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) Delay.-- The Secretary of Health and Human Services may not implement the policy under section 

413.174(f)(6) of title 42, Code of Federal Regulations (relating to oral-only ESRD-related drugs in the ESRD prospective payment system), prior to January 1, 2016. 

 (2) Monitoring.-- With respect to the implementation of oral-only ESRD-related drugs in the ESRD prospective 

payment system under subsection (b)(14) of section 1881 of the Social Security Act (42 U.S.C. 1395rr(b)(14)), the Secretary of Health and Human Services shall monitor the bone and mineral metabolism of individuals with end stage renal 

disease. 

(c) <42 USC 1395rr note> Analysis of Case Mix Payment Adjustments.--By not later than January 1, 2016, the 

Secretary of Health and Human Services shall--

 (1) conduct an analysis of the case mix payment adjustments being used under section 1881(b)(14)(D)(i) of the 

Social Security Act (42 U.S.C. 1395rr(b)(14)(D)(i)); and 

 (2) make appropriate revisions to such case mix payment adjustments. 

(d) Updated GAO Report.--Not later than December 31, 2015, the Comptroller General of the United States shall 

submit to Congress a report that updates the report submitted to Congress under section 10336 of the Patient Protection 

and Affordable Care Act (Public Law 111-148; 124 Stat. 974). The updated report shall include an analysis of how the 

Secretary of Health and Human Services has addressed points raised in the report submitted under [**2355] such section 10336 with respect to the Secretary's preparations to implement payment for oral-only ESRD-related drugs in the 

bundled prospective payment system under section 1881(b)(14) of the Social Security Act (42 U.S.C. 1395rr(b)(14)). 

 [*633] Sec. 633. TREATMENT OF MULTIPLE SERVICE PAYMENT POLICIES FOR THERAPY SERVICES. 

(a) Services Furnished by Physicians and Certain Other Providers.--Section 1848(b)(7) of the Social Security Act 

(42 U.S.C. 1395w-4(b)(7)) is amended--

 (1) by striking "2011," and inserting "2011, and before April 1, 2013,"; and 

 (2) by adding at the end the following new sentence: "In the case of such services furnished on or after April 1, 

2013, and for which payment is made under such fee schedules, instead of the 25 percent multiple procedure payment 

reduction specified in such final rule, the reduction percentage shall be 50 percent.". 

(b) Services Furnished by Other Providers.--Section 1834(k) of the Social Security Act (42 U.S.C. 1395m(k)) is 

amended by adding at the end the following new paragraph: 

 "(7) Adjustment in discount for certain multiple therapy services.-- In the case of therapy services furnished on 

or after April 1, 2013, and for which payment is made under this subsection pursuant to the applicable fee schedule 

amount (as defined in paragraph (3)), instead of the 25 percent multiple procedure payment reduction specified in the 

final rule published by the Secretary in the Federal Register on November 29, 2010, the reduction percentage shall be 50 

percent.". 

 [*634] Sec. 634. PAYMENT FOR CERTAIN RADIOLOGY SERVICES FURNISHED UNDER THE MEDICARE HOSPITAL OUTPATIENT DEPARTMENT PROSPECTIVE PAYMENT SYSTEM. 

Section 1833(t)(16) of the Social Security Act (42 U.S.C. 1395l(t)(16)) is amended by adding at the end the following new subparagraph: 

 "(D) Special payment rule.--

 "(i) In general.--In the case of covered OPD services furnished on or after April 1, 2013, in a hospital described in clause (ii), if--

 "(I) the payment rate that would otherwise apply under this subsection for stereotactic radiosurgery, complete course of treatment of cranial lesion(s) consisting of 1 session that is multi-source Cobalt 60 based (identified as of 

January 1, 2013, by HCPCS code 77371 (and any succeeding code) and reimbursed as of such date under APC 0127 

(and any succeeding classification group)); exceeds 

 "(II) the payment rate that would otherwise apply under this subsection for linear accelerator based stereotactic radiosurgery, complete course of therapy in one session (identified as of January 1, 2013, by HCPCS code G0173 

234 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 37

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(and any succeeding code) and reimbursed as of such date under APC 0067 (and any succeeding classification group)), 

[**2356] the payment rate for the service described in subclause (I) shall be reduced to an amount equal to the payment rate for the service described in subclause (II). 

 "(ii) Hospital described.--A hospital described in this clause is a hospital that is not--

 "(I) located in a rural area (as defined in section 1886(d)(2)(D)); 

 "(II) classified as a rural referral center under section 1886(d)(5)(C); or 

 "(III) a sole community hospital (as defined in section 1886(d)(5)(D)(iii)). 

 "(iii) Not budget neutral.--In making any budget neutrality adjustments under this subsection for 2013 (with 

respect to covered OPD services furnished on or after April 1, 2013, and before January 1, 2014) or a subsequent year, 

the Secretary shall not take into account the reduced expenditures that result from the application of this subparagraph.". 

 [*635] Sec. 635. ADJUSTMENT OF EQUIPMENT UTILIZATION RATE FOR ADVANCED IMAGING 

SERVICES. 

Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended--

 (1) in subsection (b)(4)(C)--

 (A) by striking "and subsequent years" and inserting ", 2012, and 2013"; and 

 (B) by adding at the end the following new sentence: "With respect to fee schedules established for 2014 and 

subsequent years, in such methodology, the Secretary shall use a 90 percent utilization rate."; and 

 (2) in subsection (c)(2)(B)(v)(III), by striking "change in the utilization rate applicable to 2011, as described in" 

and inserting "changes in the utilization rate applicable to 2011 and 2014, as described in the first and second sentence, 

respectively, of". 

 [*636] Sec. 636. MEDICARE PAYMENT OF COMPETITIVE PRICES FOR DIABETIC SUPPLIES AND 

ELIMINATION OF OVERPAYMENT FOR DIABETIC SUPPLIES. 

(a) Application of Competitive Bidding Prices for Diabetic Supplies.--Section 1834(a)(1) of the Social Security Act 

(42 U.S.C. 1395m(a)(1)) is amended--

 (1) in subparagraph (F), in the matter preceding clause (i), by striking "subparagraph (G)" and inserting "subparagraphs (G) and (H)"; and 

 (2) by adding at the end the following new subparagraph: 

 "(H) Diabetic supplies.--

 "(i) In general.--On or after the date described in clause (ii), the payment amount under this part for diabetic 

supplies, including testing strips, that are non-mail order items (as defined by the Secretary) shall be equal to the single 

payment amounts established under the national mail order competition for diabetic supplies under section 1847. 

 "(ii) Date described.--The date described in this clause is the date of the implementation of the single payment amounts under the national mail order competition for diabetic supplies under section 1847.". 

 [**2357] (b) Overpayment Elimination for Diabetic Supplies.--Section 1834(a) of the Social Security Act (42 

U.S.C. 1395m(a)) is amended by adding at the end the following new paragraph: 

 "(22) Special payment rule for diabetic supplies.-- Notwithstanding the preceding provisions of this subsection, 

for purposes of determining the payment amount under this subsection for diabetic supplies furnished on or after the 

first day of the calendar quarter during 2013 that is at least 30 days after the date of the enactment of this paragraph and 

before the date described in paragraph (1)(H)(ii), the Secretary shall recalculate and apply the covered item update under paragraph (14) as if subparagraph (J)(i) of such paragraph was amended by striking 'but only if furnished through 

mail order'.". 

 [*637] Sec. 637. MEDICARE PAYMENT ADJUSTMENT FOR NON-EMERGENCY AMBULANCE 

TRANSPORTS FOR ESRD BENEFICIARIES. 

235 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 38

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

Section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)) is amended by adding at the end the following new 

paragraph: 

 "(15) Payment adjustment for non-emergency ambulance transports for ESRD beneficiaries.-- The fee schedule 

amount otherwise applicable under the preceding provisions of this subsection shall be reduced by 10 percent for ambulance services furnished on or after October 1, 2013, consisting of non-emergency basic life support services involving transport of an individual with end-stage renal disease for renal dialysis services (as described in section 

1881(b)(14)(B)) furnished other than on an emergency basis by a provider of services or a renal dialysis facility.". 

 [*638] Sec. 638. REMOVING OBSTACLES TO COLLECTION OF OVERPAYMENTS. 

(a) In General.--The last sentence of subsections (b) and (c) of section 1870 of the Social Security Act (42 U.S.C. 

1395gg) are each amended--

 (1) by striking "third year" and inserting "fifth year"; and 

 (2) by striking "three-year" and inserting "five-year". 

(b) <42 USC 1395gg note> Effective Date.--The amendments made by subsection (a) shall take effect on the date 

of the enactment of this Act. 

 [*639] Sec. 639. MEDICARE ADVANTAGE CODING INTENSITY ADJUSTMENT. 

Section 1853(a)(1)(C)(ii)(III) of the Social Security Act (42 U.S.C. 1395w-23(a)(1)(C)(ii)(III)) is amended--

 (1) by striking "1.3 percentage points" and inserting "1.5 percentage points"; and 

 (2) by striking "5.7 percent" and inserting "5.9 percent". 

 [*640] Sec. 640. ELIMINATION OF ALL FUNDING FOR THE MEDICARE IMPROVEMENT FUND. 

Section 1898(b)(1) of the Social Security Act (42 U.S.C. 1395iii(b)(1)) is amended by striking subparagraphs (A), 

(B), and (C) and inserting the following new subparagraphs: 

 "(A) fiscal year 2014, $ 0; and 

 "(B) fiscal year 2015, $ 0.". 

 [*641] Sec. 641. REBASING OF STATE DSH ALLOTMENTS. 

Section 1923(f)(8) of the Social Security Act (42 U.S.C. 1396r-4(f)(8)) is amended to read as follows: 

 [**2358] "(8) Special rules for calculating DSH allotments for certain fiscal years.----

 "(A) Fiscal year 2021.--Only with respect to fiscal year 2021, the DSH allotment for a State, in lieu of the 

amount determined under paragraph (3) for the State for that year, shall be equal to the DSH allotment for the State as 

reduced under paragraph (7) for fiscal year 2020, increased, subject to subparagraphs (B) and (C) of paragraph (3), and 

paragraph (5), by the percentage change in the consumer price index for all urban consumers (all items; U.S. city average), for fiscal year 2020. 

 "(B) Fiscal year 2022.--Only with respect to fiscal year 2022, the DSH allotment for a State, in lieu of the 

amount determined under paragraph (3) for the State for that year, shall be equal to the DSH allotment for the State for 

fiscal year 2021, as determined under subparagraph (A), increased, subject to subparagraphs (B) and (C) of paragraph 

(3), and paragraph (5), by the percentage change in the consumer price index for all urban consumers (all items; U.S. 

city average), for fiscal year 2021. 

 "(C) Subsequent fiscal years.--The DSH allotment for a State for fiscal years after fiscal year 2022 shall be 

calculated under paragraph (3) without regard to this paragraph and paragraph (7).". 

 [*642] Sec. 642. REPEAL OF CLASS PROGRAM. 

(a) <42 USC 300ll300ll9> Repeal.--Title XXXII of the Public Health Service Act (42 U.S.C. 300ll et seq.; relating 

to the CLASS program) is repealed. 

(b) Conforming Changes.--

236 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 39

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) Title VIII of the Patient Protection and Affordable Care <42 USC 201 note, 300ll notes> Act (Public Law 

111-148; 124 Stat. 119, 846-847) is repealed. 

 (2) Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended--

 (A) by striking paragraphs (81) and (82); 

 (B) in paragraph (80), by inserting "and" at the end; and 

 (C) by redesignating paragraph (83) as paragraph (81).

 (3) Paragraphs (2) and (3) of section 6021(d) of the Deficit Reduction Act of 2005 (42 U.S.C. 1396p note) are 

amended to read as such paragraphs were in effect on the day before the date of the enactment of section 8002(d) of the 

Patient Protection and Affordable Care Act (Public Law 111-148). Of the funds appropriated by paragraph (3) of such 

section 6021(d), as amended by the Patient Protection and Affordable Care Act, the unobligated balance is rescinded. 

 [*643] Sec. 643. COMMISSION ON LONG-TERM CARE. 

(a) Establishment.--There is established a commission to be known as the Commission on Long-Term Care (referred to in this section as the "Commission"). 

(b) Duties.--

 (1) In general.-- The Commission shall develop a plan for the establishment, implementation, and financing of a 

comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for 

individuals in need of such services and supports, including elderly individuals, individuals with substantial cognitive or 

functional limitations, other individuals who require assistance to perform [**2359] activities of daily living, and individuals desiring to plan for future long-term care needs. 

 (2) Existing health care programs.-- For purposes of developing the plan described in paragraph (1), the Commission shall provide recommendations for--

 (A) addressing the interaction of a long-term services and support system with existing programs for long-term 

services and supports, including the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 

seq.) and the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), and private 

long-term care insurance; 

 (B) improvements to such health care programs that are necessary for ensuring the availability of long-term 

services and supports; and 

 (C) issues related to workers who provide long-term services and supports, including--

 (i) whether the number of such workers is adequate to provide long-term services and supports to individuals 

with long-term care needs; 

 (ii) workforce development necessary to deliver high-quality services to such individuals; 

 (iii) development of entities that have the capacity to serve as employers and fiscal agents for workers who 

provide long-term services and supports in the homes of such individuals; and 

 (iv) addressing gaps in Federal and State infrastructure that prevent delivery of high-quality long term services and supports to such individuals. 

 (3) Additional considerations.-- For purposes of developing the plan described in paragraph (1), the Commission 

shall take into account projected demographic changes and trends in the population of the United States, as well as the 

potential for development of new technologies, delivery systems, or other mechanisms to improve the availability and 

quality of long-term services and supports. 

 (4) Consultation.-- For purposes of developing the plan described in paragraph (1), the Commission shall consult 

with the Medicare Payment Advisory Commission, the Medicaid and CHIP Payment and Access Commission, the National Council on Disability, and relevant consumer groups. 

(c) Membership.--

237 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 40

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (1) In general.-- The Commission shall be composed of 15 members, to be appointed not later than 30 days after 

the date of enactment of this Act, as follows: 

 (A) The President of the United States shall appoint 3 members. 

 (B) The majority leader of the Senate shall appoint 3 members. 

 (C) The minority leader of the Senate shall appoint 3 members. 

 (D) The Speaker of the House of Representatives shall appoint 3 members. 

 (E) The minority leader of the House of Representatives shall appoint 3 members. 

 (2) Representation.-- The membership of the Commission shall include individuals who--

 [**2360] (A) represent the interests of--

 (i) consumers of long-term services and supports and related insurance products, as well as their representatives; 

 (ii) older adults; 

 (iii) individuals with cognitive or functional limitations; 

 (iv) family caregivers for individuals described in clause (i), (ii), or (iii); 

 (v) the health care workforce who directly provide long-term services and supports; 

 (vi) private long-term care insurance providers; 

 (vii) employers; 

 (viii) State insurance departments; and 

 (ix) State Medicaid agencies; 

 (B) have demonstrated experience in dealing with issues related to long-term services and supports, health care 

policy, and public and private insurance; and 

 (C) represent the health care interests and needs of a variety of geographic areas and demographic groups. 

 (3) Chairman and vice-chairman.-- The Commission shall elect a chairman and vice chairman from among its 

members. 

 (4) Vacancies.-- Any vacancy in the membership of the Commission shall be filled in the manner in which the 

original appointment was made and shall not affect the power of the remaining members to execute the duties of the 

Commission. 

 (5) Quorum.-- A quorum shall consist of 8 members of the Commission, except that 4 members may conduct a 

hearing under subsection (e)(1). 

 (6) Meetings.-- The Commission shall meet at the call of its chairman or a majority of its members. 

 (7) Compensation and reimbursement of expenses.---- 

 (A) In general.--To enable the Commission to exercise its powers, functions, and duties, there are authorized 

to be disbursed by the Senate the actual and necessary expenses of the Commission approved by the chairman and vice 

chairman, subject to subparagraph (B) and the rules and regulations of the Senate. 

 (B) Members.--Members of the Commission are not entitled to receive compensation for service on the Commission. Members may be reimbursed for travel, subsistence, and other necessary expenses incurred in carrying out the 

duties of the Commission. 

(d) Staff and Ethical Standards.--

 (1) Staff.-- The chairman and vice chairman of the Commission may jointly appoint and fix the compensation of 

staff as they deem necessary, within the guidelines for employees of the Senate and following all applicable rules and 

employment requirements of the Senate. 

238 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 41

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (2) Ethical standards.-- Members of the Commission who serve in the House of Representatives shall be governed by the ethics rules and requirements of the House. Members of the Senate who serve on the Commission and staff 

of the Commission shall comply with the ethics rules of the Senate. 

(e) Powers.--

 (1) Hearings and other activities.-- For the purpose of carrying out its duties, the Commission may hold such 

hearings [**2361] and undertake such other activities as the Commission determines to be necessary to carry out its 

duties. 

 (2) Studies by general accounting office.-- Upon the request of the Commission, the Comptroller General of the 

United States shall conduct such studies or investigations as the Commission determines to be necessary to carry out its 

duties. 

 (3) Cost estimates by congressional budget office.-- Upon the request of the Commission, the Director of the 

Congressional Budget Office shall provide to the Commission such cost estimates as the Commission determines to be 

necessary to carry out its duties. 

 (4) Detail of federal employees.-- Upon the request of the Commission, the head of any Federal agency is authorized to detail, without reimbursement, any of the personnel of such agency to the Commission to assist the Commission in carrying out its duties. Any such detail shall not interrupt or otherwise affect the civil service status or privileges of the Federal employee. 

 (5) Technical assistance.-- Upon the request of the Commission, the head of a Federal agency shall provide such 

technical assistance to the Commission as the Commission determines to be necessary to carry out its duties. 

 (6) Use of mails.-- The Commission may use the United States mails in the same manner and under the same 

conditions as Federal agencies. 

 (7) Obtaining information.-- The Commission may secure directly from any Federal agency information necessary to enable it to carry out its duties, if the information may be disclosed under section 552 of title 5, United States 

Code. Upon request of the Chairman of the Commission, the head of such agency shall furnish such information to the 

Commission. 

 (8) Administrative support services.-- Upon the request of the Commission, the Administrator of General Services shall provide to the Commission on a reimbursable basis such administrative support services as the Commission 

may request. 

(f) Commission Consideration.--

 (1) Approval of report and legislative language.---- 

 (A) In general.--Not later than 6 months after appointment of the members of the Commission (as described in 

subsection (c)(1)), the Commission shall vote on a comprehensive and detailed report based on the long-term care plan 

described in subsection (b)(1) that contains any recommendations or proposals for legislative or administrative action as 

the Commission deems appropriate, including proposed legislative language to carry out the recommendations or proposals (referred to in this section as the "Commission bill"). 

 (B) Approval by majority of members.--The Commission bill shall require the approval of a majority of the 

members of the Commission. 

 (2) Transmission of commission bill.---- 

 (A) In general.--If the Commission bill is approved by the Commission pursuant to paragraph (1), then not 

later than 10 days after such approval, the Commission [**2362] shall submit the Commission bill to the President, the 

Vice President, the Speaker of the House of Representatives, and the majority and minority Leaders of each House on 

Congress. 

 (B) Commission bill to be made public.--Upon the approval or disapproval of the Commission bill pursuant to 

paragraph (1), the Commission shall promptly make such proposal, and a record of the vote, available to the public. 

(g) Termination.--The Commission shall terminate 30 days after the vote described in subsection (f)(1). 

239 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 42

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(h) Consideration of Commission Recommendations.--If approved by the majority required by subsection (f)(1), 

the Commission bill that has been submitted pursuant to subsection (f)(2)(A) shall be introduced in the Senate (by request) on the next day on which the Senate is in session by the majority leader of the Senate or by a Member of the Senate designated by the majority leader of the Senate and shall be introduced in the House of Representatives (by request) 

on the next legislative day by the majority leader of the House or by a member of the House designated by the majority 

leader of the House. 

 [*644] Sec. 644. CONSUMER OPERATED AND ORIENTED PLAN PROGRAM CONTINGENCY FUND. 

(a) <42 USC 18042 note> Establishment.--The Secretary of Health and Human Services shall establish a fund to be 

used to provide assistance and oversight to qualified nonprofit health insurance issuers that have been awarded loans or 

grants under section 1322 of the Patient Protection and Affordable Care Act (42 U.S.C. 18042) prior to the date of enactment of this Act. 

(b) Transfer and Rescission.--

 (1) Transfer.-- From the unobligated balance of funds appropriated under section 1322(g) of the Patient Protection and Affordable Care Act (42 U.S.C. 18042(g)), 10 percent of such sums are hereby transferred to the fund established under subsection (a) to remain available until expended. 

 (2) Rescission.-- Except as provided for in paragraph (1), amounts appropriated under section 1322(g) of the Patient Protection and Affordable Care Act (42 U.S.C. 18042(g)) that are unobligated as of the date of enactment of this 

Act are rescinded. 

 

 TITLE VII--EXTENSION OF AGRICULTURAL PROGRAMS 

 [*701] Sec. 701. <7 USC 8701 note> 1-YEAR EXTENSION OF AGRICULTURAL PROGRAMS. 

(a) Extension.--Except as otherwise provided in this section and amendments made by this section and notwithstanding any other provision of law, the authorities provided by each provision of the Food, Conservation, and Energy 

Act of 2008 (Public Law 110-246; 122 Stat. 1651) and each amendment made by that Act (and for mandatory programs at such funding levels), as in effect on September 30, 2012, shall continue, and the Secretary of Agriculture shall 

carry out the authorities, until the later of--

 (1) September 30, 2013; or 

 [**2363] (2) the date specified in the provision of that Act or amendment made by that Act. 

(b) Commodity Programs.--

 (1) In general.-- The terms and conditions applicable to a covered commodity or loan commodity (as those terms 

are defined in section 1001 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8702)) or to peanuts, sugarcane, or sugar beets for the 2012 crop year pursuant to title I of that Act (7 U.S.C. 8702 et seq.) and each amendment 

made by that title shall be applicable to the 2013 crop year for that covered commodity, loan commodity, peanuts, sugarcane, or sugar beets. 

 (2) Milk.---- 

 (A) In general.--Notwithstanding subsection (a), the Secretary of Agriculture shall carry out the dairy product 

price support program under section 1501 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8771) through 

December 31, 2013. 

 (B) Milk income loss contract program.--Section 1506 of the Food, Conservation, and Energy Act of 2008 (7 

U.S.C. 8773) is amended by striking "2012" each place <7 USC 8773 note> it appears in subsections (c)(3), (d)(1), 

(d)(2), (e)(2)(A), (g), and (h)(1) and inserting "2013". 

 (3) Suspension of permanent price support authorities.-- The provisions of law specified in subsections (a) 

through (c) of section 1602 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8782) shall be suspended--

 (A) for the 2013 crop or production year of a covered commodity (as that term is defined in section 1001 of 

that Act (7 U.S.C. 8702)), peanuts, sugarcane, and sugar, as appropriate; and 

 (B) in the case of milk, through December 31, 2013. 

240 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 43

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

(c) Conservation Programs.--

 (1) Conservation reserve.-- Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended in 

the second sentence by striking "and 2012" and inserting "2012, and 2013". 

 (2) Voluntary public access.-- Section 1240R of the Food Security Act of 1985 (16 U.S.C. 3839bb-5) is amended by striking subsection (f) and inserting the following: 

"(f) Funding.--

 "(1) Fiscal years 2009 through 2012.-- Of the funds of the Commodity Credit Corporation, the Secretary shall 

use to carry out this section, to the maximum extent practicable, $ 50,000,000 for the period of fiscal years 2009 

through 2012. 

 "(2) Authorization of appropriations.-- There is authorized to be appropriated to carry out this section $ 

10,000,000 for fiscal year 2013.". 

(d) Supplemental Nutrition Assistance Program.--

 (1) Employment and training program.-- Section 16(h)(1)(A) of the Food and Nutrition Act of 2008 (7 U.S.C. 

2025(h)(1)(A)) is amended by inserting ", except that for fiscal year 2013, the amount shall be $ 79,000,000" before the 

period at the end. 

 (2) Nutrition education.-- Section 28(d)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 2036a(d)(1)) is 

amended--

 (A) in subparagraph (A), by striking "and" after the semicolon at the end; and 

 [**2364] (B) by striking subparagraph (B) and inserting the following: 

 "(B) for fiscal year 2012, $ 388,000,000; 

 "(C) for fiscal year 2013, $ 285,000,000; 

 "(D) for fiscal year 2014, $ 401,000,000; 

 "(E) for fiscal year 2015, $ 407,000,000; and 

 "(F) for fiscal year 2016 and each subsequent fiscal year, the applicable amount during the preceding fiscal 

year, as adjusted to reflect any increases for the 12-month period ending the preceding June 30 in the Consumer Price 

Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.". 

(e) Research Programs.--

 (1) Organic agriculture research and extension initiative.-- Section 1672B(f) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b(f)) is amended--

 (A) in the heading of paragraph (1), by striking "In general" and inserting "Mandatory funding for fiscal years 

2009 through 2012"; 

 (B) in the heading of paragraph (2), by striking "Additional funding" and inserting "Discretionary funding for 

fiscal years 2009 through 2012"; and 

 (C) by adding at the end the following: 

 "(3) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 25,000,000 for fiscal 

year 2013.". 

 (2) Specialty crop research initiative.-- Section 412(h) of the Agricultural Research, Extension, and Education 

Reform Act of 1998 (7 U.S.C. 7632(h)) is amended--

 (A) in the heading of paragraph (1), by striking "In general" and inserting "Mandatory funding for fiscal years 

2008 through 2012"; 

 (B) in the heading of paragraph (2), by inserting "for fiscal years 2008 through 2012" after "Appropriations"; 

 (C) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and 

241 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 44

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (D) by inserting after paragraph (2) the following: 

 "(3) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 100,000,000 for fiscal 

year 2013.". 

 (3) Beginning farmer and rancher development program.-- Section 7405(h) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 3319f(h)) is amended--

 (A) in the heading of paragraph (1), by striking "In general" and inserting "Mandatory funding for fiscal years 

2009 through 2012"; 

 (B) in the heading of paragraph (2), by inserting "for fiscal years 2008 through 2012" after "Appropriations"; 

and 

 (C) by adding at the end the following: 

 "(3) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 30,000,000 for fiscal 

year 2013.". 

(f) Energy Programs.--

 (1) Biobased markets program.-- Section 9002(h) of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8102(h)) [**2365] is amended in paragraph (2) by striking "2012" and inserting "2013". 

 (2) Biorefinery assistance.-- Section 9003(h)(2) of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8103(h)(2)) is amended by striking "2012" and inserting "2013". 

 (3) Repowering assistance.-- Section 9004(d)(2) of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8104(d)(2)) is amended by striking "2012" and inserting "2013".

 (4) Bioenergy program for advanced biofuels.-- Section 9005(g)(2) of the Farm Security and Rural Investment 

Act of 2002 (7 U.S.C. 8105(g)(2)) is amended by striking "2012" and inserting "2013". 

 (5) Biodiesel fuel education program.-- Section 9006 of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8106) is amended by striking subsection (d) and inserting the following: 

"(d) Funding.--

 "(1) Fiscal years 2009 through 2012.-- Of the funds of the Commodity Credit Corporation, the Secretary shall 

use to carry out this section $ 1,000,000 for each of fiscal years 2008 through 2012. 

 "(2) Authorization of appropriations.-- There is authorized to be appropriated to carry out this section $ 

1,000,000 for fiscal year 2013.". 

 (6) Rural energy for America program.-- Section 9007(g)(3) of the Farm Security and Rural Investment Act of 

2002 (7 U.S.C. 8107(g)(3)) is amended by striking "2012" and inserting "2013". 

 (7) Biomass research and development.-- Section 9008(h)(2) of the Farm Security and Rural Investment Act of 

2002 (7 U.S.C. 8108(h)(2)) is amended by striking "2012" and inserting "2013". 

 (8) Rural energy self-sufficiency initiative.-- Section 9009(d) of the Farm Security and Rural Investment Act of 

2002 (7 U.S.C. 8109(d)) is amended by striking "2012" and inserting "2013". 

 (9) Feedstock flexibility program for bioenergy producers.-- Section 9010(b) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8110(b)) is amended in paragraphs (1)(A) and (2)(A) by striking "2012" each place it 

appears and inserting "2013". 

 (10) Biomass crop assistance program.-- Section 9011(f) of the Farm Security and Rural Investment Act of 2002 

(7 U.S.C. 8111(f)) is amended--

 (A) by striking " (f) Funding.--Of the funds" and inserting " (f) Funding.--

 "(1) Fiscal years 2008 through 2012.-- Of the funds"; and 

 (B) adding at the end the following: 

 "(2) Fiscal year 2013.---- 

242 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 45

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(A) In general.--There is authorized to be appropriated to carry out this section $ 20,000,000 for fiscal year 

2013.

 "(B) Multiyear contracts.--For each multiyear contract entered into by the Secretary during a fiscal year under 

this paragraph, the Secretary shall ensure that sufficient funds are obligated from the amounts appropriated [**2366] 

for that fiscal year to fully cover all payments required by the contract for all years of the contract.". 

 (11) Forest biomass for energy.-- Section 9012(d) of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8112(d)) is amended by striking "2012" and inserting "2013". 

 (12) Community wood energy program.-- Section 9013(e) of the Farm Security and Rural Investment Act of 

2002 (7 U.S.C. 8113(e)) is amended by striking "2012" and inserting "2013". 

(g) Horticulture and Organic Agriculture Programs.--

 (1) Farmers market promotion program.-- Section 6(e) of the Farmer-to-Consumer Direct Marketing Act of 1976 

(7 U.S.C. 3005(e)) is amended--

 (A) in the heading of paragraph (1), by striking "In general" and inserting "Fiscal years 2008 through 2012"; 

 (B) by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (4), and (5), respectively; 

 (C) by inserting after paragraph (1) the following: 

 "(2) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 10,000,000 for fiscal 

year 2013."; 

 (D) in paragraph (3) (as so redesignated), by striking "paragraph (1)" and inserting "paragraph (1) or (2)"; and 

 (E) in paragraph (5) (as so redesignated), by striking "paragraph (2)" and inserting "paragraph (3)". 

 (2) National clean plant network.-- Section 10202(e) of the Food, Conservation, and Energy Act of 2008 (7 

U.S.C. 7761(e)) is amended--

 (A) by striking "Of the funds" and inserting the following: 

 "(1) Fiscal years 2009 through 2012.-- Of the funds"; and 

 (B) by adding at the end the following: 

 "(2) Fiscal year 2013.-- There is authorized to be appropriated to carry out the Program $ 5,000,000 for fiscal 

year 2013.". 

 (3) National organic certification cost-share program.-- Section 10606 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523) is amended--

 (A) in subsection (a), by striking "Of funds of the Commodity Credit Corporation, the Secretary of Agriculture 

(acting through the Agricultural Marketing Service) shall use $ 22,000,000 for fiscal year 2008, to remain available until expended, to" and inserting "The Secretary of Agriculture (acting through the Agricultural Marketing Service) shall"; 

and 

 (B) by adding at the end the following: 

"(d) Funding.--

 "(1) Mandatory funding for fiscal years 2008 through 2012.-- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section $ 22,000,000 for the period of fiscal years 2008 through 

2012.

 "(2) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 22,000,000 for fiscal 

year 2013, to remain available until expended.". 

 (4) Organic production and market data initiatives.-- Section 7407(d) of the Farm Security and Rural Investment 

Act of 2002 (7 U.S.C. 5925c(d)) is amended--

 [**2367] (A) in the heading of paragraph (1), by striking "In general" and inserting "Mandatory funding 

through fiscal year 2012"; 

243 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 46

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (B) in the heading of paragraph (2), by striking "Additional funding" and inserting "Discretionary funding for 

fiscal years 2008 through 2012"; and 

 (C) by adding at the end the following: 

 "(3) Fiscal year 2013.-- There is authorized to be appropriated to carry out this section $ 5,000,000, to remain 

available until expended.". 

(h) Outreach and Technical Assistance for Socially Disadvantaged Farmers or Ranchers.--Section 2501(a)(4) of the 

Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(a)(4)) is amended--

 (1) in the heading of subparagraph (A), by striking "In general" and inserting "Fiscal years 2009 through 2012"; 

 (2) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively; 

 (3) by inserting after subparagraph (A) the following: 

 "(B) Fiscal year 2013.--There is authorized to be appropriated to carry out this section $ 20,000,000 for fiscal 

year 2013."; 

 (4) in subparagraph (C) (as so redesignated), by striking "subparagraph (A)" and inserting "subparagraph (A) or 

(B)"; and 

 (5) in subparagraph (D) (as so redesignated), by striking "subparagraph (A)" and inserting "subparagraph (A) or 

(B)". 

(i) Exceptions.--

 (1) In general.-- Subsection (a) does not apply with respect to mandatory funding provided by programs authorized by provisions of law amended by subsections (d) through (h). 

 (2) Conservation.-- Subsection (a) does not apply with respect to the programs specified in paragraphs (3)(B), 

(4), (6), and (7) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)), relating to the conservation 

stewardship program, farmland protection program, environmental quality incentives program, and wildlife habitat incentives program, for which program authority was extended through fiscal year 2014 by section 716 of Public Law 

112-55 ( 125 Stat. 582). 

 (3) Trade.-- Subsection (a) does not apply with respect to the following provisions of law: 

 (A) Section 3206 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 1726c) relating to the use of 

Commodity Credit Corporation funds to support local and regional food aid procurement projects. 

 (B) Section 3107(l)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 1736o-1(l)(1)) relating to the use of Commodity Credit Corporation funds to carry out the McGovern-Dole International Food for Education and Child Nutrition Program. 

 (4) Survey of foods purchased by school food authorities.-- Subsection (a) does not apply with respect to section 

4307 of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat. 1893) relating to the use of 

Commodity Credit Corporation funds for a survey and report regarding foods purchased by school food authorities. 

 [**2368] (5) Rural development.-- Subsection (a) does not apply with respect to the following provisions of 

law: 

 (A) Section 379E(d)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008s(d)(1)), relating 

to funding of the rural microentrepreneur assistance program. 

 (B) Section 6029 of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat. 1955) 

relating to funding of pending rural development loan and grant applications. 

 (C) Section 231(b)(7)(A) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1632a(b)(7)(A)), relating 

to funding of value-added agricultural market development program grants. 

 (D) Section 375(e)(6)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008j(e)(6)(B)) relating to the use of Commodity Credit Corporation funds for the National Sheep Industry Improvement Center. 

244 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 47

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (6) Market loss assistance for asparagus producers.-- Subsection (a) does not apply with respect to section 

10404(d) of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat. 2112). 

 (7) Supplemental agricultural disaster assistance.-- Subsection (a) does not apply with respect to section 531 of 

the Federal Crop Insurance Act (7 U.S.C. 1531) and title IX of the Trade Act of 1974 (19 U.S.C. 2497 et seq.) relating 

to the provision of supplemental agricultural disaster assistance. 

 (8) Pigford claims.-- Subsection (a) does not apply with respect to section 14012 of the Food, Conservation, and 

Energy Act of 2008 (Public Law 110-246; 122 Stat. 2209) relating to determination on the merits of Pigford claims. 

 (9) Heartland, habitat, harvest, and horticulture act of 2008.-- Subsection (a) does not apply with respect to title 

XV of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat. 2246), and amendments made 

by that title, relating to the provision of supplemental agricultural disaster assistance under title IX of the Trade Act of 

1974 (19 U.S.C. 2497 et seq.), certain revenue and tax provisions, and certain trade benefits and other matters. 

(j) Effective Date.--Except as otherwise provided in this section, this section and the amendments made by this section take effect on the earlier of--

 (1) the date of the enactment of this Act; or 

 (2) September 30, 2012. 

 [*702] Sec. 702. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE. 

(a) In General.--Section 531 of the Federal Crop Insurance Act (7 U.S.C. 1531) is amended--

 (1) in subsection (a)(5)--

 (A) in the matter preceding clause (i), by striking the first "under"; and 

 (B) by redesignating clauses (i) through (iii) as subparagraphs (A), (B), and (C), respectively, and indenting 

appropriately; 

 (2) in subsection (c)--

 (A) in paragraph (1), by striking "use such sums as are necessary from the Trust Fund to"; and 

 [**2369] (B) by adding at the end the following: 

 "(3) Authorization of appropriations.-- There is authorized to be appropriated to carry out this subsection $ 

80,000,000 for each of fiscal years 2012 and 2013."; 

 (3) in subsection (d)--

 (A) in paragraph (2), by striking "use such sums as are necessary from the Trust Fund to"; and 

 (B) by adding at the end the following: 

 "(7) Authorization of appropriations.-- There is authorized to be appropriated to carry out this subsection $ 

400,000,000 for each of fiscal years 2012 and 2013."; 

 (4) in subsection (e)--

 (A) in paragraph (1), by striking "use up to $ 50,000,000 per year from the Trust Fund to"; and 

 (B) by adding at the end the following: 

 "(4) Authorization of appropriations.-- There is authorized to be appropriated to carry out this subsection $ 

50,000,000 for each of fiscal years 2012 and 2013."; 

 (5) in subsection (f)--

 (A) in paragraph (2)(A), by striking "use such sums as are necessary from the Trust Fund to"; and 

 (B) by adding at the end the following: 

 "(5) Authorization of appropriations.-- There is authorized to be appropriated to carry out this subsection $ 

20,000,000 for each of fiscal years 2012 and 2013."; and 

245 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 48

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 (6) in subsection (i), by inserting "or, in the case of subsections (c) through (f), September 30, 2013" after 

"2011,". 

(b) <7 USC 1531 note> Effective Date.--The amendments made by subsection (a) shall take effect on October 1, 

2012.

 

 TITLE VIII--MISCELLANEOUS PROVISIONS 

 [*801] Sec. 801. STRATEGIC DELIVERY SYSTEMS. 

(a) In General.--Paragraph 3 of section 495(c) of title 10, United States Code,, as added by section 1035 of the National Defense Authorization Act for Fiscal Year 2013, is amended--

 (1) by striking "that" before "the Russian Federation" and inserting "whether"; and 

 (2) by inserting "strategic" before "arms control obligations". 

(b) <10 USC 495 note> Effective Date.--The amendments made by subsection (a) shall take effect as if included in 

the enactment of the National Defense Authorization Act for Fiscal Year 2013. 

 [*802] Sec. 802. NO COST OF LIVING ADJUSTMENT IN PAY OF MEMBERS OF CONGRESS. 

Notwithstanding any other provision of law, no adjustment <2 USC 31 note> shall be made under section 601(a) of 

the Legislative Reorganization Act of 1946 (2 U.S.C. 31) (relating to cost of living adjustments for Members of Congress) during fiscal year 2013. 

 

 [**2370] TITLE IX--BUDGET PROVISIONS 

 

 Subtitle A--Modifications of Sequestration 

 [*901] Sec. 901. TREATMENT OF SEQUESTER. 

(a) <2 USC 901a> Adjustment.--Section 251A(3) of the Balanced Budget and Emergency Deficit Control Act of 

1985 is amended--

 (1) in subparagraph (C), by striking "and" after the semicolon; 

 (2) in subparagraph (D), by striking the period and inserting" ; and"; and 

 (3) by inserting at the end the following: 

 "(E) for fiscal year 2013, reducing the amount calculated under subparagraphs (A) through (D) by $ 

24,000,000,000.". 

(b) After Session Sequester.--Notwithstanding any other provision of law, the fiscal year 2013 spending reductions 

required by section 251(a)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 shall be evaluated 

and implemented on March 27, 2013. 

(c) Postponement of Budget Control Act Sequester for Fiscal Year 2013.--Section 251A of the Balanced Budget 

and Emergency Deficit Control Act of 1985 is amended--

 (1) in paragraph (4), by striking "January 2, 2013" and inserting "March 1, 2013"; and 

 (2) in paragraph (7)(A), by striking "January 2, 2013" and inserting "March 1, 2013". 

(d) Additional Adjustments.--

 (1) Section 251.-- Paragraphs (2) and (3) of section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 <2 USC 901> are amended to read as follows: 

 "(2) for fiscal year 2013--

 "(A) for the security category, as defined in section 250(c)(4)(B), $ 684,000,000,000 in budget authority; and 

 "(B) for the nonsecurity category, as defined in section 250(c)(4)(A), $ 359,000,000,000 in budget authority; 

 "(3) for fiscal year 2014--

246 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 49

112 P.L. 240, *; 126 Stat. 2313, **; 

2013 Enacted H.R. 8; 112 Enacted H.R. 8 

 "(A) for the security category, $ 552,000,000,000 in budget authority; and 

 "(B) for the nonsecurity category, $ 506,000,000,000 in budget authority;". 

(e) <2 USC 901a note> 2013 Sequester.--On March 1, 2013, the President shall order a sequestration for fiscal year 

2013 pursuant to section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by this 

section, pursuant to which, only for the purposes of the calculation in sections 251A(5)(A), 251A(6)(A), and 

251A(7)(A), section 251(c)(2) shall be applied as if it read as follows: 

 "(2) For fiscal year 2013--

 "(A) for the security category, $ 544,000,000,000 in budget authority; and 

 "(B) for the nonsecurity category, $ 499,000,000,000 in budget authority;". 

 [*902] [**2371] Sec. 902. AMOUNTS IN APPLICABLE RETIREMENT PLANS MAY BE TRANSFERRED TO DESIGNATED ROTH ACCOUNTS WITHOUT DISTRIBUTION. 

(a) <26 USC 402A> In General.--Section 402A(c)(4) is amended by adding at the end the following: 

 "(E) Special rule for certain transfers.--In the case of an applicable retirement plan which includes a qualified 

Roth contribution program--

 "(i) the plan may allow an individual to elect to have the plan transfer any amount not otherwise distributable under the plan to a designated Roth account maintained for the benefit of the individual, 

 "(ii) such transfer shall be treated as a distribution to which this paragraph applies which was contributed in 

a qualified rollover contribution (within the meaning of section 408A(e)) to such account, and 

 "(iii) the plan shall not be treated as violating the provisions of section 401(k)(2)(B)(i), 403(b)(7)(A)(i), 

403(b)(11), or 457(d)(1)(A), or of section 8433 of title 5, United States Code, solely by reason of such transfer.". 

(b) <26 USC 402A note> Effective Date.--The amendment made by this section shall apply to transfers after December 31, 2012, in taxable years ending after such date. 

 

 Subtitle B--Budgetary Effects 

 [*911] Sec. 911. BUDGETARY EFFECTS. 

(a) PAYGO Scorecard.--The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010. 

(b) Senate PAYGO Scorecard.--The budgetary effects of this Act shall not be entered on any PAYGO scorecard 

maintained for purposes of section 201 of S. Con. Res. 21 (110th Congress). 

 

Speaker of the House of Representatives. 

Vice President of the United States and President of the Senate. 

DESCRIPTORS: AGRICULTURAL POLICIES; AGRICULTURAL SUBSIDIES; BUDGET DEFICITS; CHILDREN; COMMODITIES; CONGRESS; CORPORATE TAX; COST OF LIVING; DAIRY INDUSTRY AND 

PRODUCTS; DEPARTMENT OF AGRICULTURE; DIESEL FUEL; DISASTER RELIEF; EMPLOYMENT; ENERGY CONSERVATION; ENERGY RESOURCES; FARMS AND FARMERS; FEDERAL AID TO RURAL AREAS; FOOD ASSISTANCE; GIFTS AND DONATIONS; INCOME TAXES; MEDICAID; MEDICAL ECONOMICS; 

MEDICAL REGULATION; MEDICARE; MINES AND MINING; MORTGAGES; MOTION PICTURES; NATIVE 

AMERICANS; NEW YORK CITY; PHYSICIANS; PUERTO RICO; RAILROADS; RESEARCH; SALES TAX; 

SECURITIES; SYNTHETIC FUELS; TAX INCENTIVES AND SHELTERS; TELEVISION; TUITION AND FEES; 

UNEMPLOYMENT COMPENSATION; 112 PL 240 

247 DCMA Administrative Record for FY 2013 Furlough Appeals
SECRETARY OF DEFENSE 

1000 DEFENSE PENTAGON 

WASHINGTON, DC 20301-1000 

MEMORANDUM FOR: SEE DISTRIBUTION 

SUBJECT: Implications of Ongoing Fiscal Cliff Negotiations 

DEC 2 0 2012 

We are providing you this infonnation regarding the potential impact of sequestration 

here at DoD. A1l you are all likely aware, the Administration and Congress are contirtuing to 

work to resolve a series of economic or fiscal events, collectively referred to as the-'~fiscal cliff," 

that are scheduled to occur around the end of the year. One of the key issues involves potential 

across·the·board reductions in Federal spending-also known as usequesttation"-w.bich were 

put in place by the Budget Conlrol Act of2011. Under. current law, these reductions are 

scheduled to take effect on Janumy :2,2013. Many of you have J'llised questions regarding the 

impact of a potential sequestration fOr the Department of Defense, and I would like to take a 

moment to clarify a few things. 

I want to stan by noting that this past summer, the President indicated his intent to 

exercise his legal authority to exempt Dlililaiy personnel funding from sequestration. This means 

that military endstrength wilt not be affected by sequestration in FY2013. 

Our civilian employees should keep in mind that the Administration remains focused on 

working with Congress to reach agreement on a balanud deficit reduction plan that avoids such 

cuts. Sequestration was never intended to be implemented, and there is no reason why both sides 

should not be able to come together andprevent this scenario. 

Nevertheless, with only a couple. of weeks left before sequestration .could occur should a 

deal not be reached, it is important to clarify the potential implications. Let me stan by 

explaining what sequestration is and what ifis not; Sequestration is an across-th .. board 

reduction in budgetary resources for all aocounts within tluf.Department of Defense that have not 

been exempted by Congress: If it occurs, sequestratio!l will reduce our budgetary resources for 

the remainder of the fiscal year (which runs thmugh September 30). These cuts, while 

significant and harmful to our collective mission as an agency, would not necessarily-require 

immediate reductions in spending. Under sequestration, we would still have funds available 

after January 2, 2013, but our overall funding for the temainder,ofthe year would be reduced. 

Accordingly, this situBtiottis diffe'rent froin other scenarjos we hav_e_ encountered in recent years, 

such as threats of government shutdown due to a lapse in appropriations. 

For these reasons, I do not expect our day-to-day operations to change dramatically on or 

immediately after Janumy 2, 2013, should sequestration occur. This means that we will not be 

executing any immediate civiJian personnel actions, such as furloughs, on that date. Should we 

have to operate Wlder reduced funding levels for an extended period of time, we may have to 

consider furloughs or other actions in the fiiture. But let me assure you that we. will carefully 

examine other options to reduce costs within the agency before taking such action, taking into 

080015618-12 

248 DCMA Administrative Record for FY 2013 Furlough Appeals
considemtion our obligation to execute our core lllisslon. Moreover, if such action proves to be 

necessary, We would provide affected employees the requisiie advam:e notice before a furlough 

or other pelSOnnell!Ction would ocelli. We would also inunediately tam:el any scheduled 

pelSOnnel actions should a deficit Rlduction agreelllent be Uhed that restores our agency 

fimlling. 

I WliDI to assure you that we will do out very best to provide clear infbnnation about the 

staluli of events as they unfold. · 

Finally,let ine ~my gratitude dllling this holiday season for. your coniiliUed hard 

work and dedication to the vital ml!ISionoftbe DepattmentofDefense. Your comributioDs touch 

people's lives In many Significant ways, and l want you to know how deeply appreciative the 

Presidentand myself are for all that youdo. 

DISTRIBliTION: . 

SECKETARIESOJiinJE:MILITARYDEI'ARTMENTs 

CHAIRMAN OF llttUOlNT'OHllll.'SOFSTAFF 

UNJ)ER SECIUlTARIBS OF DEFENSE . 

DEPUTY CHIEF ~AGEMENXOl'FICER 

COMMANDERS OFlliECOMBATANT coMMANDs 

DIRECTOR. COST ASSESSMBNt':ANJ) PROORAM EVALUATION 

DIREC'I'OR, OPERATIONAL Tll&TJUID EVALlTATION 

oENERAL:CbuNSELOF TIIEilliPAR.'h.mNToFl>EFENSE 

INSPECTOR GENERAL OF lliEDEPARTMENT OF DEFENSE 

ASSISTANT SECRETAR.!Bs OF DEFENSE 

DEPARTMENT OF DEFENSE CHIEF INFORMATION OFFICER 

ASSISTANTS TOTIIESECRETARYOFDEFI!NSE 

DIRECTOR, ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF TilE DEFENSE AGENCIES 

DIRECTORS OF Tim DOD FIELD ACTIVtrlES 

2 

249 DCMA Administrative Record for FY 2013 Furlough Appeals
"'r r-orce Allm!nlstrative Record for FY 2013 Furlough Appeals 

DEPUTY SECRETARY OF DEFENSE 

1010 DEFENSE PENTAGON 

WASHINGTON, DC 20301-1010 

MEMORANDUM FOR: SEE DISTRIBUTION 

SUBJECT: Guidance on Fiscal Year 2013 Joint Committee Sequestration 

SEP 2 5 2012 

The Budget Control Ac!of20 I I (BCA) established the Joint Select Committee on 

Deficit Reduction (Joint Committee) and charged it with developing a proposal that would 

achieve at least $1.2 trillion in deficit reduction. Last November, the Joint Committee 

announced that it could not reach agreement on a deficit reduction plan. This failure triggered an 

enforcement mechanism of automatic funding cuts in Fiscal Year (FY) 2013, known as 

sequestration, above and beyond the reductions alreadY reflected . .in the FY 2013 budget the 

Department submitted in February. The law requires the President to issue a sequestration order 

on January 2, 2013, to implement the required cuts unless Coi:tgress acts to.avoid it. 

The additional funding cuts required uuder the BCA are very large. A recent report by 

the Office of Management and Budget (OMB) estimates that the cuts in the Departlilent of 

Defense (DoD) budget would exceed $50 billion in FY 2013 alone. The law further requires that 

the FY 2013 cuts be implemented in an indiscriminate, across-the-board manner that will greatly 

exacerbate their adverse effects. These large· cuts would lead to devastati~g effects on the 

Department and virtually every other Federal agency. For this reason, the Administration 

strongly believes that Congress needs to act to avoid sequestration by passing a balanced deficit 

reduction package that the President can sign. 

If Congress fails to enact balanced deficit reduction and avoid sequestration, DoD and 

other affected agencies must be prepared, under the BCA, to implement sequestration on Jaimary 

2. 2013. On July 31,2012, OMB issued the attached guidance infonning agencies that OMB 

will be consulting with them on matters related to the i~uance of the sequestration Order. Over 

the loii.ger term, in the absence of congressional action on a balanced deficit reduction plan in 

advance of January 2, 2013, OMB will undertake tidditionaJ activities related to the 

implementation of the sequestration. Within DoD, the Under Secretary of Defense (Comptroller) 

will take the lead in these efforts and, working with OMB as necessary, will ensure that the 

Departmeni is ready to implerD.ent sequestration in January if it occurs. 

080011885-12 

001 

250 DCMA Administrative Record for FY 2013 Furlough Appeals
1-11r rorce Aomm1s1ra11ve Kecora tor t-Y 2013 Furlough Appears 

In the meantime, consisient with OMB guidance, DoD needs to continue normal 

spending and operations. We do not want our programs, personnel, and activities to begin to 

suffer the hamiful effects of sequestration while there is still a chance it can be avoided. I am 

therefore directing that all commanders and managers in the Department of Defense continue the 

defense mission under current laws and policies, without taldng any steps that assume 

sequestration will occur. Commanders should not, for example, curtail planned training, 

maintenance, healthcare or family programs. Commanders and managers should not alarm our 

employees and their families by announculg personnel actions related to sequestration or by 

suggesting that these actions are likely. Nor should commanders and managers hold back on the 

obligation of funds - either for investments or for operating programs -if those funds would 

have been obligated in the absence of the sequester ihieat. 

If you have questions aboi.rt this guidance, please consult your chain of command. 

Addressees on this memo who have.questions should direct them to the Under Secretary Of 

Defense (Comptroller). 

Attachment: 

As stated 

2 

002 

251 DCMA Administrative Record for FY 2013 Furlough Appeals
Air Force Adlrinistratlve Record for FY 2013 Furlough Appears 

DISTRIBUTION: 

SECRETARIES OF DIE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CHIEFS OF STAFF 

UNDER SECRETARIES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFICER 

COMMANDERS OF THE COMBATANT COMMANDS 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE 

ASSISTANT SECRET ARIES OF DEFENSE 

DEPARTMENT OF DEFENSE CHIEF INFORMATION OFFICER 

ASSISTANTS TO THE SECRETARY OF DEFENSE 

DIRECTOR, ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSE AGENCIES 

DIRECTORS OF THE DOD FIELD ACTIVITIES 

3 

003 

252 DCMA Administrative Record for FY 2013 Furlough Appeals
M-12-17 

..... r rorce AamlniStrauve Record for FY 2013 Furlough Appears 

EXECUllVE OFFICE OF THE PRESIDENT 

OFACE OF MANAGEMENT ANC BUDGET 

WAI3WoiGTON. D.C. 20503 

July31,2012 

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 

FROM: Jeflrey D. Zie£ I\\ v ActingD~\Y 

SUJlJECT: Issues Raised by Potential Sequestration Pursuant To Section 251A of the 

Balanced Budget and Emergency Deficit Control Act of 1985 

Passed by bipartisan majorities in both houses of the Congress, the Budget Control Act of 

2011 (BCA; Public Law 112-25) amended the Balanced Budget and Emergency Deficit Control 

Act of 1985 (BBEDCA) to put into place an automatic process of across-the-board reductions in 

budgetary resources, known as a sequestration, specified in an order to be issoed on January 2, 

2013, if the Joint Select Committee on Deficit Reduction failed to propose, and the Congress 

failed to enact, a bill containing at least $1.2 trillion in deficit reduction. 

The President has mede clear that the Congress should act to avoid such a sequestration. 

If allowed to occur, the sequestration would be highly destructive to national security and 

domestic priorities, as well as to core government functions. To avoid this, the President 

submitted a budget for 2013 that includes a comprehensive and balanced set of propoaals that 

contain greater deficit reduction than the Congress was charged with achieving. Tbe 

Administration believes the Congress should redouble its efforts to reduce the deficit in a 

bipartisan, balanced, and fiscally responsible manner and avoid the sequestration. 

If Congress were to enact the requisite deficit reduction messures and avoid the 

sequestration, there would be no need to take steps to issue the sequestration order, and then to 

develop plans for agency oparations for the remainder of FY 2013 within the constraints of that 

order. These sequestration planning and implementstion activities, once nndertaken, will 

necessarily divert scarce resources .from other important agency activities and priorities. The 

President remains confident that Congress will act, but because it has not yet made progress 

towards enacting sufficient deficit reduction, the Office of Management and Budget (OMB) will 

work with agencies, as necessary, on issues raised by a sequestration of this magnitude. 

To that end, OMB will be holding discussions on these issues with you and your staff 

over the coming months. ln the near term. OMB will consult with you on such topics as the 

application to your ageD.cy's accounts and programs of the exemptions from sequestration 

contained in section 255 ofBBEDCA and the applicable sequestration rules specified in section 

256 ofBBEDCA. These discussions should be informed by your General Counsel's analysis of 

how the requirements ofBBEDCA, as amended by the BCA, and other statutory authorities 

OSD009393-12 

004 

253 DCMA Administrative Record for FY 2013 Furlough Appeals
Alr Force Administrative Record for FY 2013 Furlough Appeals 

apply to a particular issue involving your agency. OMB will also engage with agencies on 

anticipated reporting requirements established by Congress that are related to, but separate from, 

planning for or implementing a sequestration order under the BCA. 

Over the longer term, in the absence of Congressional aetion on a balanced deficit 

reduction plan in advance ofJanuary 2, 2013, OMB will undertake additional activities related to 

the implementation of the BCA. OMB will work with agencies, as necessary, on issues 

surrounding the sequestration order and its implementation. For example, sequeotrable amounts 

can only be calculated once FY 2013 fimding levels are known; therefore, shortly before any 

sequestration order is issued, OMB will collect information from agencies on sequestmble 

amounts and, where applicable, unobligated balances, and calculate the percentage reductions 

necessary to implement the sequestration. In the meantime, agencies should continue normal 

spending _and operations since more than 5 months remain for Congress to act. 

The steps described above are necessary to prepare for the contingency of having to issue 

a sequesllafion order, but they do not change the fuct that sequestiation is bad policy, was never 

meant to be implemented, and should be avoided threngh the enactment ofbipartiaan, balanced 

deficit legislation. The Administration urges the Congress to take this course. 

2 

005 

254 DCMA Administrative Record for FY 2013 Furlough Appeals
DEPUTY SECRETARY.OF DEFENSE 

I()IC> DEFENSE PENTAGON 

WASHINGTON. DC 20301-1010 

!Reference (c) I 

MEMORANDUM FOR: SEE DISTRIBUTION JUN 0 3 2012 

SUBJECT: Guidance for Lilllitation on Aggregate Annual Amount Available for Contracted 

SerVices 

This memorandum provides guidance (Attachment I) regarding compliance with 

section 808 of the NationBI Defense Authorization A~t for Fiscal Year 2012, P.L. 112-81. 

Section 808 limits the amount of funds the Department may obligate for contract services in 

FY 2012 and FY 2013. Consisten.t with this statutory language; the Department's obligations for 

all contracted services shall not exceed, in FY 2012 and FY 2013, the total amount requested for 

the Department for all contracted services in the President's FY 2010 budget submission, 

excluding Contracted -services relating. to- overseas cont-ingency-opetations~ militarY construction, 

and research and development. -EB.ch Component must take action to_ ensure compliance with the 

limitation on the aggregate amount for· cohtracted services reflected in your FY 2012-enacted 

budget and FY 2013 Presideot's Budget request. 

Given the nature of how appropriated funds are allocated to fulfill requirements for 

contracted services and the .fiict we are well into the year_ of executionJor FY 2012, _compliance 

with section 808 will require close· cootdinstion among all stakeholders. Execution will be 

measured using obligations from base :fuilds, reported semi-annually in the Department's 

accounting systems as described in Attachment- 2, to~ensure that there is no migration or growth 

of contracted services that were excluded from the FY 2010 baseline and as tracked against 

Component services portfolios and contractor inventories. 

Questions regarding this guidance should be directed to thdollowing points of contact: 

Office ofthe Under Secretary of Defense (OUSD) (Comptroller): Mr. Keith Anderson 

(keith,anderson@osd.mil); OUSD (Personnel and Readiness): Ms. Amy Parker 

(amy.parker@osd.ntil) and Mr. Thomas Hessel (thomas.hessel@osd.mil); and 

OUSD (Atquisitiol), Technology and Logistics): Mr. John Tenaglia Gohn.tenaglia@osd.mil) 

and Mr. Jeffrey Grover Geffrey.grover@osd.ntil). 

Attachments: 

As stated 

0 OSDDD6113-12 

255 DCMA Administrative Record for FY 2013 Furlough Appeals
The Department is currently precluded, under a moratorium, from conducting public-private 

competitions. This prohibits the conversion of any work currently performed (or designated for 

performance) by civilian personnel to cortlract performance. This prohibition applies to functions and 

work assigned to civilians, regardless of whether or not the position is encumbered. When new 

requirements arise, such as those thst may occur as military end-strength levels are reduced, special 

considemtion must first be provided, consistent with section 2463 of title I 0, U .S.C., and applicable 

Department policies, to using Department ofDefense civilian employees. This includes billets and 

work that may have been unencumbered for an extended period of time. 

Please ensure maximum distribution of this memomndum across your organi2Biion,.particularly 

to your manpower, personnel, and acquisition communities. Questions regarding implementation/ 

enforcement of this memo should be addressed to my points of contact Mr. Thomas Hessel 

(thomas.hessel@osd.mil or 703-597-3402}and Ms. Amy Patker (llllly.parker@osd.mil or 703-697-

1735). 

256 DCMA Administrative Record for FY 2013 Furlough Appeals
UNDER SECRETARY OF DEFENSE . 4000 DEJ=-E PEtfrAGON 

WASHJNGTON, D.C. 20301-4000 

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CHIEFS OF STAFF 

UNDER SECRETARIES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFfCER 

C01Y!MANJ)ERS OF THE COMBAT ANT COMMANDS 

ASSISTANT SECRETARIES OF DEFENSE 

!Reference (d) I 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

INSPECTOR GENERAL OF tHE DEPARTMENT OF DEFENSE 

ASSISTANTS TO TilE SECRETARY OF DEFENSE 

DIRECTOR. ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSEAGENCIES 

DIRECTORS OF TilE DoD FIELD ACTIVITIES 

SUBJECT: Guidance Relate<;~ to the Utilizlltion of Military Manpower to Perform .Certain Functions 

This memorandUm ad~ the. use of''fepwposed", or "borro~", military manpower (both 

active and reserve) to perfcmn new, el<J>lnding, or existing missions, aod most specifically work that is 

most appropriately aligned to non"military resources, including work recently performed by 

government civi!iaos or through eonlral:ted services, 

The Department's "sourcing" of necessary f\mctions and work between military, civilian, and 

contracted services must be consistent wi!h applicable laws and ·policies; as well as workload 

requirements, fUnding availability, Nadiness 1111d maoagement needs. Declining operating tempos may 

reslllt in a perception that military peisonllel will be available to fill.staffing shortfalls for non-military 

essential functions or workload. This is particularly true as. the Deparllnent faces declining budgets and 

continues to implement efficiency initiatives. While there may be instanees where military peiSonnel 

can be used to appropriately satisfy a near-terlll deniand, the Deparllnentmust be vigilant in ellsuring 

military peiSOnnel are not inappropriately utilized, particularly in .a manner that may degrade readiness. 

To ensure efficient and effective Total Force MIU1agernent, Compollellts shall bal~Ut~e these needs and 

consider !he following in sbapins their workforce and assigned militiuy personnel. 

Consistent with DoD !nstrulition 1100.22, "Policy and Procedures for Determining Wor/iforce 

Mix" (Aprll 2010), tasks that are not military essential in nature must be designated for government 

civilian personnel,. or contract performance where appropriate. Exceptions will be based upon a 

demonstrated and documented military J:J.eed ·e.g., to provide -a reasonable overseas rotation or career 

progression base. Cemponerrts shall refer to DoD Instruction 1100.22 for the Criteria to determine 

appropriateness of military personnel utilization. 

257 DCMA Administrative Record for FY 2013 Furlough Appeals
DISTRIBUTION: 

SECRETARIES OF THE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CIDEFS OF STAFF 

UNDER SECRET ARIES OF DEFENSE 

COMMANDERS OF THE COMBATANT COMMANDS 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE 

ASSISTANT SECRETARIES OF DEFENSE 

ASSISTANTS TO THE SECRETARY OF DEFENSE 

DIRECTOR, ADMINISTRATION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSE AGENCIES 

DIRECTORS OF THE DOD FIELD ACTIVITIES 

PRESIDENT, DEFENSE ACQUISITION UNNERSITY 

PRESIDENT, NATIONAL DEFENSE UNNERSITY 

2 

258 DCMA Administrative Record for FY 2013 Furlough Appeals
Guidance to Implement Section 808 of the National Defense Authorization Act for 

Fiscal Year 2012,P.L.112-81 

1. The primary means by which the Department is to meet or be below the aggregate annual 

limitation for contracted services is for the individual Military Departments and Defense 

Components to limit obligations for contrncted services to the FY 2012 enacted budget 

amount and FY 2013 President's Budget request. The following adjustments apply: 

a. Excluding amounts allocated for overseas contingency operations, military 

construction, and research, development, test and evaluation; 

b. locluding all object classification code 25 categories, except 25.3 (Other goods and 

services from Federal sources) and 25.6 (Medical Care) as defined in DoD Financial 

Management Regulation 7000.14-R Volume 1: General Financial Management 

loformation, Systems and Requirements, Appendix A; 

c. Excluding statutory exceptions for offsetting cost increases associated with the 

number of civilian billets approved above the number of billets in the FY 20 I 0 

civilian personnel baseline as part of the Department's efficiencies initiatives; and 

d. Excluding amounts adjusted for net trnnsfer from funding for overseas contingency 

operations. 

Except where approved increases to the current limitations on civilian personnel occur, 

each Military Department and Defense Agency will not exceed the FY 2012 President's 

Budget enacted amount for contract services and FY 2013 President's Budget request for 

the Department to meet the aggregate limitation, as reflected in this attachment. 

2. For all contracts or task orders with an estimated value of more than $I 0,000,000 

awarded for contracted services in FY 2012 or FY 2013, contracting officers shall 

establish negotiation objectives for direct labor and overhead rates that are less than or 

equal to direct labor and overhead rates paid to that contractor for the same or similar 

contracted services in FY 2010. Contracting officers shall coordinate with the Defense 

Contrnct Management Agency and the Defense Contrnct Audit Agency to determine the 

applicable rates. In the event such contracts or task orders are to be awarded that provide 

for continuing services at an annual cost that exceeds the annual cost paid by the Military 

Department or Defense Agency/Field Activity for the same or similar services paid in 

FY 20!0, the Secretary of the Military Department or the Head of the Defense 

Agency/Field Activity must provide written approval prior to contract award or order 

issuance. 

3. The Secretaries of the Military Departments and the Heads of the Defense Agencies/Field 

Activities (to include the Offices of the Secretary of Defense, the Joint Staff, the 

Combatant ColJllllands, and all other organizations of the Department of Defense) shall 

identify and eliminate any instance where such organization is utilizing contracted 

services to perform inherently governmental functions. In instances where inherently 

governmental functions are found to be perfonned under contract, the department or 

Attachment 1 

259 DCMA Administrative Record for FY 2013 Furlough Appeals
agency shall take immediate actions to either in-source the work to government civilian 

performance or immediately divest the function and associated workload, reducing the 

scope of the contract. The term "inherently governmental ftmctions" is defined in the 

Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of 

Inherently Governmental and Critical Functions, available online at 

(bttp://www.whitehouse.gov/omb!procurement_ index_ work _performance/). 

4. The Secretaries of the Military Departments and the Heads of the Defense Components 

(to include the Offices of the Secretary of Defense, the Joint Staff, the Combslant 

Commands, and all other organizations of the Department of Defense) sball reduce by 10 

percent per fiscal year in FY 2012 and FY 2013 obligations for staff augmentation 

contracts and contracts for the performance of functions closely associated with 

inherently governmental functions (as defmed in section 2383(b)(3) of title 10, U.S.C., 

and described in OFPP Policy Letter 11-01). 

a. Section 808 defines staff augmentation contracts as contracts for personnel who 

are subject to the direction of a government official other than the contracting 

officer for the contract, including but not limited to contractor personnel who 

perform personal service contracts. The reductions for staff augmentation 

contracts have already been factored into the budget documentation for FY 2012 

and FY 2013. However, the aforementioned senior officials are responsible for 

ensuring those reductions are sustained. 

b. For the purpose of fulfi.Iling the requirement to reduce by I 0 percent the amount 

of contracted services spent acquiring functions that are closely associated with 

inherently governmental functions, Components should use the classification in 

the FY 2010 Inventory of Contract Services as the bsseline amount. If this data is 

unknown in the FY 2010 inventory, Components should use the classification in 

the FY 20lllnventory of Contract Services. 

S. The Secretaries of the Military Departments and the Heads of the Defense Agencies sball 

assign responsibility for overseeing and implementing this guidance to the officials 

designated pursuant to section 2330 oftitle 10, U.S.C., and section 812(b) of the National 

Defense Authorization Act for Fiscal Year2006, P.L. 109-163, and ensure that the 

contractor inventory and program and budget proponents provide appropriate support. 

6. As required by section 235 of title 10, U.S.C., this information must be consistent with a 

component's contractor inventory compiled pursuant to section 2330a. 

2 

Attachment 

260

I 

DCMA Administrative Record for FY 2013 Furlough Appeals
,· ''· 

FOrc:G 

. R"""\iely Act 

ReOOilai')IAct 

Navy ~nd Martne corps 

_,NJ:~W 

C""""CI!Ierv-

(lnclucles au approprtailonux••l'l MU.CONand RDT&E) 

Ob - _elisa· 2Sjoor: e u :aa -;e 

FYt012PB FY2013PB 

. En~ 8otiueot 

PRCP Ban<>nl CIS OO'f'EB-2012 Fino 

128.417 

11l5.328 

11,143 

53,182 

25 

7, 162;-5.14 

1,248,3Z., 

.626,184 

129,002 

1za,ss7 

23,~ 

9,231,443 

393,168 

5,448 

1.27;4~: 

172,328 

10;111 

48,212 

25 

10,107,133 

1,280,;!19 

502;25'( 

112,253 

151,504 

1.3~.816 

164,412 

118,619 

10.021 

5,700 

9:896 1,377~ 

84,194 

10,819.377 

337,ll13 

Attachment 2 

261 DCMA Administrative Record for FY 2013 Furlough Appeals
OA1) 

oc.v. 

DGMA 

CFAS 

OHI!A 

DIA 

OJSA 

OLA 

OLeA 

i>I.W:T 

DOOEA -oPfdo. 

~ OTRA 

orSA 

MOA 

·No'U. 

=t.-1e:z.~· 

'455;"175 

2'f;ll51l 

161_;01.4 2;1_&4 

9f.-.2b2 

7;295 

-w.m 

S,1!Ja 

9'f,8''t5 

-47,1:112 

19,~ 

16;225 

4111.1_3' 

:f:f,97,f!. -.z•""' 1;-1.5~~} '84f.~ 

124;45'1-

.. t:OOS: 

81-554· 

280:1:1; 

622. 

$M38 

68,894. 

21>9._578 

6,-408 

,98&;579 

42.t.3l'.9 

9Q1e 

'.1166-.287 

1';788" 

f,ll55 

229 

2991&42 

~001; 

1~o>;9 1-9-032 ~' ' 

Dop<HIIl1f'lll TOTAL 517.11 916 58 55~ 820 

262 DCMA Administrative Record for FY 2013 Furlough Appeals
Organizational and Management Planning Page 2 of3 

Organization of the 

~ Department of Defense I Depa 

Secretary of Defense 

I Officeoftl>EitnspectorGene~•,• I 

oftheDepartment oro..ren.., 

I I 

Office of the Department of Department of Dlilpartmentof Joint Chiefs 

Seeretal)'of Defense tile Army tire Navy the Air Force of Staff 

DeputySecretaJyot Seet«aiY,oftheAJmi SecrttaryottheiiQIIY Se<:retaJYOftheAit Fo~<:e Chaifmln ofthe 

Defense.: Under h r JGlntChlds of staff 

otirce Secrd~riesof Ol'llce Ol!ice ' - OOice 

Defen~ 'Asslstant ' ••• -~ .... ... ' s.crid~ry· · '" llim '"" I~·'"·~ -- -·· s..a.tary '"' Secretaries ' oint staff of .Army stall -~ Nr stall ' Joint Chiefs 

Defense, and other ••• -~~ . .. ••• ' 

specified offldaJs ~., Opefatioi>s .. ~ Corps Air Force ' 

The noo n .. Tho MarineArmY """' Corps Air Force 

I 

DefenseAg'encres (17) DoD Field Activities (fOJ Combatant Commands (9} 

DefenseAdvancedReseiii'Ch PrO)ectsAgency Det«lseMedla Activity Africa cornnand 

DefenllOCOrrmi$$11)' Agency DefenO»POWMIII'ingPeRQI'IIlGi Oflite Ccnpal C<>rm1<1rid 

DefenseColltlitctAudltAgency Defense TedmicaUnronmtlon c~ Europeo~n Conn111nd 

Dd'en...,co~ManaDemte'tAgency' Defense T<:ehnolo{JY5«:urityAdrrinistmion llorthemConwrr;:md 

DetenileFimmcoand'Acco'untingSeiV!ce DoD EducationActlvii;Y Pi11:ffic Comnand 

Defenselnfon:mtlonSystemsAgcncy' D_oD Hlln'lilnResourusAdhrity Southern Conlnilhd 

Defenselntelllgm~Agtricy_• DOD TeitR.esoun:eMan~gement Center Speci.lloj,MitlonaCommnd 

De!enseL'eQliiServil"e.Ageucy omceofEconomicAdjuotment. Slmtegle COtmliDld 

DoefenseL'iigi&ticaAgency' TRICARE Milnaoement Adivil;y TmnvportatJouColl'nilnd 

DefenseSecwflyCoopenltlon Agency Wa11hington Hoiadqwrt'en!Stfvlces 

DdenseSecwflySenrl~:e 

Defense Thle.ltReduaklnAgency' 

MareoetenseAgency 

llational G«nnp;dfal.lnteiUgenr:eAgency • 

llational Reconnalnance Otnce' 

llatlonaJSecurityAgency!CentniSa:uritySentlee' 'ldontifiodouComl 

P~gonFon:eP~onAgency Pl'l!,.....di>y< Dl;..,«<> 

ortr..,.,r, ... n;...,,,.. 

h<~nryofD..renso-Mor<h lCU '""'""~ 

Related Links: 

• DoD Organizational Charts 

• Information about DoDD 5100.01 Functions of th!! Department of Defense and Its Major 

Components 

http:/ /odam.defense.gov/omp/Functions/Organizational_ Portfolios/Organization_ and _Functions_ Guidebook.html 8/14/2013 

263 DCMA Administrative Record for FY 2013 Furlough Appeals
PERSONNEL AND 

READINESS 

UNDER SECRETARY OF DEFENSE 

4000 DEFENSE PENTACON 

WASHINGTON, D.C. 20301:.11000 

DEC 1 21111 

/Reference (b Jl 

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS 

CHAIRMAN OF THE JOINT CHIEFS OF STAFF 

UNDER SECRETARIES OF DEFENSE 

DEPUTY CHIEF MANAGEMENT OFFICER 

COMMANDERS OF THE COMBATANT COMMANDS 

ASSISTANT SECRETARIES OF DEFENSE 

GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE 

DIRECTOR, OPERATIONAL TEST AND EVALUATION 

DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION 

INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE 

ASSISTANTS TO THE SECRETARY OF DEFENSE 

DIRECTOR, ADMJNISTRA TION AND MANAGEMENT 

DIRECTOR, NET ASSESSMENT 

DIRECTORS OF THE DEFENSE AGENCIES 

DIRECTORS OF THE DoD FIELD ACTIVITIES 

SUBJECT: Prohibition on Converting Certain Functions to Contract Performance 

This memorandum provides clarification regarding statutory language as related to the 

conversion of certain functions to contract performance. While the Department is holding civilian 

funding at fiscal year (FY) 2010 levels through FY 2013, with some exceptions, the Congress and the 

Secretary also remain concerned that the Department not be overly reliant on contracted services. 

As the Department adapts to declining budgets and operating in a constrained fiscal 

environment, we must ensure that we make analytically-based spending choices based on sound 

strategy and policies. In particular, as we implement the results of organizational assessments; 

continue to assess missions and functions in terms of priority; and revisit both our civilian and military 

force structures, we must be particularly vigilant to prevent the inappropriate conversion of work to 

contract performance. 

Under section 2461 of title 10, United States Code (U.S.C.) the Department is prohibited from 

converting work currently performed (or designated for perfonnance) by civilian personnel to private 

sector (contract) performance without first conducting a public-private competition. The National 

Defense Authorization Act for fiscal year 2010 (Public Law 111-84) included a significant 

modification to this statute, extending the requirement for a pUblic-private competition prior to the 

conversion of work by any number of civilian employees. Prior to this change, functions performed by 

fewer than 10 civilian employees could be converted to contract performance absent a public-private 

competition, known as a "direct conversion". 

264 DCMA Administrative Record for FY 2013 Furlough Appeals
Table I. Categories of Approved Near-Term Actions 

• Freeze civilian hiring (with exceptions for mission-critical activities•). 

• Provide authority to terminate employment of temporary hires and to notiiY term employees 

that their contracts will not be renewed (with exceptions for mission-critical activities and 

when appropriate in terms of personnel timing•). 

• Reduce base operating funding. 

• Curtail travel, training, and conferences (all with exceptions for mission-critical activities* 

including those required to maintain professional licensure or equivalent certifications). 

• Curtail facilities maintenance or Facilities Sustainment, Restoration, and Modernization 

· (FSRM) (with exceptions for ntission-criticalactivities•). 

o If necessary, services/agencies are authorized to fund FSRM at levels below CWTent 

guidance. 

• Curtail administrative expenses such as supply purchases, business IT, ceremonies, etc. 

(with exceptions for mission-critical activities*). 

• Review contracts and studies for possible cost·savings. 

• Cancel3"' and 4"' quarter ship maintenance availabilities and aviation and ground depotlevel maintenance activities. Take this action no earlier than Febrwuy 15,2013. 

• Clear all R&D and production contracts and contract modifications that obligate more than 

$500 million with the USD(AT&L) prior to award. 

• For Science and Technology accounts, provide the USD(AT&L) and the Assistant Secretary 

of Defense (Research & Engineering) with an assessment of the impact that budgetary 

uncertainty may have on meeting Departmental research priorities. 

• Approvals will be granted by Component beads or by senior officials designated by the 

Component head. 

Components with personnel serving Combatant Commanders (COCOMs) must consult with the 

COCOMs before implementing actions that affect them. Disputes will be brought to the attention 

of the Chainnan of the Joint Chiefs of Staff for further resolotion. 

Components receiving reimbursements should coonlinate with customer before taking actions that 

would affect the customer's mission. 

265 DCMA Administrative Record for FY 2013 Furlough Appeals
Table 2. Information to Be Included in Draft Implementation Plans 

The following information should be provided at the Component level. Information by commands 

and bases/installations is not required. 

• For operating accounts, identify major actions to include, at a minimum: 

o Extent of civilian hiring freezes; expected number of temps/terms released; expected 

number, duration, and nature of furloughs. 

o Reductions in flying hours, steaming days, vehicle miles, and other 

operations/training/support activities that affect force readiness. 

o Areas of budgets experiencing disproportionate cuts. 

• For investment accounts: 

o Plans for large prognuus (ACAT lD and lC, and MA!S programs). 

• Include major changes in unit buys, delays, etc. 

o Significant changes in all joint programs. 

• Identify and prioritize any essential reprogramming actions with offsets. 

266 DCMA Administrative Record for FY 2013 Furlough Appeals
o To the extent feasible, protect funding most directly associated with readiness; focus 

the necessary cuts on later deploying units. 

• For the investment portions of the DoD budget (procurement, RDT&E, construction): 

o Protect investments funded in Overseas Contingency Operstions if associated with 

urgent operational needs. 

o To the extent feasible, protect programs mostly closely associated with the new 

defense strategy. 

o Take prudent steps to minimize disruption and sdded costs (e.g., avoid penalties 

associated with potential contmct cancellations where feasible; prudently manage 

construction projects funded with prior-year monies). 

While we are hopeful of avoiding budgetary problems, draft Component plans should reflect 

the possibility that we may have to operate under a year-long CR and that sequestration takes place. 

Table 2 shows the types of information that should be included in the plans. Components should 

submit these draft plans to the Under Secretary of Defense (Comptroller) by February I, 2013. The 

Under Secretary of Defense (Comptroller) will work with the Components to sdjust this schedule if 

changes are required due to the desdlines for the preparation of the FY 2014 President's Budget 

submission. 

I appreciate your patience as we work thmugh these difficult budgetary times. The 

Department will continue to do its best to resolve these budgetary uncertainties in a manner that 

permits us to support our current defense strategy and maintain a strong defense. 

If sddressees have questions about this memorandwn, they should direct them to the Under 

Secretary of Defense (Comptroller). 

3 

267 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 1

UNITED STATES PUBLIC LAWS 

112th Congress -- 1st Session 

(c) 2011, LEXIS-NEXIS, A DIVISION OF REED ELSEVIER INC. AND REED ELSEVIER PROPERTIES INC. 

PUBLIC LAW 112-25 [S. 365] 

AUG. 02, 2011 

BUDGET CONTROL ACT OF 2011 

112 P.L. 25; 125 Stat. 240; 2011 Enacted S. 365; 112 Enacted S. 365 

BILL TRACKING REPORT: 112 Bill Tracking S. 365 

FULL TEXT VERSION(S) OF BILL: 112 S. 365 

CIS LEGIS. HISTORY DOCUMENT: 112 CIS Legis. Hist. P.L. 25 

 An Act 

To provide for budget control. 

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

 [*1] SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) <2 USC 900 note> Short Title.--This Act may be cited as the "Budget Control Act of 2011". 

(b) Table of Contents.--The table of contents for this Act is as follows: 

 Sec. 1. Short title; table of contents. 

 Sec. 2. Severability. 

 

TITLE I--TEN-YEAR DISCRETIONARY CAPS WITH SEQUESTER 

 Sec. 101. Enforcing discretionary spending limits. 

 Sec. 102. Definitions. 

 Sec. 103. Reports and orders. 

 Sec. 104. Expiration. 

 Sec. 105. Amendments to the Congressional Budget and Impoundment Control Act of 1974. 

 Sec. 106. Senate budget enforcement. 

 

TITLE II--VOTE ON THE BALANCED BUDGET AMENDMENT 

 Sec. 201. Vote on the balanced budget amendment. 

 Sec. 202. Consideration by the other House. 

 

TITLE III--DEBT CEILING DISAPPROVAL PROCESS 

 Sec. 301. Debt ceiling disapproval process. 

 Sec. 302. Enforcement of budget goal. 

 

TITLE IV--JOINT SELECT COMMITTEE ON DEFICIT REDUCTION 

 Sec. 401. Establishment of Joint Select Committee. 

 Sec. 402. Expedited consideration of joint committee recommendations. 

 Sec. 403. Funding. 

 Sec. 404. Rulemaking. 

 

268 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 2

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

TITLE V--PELL GRANT AND STUDENT LOAN PROGRAM CHANGES 

 Sec. 501. Federal Pell grants. 

 Sec. 502. Termination of authority to make interest subsidized loans to graduate and professional students. 

 Sec. 503. Termination of direct loan repayment incentives. 

 Sec. 504. Inapplicability of title IV negotiated rulemaking and master calendar exception. 

 [*2] Sec. 2. <2 USC 900 note> SEVERABILITY. 

If any provision of this Act, or any application of such provision to any person or circumstance, is held to be unconstitutional, the remainder of this Act and the application of this Act to any other person or circumstance shall not be 

affected. 

 

 TITLE I--TEN-YEAR DISCRETIONARY CAPS WITH SEQUESTER 

 [*101] Sec. 101. ENFORCING DISCRETIONARY SPENDING LIMITS. 

Section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows: <2 

USC 901> 

"Sec. 251. ENFORCING DISCRETIONARY SPENDING LIMITS. 

"(a) Enforcement.--

 "(1) Sequestration.-- Within 15 calendar days after Congress adjourns to end a session there shall be a sequestration to eliminate a budget-year breach, if any, within any category. 

 "(2) Eliminating a breach.-- Each non-exempt account within a category shall be reduced by a dollar amount 

calculated by multiplying the enacted level of sequestrable budgetary resources in that account at that time by the uniform percentage necessary to eliminate a breach within that category. 

 "(3) Military personnel.-- If the President uses the authority to exempt any personnel account from sequestration 

under section 255(f), each account within subfunctional category 051 (other than those military personnel accounts for 

which the authority provided under section 255(f) has been exercised) shall be further reduced by a dollar amount calculated by multiplying the enacted level of non-exempt budgetary resources in that account at that time by the uniform 

percentage necessary to offset the total dollar amount by which outlays are not reduced in military personnel accounts 

by reason of the use of such authority. 

 "(4) Part-year appropriations.-- If, on the date specified in paragraph (1), there is in effect an Act making or continuing appropriations for part of a fiscal year for any budget account, then the dollar sequestration calculated for that 

account under paragraphs (2) and (3) shall be subtracted from--

 "(A) the annualized amount otherwise available by law in that account under that or a subsequent part-year 

appropriation; and 

 "(B) when a full-year appropriation for that account is enacted, from the amount otherwise provided by the 

full-year appropriation for that account. 

 "(5) Look-back.-- If, after June 30, an appropriation for the fiscal year in progress is enacted that causes a breach 

within a category for that year (after taking into account any sequestration of amounts within that category), the discretionary spending limits for that category for the next fiscal year shall be reduced by the amount or amounts of that 

breach. 

 "(6) Within-session sequestration.-- If an appropriation for a fiscal year in progress is enacted (after Congress 

adjourns to end the session for that budget year and before July 1 of that fiscal year) that causes a breach within a category for that year (after taking into account any prior sequestration of amounts within that category), 15 days later there 

shall be a sequestration to eliminate that breach within that category following the procedures set forth in paragraphs (2) 

through (4). 

 "(7) Estimates.---- 

 "(A) CBO estimates.--As soon as practicable after Congress completes action on any discretionary appropriation, CBO, after consultation with the Committees on the Budget of the House of Representatives and the Senate, shall 

269 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 3

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

provide OMB with an estimate of the amount of discretionary new budget authority and outlays for the current year, if 

any, and the budget year provided by that legislation. 

 "(B) OMB estimates and explanation of differences.--Not later than 7 calendar days (excluding Saturdays, 

Sundays, and legal holidays) after the date of enactment of any discretionary appropriation, OMB shall transmit a report 

to the House of Representatives and to the Senate containing the CBO estimate of that legislation, an OMB estimate of 

the amount of discretionary new budget authority and outlays for the current year, if any, and the budget year provided 

by that legislation, and an explanation of any difference between the 2 estimates. If during the preparation of the report 

OMB determines that there is a significant difference between OMB and CBO, OMB shall consult with the Committees 

on the Budget of the House of Representatives and the Senate regarding that difference and that consultation shall include, to the extent practicable, written communication to those committees that affords such committees the opportunity to comment before the issuance of the report. 

 "(C) Assumptions and guidelines.--OMB estimates under this paragraph shall be made using current economic 

and technical assumptions. OMB shall use the OMB estimates transmitted to the Congress under this paragraph. OMB 

and CBO shall prepare estimates under this paragraph in conformance with scorekeeping guidelines determined after 

consultation among the Committees on the Budget of the House of Representatives and the Senate, CBO, and OMB. 

 "(D) Annual appropriations.--For purposes of this paragraph, amounts provided by annual appropriations shall 

include any discretionary appropriations for the current year, if any, and the budget year in accounts for which funding 

is provided in that legislation that result from previously enacted legislation. 

"(b) Adjustments to Discretionary Spending Limits.--

 "(1) Concepts and definitions.-- When the President submits the budget under section 1105 of title 31, United 

States Code, OMB shall calculate and the budget shall include adjustments to discretionary spending limits (and those 

limits as cumulatively adjusted) for the budget year and each outyear to reflect changes in concepts and definitions. 

Such changes shall equal the baseline levels of new budget authority and outlays using up-to-date concepts and definitions, minus those levels using the concepts and definitions in effect before such changes. Such changes may only be 

made after consultation with the Committees on Appropriations and the Budget of the House of Representatives and the 

Senate, and that consultation shall include written communication to such committees that affords such committees the 

opportunity to comment before official action is taken with respect to such changes. 

 "(2) Sequestration reports.-- When OMB submits a sequestration report under section 254(e), (f), or (g) for a 

fiscal year, OMB shall calculate, and the sequestration report and subsequent budgets submitted by the President under 

section 1105(a) of title 31, United States Code, shall include adjustments to discretionary spending limits (and those 

limits as adjusted) for the fiscal year and each succeeding year, as follows: 

 "(A) Emergency appropriations; overseas contingency operations/global war on terrorism.--If, for any fiscal 

year, appropriations for discretionary accounts are enacted that--

 "(i) the Congress designates as emergency requirements in statute on an account by account basis and the 

President subsequently so designates, or 

 "(ii) the Congress designates for Overseas Contingency Operations/Global War on Terrorism in statute on an 

account by account basis and the President subsequently so designates, 

the adjustment shall be the total of such appropriations in discretionary accounts designated as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism, as applicable. 

 "(B) Continuing disability reviews and redeterminations.--(i) If a bill or joint resolution making appropriations 

for a fiscal year is enacted that specifies an amount for continuing disability reviews under titles II and XVI of the Social Security Act and for the cost associated with conducting redeterminations of eligibility under title XVI of the Social 

Security Act, then the adjustments for that fiscal year shall be the additional new budget authority provided in that Act 

for such expenses for that fiscal year, but shall not exceed--

 "(I) for fiscal year 2012, $ 623,000,000 in additional new budget authority; 

 "(II) for fiscal year 2013, $ 751,000,000 in additional new budget authority; 

 "(III) for fiscal year 2014, $ 924,000,000 in additional new budget authority; 

270 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 4

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(IV) for fiscal year 2015, $ 1,123,000,000 in additional new budget authority; 

 "(V) for fiscal year 2016, $ 1,166,000,000 in additional new budget authority; 

 "(VI) for fiscal year 2017, $ 1,309,000,000 in additional new budget authority; 

 "(VII) for fiscal year 2018, $ 1,309,000,000 in additional new budget authority; 

 "(VIII) for fiscal year 2019, $ 1,309,000,000 in additional new budget authority; 

 "(IX) for fiscal year 2020, $ 1,309,000,000 in additional new budget authority; and 

 "(X) for fiscal year 2021, $ 1,309,000,000 in additional new budget authority. 

 "(ii) As used in this subparagraph--

 "(I) the term 'continuing disability reviews' means continuing disability reviews under sections 221(i) and 

1614(a)(4) of the Social Security Act; 

 "(II) the term 'redetermination' means redetermination of eligibility under sections 1611(c)(1) and 

1614(a)(3)(H) of the Social Security Act; and 

 "(III) the term 'additional new budget authority' means the amount provided for a fiscal year, in excess of $ 

273,000,000, in an appropriation Act and specified to pay for the costs of continuing disability reviews and redeterminations under the heading 'Limitation on Administrative Expenses' for the Social Security Administration. 

 "(C) Health care fraud and abuse control.--(i) If a bill or joint resolution making appropriations for a fiscal 

year is enacted that specifies an amount for the health care fraud abuse control program at the Department of Health and 

Human Services (75-8393-0-7-571), then the adjustments for that fiscal year shall be the amount of additional new 

budget authority provided in that Act for such program for that fiscal year, but shall not exceed--

 "(I) for fiscal year 2012, $ 270,000,000 in additional new budget authority; 

 "(II) for fiscal year 2013, $ 299,000,000 in additional new budget authority; 

 "(III) for fiscal year 2014, $ 329,000,000 in additional new budget authority; 

 "(IV) for fiscal year 2015, $ 361,000,000 in additional new budget authority; 

 "(V) for fiscal year 2016, $ 395,000,000 in additional new budget authority; 

 "(VI) for fiscal year 2017, $ 414,000,000 in additional new budget authority; 

 "(VII) for fiscal year 2018, $ 434,000,000 in additional new budget authority; 

 "(VIII) for fiscal year 2019, $ 454,000,000 in additional new budget authority; 

 "(IX) for fiscal year 2020, $ 475,000,000 in additional new budget authority; and 

 "(X) for fiscal year 2021, $ 496,000,000 in additional new budget authority. 

 "(ii) As used in this subparagraph, the term 'additional new budget authority' means the amount provided for 

a fiscal year, in excess of $ 311,000,000, in an appropriation Act and specified to pay for the costs of the health care 

fraud and abuse control program. 

 "(D) Disaster funding.--

 "(i) If, for fiscal years 2012 through 2021, appropriations for discretionary accounts are enacted that Congress designates as being for disaster relief in statute, the adjustment for a fiscal year shall be the total of such appropriations for the fiscal year in discretionary accounts designated as being for disaster relief, but not to exceed the total of--

 "(I) the average funding provided for disaster relief over the previous 10 years, excluding the highest and 

lowest years; and 

 "(II) the amount, for years when the enacted new discretionary budget authority designated as being for 

disaster relief for the preceding fiscal year was less than the average as calculated in subclause (I) for that fiscal year, 

that is the difference between the enacted amount and the allowable adjustment as calculated in such subclause for that 

fiscal year. 

271 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 5

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(ii) OMB shall report to the Committees on Appropriations and Budget in each House the average calculated pursuant to clause (i)(II), not later than 30 days after the date of the enactment of the Budget Control Act of 2011. 

 "(iii) For the purposes of this subparagraph, the term 'disaster relief' means activities carried out pursuant to 

a determination under section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 

U.S.C. 5122(2)). 

 "(iv) Appropriations considered disaster relief under this subparagraph in a fiscal year shall not be eligible 

for adjustments under subparagraph (A) for the fiscal year. 

"(c) Discretionary Spending Limit.--As used in this part, the term 'discretionary spending limit' means--

 "(1) with respect to fiscal year 2012--

 "(A) for the security category, $ 684,000,000,000 in new budget authority; and 

 "(B) for the nonsecurity category, $ 359,000,000,000 in new budget authority; 

 "(2) with respect to fiscal year 2013--

 "(A) for the security category, $ 686,000,000,000 in new budget authority; and 

 "(B) for the nonsecurity category, $ 361,000,000,000 in new budget authority; 

 "(3) with respect to fiscal year 2014, for the discretionary category, $ 1,066,000,000,000 in new budget authority; 

 "(4) with respect to fiscal year 2015, for the discretionary category, $ 1,086,000,000,000 in new budget authority; 

 "(5) with respect to fiscal year 2016, for the discretionary category, $ 1,107,000,000,000 in new budget authority; 

 "(6) with respect to fiscal year 2017, for the discretionary category, $ 1,131,000,000,000 in new budget authority; 

 "(7) with respect to fiscal year 2018, for the discretionary category, $ 1,156,000,000,000 in new budget authority; 

 "(8) with respect to fiscal year 2019, for the discretionary category, $ 1,182,000,000,000 in new budget authority; 

 "(9) with respect to fiscal year 2020, for the discretionary category, $ 1,208,000,000,000 in new budget authority; and 

 "(10) with respect to fiscal year 2021, for the discretionary category, $ 1,234,000,000,000 in new budget authority; 

as adjusted in strict conformance with subsection (b).". 

 [*102] Sec. 102. DEFINITIONS. 

Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows: <2 USC 

900>

 (1) Strike paragraph (4) and insert the following new paragraph: 

 "(4)(A) The term 'nonsecurity category' means all discretionary appropriations not included in the security category defined in subparagraph (B). 

 "(B) The term 'security category' includes discretionary appropriations associated with agency budgets for the 

Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account (95-0401-0-1-054), and all budget accounts in budget function 150 (international affairs). 

 "(C) The term 'discretionary category' includes all discretionary appropriations.". 

272 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 6

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 (2) In paragraph (8)(C), strike "the food stamp program" and insert "the Supplemental Nutrition Assistance Program". 

 (3) Strike paragraph (14) and insert the following new paragraph: 

 "(14) The term 'outyear' means a fiscal year one or more years after the budget year.". 

 (4) At the end, add the following new paragraphs: 

 "(20) The term 'emergency' means a situation that--

 "(A) requires new budget authority and outlays (or new budget authority and the outlays flowing therefrom) 

for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and 

 "(B) is unanticipated. 

 "(21) The term 'unanticipated' means that the underlying situation is--

 "(A) sudden, which means quickly coming into being or not building up over time; 

 "(B) urgent, which means a pressing and compelling need requiring immediate action; 

 "(C) unforeseen, which means not predicted or anticipated as an emerging need; and 

 "(D) temporary, which means not of a permanent duration.". 

 [*103] Sec. 103. REPORTS AND ORDERS. 

Section 254 of the Balanced Budget and Emergency Deficit <2 USC 904> Control Act of 1985 is amended as follows: 

 (1) In subsection (c)(2), strike "2002" and insert "2021". 

 (2) At the end of subsection (e), insert "This report shall also contain a preview estimate of the adjustment for 

disaster funding for the upcoming fiscal year.". 

 (3) In subsection (f)(2)(A), strike "2002" and insert "2021"; before the concluding period insert ", including a 

final estimate of the adjustment for disaster funding". 

 [*104] Sec. 104. EXPIRATION. 

(a) Repealer.--Section 275 of the Balanced Budget and Emergency <2 USC 900 note> Deficit Control Act of 1985 

is repealed. 

(b) <2 USC 902 note> Conforming Change.--Sections 252(d)(1), 254(c), 254(f)(3), and 254(i) of the Balanced 

Budget and Emergency Deficit Control Act of 1985 shall not apply to the Congressional Budget Office. 

 [*105] Sec. 105. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974. 

(a) Adjustments.--Section 314 of the Congressional Budget <2 USC 645> Act of 1974 is amended as follows: 

 (1) Strike subsection (a) and insert the following: 

"(a) Adjustments.--After the reporting of a bill or joint resolution or the offering of an amendment thereto or the 

submission of a conference report thereon, the chairman of the Committee on the Budget of the House of Representatives or the Senate may make appropriate budgetary adjustments of new budget authority and the outlays flowing therefrom in the same amount as required by section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 

1985.". 

 (2) Strike subsections (b) and (e) and redesignate subsections (c) and (d) as subsections (b) and (c), respectively. 

 (3) At the end, add the following new subsections: 

"(d) Emergencies in the House of Representatives.-- (1) In the House of Representatives, if a reported bill or joint 

resolution, or amendment thereto or conference report thereon, contains a provision providing new budget authority and 

outlays or reducing revenue, and a designation of such provision as an emergency requirement pursuant to 251(b)(2)(A) 

of the Balanced Budget and Emergency Deficit Control Act of 1985, the chair of the Committee on the Budget of the 

273 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 7

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

House of Representatives shall not count the budgetary effects of such provision for purposes of title III and title IV of 

the Congressional Budget Act of 1974 and the Rules of the House of Representatives. 

 "(2)(A) In the House of Representatives, if a reported bill or joint resolution, or amendment thereto or conference report thereon, contains a provision providing new budget authority and outlays or reducing revenue, and a designation of such provision as an emergency pursuant to paragraph (1), the chair of the Committee on the Budget shall not 

count the budgetary effects of such provision for purposes of this title and title IV and the Rules of the House of Representatives. 

"(B) In the House of Representatives, a proposal to strike a designation under subparagraph (A) shall be excluded 

from an evaluation of budgetary effects for purposes of this title and title IV and the Rules of the House of Representatives. 

"(C) An amendment offered under subparagraph (B) that also proposes to reduce each amount appropriated or otherwise made available by the pending measure that is not required to be appropriated or otherwise made available shall 

be in order at any point in the reading of the pending measure. 

"(e) Enforcement of Discretionary Spending Caps.--It shall not be in order in the House of Representatives or the 

Senate to consider any bill, joint resolution, amendment, motion, or conference report that would cause the discretionary 

spending limits as set forth in section 251 of the Balanced Budget and Emergency Deficit Control Act to be exceeded.". 

(b) Definitions.--Section 3 of the Congressional Budget and Impoundment Control Act of 1974 is amended by 

adding at the <2 USC 622> end the following new paragraph: 

 "(11) The terms 'emergency' and 'unanticipated' have the meanings given to such terms in section 250(c) of the 

Balanced Budget and Emergency Deficit Control Act of 1985.". 

(c) Appeals for Discretionary Caps.--Section 904(c)(2) of the Congressional Budget Act of 1974 is amended by 

striking "and <2 USC 621 note> 312(c)" and inserting "312(c), and 314(e)". 

 [*106] Sec. 106. SENATE BUDGET ENFORCEMENT. <2 USC 631 note> 

(a) In General.--

 (1) For the purpose of enforcing the Congressional Budget Act of 1974 through April 15, 2012, including section 300 of that Act, and enforcing budgetary points of order in prior concurrent resolutions on the budget, the allocations, aggregates, and levels set in subsection (b)(1) shall apply in the Senate in the same manner as for a concurrent 

resolution on the budget for fiscal year 2012 with appropriate budgetary levels for fiscal years 2011 and 2013 through 

2021.

 (2) For the purpose of enforcing the Congressional Budget Act of 1974 after April 15, 2012, including section 

300 of that Act, and enforcing budgetary points of order in prior concurrent resolutions on the budget, the allocations, 

aggregates, and levels set in subsection (b)(2) shall apply in the Senate in the same manner as for a concurrent resolution on the budget for fiscal year 2013 with appropriate budgetary levels for fiscal years 2012 and 2014 through 2022. 

(b) Committee Allocations, Aggregates, and Levels.--

 (1) As soon as practicable after the date of enactment of this section, the Chairman of the Committee on the 

Budget shall file--

 (A) for the Committee on Appropriations, committee allocations for fiscal years 2011 and 2012 consistent 

with the discretionary spending limits set forth in this Act for the purpose of enforcing section 302 of the Congressional 

Budget Act of 1974; 

 (B) for all committees other than the Committee on Appropriations, committee allocations for fiscal years 

2011, 2012, 2012 through 2016, and 2012 through 2021 consistent with the Congressional Budget Office's March 2011 

baseline adjusted to account for the budgetary effects of this Act and legislation enacted prior to this Act but not included in the Congressional Budget Office's March 2011 baseline, for the purpose of enforcing section 302 of the Congressional Budget Act of 1974; 

 (C) aggregate spending levels for fiscal years 2011 and 2012 and aggregate revenue levels for fiscal years 

2011, 2012, 2012 through 2016, 2012 through 2021 consistent with the Congressional Budget Office's March 2011 

baseline adjusted to account for the budgetary effects of this Act and legislation enacted prior to this Act but not in274 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 8

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

cluded in the Congressional Budget Office's March 2011 baseline, and the discretionary spending limits set forth in this 

Act for the purpose of enforcing section 311 of the Congressional Budget Act of 1974; and 

 (D) levels of Social Security revenues and outlays for fiscal years 2011, 2012, 2012 through 2016, and 2012 

through 2021 consistent with the Congressional Budget Office's March 2011 baseline adjusted to account for the budgetary effects of this Act and legislation enacted prior to this Act but not included in the Congressional Budget Office's 

March 2011 baseline, for the purpose of enforcing sections 302 and 311 of the Congressional Budget Act of 1974. 

 (2) Not later than April 15, 2012, the Chairman of the Committee on the Budget shall file--

 (A) for the Committee on Appropriations, committee allocations for fiscal years 2012 and 2013 consistent 

with the discretionary spending limits set forth in this Act for the purpose of enforcing section 302 of the Congressional 

Budget Act of 1974; 

 (B) for all committees other than the Committee on Appropriations, committee allocations for fiscal years 

2012, 2013, 2013 through 2017, and 2013 through 2022 consistent with the Congressional Budget Office's March 2012 

baseline for the purpose of enforcing section 302 of the Congressional Budget Act of 1974; 

 (C) aggregate spending levels for fiscal years 2012 and 2013 and aggregate revenue levels for fiscal years 

2012, 2013, 2013-2017, and 2013-2022 consistent with the Congressional Budget Office's March 2012 baseline and the 

discretionary spending limits set forth in this Act for the purpose of enforcing section 311 of the Congressional Budget 

Act of 1974; and 

 (D) levels of Social Security revenues and outlays for fiscal years 2012 and 2013, 2013-2017, and 2013-2022 

consistent with the Congressional Budget Office's March 2012 baseline budget for the purpose of enforcing sections 

302 and 311 of the Congressional Budget Act of 1974. 

(c) Senate Pay-as-you-go Scorecard.--

 (1) Effective on the date of enactment of this section, for the purpose of enforcing section 201 of S. Con. Res. 21 

(110th Congress), the Chairman of the Senate Committee on the Budget shall reduce any balances of direct spending 

and revenues for any fiscal year to 0 (zero). 

 (2) Not later than April 15, 2012, for the purpose of enforcing section 201 of S. Con. Res. 21 (110th Congress), 

the Chairman of the Senate Committee on the Budget shall reduce any balances of direct spending and revenues for any 

fiscal year to 0 (zero). 

 (3) Upon resetting the Senate paygo scorecard pursuant to paragraph (2), the Chairman shall publish a notification of such action in the Congressional Record. 

(d) Further Adjustments.--

 (1) The Chairman of the Committee on the Budget of the Senate may revise any allocations, aggregates, or levels set pursuant to this section to account for any subsequent adjustments to discretionary spending limits made pursuant 

to this Act. 

 (2) With respect to any allocations, aggregates, or levels set or adjustments made pursuant to this section, sections 412 through 414 of S. Con. Res. 13 (111th Congress) shall remain in effect. 

(e) Expiration.--

 (1) Subsections (a)(1), (b)(1), and (c)(1) shall expire if a concurrent resolution on the budget for fiscal year 2012 

is agreed to by the Senate and House of Representatives pursuant to section 301 of the Congressional Budget Act of 

1974.

 (2) Subsections (a)(2), (b)(2), and (c)(2) shall expire if a concurrent resolution on the budget for fiscal year 2013 

is agreed to by the Senate and House of Representatives pursuant to section 301 of the Congressional Budget Act of 

1974.

 

 TITLE II--VOTE ON THE BALANCED BUDGET AMENDMENT 

 [*201] Sec. 201. VOTE ON THE BALANCED BUDGET AMENDMENT. 

275 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 9

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

After September 30, 2011, and not later than December 31, 2011, the House of Representatives and Senate, respectively, shall vote on passage of a joint resolution, the title of which is as follows: "Joint resolution proposing a balanced 

budget amendment to the Constitution of the United States.". 

 [*202] Sec. 202. CONSIDERATION BY THE OTHER HOUSE. 

(a) House Consideration.--

 (1) Referral.-- If the House receives a joint resolution described in section 201 from the Senate, such joint resolution shall be referred to the Committee on the Judiciary. If the committee fails to report the joint resolution within five 

legislative days, it shall be in order to move that the House discharge the committee from further consideration of the 

joint resolution. Such a motion shall not be in order after the House has disposed of a motion to discharge the joint resolution. The previous question shall be considered as ordered on the motion to its adoption without intervening motion 

except twenty minutes of debate equally divided and controlled by the proponent and an opponent. If such a motion is 

adopted, the House shall proceed immediately to consider the joint resolution in accordance with paragraph (3). A motion to reconsider the vote by which the motion is disposed of shall not be in order. 

 (2) Proceeding to consideration.-- After the joint resolution has been referred to the appropriate calendar or the 

committee has been discharged (other than by motion) from its consideration, it shall be in order to move to proceed to 

consider the joint resolution in the House. Such a motion shall not be in order after the House has disposed of a motion 

to proceed with respect to the joint resolution. The previous question shall be considered as ordered on the motion to its 

adoption without intervening motion. A motion to reconsider the vote by which the motion is disposed of shall not be in 

order. 

 (3) Consideration.-- The joint resolution shall be considered as read. All points of order against the joint resolution and against its consideration are waived. The previous question shall be considered as ordered on the joint resolution to its passage without intervening motion except two hours of debate equally divided and controlled by the proponent and an opponent and one motion to limit debate on the joint resolution. A motion to reconsider the vote on passage 

of the joint resolution shall not be in order. 

(b) Senate Consideration.--(1) If the Senate receives a joint resolution described in section 201 from the House of 

Representatives, such joint resolution shall be referred to the appropriate committee of the Senate. If such committee 

has not reported the joint resolution at the close of the fifth session day after its receipt by the Senate, such committee 

shall be automatically discharged from further consideration of the joint resolution and it shall be placed on the appropriate calendar. 

 (2) Consideration of the joint resolution and on all debatable motions and appeals in connection therewith, shall 

be limited to not more than 20 hours, which shall be divided equally between the majority and minority leaders or their 

designees. A motion further to limit debate is in order and not debatable. An amendment to, or a motion to postpone, or 

a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order. 

Any debatable motion or appeal is debatable for not to exceed 1 hour, to be divided equally between those favoring and 

those opposing the motion or appeal. All time used for consideration of the joint resolution, including time used for 

quorum calls and voting, shall be counted against the total 20 hours of consideration. 

 (3) If the Senate has voted to proceed to a joint resolution, the vote on passage of the joint resolution shall be 

taken on or before the close of the seventh session day after such joint resolution has been reported or discharged or 

immediately following the conclusion of consideration of the joint resolution, and a single quorum call at the conclusion 

of the debate if requested in accordance with the rules of the Senate. 

 

 TITLE III--DEBT CEILING DISAPPROVAL PROCESS 

 [*301] Sec. 301. DEBT CEILING DISAPPROVAL PROCESS. 

(a) In General.--Subchapter I of chapter 31 of subtitle III of title 31, United States Code, is amended--

 (1) in section 3101(b), by striking "or otherwise" and inserting "or as provided by section 3101A or otherwise"; 

and 

 (2) by inserting after section 3101 the following: 

"§ 3101A. Presidential modification of the debt ceiling 

276 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 10

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

"(a) In General.--

 "(1) $ 900 billion.---- 

 "(A) Certification.--If, not later than December 31, 2011, the President submits a written certification to Congress that the President has determined that the debt subject to limit is within $ 100,000,000,000 of the limit in section 

3101(b) and that further borrowing is required to meet existing commitments, the Secretary of the Treasury may exercise authority to borrow an additional $ 900,000,000,000, subject to the enactment of a joint resolution of disapproval 

enacted pursuant to this section. Upon submission of such certification, the limit on debt provided in section 3101(b) 

(referred to in this section as the 'debt limit') is increased by $ 400,000,000,000. 

 "(B) Resolution of disapproval.--Congress may consider a joint resolution of disapproval of the authority under subparagraph (A) as provided in subsections (b) through (f). The joint resolution of disapproval considered under 

this section shall contain only the language provided in subsection (b)(2). If the time for disapproval has lapsed without 

enactment of a joint resolution of disapproval under this section, the debt limit is increased by an additional $ 

500,000,000,000. 

 "(2) Additional amount.---- 

 "(A) Certification.--If, after the debt limit is increased by $ 900,000,000,000 under paragraph (1), the President 

submits a written certification to Congress that the President has determined that the debt subject to limit is within $ 

100,000,000,000 of the limit in section 3101(b) and that further borrowing is required to meet existing commitments, 

the Secretary of the Treasury may, subject to the enactment of a joint resolution of disapproval enacted pursuant to this 

section, exercise authority to borrow an additional amount equal to--

 "(i) $ 1,200,000,000,000, unless clause (ii) or (iii) applies; 

 "(ii) $ 1,500,000,000,000 if the Archivist of the United States has submitted to the States for their ratification a proposed amendment to the Constitution of the United States pursuant to a joint resolution entitled 'Joint resolution proposing a balanced budget amendment to the Constitution of the United States'; or 

 "(iii) if a joint committee bill to achieve an amount greater than $ 1,200,000,000,000 in deficit reduction as 

provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011 is enacted, an amount equal to the amount of 

that deficit reduction, but not greater than $ 1,500,000,000,000, unless clause (ii) applies. 

 "(B) Resolution of disapproval.--Congress may consider a joint resolution of disapproval of the authority under subparagraph (A) as provided in subsections (b) through (f). The joint resolution of disapproval considered under 

this section shall contain only the language provided in subsection (b)(2). If the time for disapproval has lapsed without 

enactment of a joint resolution of disapproval under this section, the debt limit is increased by the amount authorized 

under subparagraph (A). 

"(b) Joint Resolution of Disapproval.--

 "(1) In general.-- Except for the $ 400,000,000,000 increase in the debt limit provided by subsection (a)(1)(A), 

the debt limit may not be raised under this section if, within 50 calendar days after the date on which Congress receives 

a certification described in subsection (a)(1) or within 15 calendar days after Congress receives the certification described in subsection (a)(2) (regardless of whether Congress is in session), there is enacted into law a joint resolution 

disapproving the President's exercise of authority with respect to such additional amount. 

 "(2) Contents of joint resolution.-- For the purpose of this section, the term 'joint resolution' means only a joint 

resolution--"(A) 

 (i) for the certification described in subsection (a)(1), that is introduced on September 6, 7, 8, or 9, 2011 (or, 

if the Senate was not in session, the next calendar day on which the Senate is in session); and 

 "(ii) for the certification described in subsection (a)(2), that is introduced between the date the certification is 

received and 3 calendar days after that date; 

 "(B) which does not have a preamble; 

 "(C) the title of which is only as follows: 'Joint resolution relating to the disapproval of the President's exercise 

of authority to increase the debt limit, as submitted under section 3101A of title 31, United States Code, on 

G7XXXXXX' (with the blank containing the date of such submission); and 

277 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 11

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(D) the matter after the resolving clause of which is only as follows: 'That Congress disapproves of the President's exercise of authority to increase the debt limit, as exercised pursuant to the certification under section 3101A(a) 

of title 31, United States Code.'. 

"(c) Expedited Consideration in House of Representatives.--

 "(1) Reconvening.-- Upon receipt of a certification described in subsection (a)(2), the Speaker, if the House 

would otherwise be adjourned, shall notify the Members of the House that, pursuant to this section, the House shall 

convene not later than the second calendar day after receipt of such certification. 

 "(2) Reporting and discharge.-- Any committee of the House of Representatives to which a joint resolution is 

referred shall report it to the House without amendment not later than 5 calendar days after the date of introduction of a 

joint resolution described in subsection (a). If a committee fails to report the joint resolution within that period, the 

committee shall be discharged from further consideration of the joint resolution and the joint resolution shall be referred 

to the appropriate calendar. 

 "(3) Proceeding to consideration.-- After each committee authorized to consider a joint resolution reports it to 

the House or has been discharged from its consideration, it shall be in order, not later than the sixth day after introduction of a joint resolution under subsection (a), to move to proceed to consider the joint resolution in the House. All 

points of order against the motion are waived. Such a motion shall not be in order after the House has disposed of a motion to proceed on a joint resolution addressing a particular submission. The previous question shall be considered as 

ordered on the motion to its adoption without intervening motion. The motion shall not be debatable. A motion to reconsider the vote by which the motion is disposed of shall not be in order. 

 "(4) Consideration.-- The joint resolution shall be considered as read. All points of order against the joint resolution and against its consideration are waived. The previous question shall be considered as ordered on the joint resolution to its passage without intervening motion except two hours of debate equally divided and controlled by the proponent and an opponent. A motion to reconsider the vote on passage of the joint resolution shall not be in order. 

"(d) Expedited Procedure in Senate.--

 "(1) Reconvening.-- Upon receipt of a certification under subsection (a)(2), if the Senate has adjourned or recessed for more than 2 days, the majority leader of the Senate, after consultation with the minority leader of the Senate, 

shall notify the Members of the Senate that, pursuant to this section, the Senate shall convene not later than the second 

calendar day after receipt of such message. 

 "(2) Placement on calendar.-- Upon introduction in the Senate, the joint resolution shall be immediately placed 

on the calendar. 

 "(3) Floor consideration.----

 "(A) In general.--Notwithstanding Rule XXII of the Standing Rules of the Senate, it is in order at any time 

during the period beginning on the day after the date on which Congress receives a certification under subsection (a) 

and, for the certification described in subsection (a)(1), ending on September 14, 2011, and for the certification described in subsection (a)(2), on the 6th day after the date on which Congress receives a certification under subsection (a) 

(even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of the 

joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are 

waived. The motion to proceed is not debatable. The motion is not subject to a motion to postpone. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the resolution is agreed to, the joint resolution shall remain the unfinished business until disposed of. 

 "(B) Consideration.--Consideration of the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours, which shall be divided equally between the majority and 

minority leaders or their designees. A motion further to limit debate is in order and not debatable. An amendment to, or 

a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint 

resolution is not in order. 

 "(C) Vote on passage.--If the Senate has voted to proceed to a joint resolution, the vote on passage of the joint 

resolution shall occur immediately following the conclusion of consideration of the joint resolution, and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate. 

278 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 12

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(D) Rulings of the chair on procedure.--Appeals from the decisions of the Chair relating to the application of 

the rules of the Senate, as the case may be, to the procedure relating to a joint resolution shall be decided without debate. 

"(e) Amendment Not in Order.--A joint resolution of disapproval considered pursuant to this section shall not be 

subject to amendment in either the House of Representatives or the Senate. 

"(f) Coordination With Action by Other House.--

 "(1) In general.-- If, before passing the joint resolution, one House receives from the other a joint resolution--

 "(A) the joint resolution of the other House shall not be referred to a committee; and 

 "(B) the procedure in the receiving House shall be the same as if no joint resolution had been received from 

the other House until the vote on passage, when the joint resolution received from the other House shall supplant the 

joint resolution of the receiving House. 

 "(2) Treatment of joint resolution of other house.-- If the Senate fails to introduce or consider a joint resolution 

under this section, the joint resolution of the House shall be entitled to expedited floor procedures under this section. 

 "(3) Treatment of companion measures.-- If, following passage of the joint resolution in the Senate, the Senate 

then receives the companion measure from the House of Representatives, the companion measure shall not be debatable. 

 "(4) Consideration after passage.-- (A) If Congress passes a joint resolution, the period beginning on the date the 

President is presented with the joint resolution and ending on the date the President signs, allows to become law without 

his signature, or vetoes and returns the joint resolution (but excluding days when either House is not in session) shall be 

disregarded in computing the appropriate calendar day period described in subsection (b)(1). 

 "(B) Debate on a veto message in the Senate under this section shall be 1 hour equally divided between the 

majority and minority leaders or their designees. 

 "(5) Veto override.-- If within the appropriate calendar day period described in subsection (b)(1), Congress 

overrides a veto of the joint resolution with respect to authority exercised pursuant to paragraph (1) or (2) of subsection 

(a), the limit on debt provided in section 3101(b) shall not be raised, except for the $ 400,000,000,000 increase in the 

limit provided by subsection (a)(1)(A). 

 "(6) Sequestration.-- (A) If within the 50-calendar day period described in subsection (b)(1), the President signs 

the joint resolution, the President allows the joint resolution to become law without his signature, or Congress overrides 

a veto of the joint resolution with respect to authority exercised pursuant to paragraph (1) of subsection (a), there shall 

be a sequestration to reduce spending by $ 400,000,000,000. OMB shall implement the sequestration forthwith. 

 "(B) OMB shall implement each half of such sequestration in accordance with section 255, section 256, and 

subsections (c), (d), (e), and (f) of section 253 of the Balanced Budget and Emergency Deficit Control Act of 1985, and 

for the purpose of such implementation the term 'excess deficit' means the amount specified in subparagraph (A). 

"(g) Rules of House of Representatives and Senate.--This subsection and subsections (b), (c), (d), (e), and (f) (other 

than paragraph (6)) are enacted by Congress--

 "(1) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as 

such it is deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be 

followed in that House in the case of a joint resolution, and it supersedes other rules only to the extent that it is inconsistent with such rules; and 

 "(2) with full recognition of the constitutional right of either House to change the rules (so far as relating to the 

procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that 

House.". 

(b) Conforming Amendment.--The table of sections for chapter 31 of title 31, United States Code, is amended by 

inserting after the item relating to section 3101 the following new item: 

 "3101A. Presidential modification of the debt ceiling.". 

 [*302] Sec. 302. ENFORCEMENT OF BUDGET GOAL. 

279 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 13

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

(a) In General.--The Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting after 

section 251 the following new section: 

"Sec. 251A. <2 USC 901a> ENFORCEMENT OF BUDGET GOAL. 

"Unless a joint committee bill achieving an amount greater than $ 1,200,000,000,000 in deficit reduction as provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011 is enacted by January 15, 2012, the discretionary 

spending limits listed in section 251(c) shall be revised, and discretionary appropriations and direct spending shall be 

reduced, as follows: 

 "(1) Revised security category; revised nonsecurity category.-- (A) The term 'revised security category' means 

discretionary appropriations in budget function 050. 

 "(B) The term 'revised nonsecurity category' means discretionary appropriations other than in budget function 

050.

 "(2) Revised discretionary spending limits.-- The discretionary spending limits for fiscal years 2013 through 

2021 under section 251(c) shall be replaced with the following: 

 "(A) For fiscal year 2013--

 "(i) for the security category, $ 546,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 501,000,000,000 in budget authority. 

 "(B) For fiscal year 2014--

 "(i) for the security category, $ 556,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 510,000,000,000 in budget authority. 

 "(C) For fiscal year 2015--

 "(i) for the security category, $ 566,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 520,000,000,000 in budget authority. 

 "(D) For fiscal year 2016--

 "(i) for the security category, $ 577,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 530,000,000,000 in budget authority. 

 "(E) For fiscal year 2017--

 "(i) for the security category, $ 590,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 541,000,000,000 in budget authority. 

 "(F) For fiscal year 2018--

 "(i) for the security category, $ 603,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 553,000,000,000 in budget authority. 

 "(G) For fiscal year 2019--

 "(i) for the security category, $ 616,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 566,000,000,000 in budget authority. 

 "(H) For fiscal year 2020--

 "(i) for the security category, $ 630,000,000,000 in budget authority; and 

 "(ii) for the nonsecurity category, $ 578,000,000,000 in budget authority. 

 "(I) For fiscal year 2021--

 "(i) for the security category, $ 644,000,000,000 in budget authority; and 

280 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 14

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(ii) for the nonsecurity category, $ 590,000,000,000 in budget authority. 

 "(3) Calculation of total deficit reduction.-- OMB shall calculate the amount of the deficit reduction required by 

this section for each of fiscal years 2013 through 2021 by--

 "(A) starting with $ 1,200,000,000,000; 

 "(B) subtracting the amount of deficit reduction achieved by the enactment of a joint committee bill, as provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011; 

 "(C) reducing the difference by 18 percent to account for debt service; and 

 "(D) dividing the result by 9. 

 "(4) Allocation to functions.-- On January 2, 2013, for fiscal year 2013, and in its sequestration preview report 

for fiscal years 2014 through 2021 pursuant to section 254(c), OMB shall allocate half of the total reduction calculated 

pursuant to paragraph (3) for that year to discretionary appropriations and direct spending accounts within function 050 

(defense function) and half to accounts in all other functions (nondefense functions). 

 "(5) Defense function reduction.-- OMB shall calculate the reductions to discretionary appropriations and direct 

spending for each of fiscal years 2013 through 2021 for defense function spending as follows: 

 "(A) Discretionary.--OMB shall calculate the reduction to discretionary appropriations by--

 "(i) taking the total reduction for the defense function allocated for that year under paragraph (4); 

 "(ii) multiplying by the discretionary spending limit for the revised security category for that year; and 

 "(iii) dividing by the sum of the discretionary spending limit for the security category and OMB's baseline 

estimate of nonexempt outlays for direct spending programs within the defense function for that year. 

 "(B) Direct spending.--OMB shall calculate the reduction to direct spending by taking the total reduction for 

the defense function required for that year under paragraph (4) and subtracting the discretionary reduction calculated 

pursuant to subparagraph (A). 

 "(6) Nondefense function reduction.-- OMB shall calculate the reduction to discretionary appropriations and to 

direct spending for each of fiscal years 2013 through 2021 for programs in nondefense functions as follows: 

 "(A) Discretionary.--OMB shall calculate the reduction to discretionary appropriations by--

 "(i) taking the total reduction for nondefense functions allocated for that year under paragraph (4); 

 "(ii) multiplying by the discretionary spending limit for the revised nonsecurity category for that year; and 

 "(iii) dividing by the sum of the discretionary spending limit for the revised nonsecurity category and OMB's 

baseline estimate of nonexempt outlays for direct spending programs in nondefense functions for that year. 

 "(B) Direct spending.--OMB shall calculate the reduction to direct spending programs by taking the total reduction for nondefense functions required for that year under paragraph (4) and subtracting the discretionary reduction 

calculated pursuant to subparagraph (A). 

 "(7) Implementing discretionary reductions.----

 "(A) Fiscal year 2013.--On January 2, 2013, for fiscal year 2013, OMB shall calculate and the President shall 

order a sequestration, effective upon issuance and under the procedures set forth in section 253(f), to reduce each account within the security category or nonsecurity category by a dollar amount calculated by multiplying the baseline 

level of budgetary resources in that account at that time by a uniform percentage necessary to achieve--

 "(i) for the revised security category, an amount equal to the defense function discretionary reduction calculated pursuant to paragraph (5); and 

 "(ii) for the revised nonsecurity category, an amount equal to the nondefense function discretionary reduction calculated pursuant to paragraph (6). 

281 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 15

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(B) Fiscal years 2014-2021.--On the date of the submission of its sequestration preview report for fiscal years 

2014 through 2021 pursuant to section 254(c) for each of fiscal years 2014 through 2021, OMB shall reduce the discretionary spending limit--

 "(i) for the revised security category by the amount of the defense function discretionary reduction calculated pursuant to paragraph (5); and 

 "(ii) for the revised nonsecurity category by the amount of the nondefense function discretionary reduction 

calculated pursuant to paragraph (6). 

 "(8) Implementing direct spending reductions.-- On the date specified in paragraph (4) during each applicable 

year, OMB shall prepare and the President shall order a sequestration, effective upon issuance, of nonexempt direct 

spending to achieve the direct spending reduction calculated pursuant to paragraphs (5) and (6). When implementing the 

sequestration of direct spending pursuant to this paragraph, OMB shall follow the procedures specified in section 6 of 

the Statutory Pay-As-You-Go Act of 2010, the exemptions specified in section 255, and the special rules specified in 

section 256, except that the percentage reduction for the Medicare programs specified in section 256(d) shall not be 

more than 2 percent for a fiscal year. 

 "(9) Adjustment for medicare.-- If the percentage reduction for the Medicare programs would exceed 2 percent 

for a fiscal year in the absence of paragraph (8), OMB shall increase the reduction for all other discretionary appropriations and direct spending under paragraph (6) by a uniform percentage to a level sufficient to achieve the reduction required by paragraph (6) in the non-defense function. 

 "(10) Implementation of reductions.-- Any reductions imposed under this section shall be implemented in accordance with section 256(k). 

 "(11) Report.-- On the dates specified in paragraph (4), OMB shall submit a report to Congress containing information about the calculations required under this section, the adjusted discretionary spending limits, a listing of the 

reductions required for each nonexempt direct spending account, and any other data and explanations that enhance public understanding of this title and actions taken under it.". 

(b) Conforming Amendment.--The table of contents set forth in section 250(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting after the item relating to section 251 the following: 

 "Sec. 251A. Enforcement of budget goal.". 

 

 TITLE IV--JOINT SELECT COMMITTEE ON DEFICIT REDUCTION 

 [*401] Sec. 401. ESTABLISHMENT OF JOINT SELECT COMMITTEE. <2 USC 900 note> 

(a) Definitions.--In this title: 

 (1) Joint committee.-- The term "joint committee" means the Joint Select Committee on Deficit Reduction established under subsection (b)(1). 

 (2) Joint committee bill.-- The term "joint committee bill" means a bill consisting of the proposed legislative 

language of the joint committee recommended under subsection (b)(3)(B) and introduced under section 402(a). 

(b) Establishment of Joint Select Committee.--

 (1) Establishment.-- There is established a joint select committee of Congress to be known as the "Joint Select 

Committee on Deficit Reduction". 

 (2) Goal.-- The goal of the joint committee shall be to reduce the deficit by at least $ 1,500,000,000,000 over the 

period of fiscal years 2012 to 2021. 

 (3) Duties.----

 (A) In general.--

 (i) Improving the short-term and long-term fiscal imbalance.--The joint committee shall provide recommendations and legislative language that will significantly improve the short-term and long-term fiscal imbalance of the 

Federal Government. 

282 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 16

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 (ii) Recommendations of committees.--Not later than October 14, 2011, each committee of the House of 

Representatives and the Senate may transmit to the joint committee its recommendations for changes in law to reduce 

the deficit consistent with the goal described in paragraph (2) for the joint committee's consideration. 

 (B) Report, recommendations, and legislative language.--

 (i) In general.--Not later than November 23, 2011, the joint committee shall vote on--

 (I) a report that contains a detailed statement of the findings, conclusions, and recommendations of the 

joint committee and the estimate of the Congressional Budget Office required by paragraph (5)(D)(ii); and 

 (II) proposed legislative language to carry out such recommendations as described in subclause (I), which 

shall include a statement of the deficit reduction achieved by the legislation over the period of fiscal years 2012 to 2021. 

Any change to the Rules of the House of Representatives or the Standing Rules of the Senate included in the report or 

legislative language shall be considered to be merely advisory. 

 (ii) Approval of report and legislative language.--The report of the joint committee and the proposed legislative language described in clause (i) shall require the approval of a majority of the members of the joint committee. 

 (iii) Additional views.--A member of the joint committee who gives notice of an intention to file supplemental, minority, or additional views at the time of final joint committee vote on the approval of the report and legislative language under clause (ii) shall be entitled to 3 calendar days in which to file such views in writing with the staff 

director of the joint committee. Such views shall then be included in the joint committee report and printed in the same 

volume, or part thereof, and their inclusion shall be noted on the cover of the report. In the absence of timely notice, the 

joint committee report may be printed and transmitted immediately without such views. 

 (iv) Transmission of report and legislative language.--If the report and legislative language are approved by 

the joint committee pursuant to clause (ii), then not later than December 2, 2011, the joint committee shall submit the 

joint committee report and legislative language described in clause (i) to the President, the Vice President, the Speaker 

of the House of Representatives, and the majority and minority Leaders of each House of Congress. 

 (v) Report and legislative language to be made public.--Upon the approval or disapproval of the joint committee report and legislative language pursuant to clause (ii), the joint committee shall promptly make the full report and 

legislative language, and a record of the vote, available to the public. 

 (4) Membership.---- 

 (A) In general.--The joint committee shall be composed of 12 members appointed pursuant to subparagraph 

(B). 

 (B) Appointment.--Members of the joint committee shall be appointed as follows: 

 (i) The majority leader of the Senate shall appoint three members from among Members of the Senate. 

 (ii) The minority leader of the Senate shall appoint three members from among Members of the Senate. 

 (iii) The Speaker of the House of Representatives shall appoint three members from among Members of the 

House of Representatives. 

 (iv) The minority leader of the House of Representatives shall appoint three members from among Members 

of the House of Representatives. 

 (C) Co-chairs.--

 (i) In general.--There shall be two Co-Chairs of the joint committee. The majority leader of the Senate shall 

appoint one Co-Chair from among the members of the joint committee. The Speaker of the House of Representatives 

shall appoint the second Co-Chair from among the members of the joint committee. The Co-Chairs shall be appointed 

not later than 14 calendar days after the date of enactment of this Act. 

 (ii) Staff director.--The Co-Chairs, acting jointly, shall hire the staff director of the joint committee. 

 (D) Date.--Members of the joint committee shall be appointed not later than 14 calendar days after the date of 

enactment of this Act. 

283 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 17

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 (E) Period of appointment.--Members shall be appointed for the life of the joint committee. Any vacancy in 

the joint committee shall not affect its powers, but shall be filled not later than 14 calendar days after the date on which 

the vacancy occurs, in the same manner as the original designation was made. If a member of the joint committee ceases 

to be a Member of the House of Representatives or the Senate, as the case may be, the member is no longer a member 

of the joint committee and a vacancy shall exist. 

 (5) Administration.----

 (A) In general.--To enable the joint committee to exercise its powers, functions, and duties, there are authorized to be disbursed by the Senate the actual and necessary expenses of the joint committee approved by the co-chairs, 

subject to the rules and regulations of the Senate. 

 (B) Expenses.--In carrying out its functions, the joint committee is authorized to incur expenses in the same 

manner and under the same conditions as the Joint Economic Committee is authorized by section 11 of Public Law 

79-304 (15 U.S.C. 1024 (d)). 

 (C) Quorum.--Seven members of the joint committee shall constitute a quorum for purposes of voting, meeting, and holding hearings. 

 (D) Voting.--

 (i) Proxy voting.--No proxy voting shall be allowed on behalf of the members of the joint committee. 

 (ii) Congressional budget office estimates.--The Congressional Budget Office shall provide estimates of the 

legislation (as described in paragraph (3)(B)) in accordance with sections 308(a) and 201(f) of the Congressional Budget Act of 1974 (2 U.S.C. 639(a) and 601(f))(including estimates of the effect of interest payment on the debt). In addition, the Congressional Budget Office shall provide information on the budgetary effect of the legislation beyond the 

year 2021. The joint committee may not vote on any version of the report, recommendations, or legislative language 

unless such estimates are available for consideration by all members of the joint committee at least 48 hours prior to the 

vote as certified by the Co-Chairs. 

 (E) Meetings.--

 (i) Initial meeting.--Not later than 45 calendar days after the date of enactment of this Act, the joint committee shall hold its first meeting. 

 (ii) Agenda.--The Co-Chairs of the joint committee shall provide an agenda to the joint committee members 

not less than 48 hours in advance of any meeting. 

 (F) Hearings.--

 (i) In general.--The joint committee may, for the purpose of carrying out this section, hold such hearings, sit 

and act at such times and places, require attendance of witnesses and production of books, papers, and documents, take 

such testimony, receive such evidence, and administer such oaths as the joint committee considers advisable. 

 (ii) Hearing procedures and responsibilities of co-chairs.--

 (I) Announcement.--The Co-Chairs of the joint committee shall make a public announcement of the date, 

place, time, and subject matter of any hearing to be conducted, not less than 7 days in advance of such hearing, unless 

the Co-Chairs determine that there is good cause to begin such hearing at an earlier date. 

 (II) Written statement.--A witness appearing before the joint committee shall file a written statement of 

proposed testimony at least 2 calendar days before the appearance of the witness, unless the requirement is waived by 

the Co-Chairs, following their determination that there is good cause for failure to comply with such requirement. 

 (G) Technical assistance.--Upon written request of the Co-Chairs, a Federal agency shall provide technical assistance to the joint committee in order for the joint committee to carry out its duties. 

(c) Staff of Joint Committee.--

 (1) In general.-- The Co-Chairs of the joint committee may jointly appoint and fix the compensation of staff as 

they deem necessary, within the guidelines for employees of the Senate and following all applicable rules and employment requirements of the Senate. 

284 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 18

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 (2) Ethical standards.-- Members on the joint committee who serve in the House of Representatives shall be 

governed by the ethics rules and requirements of the House. Members of the Senate who serve on the joint committee 

and staff of the joint committee shall comply with the ethics rules of the Senate. 

 (d) Termination.--The joint committee shall terminate on January 31, 2012. 

 [*402] Sec. 402. EXPEDITED CONSIDERATION OF JOINT COMMITTEE RECOMMENDATIONS. <2 

USC 900 note> 

(a) Introduction.--If approved by the majority required by section 401(b)(3)(B)(ii), the proposed legislative language submitted pursuant to section 401(b)(3)(B)(iv) shall be introduced in the Senate (by request) on the next day on 

which the Senate is in session by the majority leader of the Senate or by a Member of the Senate designated by the majority leader of the Senate and shall be introduced in the House of Representatives (by request) on the next legislative 

day by the majority leader of the House or by a Member of the House designated by the majority leader of the House. 

(b) Consideration in the House of Representatives.--

 (1) Referral and reporting.-- Any committee of the House of Representatives to which the joint committee bill is 

referred shall report it to the House without amendment not later than December 9, 2011. If a committee fails to report 

the joint committee bill within that period, it shall be in order to move that the House discharge the committee from 

further consideration of the bill. Such a motion shall not be in order after the last committee authorized to consider the 

bill reports it to the House or after the House has disposed of a motion to discharge the bill. The previous question shall 

be considered as ordered on the motion to its adoption without intervening motion except 20 minutes of debate equally 

divided and controlled by the proponent and an opponent. If such a motion is adopted, the House shall proceed immediately to consider the joint committee bill in accordance with paragraphs (2) and (3). A motion to reconsider the vote by 

which the motion is disposed of shall not be in order. 

 (2) Proceeding to consideration.-- After the last committee authorized to consider a joint committee bill reports it 

to the House or has been discharged (other than by motion) from its consideration, it shall be in order to move to proceed to consider the joint committee bill in the House. Such a motion shall not be in order after the House has disposed 

of a motion to proceed with respect to the joint committee bill. The previous question shall be considered as ordered on 

the motion to its adoption without intervening motion. A motion to reconsider the vote by which the motion is disposed 

of shall not be in order. 

 (3) Consideration.-- The joint committee bill shall be considered as read. All points of order against the joint 

committee bill and against its consideration are waived. The previous question shall be considered as ordered on the 

joint committee bill to its passage without intervening motion except 2 hours of debate equally divided and controlled 

by the proponent and an opponent and one motion to limit debate on the joint committee bill. A motion to reconsider the 

vote on passage of the joint committee bill shall not be in order. 

 (4) Vote on passage.-- The vote on passage of the joint committee bill shall occur not later than December 23, 

2011.

(c) Expedited Procedure in the Senate.--

 (1) Committee consideration.-- A joint committee bill introduced in the Senate under subsection (a) shall be 

jointly referred to the committee or committees of jurisdiction, which committees shall report the bill without any revision and with a favorable recommendation, an unfavorable recommendation, or without recommendation, not later than 

December 9, 2011. If any committee fails to report the bill within that period, that committee shall be automatically 

discharged from consideration of the bill, and the bill shall be placed on the appropriate calendar. 

 (2) Motion to proceed.-- Notwithstanding Rule XXII of the Standing Rules of the Senate, it is in order, not later 

than 2 days of session after the date on which a joint committee bill is reported or discharged from all committees to 

which it was referred, for the majority leader of the Senate or the majority leader's designee to move to proceed to the 

consideration of the joint committee bill. It shall also be in order for any Member of the Senate to move to proceed to 

the consideration of the joint committee bill at any time after the conclusion of such 2-day period. A motion to proceed 

is in order even though a previous motion to the same effect has been disagreed to. All points of order against the motion to proceed to the joint committee bill are waived. The motion to proceed is not debatable. The motion is not subject 

to a motion to postpone. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in 

285 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 19

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

order. If a motion to proceed to the consideration of the joint committee bill is agreed to, the joint committee bill shall 

remain the unfinished business until disposed of. 

 (3) Consideration.-- All points of order against the joint committee bill and against consideration of the joint 

committee bill are waived. Consideration of the joint committee bill and of all debatable motions and appeals in connection therewith shall not exceed a total of 30 hours which shall be divided equally between the Majority and Minority 

Leaders or their designees. A motion further to limit debate on the joint committee bill is in order, shall require an affirmative vote of three-fifths of the Members duly chosen and sworn, and is not debatable. Any debatable motion or 

appeal is debatable for not to exceed 1 hour, to be divided equally between those favoring and those opposing the motion or appeal. All time used for consideration of the joint committee bill, including time used for quorum calls and voting, shall be counted against the total 30 hours of consideration. 

 (4) No amendments.-- An amendment to the joint committee bill, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint committee bill, is not in order. 

 (5) Vote on passage.-- If the Senate has voted to proceed to the joint committee bill, the vote on passage of the 

joint committee bill shall occur immediately following the conclusion of the debate on a joint committee bill, and a single quorum call at the conclusion of the debate if requested. The vote on passage of the joint committee bill shall occur 

not later than December 23, 2011. 

 (6) Rulings of the chair on procedure.-- Appeals from the decisions of the Chair relating to the application of the 

rules of the Senate, as the case may be, to the procedure relating to a joint committee bill shall be decided without debate. 

(d) Amendment.--The joint committee bill shall not be subject to amendment in either the House of Representatives 

or the Senate. 

(e) Consideration by the Other House.--

 (1) In general.-- If, before passing the joint committee bill, one House receives from the other a joint committee 

bill--

 (A) the joint committee bill of the other House shall not be referred to a committee; and 

 (B) the procedure in the receiving House shall be the same as if no joint committee bill had been received from 

the other House until the vote on passage, when the joint committee bill received from the other House shall supplant 

the joint committee bill of the receiving House. 

 (2) Revenue measure.-- This subsection shall not apply to the House of Representatives if the joint committee 

bill received from the Senate is a revenue measure. 

(f) Rules to Coordinate Action With Other House.--

 (1) Treatment of joint committee bill of other house.-- If the Senate fails to introduce or consider a joint committee bill under this section, the joint committee bill of the House shall be entitled to expedited floor procedures under 

this section. 

 (2) Treatment of companion measures in the senate.-- If following passage of the joint committee bill in the 

Senate, the Senate then receives the joint committee bill from the House of Representatives, the House-passed joint 

committee bill shall not be debatable. The vote on passage of the joint committee bill in the Senate shall be considered 

to be the vote on passage of the joint committee bill received from the House of Representatives. 

 (3) Vetoes.-- If the President vetoes the joint committee bill, debate on a veto message in the Senate under this 

section shall be 1 hour equally divided between the majority and minority leaders or their designees. 

(g) Loss of Privilege.--The provisions of this section shall cease to apply to the joint committee bill if--

 (1) the joint committee fails to vote on the report or proposed legislative language required under section 

401(b)(3)(B)(i) not later than November 23, 2011; or 

 (2) the joint committee bill does not pass both Houses not later than December 23, 2011. 

 [*403] Sec. 403. FUNDING. <2 USC 900 note> 

286 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 20

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

Funding for the joint committee shall be derived in equal portions from--

 (1) the applicable accounts of the House of Representatives; and 

 (2) the contingent fund of the Senate from the appropriations account "Miscellaneous Items", subject to the rules 

and regulations of the Senate. 

 [*404] Sec. 404. RULEMAKING. <2 USC 900 note> 

The provisions of this title are enacted by Congress--

 (1) as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as 

such they shall be considered as part of the rules of each House, respectively, or of that House to which they specifically 

apply, and such rules shall supersede other rules only to the extent that they are inconsistent therewith; and 

 (2) with full recognition of the constitutional right of either House to change such rules (so far as relating to such 

House) at any time, in the same manner, and to the same extent as in the case of any other rule of such House. 

 

 TITLE V--PELL GRANT AND STUDENT LOAN PROGRAM CHANGES 

 [*501] Sec. 501. FEDERAL PELL GRANTS. 

Section 401(b)(7)(A)(iv) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(7)(A)(iv)) is amended--

 (1) in subclause (II), by striking "$ 3,183,000,000" and inserting "$ 13,183,000,000"; and 

 (2) in subclause (III), by striking "$ 0" and inserting "$ 7,000,000,000". 

 [*502] Sec. 502. TERMINATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED LOANS TO 

GRADUATE AND PROFESSIONAL STUDENTS. 

Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is amended by adding at the end the following new paragraph: 

 "(3) Termination of authority to make interest subsidized loans to graduate and professional students.---- 

 "(A) In general.--Subject to subparagraph (B) and notwithstanding any provision of this part or part B, for any 

period of instruction beginning on or after July 1, 2012--

 "(i) a graduate or professional student shall not be eligible to receive a Federal Direct Stafford loan under 

this part; and 

 "(ii) the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow 

in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the maximum annual amount for such 

student determined under section 428H, plus an amount equal to the amount of Federal Direct Stafford loans the student 

would have received in the absence of this subparagraph. 

 "(B) Exception.--Subparagraph (A) shall not apply to an individual enrolled in course work specified in paragraph (3)(B) or (4)(B) of section 484(b).". 

 [*503] Sec. 503. TERMINATION OF DIRECT LOAN REPAYMENT INCENTIVES. 

Section 455(b)(8) of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)(8)) is amended--

 (1) in subparagraph (A)--

 (A) by amending the header to read as follows: "(A) Incentives for loans disbursed before july 1, 2012.--"; and 

 (B) by inserting "with respect to loans for which the first disbursement of principal is made before July 1, 

2012," after "of this part"; 

 (2) in subparagraph (B), by inserting "with respect to loans for which the first disbursement of principal is made 

before July 1, 2012" after "repayment incentives"; and 

 (3) by adding at the end the following new subparagraph: 

287 DCMA Administrative Record for FY 2013 Furlough Appeals
Page 21

112 P.L. 25, *; 125 Stat. 240; 

2011 Enacted S. 365; 112 Enacted S. 365 

 "(C) No repayment incentives for new loans disbursed on or after july 1, 2012.--Notwithstanding any other 

provision of this part, the Secretary is prohibited from authorizing or providing any repayment incentive not otherwise 

authorized under this part to encourage on-time repayment of a loan under this part for which the first disbursement of 

principal is made on or after July 1, 2012, including any reduction in the interest or origination fee rate paid by a borrower of such a loan, except that the Secretary may provide for an interest rate reduction for a borrower who agrees to 

have payments on such a loan automatically electronically debited from a bank account.". 

 [*504] Sec. 504. INAPPLICABILITY OF TITLE IV NEGOTIATED RULEMAKING <20 USC 1089 note> 

AND MASTER CALENDAR EXCEPTION. 

Sections 482(c) and 492 of the Higher Education Act of 1965 (20 U.S.C. 1089(c), 1098a) shall not apply to the 

amendments made by this title, or to any regulations promulgated under those amendments. 

 

Speaker of the House of Representatives. 

Vice President of the United States and President of the Senate. 

DESCRIPTORS: BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT; BUDGET CONTROL 

ACT; BUDGET OF THE U.S.; COMMITTEE ON DEFICIT REDUCTION, SELECT. JOINT; CONGRESS; CONGRESSIONAL BUDGET ACT; CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT; CONGRESSIONAL-EXECUTIVE RELATIONS; CONSTITUTIONAL AMENDMENTS; DEPARTMENT OF TREASURY; GOVERNMENT SPENDING; HIGHER EDUCATION ACT; OFFICE OF MANAGEMENT AND BUDGET; 

PELL GRANT PROGRAM; PUBLIC DEBT; PUBLIC DEBT; SEQUESTRATION OF APPROPRIATED FUNDS; 

STUDENT AID; 112 PL 25 

288 DCMA Administrative Record for FY 2013 Furlough Appeals
Department of Defense 

INSTRUCTION 

NUMBER 1100.22

April 12, 2010 

USD(P&R) USD(P&R) 

SUBJECT: Policy and Procedures for Determining Workforce Mix 

References: See Enclosure 1 

1. PURPOSE. In accordance with the authority in DoD Directive 5124.02 (Reference (a)), this 

Instruction: 

 a. Establishes policy, assigns responsibilities, and prescribes procedures for determining the 

appropriate mix of manpower (military and DoD civilian) and private sector support. 

 b. Implements policy established in DoD Directive 1100.4 (Reference (b). 

 c. Incorporates and cancels DoD Instruction 3020.37 (Reference (c)). 

 d. Provides manpower mix criteria and guidance for risk assessments to be used to identify 

and justify activities that are inherently governmental (IG); commercial (exempt from private 

sector performance); and commercial (subject to private sector performance). 

 e. Reconciles and consolidates the definitions and examples of IG from section 306 of title 5, 

United States Code (U.S.C.) (Reference (d)); sections 501 (note), 1115, and 1116 of title 31, 

U.S.C. (Reference (e)); Attachment A of Office of Management and Budget (OMB) Circular A76 (Reference (f)); and Subparts 2 and 7.503(c) of the Federal Acquisition Regulation (Reference 

(g)) into a set of criteria for Defense-wide use. 

 f. Implements aspects of sections 113, 118(b), 129a, and 2463 of title 10, U.S.C. (Reference 

(h)). 

 g. Reissues and cancels DoD Instruction 1100.22 (Reference (i)). 

2. APPLICABILITY. This Instruction applies to OSD, the Military Departments, the Office of 

the Chairman of the Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the 

Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD 

Field Activities, and all other organizational entities within the Department of Defense (hereafter 

referred to collectively as the “DoD Components”). 

289 DCMA Administrative Record for FY 2013 Furlough Appeals
3. DEFINITIONS. See Glossary. 

4. POLICY. It is DoD policy that: 

 a. Consistent with Reference (a) and section 118(b) of Reference (h), the workforce of the 

Department of Defense shall be established to successfully execute Defense missions at a low to 

moderate level of risk. Accordingly, risk mitigation shall take precedence over cost savings 

when necessary to maintain appropriate control of Government operations and missions. 

Consistent with Reference (a) and section 113 of Reference (h), the Defense workforce shall 

have sufficient flexibility to reconstitute or expand the capabilities of the Military Services on 

short notice to meet a resurgent or increased threat to U.S. national security. Accordingly, risk 

mitigation shall take precedence over cost savings when necessary to maintain core capabilities 

and readiness. 

 b. The Department shall provide ready forces. Accordingly, the peacetime workforce shall 

be structured with sufficient manpower to satisfy projected mobilization and crisis demands that 

cannot be met in sufficient time by mobilizing, hiring, recruiting, or reassigning DoD personnel 

or contracting for additional support. 

 c. Functions that are IG cannot be legally contracted. The Manpower Mix Criteria codes in 

this Instruction reconcile and consolidate definitions and examples for what is IG from 

References (d) through (g) and shall serve as the DoD standard for determining what is IG. 

Functions that are IG shall be designated for DoD civilian or military performance consistent 

with the criteria. 

 d. Functions that are not IG are commercial in nature. Commercial activities (CAs) that are 

exempted from private sector performance by law, Executive Order (E.o.), treaty, or 

international agreement (IA) shall be designated for DoD civilian or military performance. 

Consistent with Reference (a) and section 129a of Reference (h), CAs shall be exempted from 

private sector performance and designated for DoD civilian or military performance, as 

necessary, to provide for the readiness and workforce management needs of the Department - 

i.e., functions shall be exempted from private sector performance to mitigate operational risk and 

to provide sufficient personnel for wartime assignments, overseas or sea-to-shore rotation, career 

development, continuity of operations, and esprit de corps. 

 e. Consistent with sections 129a and 2463 of Reference (h) and with Deputy Secretary of 

Defense memorandum (Reference (j)), even if a function is not IG or exempted from private 

sector performance, it shall be designated for DoD civilian performance (subject to paragraph 

4.g. of this section) unless an approved analysis for either of the following exceptions has been 

addressed consistent with the DoD Component’s regulatory guidelines: 

 (1) A cost comparison required by Reference (j), or a public-private competition required 

by Reference (f), shows that DoD civilian personnel are not the low-cost provider. 

290 DCMA Administrative Record for FY 2013 Furlough Appeals
 (2) There is a legal, regulatory, or procedural impediment to using DoD civilian 

personnel. This shall include determinations by Human Resource (HR) officials that DoD 

civilians cannot be hired, hired in time, or retained to perform the work. 

 f. Consistent with Reference (a), manpower shall be designated as civilian except when one 

or more of the following conditions apply: 

 (1) Military-unique knowledge and skills are required for performance of the duties. 

 (2) Military incumbency is required by law, E.o., treaty, or IA. 

 (3) Military performance is required for command and control, risk mitigation, or esprit 

de corps. 

 (4) Military manpower is needed to provide for overseas and sea-to-shore rotation, career 

development, or wartime assignments. 

 (5) Unusual working conditions or costs are not conducive to civilian employment. 

 g. Consistent with DoD Instruction 1400.25, Volume 250 (Reference (k)), Civilian Strategic 

Human Capital Plans shall provide for the development of a DoD civilian workforce with 

competencies needed to meet missions requirements. 

5. RESPONSIBILITIES. See Enclosure 2. 

6. PROCEDURES. See Enclosure 3. 

7. RELEASABILITY. UNLIMITED. This Instruction is approved for public release and is 

available on the Internet from the DoD Issuances Website at http://www.dtic.mil/whs/directives. 

8. EFFECTIVE DATE. This Instruction is effective immediately. 

 

Enclosures 

 1. References 

291 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

4

 2. Responsibilities 

 3. Procedures 

 4. Manpower Mix Criteria 

5. Guidance for Risk Assessments 

 Glossary 

292 DCMA Administrative Record for FY 2013 Furlough Appeals
TABLE OF CONTENTS

ENCLOSURE 1: REFERENCES ...................................................................................................7 

ENCLOSURE 2: RESPONSIBILITIES .........................................................................................9 

 UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS 

 (USD(P&R))............................................................................... ...............9 

 USD(AT&L) ..............................................................................................................................9 

 UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE (USD(I)) ...............................9 

 HEADS OF THE DoD COMPONENTS ................................................................................10 

 CHAIRMAN OF THE JOINT CHIEFS OF STAFF ...............................................................11 

 COMMANDERS OF THE COMBATANT COMMANDS (CCDRs). ..................................11 

ENCLOSURE 3: PROCEDURES ................................................................................................12 

 WORKFORCE MIX DECISION PROCESS ..........................................................................12 

 IG FUNCTIONS AND ACTIVITIES CLOSELY ASSOCIATED WITH IG 

 FUNCTIONS .....................................................................................................................14 

 PERSONAL SERVICES .........................................................................................................14 

 PERSONNEL SHORTFALLS ................................................................................................15 

 COST AS A DECIDING FACTOR IN WORKFORCE MIX DECISIONS ..........................15 

 NON-AVAILABILITY OF DoD CIVILIAN EMPLOYEES .................................................15 

 ORDER OF PRECEDENCE FOR CODING MANPOWER IN DOD MANPOWER 

 DATABASES ....................................................................................................................15 

 CODING MILITARY-TO-CIVILIAN AND CIVILIAN-TO-MILITARY 

 CONVERSIONS................................................................................................................16 

 CODING MILITARY MANPOWER LOCATED IN ACTIVITIES OUTSIDE THE 

 MILITARY DEPARTMENTS ..........................................................................................16 

ENCLOSURE 4: MANPOWER MIX CRITERIA ......................................................................17 

 

 CRITERION A - DIRECTION AND CONTROL OF COMBAT/CRISIS SITUATIONS....17 

CRITERION B - EXEMPTION OF COMBAT SUPPORT (CS) AND COMBAT 

 SERVICE SUPPORT (CSS) DUE TO OPERATIONAL RISK .......................................24 

 CRITERION D - EXEMPTION OF MANPOWER DUAL-TASKED FOR 

 WARTIME ASSIGNMENTS ...........................................................................................26 

 CRITERION E - DoD CIVILIAN AUTHORITY, DIRECTION, AND CONTROL ............27 

 CRITERION F - MILITARY-UNIQUE KNOWLEDGE AND SKILLS ...............................33 

 CRITERION G - EXEMPTION FOR ESPRIT DE CORPS ...................................................37 

 CRITERION H - EXEMPTION FOR CONTINUITY OF INFRASTRUCTURE 

 OPERATIONS ...................................................................................................................38 

 CRITERION I - MILITARY AUGMENTATION OF THE INFRASTRUCTURE 

 DURING WAR ..................................................................................................................40 

 CRITERION J - EXEMPTION FOR CIVILIAN/MILITARY ROTATION ..........................41 

293 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

6 CONTENTS 

 CRITERION K - EXEMPTION FOR CIVILIAN/MILITARY CAREER 

 DEVELOPMENT ..............................................................................................................41 

 CRITERION L - EXEMPTED BY LAW, E.O., TREATY, OR IA........................................42 

 CRITERION M - EXEMPTED BY DoD MANAGEMENT DECISION ..............................43 

 SUBJECT TO REVIEW FOR PRIVATE SECTOR PERFORMANCE OR 

 DIVESTITURE..................................................................................................................44 

 CRITERION P - PENDING RESTRUCTURING OF CAs ....................................................44 

 CRITERION R - SUBJECT TO REVIEW FOR PUBLIC-PRIVATE COMPETITION .......44 

 CRITERION W - NON-PACKAGEABLE CA ......................................................................45 

 CRITERION X - ALTERNATIVES TO PUBLIC-PRIVATE COMPETITION. ..................45 

ENCLOSURE 5: GUIDANCE FOR RISK ASSESSMENTS .....................................................46 

 RISKS TO OVERSIGHT/CONTROL OF IG AND CAs .......................................................46 

 RISKS TO COMMAND AND OPERATIONAL CONTROL ..............................................49 

 RISKS TO FISCAL RESPONSIBILITIES .............................................................................53 

GLOSSARY ..................................................................................................................................54 

 ACRONYMS AND ABBREVIATIONS ................................................................................54 

 DEFINITIONS .........................................................................................................................55 

TABLE 

 MANPOWER MIX CRITERIA ..............................................................................................12 

294 DCMA Administrative Record for FY 2013 Furlough Appeals
ENCLOSURE 1

REFERENCES

(a) DoD Directive 1100.4, “Guidance for Manpower Management,” February 12, 2005 

(b) DoD Directive 5124.02, “Under Secretary of Defense for Personnel and Readiness 

(USD(P&R)),” June 23, 2008 

(c) DoD Instruction 3020.37, “Continuation of Essential DoD Contractor Services During 

Crisis,” November 6, 1990 (hereby cancelled) 

(d) Section 306 and Chapter 11 of title 5, United States Code 

(e) Sections 501 (note), 1115, 1116, 3711, and 3718 of title 31, United States Code 

(f) Office of Management and Budget (OMB) Circular A-76 (Revised), “Performance of 

Commercial Activities,” May 29, 2003 

(g) Federal Acquisition Regulation (FAR) sub-parts 2 and 7.5, current edition 

(h) Title 10, United States Code 

(i) DoD Instruction 1100.22, “Guidance for Determining Workforce Mix,” September 7, 2006 

(hereby cancelled) 

(j) Deputy Secretary of Defense Memorandum, “Implementation of Section 324 of the 

National Defense Authorization Act for Fiscal Year 2008 (FY 2008 NDAA)—Guidelines 

and Procedures of In-sourcing New and Contracted Out Functions,” April 4, 2008 

(k) DoD Instruction 1400.25, Volume 250, “DoD Civilian Personnel Management Systems: 

 Volume 250, Civilian Strategic Human Capital Planning (SHCP),” November 18, 2008 

(l) Defense FAR Supplement (DFARS), current edition 

(m) DoD Instruction 5000.02, “Operation of the Defense Acquisition System,” 

 December 8, 2008 

(n) DoD Instruction 3020.41, “Contractor Personnel Authorized to Accompany the U.S. Armed 

Forces,” October 3, 2005 

(o) DoD Instruction 3020.50, “Private Security Contractors Operating in Contingency 

Operations,” July 22, 2009 

(p) Sections 1038 and 1080 of Public Law 111-84, “The National Defense Authorization Act 

 For Fiscal Year 2010,” October 28, 2009 

(q) Under Secretary of Defense for Personnel and Readiness Memorandum, “Interim Policy 

and Procedures for Strategic Manpower Planning and Development of Manpower 

Estimates,” December 10, 20031

 

(r) DoD Instruction 7730.64, “Automated Extracts of Manpower and Unit Organizational 

Element File,” December 11, 2004 

(s) Deputy Under Secretary of Defense for Program Integration, “DoD Functions,” current 

edition2

(t) DoD Directive 1404.10, “DoD Civilian Expeditionary Workforce,” January 23, 2009 

(u) DoD Directive 1200.7, “Screening the Ready Reserve,” November 18, 1999 

(v) Constitution of the United States 

(w) Articles 2, 3, 4, and 32 of the Geneva Convention Relative to the Treatment of Prisoners of 

War, of August 1949 (Third Geneva Convention)3

 

1

 Available at http://www.defenselink.mil/prhome/pi.html

2

 Available at http://prhome.defense.gov/pi.html 

295 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

8 ENCLOSURE 1 

 

(x) Articles 24, 28, and 30 of Convention (I) for the Amelioration of the Condition of the 

Wounded and Sick in Armed Forces in the Field, August 12, 1949, (GWS)4

(y) DoD Directive 2310.01E, “The Department of Defense Detainee Program,” 

 September 5, 2006 

(z) DoD 5210.41-M, “Nuclear Weapon Security Manual (U),” November 22, 2004 

(aa) DoD Directive 3115.09, “DoD Intelligence Interrogations, Detainee Debriefings, and 

Tactical Questioning,” October 9, 2008 

(ab) DoD Directive 5530.3, “International Agreements,” June 11, 1987 

(ac) DoD Directive 2311.01E, “DoD Law of War Program,” May 9, 2006 

(ad) DoD Instruction 1000.17, “Detail of DoD Personnel to Duty Outside the Department of 

Defense,” April 16, 2008 

(ae) DoD Directive 1100.20, “Support and Services for Eligible Organizations and Activities 

Outside the Department of Defense,” April 12, 2004 

(af) DoD Instruction 4000.19, “Interservice and Intragovernmental Support,” August 9, 1995 

(ag) DoD Instruction 6025.5, “Personal Services Contracts (PSCS) for Health Care Providers 

(HCPS),” January 6, 1995 

(ah) DoD Directive 1315.07, “Military Personnel Assignments,” January 12, 2005 

(ai) Section 1905 of title 18, United States Code 

(aj) Section 609 of title 40, United States Code 

(ak) Section 670(a) of title 16, United States Code 

(al) DoD Directive 8500.1E, “Information Assurance” October 24, 2002 

(am) Executive Order 12473, “Courts-Martial Manual, United States, 1984” April 13, 1984, as 

amended 

(an) Secretary of Defense Memorandum, “UCMJ Jurisdiction Over DoD Civilian Employees, 

DoD Contractor Personnel, and Other Persons Serving With or Accompanying the Armed 

Forces Overseas During Declared War and a Contingency Operation,” March 10, 2008 

(ao) DoD Directive 1000.20, “Active Duty Service Determinations for Civilian or Contractual 

Groups,” September 11, 1989 

(ap) Joint Publication 1-02, “Department of Defense Dictionary of Military and Associated 

Terms,” current edition 

3

 Available at: www.unhchr.ch/html/menu3/b/91.htm 

4 Available at: www.unhchr.ch/html/menu3/b/q_genev2.htm 

296 DCMA Administrative Record for FY 2013 Furlough Appeals
ENCLOSURE 2

RESPONSIBILITIES

1. UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS 

(USD(P&R)). The USD(P&R) shall: 

 a. Maintain oversight of programs that implement this Instruction and work with the Heads 

of DoD Components to ensure that the DoD Components establish policies and procedures 

consistent with this Instruction. 

 b. Coordinate with the Under Secretary of Defense for Acquisition, Technology, and 

Logistics (USD(AT&L)) to issue annual guidance for the Inherently Governmental Commercial 

Activities (IGCA) Inventory consistent with this Instruction. 

2. USD(AT&L). The USD(AT&L) shall: 

 a. Ensure that policies and procedures governing the acquisition process are consistent with 

this Instruction. This shall include requiring the contracting officer, concurrent with the 

transmittal of the statement of work (or any modification thereof), to obtain a written statement 

from the requiring official that the work is appropriate to contract consistent with this Instruction 

and References (f), (g), (h), (j), and Defense FAR Supplement (DFARS) (Reference (l)). 

 b. Ensure that policies and procedures governing the Defense acquisition process in DoD 

Instruction 5000.02 (Reference (m)) are consistent with this Instruction. 

 c. Ensure that policies and procedures governing contractor personnel in DoD Instruction 

3020.41 (Reference (n)) and DoD Instruction 3020.50 (Reference (o)) are consistent with this 

Instruction. 

 d. Ensure that policies and procedures governing the Commercial Activities Program are 

consistent with this Instruction. 

 e. In coordination with the USD(P&R), issue annual guidance for the IGCA Inventory 

consistent with the procedures in this Instruction and use the data from the IGCA Inventory to 

develop the inventories required by Reference (f). 

3. UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE (USD(I)). The USD(I) shall: 

 a. Ensure that policies and procedures governing DoD intelligence and counterintelligence 

operations (to include intelligence interrogations and debriefings) are consistent with this 

Instruction. 

297 DCMA Administrative Record for FY 2013 Furlough Appeals
 b. Issue procedures for obtaining waiver authority to the prohibition on the interrogation of 

detainees by contractor personnel provided under section 1038 of Public Law 111-84 (Reference 

(p)) that are consistent with this Instruction. All waiver requests shall be submitted through the 

responsible Geographic Combatant Commander and the Joint Staff to the USD(I) for approval 

by the Secretary of Defense. Not later than 5 days after the Secretary issues a waiver, 

notification of the waiver shall be submitted to Congress. 

4. HEADS OF THE DoD COMPONENTS. The Heads of the DoD Components shall require 

their designated manpower authority to: 

 a. Issue implementing guidance requiring use of this Instruction when: 

 (1) Determining the workforce mix for current, new, or expanded missions, to include 

determining the workforce mix for capabilities or support elements requested during a 

mobilization or crisis. 

 (2) Developing manpower estimates for Defense acquisition programs covered by 

USD(P&R) Memorandum (Reference (q)). 

 (3) Revalidating manpower during reorganizations, mission area analyses, efficiency 

reviews, and streamlining, reengineering, or restructuring efforts (to include most efficient 

organizations, high-performing organizations, and business process reengineering studies 

covered by OMB guidance). 

 (4) Developing inter- and intra-governmental service support agreements. 

 (5) Acquiring service support. 

 (6) Considering the advantages of converting from one source of support (military, DoD 

civilian, and contractor) to another when developing the annual personnel authorization request 

to Congress, as required by section 129a of Reference (h). 

 (7) Assessing the force structure and end strength for assigned missions. 

 (8) Assisting with the development of Strategic Human Capital Plans consistent with the 

principles of this Instruction. 

 b. Ensure the Manpower Mix Criteria codes in Enclosure 4 are used to document manpower 

in the centralized DoD database as required by DoD Instruction 7730.64 (Reference (r)). 

 c. Issue procedures that require manpower officials to make determinations as to whether 

functions to be contracted are IG or exempt from private sector performance, based on the 

procedures in this Instruction. This will allow the agency head or designated requiring official to 

provide the contracting officer, concurrent with transmittal of the statement of work (or any 

modification thereof), a written determination that none of the functions to be performed under 

298 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

11 ENCLOSURE 2 

contract are IG or exempt from private sector performance as required by subpart 7.503(e) of 

Reference (g) and subpart 207.503 of Reference (l). 

 d. Provide sufficient oversight to ensure compliance with this Instruction through periodic 

reviews of the DoD Component’s workforce and reviews of annual IGCA Inventory 

submissions. 

5. CHAIRMAN OF THE JOINT CHIEFS OF STAFF. The Chairman of the Joint Chiefs of 

Staff, in addition to the responsibilities in section 4 of this enclosure, shall: 

 a. When reviewing the adequacy of manpower and manpower policies of the Military 

Services as required by sections 153(a)(3)(C) and 153(a)(4)(E) of Reference (h), assess whether 

the workforce mix is appropriate consistent with this Instruction. 

 b. When reviewing the adequacy of critical contract services that support the Combatant 

Commanders’ contingency plans during the deliberative planning process of the Joint Strategic 

Planning System, assess the risks of using contract support consistent with this Instruction and 

require Combatant Commanders to develop contingency plans if they have a reasonable doubt 

that a contractor will continue to provide essential services during a mobilization or crisis. 

 c. Ensure that joint doctrine governing the acquisition and use of private security contractors 

(PSCs) is consistent with this Instruction. 

 d. When conducting periodic reviews of combat agencies, as required by section 193 of 

Reference (h), assess the adequacy of the agency’s manpower and contract support consistent 

with this Instruction. 

6. COMMANDERS OF THE COMBATANT COMMANDS (CCDRs). The CCDRs, in 

addition to the responsibilities in section 4 of this enclosure, shall: 

 a. When determining if the authority, direction, and control they have of assigned commands 

or forces are sufficient to command effectively as required by section 164 of Reference (h), 

assess whether the authority, direction, and control they have of DoD civilian and private sector 

contract support elements are sufficient. 

 b. Ensure that procedures governing the use of PSCs during a military operation preclude 

PSCs from performing any IG or exempt function and restrict PSCs from areas of operation 

where, in the commander’s judgment, PSCs would not have sufficient discretionary latitude, 

authority, equipment, weapons, or fire power to perform successfully their contract. 

 c. Ensure that the workforce mix (military, DoD civilian, or contractor support) for requests 

for forces, additional capabilities, or support elements during a military operation (e.g., 

contingency, humanitarian, peacekeeping) or crisis is based on the policy and procedures in this 

Instruction. 

299 DCMA Administrative Record for FY 2013 Furlough Appeals
ENCLOSURE 3

PROCEDURES

1. WORKFORCE MIX DECISION PROCESS 

 a. Initial Steps. When establishing the workforce mix, manpower planners shall review all 

mission requirements and design units and/or organizations to accomplish baseline operations 

and transition quickly and easily to support military operations (e.g., contingency, humanitarian, 

peacekeeping) and crises. Manpower analysts shall identify the type of work from the list of 

DoD functions (Reference (s)). They shall use the manpower mix criteria at Enclosure 4 of this 

Instruction to distinguish between functions that are IG and commercial and to identify which IG 

and commercial functions will be performed by military personnel and which will be performed 

by DoD civilian personnel. Manpower analysts also shall use the guidance for risk assessments 

at Enclosure 5 of this Instruction to help identify risks. The Table lists the manpower mix 

criteria. 

Table. Manpower Mix Criteria

 

Military-Unique

Knowledge & Skills

Exemption by Law, Executive Order, Treaty

or International Agreement

Exemption for Civilian &

Military Career Development

Exemption of Combat Support

and Combat Service Support due to Operational Risk

Direction and Control of Combat and Crisis Situations

Exemption for Continuity of

Infrastructure Operations

Pending Restructuring of Commercial Activities 

Exemption for Esprit de Corps

DoD Civilian Authority 

Direction & Control 

Exemption of Manpower Dual-Tasked

For Wartime Assignments

Exempted by DoD Management Decision

Exemption for Civilian &

Military Rotation

Military Augmentation of

the Infrastructure During War 

A

B

G

I

F

P

M

D

H

J K

L

E

W Non-Packageable Commercial Activity

R Subject to Review for Public-Private Competition

X Alternative to Public-Private Competition

300 DCMA Administrative Record for FY 2013 Furlough Appeals
 b. IG Activities. In general, a function is IG if it is so intimately related to the public interest 

as to require performance by Federal Government personnel. IG functions shall include, among 

other things, activities that require either the exercise of substantial discretion when applying 

Federal Government authority, or value judgments when making decisions for the Federal 

Government, including judgments relating to monetary transactions and entitlements. Criteria A, 

E, F, and I identify activities that are IG consistent with section 306 of Reference (d); sections 

501 (note), 1115, and 1116 of Reference (e); Attachment A of Reference (f); and subparts 2 and 

7.503(c) of Reference (g). Criterion I identifies IG activities performed during a mobilization or 

other national emergency. Manpower authorities shall consult mobilization and crisis planners 

to identify these IG activities. Manpower analysts shall designate IG functions for performance 

by military or DoD civilian personnel as provided by criteria A, E, F, and I. 

 c. CAs That are Exempted from Private Sector Performance. Criterion L identifies CAs that 

are exempted from private sector performance due to a law, E.o., treaty, or IA. All other CAs are 

subject to private sector performance except when the work is exempted to provide for DoD 

readiness or workforce management needs. 

 (1) DoD Readiness Needs. Manpower analysts shall exempt service support functions 

performed in-theater from private sector performance for risk mitigation purposes as addressed 

by criterion B. Because operational risk is often dependent on the threat level in a geographical 

region, CCDRs shall reevaluate these exemptions as threat levels change and recommend 

workforce changes, as appropriate. Manpower analysts shall confer with mobilization and crisis 

planners within the DoD Component to exempt manpower dual-tasked for wartime assignments 

as addressed by criterion D. Manpower analysts also shall confer with mobilization and crisis 

planners to exempt commercial work from private sector performance that is needed for 

continuity of operations during a national emergency or war as addressed by criterion H. 

 (2) Workforce Management Needs of the Department. Criterion G identifies CAs that 

are exempted from private sector performance for esprit de corps reasons. Manpower analysts 

shall confer with personnel officials within the DoD Component to exempt commercial work 

from private sector performance to provide for overseas or sea-to-shore rotation (criterion J) and 

career development (criterion K). In addition, manpower analysts shall exempt CAs to provide 

for continuity of baseline operations as addressed by criterion H. CAs are also exempted based 

on DoD management decisions (criterion M). However, these exemptions are usually 

temporary, pending final resolution by the DoD Component and OSD. 

 d. CAs Subject to Private Sector Performance or Divestiture. All other CAs are subject to 

private sector performance or divestiture. These activities may be subject for review for a 

public-private competition (criterion R). They may be identified for divestiture or military to 

civilian conversion, or contracted without going through a public-private competition (criterion 

X). Also, CAs are sometimes temporarily retained in-house pending restructuring of the activity 

(criterion P), or because the CA cannot be packaged for public-private competition (criterion W). 

301 DCMA Administrative Record for FY 2013 Furlough Appeals
2. IG FUNCTIONS AND ACTIVITIES CLOSELY ASSOCIATED WITH IG FUNCTIONS 

 a. How management responsibilities are delegated within an organization often has a direct 

impact on the workforce mix. For example, approval authority is an IG task. How approval 

authority is assigned (centralized or decentralized) has a direct bearing on the number of 

personnel performing IG work. Also, if a function entails both IG and commercial tasks, how 

the work is organized dictates the workforce mix. For instance, if IG and commercial tasks are 

non-severable (both have to be performed by all the manpower in the activity to accomplish the 

mission), then all of the manpower in the activity are designated IG to ensure that all IG tasks are 

performed by Government personnel. However, if IG and commercial tasks can be separated 

into sub-functions without adverse consequence to mission success, the manpower performing 

each sub-function shall be designated IG or commercial according to the sub-function 

performed. (See subparagraph 1.d.(2) of Enclosure 4 of this Instruction for an example.) 

 b. Particular attention should be paid to activities that are closely associated with IG 

functions. Functions listed at section 7.503(d) of Reference (g) are closely associated with IG 

functions (see section 2383 of Reference (h)). However, the list of functions at section 7.503(d) 

of Reference (g) is illustrative and not all-inclusive. Functions that are closely associated with 

IG functions (to include those listed in section 7.503(d) of Reference (g)) are addressed in the 

manpower mix criteria at Enclosure 4 of this Instruction. 

 (1) Although activities that are closely associated with IG functions are generally not 

considered to be IG, they may become IG because of the way they are performed or the 

circumstances under which they are performed. Decisions as to whether or not a function is IG 

should place emphasis on the degree to which the conditions or facts restrict or put at risk the 

discretionary authority, decision-making responsibility, or accountability of Defense officials. 

When an activity is so closely associated with an IG function that it cannot be separated or 

distinguished from the IG function, it should be identified as IG to preclude transferring 

governmental authority, responsibility, or accountability to the private sector. This includes 

situations where: a contractor could have to assume IG responsibilities to accomplish the job; a 

contractor’s role with regard to an IG function would no longer be discernible from a DoD 

official’s role; or a contractor’s advice or direction could be mistaken for that of a DoD official’s 

on a matter that involves IG responsibilities. These functions shall be designated IG as 

prescribed in paragraphs 1.d., 4.b., and 5.g. of Enclosure 4. The guidance for risk assessments at 

Enclosure 5 provides examples and additional clarification. 

 (2) Activities closely associated with IG functions are also exempted from private sector 

performance for risk mitigation purposes as addressed at paragraphs 2.b. and 7.b. of Enclosure 4. 

3. PERSONAL SERVICES. Personal services shall be performed by military or DoD civilian 

personnel and not contracted unless specifically authorized (subpart 37.104 of Reference (g)). 

See subparagraph 1.b.(2) of Enclosure 5 of this Instruction for an explanation of personal 

services. 

302 DCMA Administrative Record for FY 2013 Furlough Appeals
4. PERSONNEL SHORTFALLS 

 a. If a DoD Component has a military or DoD civilian personnel shortfall, the shortfall is not 

sufficient justification for contracting an IG function. Likewise, a personnel shortfall is not 

sufficient justification for contracting activities that are closely associated with IG functions if 

contracting the activity would result in an inappropriate risk as provided in subparagraph 2.b.(1) 

of this enclosure. Personnel shortfalls shall be addressed by hiring, recruiting, reassigning 

military or DoD civilian personnel; authorizing overtime or compensatory time; mobilizing all or 

part of the Reserve Component (when appropriate); or other similar actions. 

 b. Manpower authorities shall not designate manpower for military performance based on 

the assumption that DoD civilians cannot be recruited or will not deploy to perform activities 

during a mobilization or other national emergency. Manpower authorities shall consult the 

director of the DoD Component’s Human Resource Office to verify whether DoD civilian 

employees are available or can be recruited and trained as emergency essential (E-E) employees 

to provide support during a mobilization or other national emergency. A sufficient number of EE positions shall be established as are required to support a national emergency or war. 

5. COST AS A DECIDING FACTOR IN WORKFORCE MIX DECISIONS. As provided in 

paragraph 4.f. above the signature of this Instruction, even if a function is not IG or exempt from 

private sector performance, DoD Components shall use DoD civilian personnel to perform the 

function unless DoD civilians are not the low-cost provider or there is a legal, regulatory, or 

procedural impediment to using DoD civilian personnel. When assessing workforce costs, 

manpower analysts shall not assume that one source of support (military, DoD civilian, or 

contractor) is less costly than another. DoD Components shall conduct a cost comparison as 

provided by Reference (j) to determine the low-cost provider for all new or expanding mission 

requirements and for functions that have been contracted but could be performed by DoD 

civilian employees. DoD Components shall perform public-private competitions as provided by 

Reference (f) to determine the low-cost provider for CAs. 

6. NON-AVAILABILITY OF DoD CIVILIAN EMPLOYEES. If there is a legal or regulatory 

impediment to using DoD civilian employees, or the director of the local Human Resource 

Office certifies that DoD civilians cannot be hired, hired in sufficient time, or retained to perform 

a function, the function may be contracted provided it is not IG or exempt from private sector 

performance. If the function is IG, the activity shall be designated for military performance as 

provided by section 8 of this enclosure. If the function is exempted from private sector 

performance for other than IG reasons, the exemption shall be handled through normal 

management actions. 

7. ORDER OF PRECEDENCE FOR CODING MANPOWER IN DoD MANPOWER 

DATABASES. The codes assigned to each manpower mix criterion at Enclosure 4 of this 

Instruction shall be used to document manpower in DoD manpower databases. Manpower mix 

criteria are listed in descending order of precedence at the Table in this enclosure. When two or 

303 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

16 ENCLOSURE 3 

more criteria apply, the criterion highest on the list shall take precedence. The order of 

precedence at the Table is structured to give manpower officials visibility of why activities are 

performed by DoD civilian or military personnel. By understanding the underlying reason for 

the workforce mix, Defense officials can assess the risks that manpower shortfalls have on IG 

responsibilities, readiness, workforce management, and mission accomplishment. 

8. CODING MILITARY-TO-CIVILIAN AND CIVILIAN-TO-MILITARY CONVERSIONS. 

If manpower analysts decide that military personnel are performing functions that should be 

performed by DoD civilian personnel, or that DoD civilian personnel are performing functions 

that should be performed by military personnel, they shall use the appropriate code to show that 

the activity should be converted from military to civilian or from civilian to military 

performance. For example, manpower analysts shall designate military manpower with code 

“E,” “Civilian Authority Direction & Control,” if criterion “E” best describes the type of work. 

Also, civilian manpower that performs work that requires “Military-Unique Knowledge & 

Skills” shall be coded “F.” 

9. CODING MILITARY MANPOWER LOCATED IN DoD ACTIVITIES OUTSIDE THE 

MILITARY DEPARTMENTS. When manpower authorities from OSD, the Joint Staff, 

Combatant Commands, DoD Field Activities, Defense Agencies, or other organizations outside 

the Military Departments determine or revalidate their workforce mix, they shall consult officials 

from the Military Services to ensure that manpower needed for military rotation, career 

development, and wartime assignments are properly coded. This shall include manpower for 

interagency assignments. 

304 DCMA Administrative Record for FY 2013 Furlough Appeals
ENCLOSURE 4

MANPOWER MIX CRITERIA

1. CRITERION A - DIRECTION AND CONTROL OF COMBAT/CRISIS SITUATIONS. 

Manpower analysts shall code manpower in operating forces “A” if the manpower performs any 

of the IG functions addressed in this section. Civilian manpower in overseas locations that are 

coded “A” are also designated E-E as provided by DoD Directive 1404.10 (Reference (t)). E-E 

positions are also designated key following the procedures in DoD Directive 1200.7 (Reference 

(u)) to indicate they are not to be filled by Ready Reservists that can be called to active duty. 

 a. Command of Military Forces. Command of military forces is an IG function according to 

Reference (g). Command within the Military Services is implemented through a unique 

construct of command authority, known as the “military chain of command.” Within the 

operating forces, this authority begins with field commanders and extends to the lowest level of 

command responsible for discretionary decision making, personnel safety, and mission 

accomplishment. Accordingly, manpower in operational command or that may have to assume 

operational command of military forces is designated military and coded “A.” 

 b. Operational Control of Combat, Combat Support, and Combat Service Support Units. 

Operational control is derived, in part, from IG responsibilities assigned to commanders and their 

military subordinates as explained in subparagraphs 1.b.(1) and 1.b.(2) of this enclosure. 

 (1) Military Discipline. Military officers and enlisted personnel are subject to a strict 

form of discipline – i.e., they must obey all lawful orders at all times and are trained and 

prepared to immediately perform all duties as directed by military commanders. In addition, 

military personnel may not quit or abandon their duties. See subparagraphs 2.d.(1) through 

2.d.(4) of Enclosure 5 concerning responsibilities inherent to military discipline that are uniquely 

military. This strict discipline provides military commanders with the control and flexibility 

needed to quickly reassign duties, reconstitute operations, provide relief and assistance to 

military forces during hostilities, and fight and win wars. It also provides for the orderly transfer 

of command and control of military operations if the commander is killed or incapacitated. This 

strict discipline is an IG responsibility unique to the military establishment. The unique nature of 

the military establishment and its role in defense of the Nation has been recognized by the 

Supreme Court—i.e., the differences between the military and civilian communities result from 

the fact that it is the primary business of armies and navies to fight or be ready to fight wars 

should the occasion arise. 

 (2) Uniform Code of Military Justice (UCMJ) Authority. Operational control is 

enforced, among other means, by Chapter 47 of Reference (h), also known and hereafter referred 

to as “the UCMJ.” Consistent with section 809 of Reference (h), commissioned officers have the 

authority to order the arrest or confinement of an enlisted Service member who violates the 

UCMJ. Commanding officers may authorize warrant officers, petty officers, or 

noncommissioned officers to order enlisted members of their command or individuals subject to 

their authority who violate the UCMJ into arrest or confinement. Commissioned and warrant 

305 DCMA Administrative Record for FY 2013 Furlough Appeals
officers, and those civilians subject to the UCMJ, may be ordered into arrest or confinement only 

by a commanding officer to whose authority they are subject. Civilians are subject to the UCMJ 

when serving with or accompanying U.S. armed forces in the field during a declared war or a 

qualifying contingency operation (as defined in Enclosure 5). The authority to order the arrest or 

confinement of civilians subject to the UCMJ, commissioned officers, and warrant officers may 

not be delegated by the commanding officer. UCMJ authority, together with the operational 

control it provides, entails substantial discretion and is IG-consistent with References (e), (f), and 

(g). 

 c. Combat Operations. When armed fighting or use of force is deemed necessary for 

national defense, the Department of Defense may authorize deliberate destructive and/or 

disruptive action against the armed forces or other military objectives of another sovereign 

government or against other armed actors on behalf of the United States. This entails the 

authority to plan, prepare, and execute operations to actively seek out, close with, and destroy a 

hostile force or other military objective by means of, among other things, the employment of 

firepower and other destructive and disruptive capabilities. 

 (1) Combat authorized by the U.S. Government is IG, coded “A,” and designated for 

military performance because: 

 (a) The U.S. Government has exclusive responsibility for discretionary decisions 

concerning the appropriate, measured use of combat power, including the offensive use of 

destructive or deadly force on behalf of the United States. 

 (b) Since combat operations authorized by the U.S. Government entail the exercise 

of sovereign Government authority and involve substantial discretion – i.e., can significantly 

affect the life, liberty, or property of private persons or international relations - they are IGconsistent with References (e), (f), and (g). 

 (c) The appropriate, measured use of combat power during hostilities is of critical 

national interest. Under certain circumstances, the United States can be liable for its misuse or 

compelled to make restitution due to its unintended collateral effects. The Department of 

Defense safeguards U.S. sovereign authority and reduces the risk of using destructive and/or 

disruptive force inappropriately by: 

 1. Delegating responsibility for combat operations only to military commanders 

through the military chain of command. 

 2. Holding military commanders and their forces accountable for the appropriate 

and controlled use of combat power and adherence to rules of engagement and the law of war. 

(See section 164 of Reference (h) concerning the responsibility of CCDRs for their authority, 

direction, and control of commands and forces assigned to their command. This responsibility 

entails substantial discretion and is IG-consistent with References (e), (f), and (g).) 

306 DCMA Administrative Record for FY 2013 Furlough Appeals
 3. Ensuring that the discretionary judgment, leadership, knowledge, and 

discipline necessary to perform effectively and responsibly under fire is developed and 

reinforced through extensive training of military commanders in tandem with their forces. 

 4. Holding commanders responsible for assessments of the training, discipline, 

and readiness of their forces to conduct assigned missions. (See section 117 of Reference (h) 

concerning the commanders’ responsibility for force readiness. This responsibility entails 

substantial discretion and is IG-consistent with References (e), (f), and (g).) 

 (2) Consistent with subparagraph 1.c.(1) of this enclosure, manpower shall be designated 

military and coded “A” if the planned use of destructive combat capabilities is part of the 

mission assigned to this manpower (including destructive capabilities involved in offensive 

cyber operations, electronic attack, missile defense, and air defense). This includes manpower 

located both inside and outside a theater of operations if the personnel operate a weapon system 

against an enemy or hostile force (e.g., bomber crews, inter-continental ballistic missile crews, 

and unmanned aerial vehicle operators). This does not include technical advice on the operation 

of weapon systems or other support of a non-discretionary nature performed in direct support of 

combat operations. 

 d. Security Provided to Protect Resources and Operations in Hostile or Volatile Areas 

 (1) Security provided for the protection of resources (people, information, equipment, 

supplies, facilities, etc.) or operations in uncontrolled, unpredictable, unstable, high risk, or 

hostile environments inside or outside the United States entails a wide range of capabilities, 

some of which are IG and others of which are commercial. (See paragraph 2.b. of this enclosure 

for a discussion of security functions that are not IG but are exempted from private sector 

performance.) Subparagraphs 1.d.(1)(a) through (f) of this enclosure are examples of IG security 

functions. 

 (a) If security forces that operate in hostile environments as part of a larger, totally 

integrated and cohesive armed force perform operations in direct support of combat (e.g., 

battlefield circulation control and area security), the operations are IG. These operations entail 

the discretionary use of deadly force — i.e., although these operations are governed by rules of 

engagement, mission statements, and orders expressing the commander’s intent, the military 

troops are still required to exercise initiative and substantial discretion when deciding how to 

accomplish the mission, particularly when unanticipated opportunities arise or when the original 

concept of operations no longer applies. These security operations require command decisions, 

military training, and operational control for reasons stated in subparagraph 1.c.(1) of this 

enclosure and must be provided through a military means. As PSCs may not perform these 

security operations, private security contracts are not a force structure substitute for these 

requirements. 

 (b) Security is IG if it is performed in environments where there is such a high 

likelihood of hostile fire, bombings, or biological or chemical attacks by groups using 

sophisticated weapons and devices that, in the judgment of the military commander, the situation 

could evolve into combat. Security performed in such high-risk environments requires command 

307 DCMA Administrative Record for FY 2013 Furlough Appeals
decisions, military training, and operational control for reasons stated in subparagraph 1.c.(1) of 

this enclosure and shall be designated for military performance. In such situations, private 

security contracts are not a force structure substitute for these requirements. 

 (c) Security actions that entail assisting, reinforcing, or rescuing PSCs or military 

units who become engaged in hostilities are IG because they involve taking deliberate, offensive 

action against a hostile force on behalf of the United States. This type of security requires 

command decisions, military training, and operational control for reasons stated in subparagraph 

1.c.(1) of this enclosure and shall be designated for military performance. As PSCs may not be 

given the discretionary latitude to engage in offensive actions, private security contracts are not a 

force structure substitute for these requirements. Nothing in this subparagraph of the Instruction 

shall preclude a PSC from defending another contractor or government entity of their own 

volition if consistent with U.S., international, and host nation (HN) law; Status of Forces 

Agreement (SOFA) and other IA; HN support agreement; and Federal regulation. 

 (d) Security is IG if, in the commander’s judgment, an offensive response to hostile 

acts or demonstrated hostile intentions would be required to operate in, or move resources 

through, a hostile area of operation. Decisions to offensively respond to hostile acts or 

demonstrated hostile intentions (e.g., assault or preemptively attack) entail substantial discretion 

and are IG. (See subparagraph 2.d.(6)(a) of Enclosure 5 of this Instruction for additional 

information and an example.) This type of security requires command decisions, military 

training, and operational control for reasons stated in subparagraph 1.c.(1) of this enclosure and 

shall be designated for military performance. As PSCs may not be given the discretionary 

latitude to authorize or engage in offensive actions against an enemy or hostile force, private 

security contracts are not a force structure substitute for these requirements. 

 (e) Security is IG if, in the commander’s judgment, decisions on the appropriate 

course of action would require substantial discretion, the outcome of which could significantly 

affect U.S. objectives with regard to the life, liberty, or property of private persons, a military 

mission, or international relations. Such actions typically require high-risk, on-the-spot 

judgments on the appropriate level of force, acceptable level of collateral damage, and whether 

the target is friend or foe in situations pivotal to U.S. interests. These actions are so intimately 

related to U.S. interests as to require government performance and, as provided by Reference (e), 

is IG. Private security contracts are not a force structure substitute for these requirements. 

 (f) If consistent with applicable U.S., international, and HN law; SOFAs and other 

IAs; HN support agreements; and Federal regulations, a DoD PSC may be authorized to provide 

security services so long as the services are not IG as provided by this Instruction. As provided 

by References (n) and (o), contractors may provide security services for other than uniquely 

military functions as identified in subparagraphs 1.d.(1)(a) through 1.d.(1)(e) of this enclosure, 

so long as the geographic CCDR can: 

 1. Clearly articulate rules on the use of force that preclude ceding governmental 

control and authority of IG functions to private sector contractors as addressed in subparagraphs 

1.d.(1)(a) through 1.d.(1)(e) of this enclosure. 

308 DCMA Administrative Record for FY 2013 Furlough Appeals
 2. Set clear limits on the use of force based on U.S. law and policy, and 

applicable HN law, relevant SOFAs, IAs, and international law, including the law of war. 

 3. Include in the contract for security services a description of where the PSC will 

operate, a description of the anticipated threat, a description of any known or potentially 

hazardous situations, and a plan for how appropriate assistance will be provided to PSC 

personnel who become engaged in hostile situations. 

 (2) Security shall be designated for military performance and the manpower coded “A” 

if, in the judgment of the commander, it meets one or more of the criteria addressed in 

subparagraphs 1.d.(1)(a) through 1.d.(1)(e) of this enclosure. This includes combat support (CS) 

and combat service support (CSS) if all the manpower in the unit must perform one or more of 

these IG security functions to accomplish the mission. For example, manpower in Marine Corps 

CS and CSS units are coded “A” because they are required to use offensive tactics to defend the 

unit and accomplish the mission. In this example, two functions are performed by all of the 

manpower in the unit and the IG function (security) takes precedence over the commercial 

function for coding purposes so that IG work is always performed by government personnel. 

However, if IG security operations can be performed separately without adverse impact to 

mission success, only manpower performing IG security operations are coded “A.” For example, 

if a Military Service has a new weapon system available for use during hostilities, but sufficient 

numbers of military maintainers are not yet trained, the commander might be able to use contract 

maintenance in a secure compound without degrading the operational capability of the system. 

In such cases, only the IG security forces at the compound are coded “A.” However, in such 

cases, contractor personnel may be issued weapons for self-defense as provided by Reference 

(n). 

 (3) It should be in the sole discretion of the commander of the relevant combatant 

command to determine whether or not the performance by a PSC under a contract awarded for a 

particular activity, a series of activities, or activities in a particular location, within a designated 

area of combat operations, is appropriate. Such a determination shall not be delegated to any 

person who is not in the military chain of command. 

 e. Medical and Chaplain Services Performed in Hostile Areas. Services provided by military 

medical personnel and chaplains embedded in military units that engage in hostile action are IG. 

This manpower shall be designated military and coded “A” because: 

 (1) During hostilities, military medical personnel function as an inherent part of the unit 

and (as with other members of the unit) use substantial discretion when defending their patients. 

 (2) The First Amendment prohibits any law respecting the establishment of religion or 

prohibiting the free exercise thereof. Although the Department of Defense can and does contract 

for religious ministry from individual faiths, the Department of Defense cannot contract for the 

type of religious pluralism required in operational environments. 

 (3) The Department of Defense cannot impose upon civilian religious ministry 

professionals the type of religious pluralism exercised by military chaplains without risk of 

309 DCMA Administrative Record for FY 2013 Furlough Appeals
challenge under the establishment clause of the First Amendment of the Constitution (Reference 

(v)). Accordingly, sections 3073, 5347, 5142, and 8067 of Reference (h) authorize the 

appointment of military chaplains. Chaplains provide for military members’ religious “free 

exercise” rights and satisfy both the “establishment” and “free exercise” clauses of Reference 

(v). Legal efforts to invalidate this contention have been unsuccessful. In addition, military 

chaplains have support from over 230 endorsing bodies that represent over 300 faith groups to 

work cooperatively with other faith groups to provide for the pluralistic religious needs of 

military members. 

 (4) Even though many aspects of their duties are governed by policy and practice, 

military chaplains must use substantial discretion and make value judgments when interpreting 

DoD policy and ministering to the pluralistic religious needs of the military. To avoid 

proselytizing, chaplains often have to balance their personal religious beliefs with the 

requirements of ministering to members of different faiths or to persons of no particular faith 

who are brought to personal crises during war. Also, chaplains must use substantial discretion 

when requested for actions that certain faith groups consider essential but are inconsistent with 

the chaplain’s personal religious beliefs, as opposed to civilian religious ministry professionals 

who provide specifically focused rites and sacraments according to their faith groups. 

 (5) Military chaplains also play an active, discretionary role in planning and preparation 

of activities when religion and other cultural issues and ideologies could have a pronounced 

influence on civil-military operations, psychological operations, or public affairs activities. 

 (6) If captured during an international armed conflict, unlike civilian or PSC employees 

performing religious or medical services, military chaplains and military medical personnel are 

not held as prisoners of war (POWs). They are retained persons who are permitted to attend to 

the religious and medical needs of U.S. POWs under the Geneva Convention. Their unique role 

is performed on behalf of the U.S. Government and cannot be delegated to DoD civilians or 

private sector contractors. (See Article 32 of the Third Geneva Convention (Reference (w)) and 

Articles 24, 28, and 30 of the Convention (I) for the Amelioration of the Condition of the 

Wounded and Sick in Armed Forces in the Field (Reference (x)).) 

 f. Criminal Justice and Law Enforcement Operations Performed in Operational 

Environments 

(1) How enemy prisoners of war (EPWs), civilian internees (CIs), retained persons 

(RPs), other detainees, terrorists, and other criminals are to be treated when captured, transferred, 

detained, and interrogated during or in the aftermath of hostilities, as addressed in DoD Directive 

2310.01E (Reference (y)), falls under the discretionary exercise of government authority. 

Responsibility for their handling as well as decisions concerning how they are treated cannot be 

transferred to private sector contractors. 

 (2) Consistent with Reference (g), control of prosecutions and performance of 

adjudicatory functions in support of UCMJ criminal justice proceedings are IG activities. 

Consistent with Reference (h) these activities must be performed by military personnel. 

Accordingly, this manpower shall be designated military and coded “A.” 

310 DCMA Administrative Record for FY 2013 Furlough Appeals
 (3) Certain law enforcement operations, to include issuing warrants, making arrests, and 

preservation of crime scenes, are IG activities. According to Reference (g), direct conduct of 

criminal investigations is an IG activity. This includes interrogations and interviews conducted 

for law enforcement purposes. If these activities are carried out under the UCMJ as prescribed in 

Chapter 47 of Reference (h), or are performed in hostile areas where security necessary for DoD 

civilian performance cannot be provided, the operation shall use only military personnel. The 

Department of Defense shall build the appropriate mix of code “A” manpower and acquire and 

train the requisite military and civilian personnel to meet the requirements. Contractors, to 

include PSCs, are prohibited from performing law-enforcement activities. However, in areas 

where adequate security is available and expected to continue, properly trained and cleared 

contractors may perform special non-law-enforcement security activities that do not directly 

involve criminal investigations, so long as they are monitored by sufficiently trained government 

officials as required by Reference (g). 

 (4) Direction and control of confinement/correctional facilities for U.S. military 

prisoners in areas of operation are IG functions. Manpower performing these activities shall be 

designated military and coded “A” if the facility is for the confinement of offenders of the UCMJ 

as prescribed in section 951 of Reference (h) and the prisoners are under military command. 

 (5) Direction and control of detention facilities for EPWs, CIs, RPs, other detainees, 

terrorists, and other criminals in areas of operation are IG activities. Consistent with Chapter 47 

of Reference (h) and Reference (y), these activities must be performed by military personnel. 

Manpower performing these activities shall be designated military and coded “A.” This includes 

detention under the law of war as part of ongoing operations for their own protection or to 

remove potential threats from the battle space. 

g. Intelligence and Counterintelligence Operations Performed in Operational Environments. 

Consistent with Reference (g), direction and control of intelligence and counterintelligence 

operations are IG activities. This includes the approval, supervision, and oversight of 

intelligence interrogations and detainee debriefings. Also, consistent with References (e), (f), 

and (g), intelligence and counterintelligence activities (to include intelligence interrogations and 

detainee debriefings) that require the exercise of substantial discretion in applying government 

authority and/or in making decisions for the government are IG. When performed in hostile 

areas where security necessary for DoD civilian performance cannot be provided, the manpower 

shall be designated military and coded “A.” Otherwise, the manpower shall be designated DoD 

civilian and coded “A.” (See subparagraph 2.a.(2) of this enclosure for exemptions.) 

 

 h. Federal Procurement Activities Performed in Operational Environments. According to 

Reference (g), Federal procurement activities with respect to prime contracts (to include 

determining what supplies or services are to be acquired; approving, awarding, administering, 

and terminating contracts; and determining whether contract costs are reasonable, allocable, and 

allowable) are IG. When performed in hostile areas where security necessary for DoD civilian 

performance cannot be provided, the operation shall use only military personnel. Otherwise, the 

operation shall be performed by DoD civilian manpower. The Department of Defense shall 

311 DCMA Administrative Record for FY 2013 Furlough Appeals
build the appropriate mix of code “A” manpower and acquire and train the requisite military and 

civilian personnel to meet the requirements. 

2. CRITERION B - EXEMPTION OF CS AND CSS DUE TO OPERATIONAL RISK. Section 

118(b) of Reference (h) requires that the Department of Defense plan to successfully execute the 

full range of missions called for in the national defense strategy at a low to moderate level of 

risk. Consistent with Reference (a), certain commercial CS and CSS functions are exempted 

from private sector performance and designated for DoD civilian or military performance for risk 

mitigation purposes. 

 a. Exemption for Military CS and CSS 

 (1) Manpower authorities shall designate CS or CSS support functions for military 

performance and code the manpower “B” if, in the commander’s judgment, performance of the 

function by DoD civilians or contractors or total reliance on DoD civilians or contractors would 

constitute an unacceptable risk. This includes situations where there is a significant risk that: 

 (a) The threat level could increase and military personnel would be needed on short 

notice to provide or augment a military capability. (Section 113 of Reference (h) requires the 

Department to maintain the capability to reconstitute or expand the defense capabilities of the 

armed forces on short notice to meet a resurgent or increased threat.) 

 (b) There would be an unsafe number of personnel in hostile areas who are not 

combatants. 

 (c) Activities that are closely associated with IG functions would be put at an 

inappropriate level of risk if contracted as addressed at subparagraph 1.b.(3) of Enclosure 5. 

 (d) DoD civilians or private sector contractors will not or cannot continue to perform 

their work. This includes situations where, in the commander’s judgment: 

 1. The contractor can no longer fulfill the terms of the contract because the threat 

level, duration of hostilities, or other terms specified in the contract have changed significantly. 

(See paragraph 2.d. of Enclosure 5 of this Instruction for examples.) 

 2. A U.S., international, or HN law; SOFA or other IA; or HN support agreement 

has changed in a manner that affects the terms of the contract. 

 3. There is too great a risk that a contractor would default or not comply with the 

rules on the use of force. 

 (e) Security provided by contractors could prove inadequate due to the contractor’s 

weapons, operational security, communications systems, or training. For example, contract 

security may be inadequate for a large cache of conventional arms, ammunitions, or explosives. 

In addition, a commander may determine that contract security is inadequate because there is too 

312 DCMA Administrative Record for FY 2013 Furlough Appeals
great a risk that an encounter with an enemy or hostile force would lead to hostilities and 

necessitate assistance, reinforcement, or rescue. Contractors shall not provide security for 

nuclear weapons (in accordance with DoD 5210.41-M (Reference (z))) or other weapons of mass 

destruction, e.g., captured chemical, biological, radiological, or high-explosive weapons. 

 (2) There are prohibitions on the use of contractors for intelligence interrogations. 

(a) Consistent with section 1038 of Reference (p), no enemy prisoners of war, 

civilian internee, retained personnel, other detainee, or any other individual who is in the custody 

or under the effective control of the Department of Defense or otherwise under detention in a 

DoD facility in connection with hostilities may be interrogated by contractor personnel unless 

the following four conditions are met: 

1. The Secretary of Defense determines that a waiver to this prohibition is vital to 

the national security interests of the United States and waives the prohibition for a period of 60 

days; or determines that a renewal of the waiver is vital to the national security interests of the 

United States and renews the waiver for an additional 30-day period (see section 3 of Enclosure 

2 concerning submission of requests for waivers to the USD(I)). 

2. The contract interrogator is properly trained and certified to DoD standards 

consistent with DoD Directive 3115.09 (Reference (aa)). 

3. A sufficient number of properly trained and certified DoD military and/or DoD 

civilian interrogators supervise and closely monitor the contract interrogator in real time 

throughout the interrogation process to ensure that the contract interrogator does not deviate 

from the government-approved interrogation plan or otherwise perform any IG function. 

4. A video and audio recording is made of the interrogation to the extent required 

by section 1080 of Reference (p) and consistent with Reference (aa). 

(b) Consistent with section 1038 of Reference (p), in areas where adequate security is 

available and is expected to continue, contractor personnel with proper training and security 

clearances may be used as linguists, interpreters, report writers, information technology 

technicians, and other employees filling ancillary positions (including as trainers of, and advisors 

to, interrogators) in the interrogation of persons described above if: 

 1. Such persons are subject to the same rules, procedures, policies, and laws 

pertaining to detainee operations and interrogations as apply to government personnel in such 

positions in such interrogations; and, 

 2. Appropriately qualified and trained military or civilian personnel of the 

Department of Defense are available to oversee the contractor’s performance and to ensure that 

contractor personnel do not perform activities that are prohibited under this section. 

(3) Manpower authorities also shall designate CS or CSS support functions for military 

performance and code the manpower “B” if there is a law, IA, HN support agreement, or 

313 DCMA Administrative Record for FY 2013 Furlough Appeals
regulatory impediment to contracting the support service and DoD civilians cannot perform the 

work. For example, as explained at subparagraph 1.b.(2) of Enclosure 5 of this Instruction, DoD 

Components may not award personal services contracts unless specifically authorized by statute. 

 (4) This manpower provides a ready and controlled source of technical competence (core 

capability) necessary to ensure an effective and timely response to a national emergency or 

crisis. Decisions about the number of CS and CSS units necessary to provide a core capability 

are based on the guidance for risk assessments at Enclosure 5 of this Instruction. 

 b. Exemption for Civilian CS and CSS 

 (1) Manpower authorities shall designate CAs that support the operating forces for DoD 

civilian performance and code the manpower “B” if, in the commander’s judgment, performance 

of the function by PSCs or total reliance on PSCs would constitute an unacceptable risk. 

 (2) This includes: 

(a) E-E manpower that provides continuity of operations for essential functions, 

maintains the availability of combat-essential systems, or performs duties critical to combat 

operations in overseas locations during a crisis when other civilians are evacuated as provided by 

Reference (t). 

(b) Manpower that performs personal services, or that performs activities that are 

closely associated with IG functions that would be put at an inappropriate level of risk if 

contracted (see subparagraphs 1.b.(2) and (3) of Enclosure 5). 

 (3) This manpower is exempted from private sector performance and designated for DoD 

civilian performance. These positions cannot be vacated or eliminated during a mobilization or 

other national emergency without seriously impairing the ability of the activity to function 

effectively. These positions are also designated as key following the procedures in Reference (u) 

to indicate that they are not to be filled by Ready Reservists who can be called to active duty. 

 (4) Examples include supply and maintenance of strategic weapon systems, Army units 

at echelon above division, Army logistical support elements that deploy to hostile areas, 

technology escort units that retrieve chemical and biological weapons in forward areas, and Navy 

ships with CS missions that are part of the combat logistics force. 

 c. Threat Levels. Because operational risk often depends on the threat level in a geographic 

region, coding for this manpower should be reevaluated as threat levels change. 

3. CRITERION D - EXEMPTION OF MANPOWER DUAL-TASKED FOR WARTIME 

ASSIGNMENTS. Consistent with Reference (a), manpower authorities shall establish sufficient 

manpower in the infrastructure so that an adequate pool of personnel is available for critical 

assignments in the operating forces during a mobilization or other national emergency. 

Manpower authorities shall consult mobilization and crisis planners within the DoD Component 

314 DCMA Administrative Record for FY 2013 Furlough Appeals
to identify personnel in the infrastructure who are needed for assignments in the operating forces 

during such emergencies. The manpower shall be coded “D” to indicate the incumbents are 

dual-tasked for wartime assignments (i.e., assigned to positions in the infrastructure and also 

counted for assignments in the operating forces). 

a. Military Manpower Designated for Wartime Assignments. Manpower in the 

infrastructure shall be designated military and coded “D” if the incumbents are active military or 

Active Guard and Reserve who are designated for assignments in the operating forces or serve as 

replacements for personnel in the operating forces during a mobilization or other national 

emergency, but perform CAs in the infrastructure during peacetime. For example, the Navy uses 

active-duty military from the shore establishment to stand-up fleet hospitals and to staff hospital 

ships with medical personnel during emergencies. Also, Air Force unit type code military are 

coded “D.” This manpower is designated military and exempted from private sector 

performance because the incumbents are needed for assignments in the operating forces during a 

mobilization or other national emergency before Reserve Component personnel are recalled and 

before post-mobilization recruits (i.e., personnel acquired after mobilization) can be trained and 

assigned to the operating forces to support or sustain a military operation. 

b. Civilian Manpower Designated for Assignments During a Mobilization or Crisis. 

Manpower in the infrastructure shall be designated DoD civilian and coded “D” if the 

incumbents are designated for assignments in operating forces overseas or serve as alternates or 

replacements for personnel in overseas assignments in the operating forces during a mobilization 

or other national emergency. For example, E-E personnel who are assigned overseas during a 

crisis or who replace E-E personnel assigned to positions in overseas locations according to 

Reference (t) are coded “D.” These positions are also designated as key following the 

procedures in Reference (u) to indicate that they are not to be filled by Ready Reservists that can 

be called to active duty. Also, DoD civilians who are dual-status military technicians covered by 

section 115(c) of Reference (h) who train the Selected Reserve (SELRES) or maintain or repair 

equipment issued to the SELRES or Active Component forces during peacetime are coded “D” if 

they are designated for military wartime assignments in units of the SELRES. 

c. Designations for Assignments. Manpower authorities shall consult mobilization and crisis 

planners within the DoD Component to determine the number and skills required for these 

assignments and centrally manage the coding for this manpower. 

4. CRITERION E - DoD CIVILIAN AUTHORITY, DIRECTION, AND CONTROL. The IG 

duties in this section are inherent to DoD civilian authority, direction, control, and accountability 

of the Department of Defense consistent with Reference (h). Manpower analysts shall designate 

this work for civilian performance and code the manpower “E.” If the incumbents also have 

emergency-essential responsibilities, the manpower also shall be designated E-E as provided by 

Reference (t). If the positions cannot be vacated or eliminated during a mobilization or other 

national emergency without seriously impairing the ability of the activity to function effectively, 

the manpower shall be designated as key following the procedures in Reference (u) to indicate 

that they are not to be filled by Ready Reservists that can be called to active duty. 

315 DCMA Administrative Record for FY 2013 Furlough Appeals
 a. Civilian Leadership and Control. Manpower shall be designated civilian and coded “E” if 

the incumbents are directly and ultimately accountable for accomplishment of missions, 

discretionary exercise of DoD authority, or judgments relating to monetary transactions and 

entitlements. This includes ultimate control of the acquisition, use, or disposition of U.S. 

property (real or personal, tangible or intangible). It includes the authority to obligate Federal 

funds or to commit the Department of Defense to take or not take action by contract, policy, 

regulation, authorization, order, or otherwise. Examples include the duties and responsibilities 

vested in the Secretary of Defense; Secretaries of the Military Departments; Directors of Defense 

Agencies and DoD Field Activities; and other civilian officials specified in sections 131-142, 

3013-3022, 5013-5026, and 8013-8022 of Reference (h). This also includes program/project 

managers, contracting officers, and other officials delegated management authority (direction 

and final decision making) and accountability for: 

 (1) Conduct of foreign relations and determination of foreign policy according to 

Reference (g), including implementation of IAs and treaties covered by DoD Directive 5530.3 

(Reference (ab)), law of war under DoD Directive 2311.01E (Reference (ac)), and foreign 

military sales and security assistance programs. 

 (2) Recommendations and responses to Congress for changes to governing legislation 

and comments to draft legislation on matters concerning the Department of Defense. 

 (3) Determination of policies, directives, and regulatory guidance to include determining 

the content and application of regulations, consistent with Reference (g). However, contractors 

may perform services that involve or relate to the development of regulations so long as the work 

is properly reviewed by government personnel according to Reference (g). 

 (4) Approval of strategic plans according to section 306 of Reference (d), as well as 

program goals and objectives (including national security objectives). 

 (5) Determination of DoD program priorities for budget requests and determination of 

budget policy, guidance, and strategy according to Reference (g). 

 (6) Discretionary decisions concerning the effective, efficient, and economical 

organization, administration, and operation of the Department of Defense, such as decisions to 

transfer a function, power, or duty; delegate authority; or approve support agreements, 

cooperative agreements, and non-procurement transactions. 

 (7) Direction and control of certain functions and operations, to include intelligence and 

counterintelligence operations and activities, criminal investigations, and adjudications (other 

than those relating to arbitration or other methods of alternative dispute resolution) according to 

Reference (g). 

 (8) Control of treasury accounts and the administration of public trusts and grants 

according to Reference (g). 

316 DCMA Administrative Record for FY 2013 Furlough Appeals
 (9) Direction and ultimate control over the acquisition, use, or disposal of property (real 

or personal, tangible or intangible), to include the collection, control, and disbursement of 

appropriated and non-appropriated funds according to References (e), (f), and (g). 

 b. Civilian Expertise and Experience. Manpower shall be designated civilian and coded “E” 

if Defense officials require the incumbent’s judgment and insight to make informed decisions 

and preclude sole reliance on contract advisory assistance. The incumbents of these positions 

enable Defense officials to maintain ultimate control and accountability of government 

operations, federally funded projects, contracts, or government property or funds. Their role is 

closely associated with, and inherent to, the decision maker’s. They perform an active and 

informed role in policy development, program execution, contract administration, and judiciary 

or fiduciary matters. They also perform a discretionary role in establishing objectives, setting 

priorities, judging risks, or deciding on a course of action by narrowing the number of 

alternatives and recommending the DoD-preferred position based on their corporate knowledge; 

technical expertise; and advice, opinions, and recommendations provided by sources inside and 

outside the Department of Defense. Examples include manpower that has been delegated 

authority to: 

 (1) Establish terms for IAs, treaties, foreign military sales, and security assistance 

programs. However, contractors may assist in these activities by gathering information or 

providing advice, opinions, or recommendations. 

 (2) Draft or develop proposed changes to governing legislation and comments to draft 

legislation and draft Congressional testimony, responses to Congressional correspondence, or 

agency responses to audit reports from the Inspector General, the Government Accountability 

Office, or other Federal audit entity according to Reference (g). However, contractors may 

provide background information to assist governmental personnel with these activities. 

 (3) Interpret, develop, or evaluate legal opinions and implementing policy for laws, 

E.o.s, treaties, and IAs. However, contractors may assist government personnel by providing 

non-legal advice according to Reference (g). 

 (4) Draft, develop, or evaluate strategic plans, justifications for strategic plans, planning 

options, priorities, and strategies required under section 306 of Reference (d); and draft or 

develop performance goals, performance indicators, performance plans, program evaluations, 

and program performance reports required under sections 1115 and 1116 of Reference (e). 

 (5) Develop or evaluate program and budget requests. However, contractors may assist 

government personnel with these activities through workload modeling, efficiency studies, fact 

finding, feasibility studies, “should-cost” analyses, and other analyses per Reference (g). 

 (6) Maintain control and accountability of government operations, federally funded 

programs and projects, contracts, and Federal property and funds. However, contractors may 

assist government personnel with these activities through workload modeling, fact finding, 

feasibility/efficiency studies, and other analyses of a non-discretionary nature to support program 

317 DCMA Administrative Record for FY 2013 Furlough Appeals
management, acquisition planning, and evaluations as provided by Reference (g). Manpower 

shall be designated DoD civilian and coded “E” if they are responsible for: 

 (a) Administering and managing government operations to include discretionary 

decisions on the reorganization and improvement of activities. However, contractors may assist 

government personnel by providing advice, opinions, ideas, or recommendations; gathering 

information; and performing other non-discretionary services that involve or relate to 

reorganizing or improving activities consistent with Reference (g). 

 (b) Systems acquisition management. However, according to section 2383 of 

Reference (h), contractors may support government personnel in acquisition planning by 

gathering information; providing advice, opinions, recommendations, or ideas; and assisting in 

program monitoring, milestone and schedule tracking, and other non-discretionary tasks. 

 (c) Allocating resources (dollars and manpower) and obligating Federal funds. 

However, employee utilization of government credit cards for the purchase of office supplies or 

temporary duty travel does not meet the funds obligation criteria specified here. 

 (d) With respect to prime contracts, determining what supplies or services are to be 

acquired by the government. However, according to Reference (g), an agency may give 

contractors authority to acquire supplies at prices within specified ranges and subject to other 

reasonable conditions deemed appropriate by the Department of Defense, subject to government 

oversight and acceptance. 

 (e) Awarding, terminating, and administering contracts for goods and services to 

include ordering changes to contract performance or contract quantities, taking action based on 

evaluation of contract performance, and accepting or rejecting contract products or services as 

prescribed in Reference (g). However, subject to applicable conflict-of-interest laws and 

regulations, contractors may assist in the development of statements of work and provide 

technical evaluations of contract proposals, so long as the contractor’s involvement is properly 

administered. In such cases, the government must not allow the contractor to perform in 

conflicting roles that might bias its judgment, or to gain an unfair competition advantage by 

virtue of access to confidential business information or other sensitive information. 

 (f) Approving any contractual document (including documents defining 

requirements, incentive plans, and evaluation criteria) or participating as a voting member on any 

source selection boards or performance evaluation boards according to Reference (g). However, 

contractors may participate as technical advisors to a Source Selection Evaluation Board 

according to section 2383 of Reference (h). 

 (g) Determining whether contract costs are reasonable, allocable, and allowable 

according to Reference (g). 

 (h) Determining what government property (real or personal, tangible and intangible) 

is to be disposed of and on what terms. However, contractors may be given authority under 

government oversight to dispose of property identified by the government at prices within clearly 

318 DCMA Administrative Record for FY 2013 Furlough Appeals
specified ranges as determined by the government and subject to other reasonable conditions 

deemed appropriate by the Department of Defense consistent with Reference (g). 

 (i) Consistent with Reference (g), collecting, controlling, and disbursing fees, 

royalties, duties, fines, taxes, and other public funds unless the function involves: 

 1. Activities authorized by statute, such as sections 3711 and 3718 of Reference 

(e) relating to private collection contractors and private collection services. 

 2. Collection of fees, fines, penalties, or other charges from visitors to or patrons 

of mess halls, post or base exchange concessions, and similar entities or activities, or from other 

persons, where the amount to be collected is easily calculated or predetermined and the funds 

collected can be easily controlled using standard cash management techniques. 

 3. Routine voucher and invoice examination. 

 (7) Maintain direction and control of the Defense workforce and contract services to 

include responsibility for: 

 (a) Actions to commission, appoint, direct, or control military and civilian personnel 

of the United States, consistent with Reference (e), to include the selection or non-selection of 

individuals for Federal government employment (including the interviewing of individuals for 

employment) and the approval of position descriptions and performance standards for Federal 

employees according to Reference (g). However, when activities are identified for competition 

or private sector performance, concomitant supervisory duties may also be designated for 

competition or private sector performance if they are not otherwise IG. 

 (b) Volunteers including those covered by section 1588 of Reference (h), and directand indirect-hire foreign national employees. 

 (c) Personal service contracts and general service contracts. However, contractors 

may be used for contract quality control and performance evaluation or inspection services under 

government oversight, provided guidelines for products or services can be specified and 

contractor involvement properly administered. In such cases, contractors must be precluded 

from influencing official evaluations of other contractors, and from gaining access to 

confidential business information or other sensitive information according to Reference (g). 

 (d) Supervision of contractor performance of acquisition functions required by 

section 2383(a)(2)(A) of Reference (h). 

 (8) Represent DoD interests at official functions, negotiations, and hearings, or conduct 

activities involving criminal justice, labor relation, law enforcement, or entitlement matters. 

Examples include: 

 (a) Control and performance of adjudicatory functions other than those relating to 

arbitration or other methods of alternative dispute resolution according to Reference (g). 

319 DCMA Administrative Record for FY 2013 Furlough Appeals
However, contractors may assist government personnel with these activities by gathering 

information or providing advice, opinions, recommendations, or ideas. 

 (b) Negotiation (e.g., endangered species negotiations and re-negotiations for Federal 

personnel rules for bargaining units). However, contractors may assist government personnel 

with these activities by gathering information or providing advice, opinions, and 

recommendations. 

 (c) Certain law enforcement operations. This includes the authority to execute and 

serve warrants, make arrests without a warrant, and other duties assigned to special agents of the 

Defense Criminal Investigative Service according to section 1585a of Reference (h). It also 

includes the preservations of crime scenes. However, properly trained and cleared contractors 

may perform special non-law-enforcement security activities that do not directly involve 

criminal investigations according to Reference (g). 

 (d) Direct conduct of criminal investigations according to Reference (g). 

 (e) Conduct of employee labor relations. However, contractors may serve as 

arbitrators or provide alternative methods of dispute resolution according to Reference (g). 

 (f) Conduct of administrative hearings to determine eligibility for security clearances 

or eligibility to participate in government programs; addressing actions that affect matters of 

personal reputation according to Reference (g); or resolving matters related to government 

employment except as provided in Chapter 11 of Reference (d). 

 (g) Approval of Federal license applications (except for vehicles or support 

equipment) and inspections according to Reference (g). 

 (9) Develop and clarify policy, to include DoD decisions regarding responses to requests 

for information in accordance with section 552 of Reference (d) (also known and hereafter 

referred to as “the Freedom of Information Act (FOIA)”) and administrative appeals of denials of 

FOIA requests. However, according to Reference (g), contractors may assist government 

officials with routine responses that, because of statute, regulation, or agency policy, do not 

require the exercise of any judgment in determining whether documents are to be released or 

withheld. 

 (10) Conduct test and evaluations (T&E) to determine the potential utility and 

operational suitability and effectiveness of systems and technologies; or the suitability of critical 

human design and human factors engineering features for systems that will be operated or 

maintained by DoD civilians. However, contractors may be used to provide direct support to 

organic T&E activities under government oversight and according to applicable laws. 

 (11) Direct or control intelligence and counterintelligence operations consistent with 

Reference (g), and perform intelligence activities that require the exercise of substantial 

discretion in applying government authority and/or in making decisions for the government 

consistent with Reference (e), (f), and (g). This includes clandestine intelligence operations. It 

320 DCMA Administrative Record for FY 2013 Furlough Appeals
also includes direction, control, approval, supervision, and oversight of intelligence 

interrogations and detainee debriefings and, consistent with References (e), (f), and (g), 

performance of those aspects of intelligence interrogations and detainee debriefings that require 

the exercise of substantial discretion in applying government authority and/or in making 

decisions for the government. (See subparagraph 2.a.(2) of this enclosure for additional 

exemptions.) 

 c. Support to Agencies Outside the Department of Defense. Manpower shall be designated 

civilian and coded “E” if they provide advisory assistance on defense-related matters on behalf 

of the Department of Defense while on permanent duty outside the Department of Defense (e.g., 

to Congress, the White House, and other Federal or State agencies). This manpower is 

established by formal request and approved following procedures in DoD Directive 1000.17 

(Reference (ad)) or some other formal approval process. 

 d. Support Provided to International Organizations and Foreign Nations. Manpower that 

provides advisory assistance and support to international organizations and foreign nations on 

defense-related matters shall be designated civilian and coded “E” if the work requires 

proficiencies that are not authorized to be obtained from the private sector or other government 

agencies. For example, exchanges of civilian personnel between the Department of Defense and 

defense ministries of foreign governments intended to encourage a democratic orientation of 

defense establishments of other countries as prescribed in section 168 of Reference (h) are coded 

“E.” 

5. CRITERION F - MILITARY-UNIQUE KNOWLEDGE AND SKILLS 

 a. Military Advice and Counsel. Manpower shall be designated military and coded “F” if 

the incumbents are specifically required by Reference (h) to provide military advice and counsel 

to the President, Congress, National Security Council, Secretary of Defense, senior DoD 

officials, or Secretaries, Under Secretaries, and Assistant Secretaries of the Army, Navy, and Air 

Force. Examples include the Chairman and Vice Chairman of the Joint Chiefs of Staff; Chiefs, 

Vice Chiefs, Deputy Chiefs, and Assistant Chiefs of Staff of the Army, Air Force, and Marine 

Corps; Chief, Vice Chief, Deputy Chiefs, and Assistant Chiefs of Naval Operations; and 

Commandant and Assistant Commandant of the Marine Corps. These are IG responsibilities, 

established by post or appointment under Reference (h), that require extensive military judgment 

based on military experience and cannot be transferred to DoD civilians or to the private sector. 

 b. Accomplishment of Military Missions. CCDRs are responsible to the President and 

Secretary of Defense for the execution of military missions. These are IG responsibilities 

established under Reference (h) that require military judgment based on extensive military 

experience and cannot be transferred to DoD civilians or to the private sector. This manpower 

shall be designated military and coded “F.” 

 c. Policy and Procedure. Manpower in infrastructure activities shall be designated military 

and coded “F” if the incumbents have the authority to commit the Department of Defense to take 

action by direction, order, policy, regulation, contract, authorization, or otherwise; or have 

321 DCMA Administrative Record for FY 2013 Furlough Appeals
responsibility for activities listed in paragraph 4.a. of this enclosure and the work requires 

military-unique knowledge and skills. This includes program directors, managers, directors of 

line operations, or principal staff elements, and other military personnel that are delegated these 

authorities and whose recent military training and current military experience are required for the 

successful performance of the prescribed duties. 

 d. Military Justice. Manpower in infrastructure activities responsible for military justice on 

behalf of the United States shall be designated military and coded “F.” These are IG 

responsibilities established by Reference (h) that require military representation and cannot be 

transferred to DoD civilians or to the private sector. For instance, responsibility for the 

administration of justice under the UCMJ in general and special courts-martial, summary courtsmartial, courts of inquiry, and other legal proceedings is assigned to the Judge Advocates 

General, military judges, and judge advocates (staff judge advocates, prosecutors, defense 

counsel, and appellate counsel), as defined in section 801 of Reference (h). The exercise of 

judicial and non-judicial punishment under the UCMJ is a responsibility assigned to 

commanding officers, as defined in section 801 of Reference (h), pursuant to sections 822-824 

and section 815 of Reference (h). 

 e. Law Enforcement Under the UCMJ. Manpower that issue warrants, make arrests, 

preserve crime scenes, or (consistent with Reference (g)) conduct criminal investigations shall be 

designated military and coded “F” if the duties are carried out under the UCMJ as prescribed in 

Chapter 47 of Reference (h). 

 f. Administration of Military Confinement/Correctional Facilities. Manpower responsible 

for the direction and control of military confinement/correctional facilities shall be designated 

military and coded “F” if the facility is established for the confinement of offenders of the UCMJ 

as prescribed in section 951 of Reference (h), and the prisoners are under military command. 

 g. Military-Unique Knowledge and Experience. Manpower shall be designated military and 

coded “F” if Defense officials require the incumbent’s military-unique judgment and insight to 

make informed decisions and preclude sole reliance on contract advisory assistance. The 

incumbents of these positions enable Defense officials to maintain ultimate control and 

accountability of government operations, federally funded projects, Federal contracts, 

government property, and funds. Their role is closely associated with, and inherent to, the 

decision maker’s. They perform an active and informed role in policy development, program 

execution, contract administration, and judiciary or fiduciary matters. The incumbents ensure 

that DoD officials are properly connected to the warfighting establishment and are aware of the 

warfighter’s perspective on programs and actions intended to support military operations. They 

perform a discretionary role in establishing objectives, setting priorities, assessing alternatives, 

judging risks, and deciding the course of action on military-related matters by narrowing the 

number of alternatives and recommending the preferred position. They decide the DoD 

preferred position based on their military-unique knowledge and experience; technical expertise; 

and advice, opinions, recommendations, and ideas provided by sources inside and outside the 

Department of Defense. (The required knowledge and experience must be more substantial than 

what DoD civilians with prior military experience could provide.) This includes activities 

322 DCMA Administrative Record for FY 2013 Furlough Appeals
identified and examples listed in paragraph 4.b. and subparagraphs 5.g.(1) through (5) of this 

enclosure. 

 (1) Manpower that determines operational requirements and gaps in military capabilities 

shall be designated military and coded “F” if the work entails judgment based on military-unique 

knowledge and experience acquired through recent assignments in the operating forces. 

 (2) Manpower that provides military training shall be designated military and coded “F” 

if it meets the following criteria. 

(a) Training shall be designated military and coded “F” if the instructor commands 

military trainees (as with basic training) or provides training that is specifically designed to 

acculturate military personnel on military standards or conventions. In addition, training of 

military doctrine or tactics is IG if the course material is evolving and not yet covered by 

government practice, policy, or procedures, or the training requires military expertise that can 

only be acquired through recent operational experience. Training is also IG if military presence 

is needed to demonstrate military leadership; to ingrain responsibility for the proper use of 

deadly force and proper conduct during armed conflicts; or, through example, to reinforce the 

integrity of the military command structure. Training functions that require substantial 

discretion are IG. For example, oversight of the instruction and approval of the curriculum are 

IG functions. 

(b) Training that is coded “F” may be imparted formally in a classroom or in a unit. 

Examples include drill instructors; commandants of cadets at military academies; instructors in 

fleet training centers and schools that provide tactical aviation or field training based on current 

operational experience; and Active Component advisors to the United States National Guard and 

United States Army Reserves. 

(c) Contractors may assist government instructors or provide training on the 

mechanics, supply, maintenance, functionality, or operation of military equipment or weapons, 

provided the course material is approved by government personnel and proper oversight of the 

instruction is maintained. 

 (3) Manpower that performs research, development, test, and evaluation shall be 

designated military and coded “F” if the work requires judgment concerning the potential utility 

of emerging technologies; strategies for integrating new systems with fielded systems on the 

battlefield or in the fleet; critical human design and human factors engineering features; or 

appropriate tests for operational suitability and effectiveness. 

(a) This includes activities at program development agencies, testing facilities, 

aircraft plants, shipyards, or other armament production centers where recent “hands-on” 

experience and military judgment are needed to provide an independent and objective evaluation 

of operational effectiveness and suitability of acquisition systems that will be operated and 

supported by military personnel. (Defense policy requires that during operational test and 

evaluation, “typical” military users operate and maintain the test systems under conditions that 

323 DCMA Administrative Record for FY 2013 Furlough Appeals
realistically simulate combat stress and peacetime environments if military personnel will be 

operating and maintaining the systems once they are fielded and/or deployed.) 

(b) This does not include positions covered by section 1722 of Reference (h) that are 

competed for fill by both DoD civilian and military personnel unless the work requires militaryunique judgment. 

 

 (4) How enemy EPWs, CIs, RPs, other detainees, terrorists, and other criminals are 

treated when captured, transferred, detained, and interrogated during or in the aftermath of 

hostilities (as addressed in Reference (y)) falls under the discretionary exercise of government 

authority. Responsibility for their handling as well as decisions concerning how they are to be 

treated cannot be transferred to the private sector to contractors who are beyond the reach of 

government controls. This does not include support functions performed by linguists, 

interpreters, report writers, command, control, communication, computer, and information 

technology technicians, etc., provided sufficient safeguards are implemented to ensure the work 

is non-discretionary and properly performed. (See Enclosure 5 of this Instruction.) 

 (5) Manpower that performs certain law enforcement functions, to include issuing 

warrants, making arrests, and preserving crime scenes, shall be designated military and coded 

“F.” Consistent with Reference (g), manpower for the conduct of criminal investigations for 

EPWs, CIs, RPs, other detainees, terrorists, or other criminals shall be designated military and 

coded “F” if the individuals are detained under the law of war as part of ongoing operations for 

their own protection or to remove potential threats from the battle space. However, properly 

trained and cleared DoD civilians and contractors may perform special non-law-enforcement 

security activities that do not directly involve criminal investigations according to Reference (g). 

 (6) Manpower that directs and controls detention facilities for EPWs, CIs, RPs, other 

detainees, terrorists, and other criminals outside the areas of operation shall be designated 

military and coded “F” (consistent with Chapter 47 of Reference (h) and Reference (y)) if the 

individuals are detained under the law of war as part of ongoing operations for their own 

protection or to remove potential threats from the battle space. 

 (7) Manpower that directs and controls intelligence and counterintelligence operations 

consistent with Reference (g), and performs intelligence or counterintelligence 

activities/operations that require the exercise of substantial discretion in applying government 

authority and/or making decisions for the government consistent with References (e), (f), and (g) 

shall be designated military and coded “F” if the required knowledge and skills are militaryunique. (See Enclosure 5 of this Instruction.) This includes clandestine intelligence operations 

and direction, control, approval, supervision, and oversight of intelligence interrogations and 

detainee debriefings and, consistent with References (e), (f), and (g), performance of those 

aspects of interrogations and detainee debriefings that require the exercise of substantial 

discretion in applying government authority and/or making decisions for the government. (See 

subparagraph 2.a.(2) of this enclosure for additional exemptions.) 

 h. Support to Agencies Outside the Department of Defense. Manpower that provides 

advisory assistance to agencies outside the Department of Defense on defense-related matters on 

324 DCMA Administrative Record for FY 2013 Furlough Appeals
behalf of the Department shall be designated military and coded “F” if the work requires 

military-unique knowledge and skills. 

 (1) This includes personnel in permanent duty stations outside the Department of 

Defense established by formal request and approved following procedures in Reference (ad) or 

some other formal approval process. Examples include attachés to U.S. embassies and couriers 

for the State Department, as prescribed in sections 711-720 of Reference (h). 

 (2) This does not include military support provided to eligible organizations and 

activities outside the Department of Defense that is incidental to military training, accomplished 

through innovative readiness training covered by DoD Directive 1100.20 (Reference (ae)) or 

interagency support to a DoD activity by a DoD activity according to DoD Instruction 4000.19 

(Reference (af)). 

 i. Support Provided to International Organizations and Foreign Nations. Manpower that 

provides advisory assistance and support to international organizations and foreign nations on 

defense-related matters on behalf of the Department of Defense shall be designated military and 

coded “F” if the work requires military-unique knowledge and skills acquired through recent 

assignments in the operating forces. Examples include: 

 (1) Military details to republics in the Western Hemisphere to assist in military matters 

according to section 712 of Reference (h). 

 (2) Support to North Atlantic Treaty Organization military commands and agencies if the 

manpower is not part of DoD internal management or command structure. 

 (3) Exchanges of military personnel between the Department of Defense and defense 

ministries of foreign governments and between units of the Military Services and units of foreign 

armed forces to encourage a democratic orientation of defense establishments and military forces 

of other countries as prescribed in Reference (h). 

6. CRITERION G - EXEMPTION FOR ESPRIT DE CORPS. Consistent with Reference (a), 

manpower authorities shall exempt a limited number of CAs in the infrastructure from private 

sector performance for esprit de corps, to foster public support for the Department of Defense 

and assist in meeting recruitment and retention objectives. This manpower shall be designated 

DoD civilian or military and coded “G” as explained in this section. These exemptions are 

intended to demonstrate DoD commitment to the men and women who serve in defense of the 

Nation and engender group spirit, camaraderie, and a sense of pride. 

 a. Military Esprit de Corps 

 (1) Examples of military esprit de corps include: 

 (a) Military bands that wear military uniforms and perform during peacetime and war 

to promote group spirit and pride. 

325 DCMA Administrative Record for FY 2013 Furlough Appeals
 (b) Honor guards such as the 3rd Infantry Old Guard and Honor Guards, who 

perform at funerals and other ceremonies during peacetime and war to promote group spirit, a 

sense of pride, and honor. 

 (c) Navy Blue Angels who demonstrate military expertise to the public. 

 (d) Superintendents at the U.S. Military Academy, the U.S. Naval Academy, and the 

U.S. Air Force Academy, covered by Reference (h), and Reserve Officers’ Training Corps 

instructors, who all serve as military role models. 

 (e) The Army Director of Religious Education who provides religious education and 

counseling to soldiers and their family members. (Chaplain assistants in garrison assignments 

are not included.) 

 (f) A set number of military recruiters who wear military uniforms to instill a sense 

of pride in military service and serve as military role models for potential recruits. 

 (2) These exemptions are for functions that can be performed by DoD civilians or, in 

some cases, the private sector, but without the same effect. Military performance of these 

activities carries special meaning for military personnel, their families, and the public. 

 (3) In the manpower mix order of precedence, “Exemptions for Military and Civilian 

Wartime Designations (dual status),” code “D,” takes precedence over esprit de corps. 

Therefore, manpower that promote esprit de corps during peacetime but are dual-tasked for 

wartime assignments (such as Thunderbirds, Golden Knights, Army Marksmanship Units, and 

Parachute Units that demonstrate military expertise to the public) are coded “D.” Only 

manpower that promote military esprit de corps during peacetime and war are coded “G.” 

 b. Civilian Esprit de Corps 

 (1) Examples of civilian esprit de corps include faculty at the U.S. Military Academy, 

U.S. Naval Academy, and U.S. Air Force Academy, as authorized by Reference (h), and 

principals and faculty at DoD Dependents’ Schools to demonstrate family support, promote 

quality of life, and foster camaraderie for recruitment and retention purposes. 

 (2) These exemptions are for functions that can be performed by the contractors but 

without the same effect. Direct involvement by DoD civilians demonstrates DoD dedication to 

family matters and carries special meaning for military members and their families. 

7. CRITERION H - EXEMPTION FOR CONTINUITY OF INFRASTRUCTURE 

OPERATIONS. Consistent with Reference (a), manpower authorities shall provide sufficient 

manpower for the efficient and effective operation of the Department of Defense. This includes 

manpower needed for continuity of operations during peacetime, crisis, or war. 

326 DCMA Administrative Record for FY 2013 Furlough Appeals
 a. Continuity of Operations During National Emergency or War. During a national 

emergency or war, when military and DoD civilian personnel dual-tasked for wartime 

assignments (code “D”) are reassigned to operating units, their vacant positions might not be 

backfilled immediately, or at all, depending on the wartime mission and workload. However, 

because high numbers of vacant positions can impair the ability of an activity to function 

effectively, activities with critical wartime missions that employ code “D” manpower must retain 

sufficient manpower to continue operations until critical vacated positions are filled. 

 (1) Manpower in the infrastructure shall be designated civilian and coded “H” if the 

positions cannot be vacated or eliminated during a national emergency or war without seriously 

impairing the ability of the activity to function effectively. This manpower serves as a corps 

capability during a national emergency or war. For example, the Department requires a corps 

capability for training critical skills. Manpower authorities also shall designate these positions as 

key positions following the procedures in Reference (u) to indicate that they are not to be filled 

by Ready Reservists that can be called to active duty. 

 (2) Decisions to code manpower “H” shall be made in conjunction with decisions to 

code manpower “D” as addressed in section 3 of this enclosure. 

 b. Continuity of Peacetime Operations 

 (1) CAs with manpower that are designated for rotation (code “J”) or career development 

(code “K”) must have sufficient manpower to continue operations as personnel transfer in and 

out of the activity. (See sections 9 and 10 of this enclosure.) Manpower shall be designated 

civilian and coded “H” if it is needed for continuity of operations in CAs where there is high 

personnel turnover due to rotation or career development. This manpower serves as a corps 

capability during peacetime. Decisions to code manpower “H” shall be made in conjunction 

with decisions to code manpower “J” and “K.” Also, decisions on the numbers of civilians 

needed for the continuity of direct patient care shall be determined in conjunction with decisions 

for shared health care as provided by DoD Instruction 6025.5 (Reference (ag)). 

 (2) Some activities require personal services for their efficient and effective operation. 

Consistent with Subpart 37.104 of Reference (g), personal services may not be contracted unless 

specifically authorized by statute. Determination as to what qualifies as personal services is 

often tied to how the work is performed or administered. A key indicator of personal services is 

when the government must exercise relatively continuous supervision and control over the 

personnel performing the work. This includes situations where (due to the nature of the service 

or the manner in which it is provided) government direction or supervision is needed to 

adequately protect the government’s interests, retain control of the function involved, or retain 

full personal responsibility for the function supported in a government official or employee. 

(See subparagraph 1.b.(2) of Enclosure 5 of this Instruction for examples.) When assessing these 

positions, particular attention should be paid to services that are closely associated with IG 

functions since they often require the type of continuous supervision or control that is prohibited 

under section 37.104 of Reference (g). This includes, but is not limited to, functions listed in 

section 7.503(d) of Reference (g). Also, not all personal services are prohibited from being 

contracted. This includes personal services for experts and consultants authorized under section 

327 DCMA Administrative Record for FY 2013 Furlough Appeals
129b of Reference (h) and health care authorized under section 1091 of Reference (h). 

Manpower shall be designated civilian and coded “H” if the incumbents provide personal 

services that are required for the efficient and effective operation of an activity but are prohibited 

from being contracted. 

 (3) CAs that are closely associated with IG functions may be designated for DoD civilian 

performance rather than contracted when the manpower is needed to respond quickly and 

efficiently to constantly changing priorities or peak workloads within IG activities, or to properly 

administer or retain control of operations. This includes, but is not limited to, functions listed in 

section 7.503(d) of Reference (g). For example, this includes civilian personnel that would be 

needed to perform acquisition functions closely associated with IG functions as required by 

section 2383(a)(1) of Reference (h). To be coded “H,” the manpower must be needed as a ready 

and controlled source of technical or professional expertise (a core capability) to quickly respond 

to recurring or sporadic surges in IG workload or to enable managers to more effectively manage 

or control work that is associated with IG functions so that IG responsibilities are not put at risk 

and continuity of operations is maintained. (See subparagraph 1.b.(3) of Enclosure 5 of this 

Instruction for examples.) 

 c. Emergency Operations Critical to the Department of Defense. Manpower in CAs in the 

infrastructure shall be designated civilian and coded “H” if they are needed to provide a ready 

and controlled source of technical competence for emergency operations involving skills and 

equipment critical to the Department of Defense. Examples include firefighting and rescue 

operations at areas with chemical, biological, nuclear, or other agents that require special 

firefighting equipment or training. 

 d. Core Logistic Capabilities with Unique Skills. Manpower in logistics functions shall be 

designated civilian and coded “H” if they are needed to provide a ready and controlled source of 

technical competence necessary for an effective and timely response to a mobilization or other 

national emergency involving skills unique to the Department of Defense. Manpower for the 

maintenance and repair of Navy nuclear propulsion systems at Navy shipyards is an example. 

8. CRITERION I - MILITARY AUGMENTATION OF THE INFRASTRUCTURE DURING 

WAR. During a crisis, military personnel in IG activities in the infrastructure (code “F”) that are 

dual-tasked for wartime assignments may be reassigned to operating units and their vacated 

positions might not be backfilled immediately, or at all, depending on the wartime mission and 

workload of the activity. Manpower needed to backfill critical positions vacated by active-duty 

military shall be designated military and coded “I” if the duties require military-unique 

knowledge and skills. Also, manpower that is needed to augment infrastructure activities during 

a mobilization or other national emergency due to increased workload shall be designated 

military and coded “I” if the work requires military-unique knowledge and skills. 

 a. Determining Manpower Requirements. Manpower authorities shall use a formally 

approved process for determining mobilization or crisis demands as required by Reference (a) 

and centrally manage the coding for this manpower within the DoD Component. 

328 DCMA Administrative Record for FY 2013 Furlough Appeals
 b. Continuity of Operations During Crises. This work is IG and designated military because 

it is needed for continuity of operations during a mobilization or other national emergency and 

the work requires military-unique knowledge and skills. 

9. CRITERION J - EXEMPTION FOR CIVILIAN/MILITARY ROTATION. Consistent with 

Reference (b), DoD Component shall provide a rotation base for overseas and sea-to-shore 

rotation. This coding shall be centrally managed within the DoD Component by manpower 

officials. Decisions to code manpower “J” shall be made in conjunction with decisions to code 

manpower “H” and “K.” (See sections 7 and 10 of this enclosure.) 

 a. Civilian Rotation. Manpower authorities shall designate manpower in CAs in the 

infrastructure that perform work that could be considered for private sector performance as 

civilian code “J” if it is needed to provide a rotation base for civilian positions outside the United 

States. This shall be done when the number of civilian manpower coded “A” through “I” is not 

sufficient to satisfy peacetime rotation needs. This manpower is designated civilian and 

exempted from private sector performance because it is needed to maintain civilian overseas tour 

lengths and civilian personnel turnover at appropriate levels as required by section 1586 of 

Reference (h). This manpower shall be determined by civilian series and based on assignment, 

rotation, and other relevant policies. Manpower authorities shall consult the DoD Component 

HR authorities to verify the validity of these requirements and ensure the numbers are 

determined using a formally approved process. 

 b. Military Rotation. Manpower authorities shall designate manpower in CAs in the 

infrastructure that would not otherwise require military incumbents as military code “J” if it is 

needed to provide a rotation base for overseas or sea-to-shore assignments. This shall be done 

when the number of manpower coded “A” through “I” is not sufficient to satisfy peacetime 

rotation needs. This manpower is designated military and exempted from private sector 

performance because it is needed to maintain military tour lengths and personnel turnover at 

appropriate levels and, by so doing, keep recruitment, retention, and training costs to a minimum. 

This manpower shall be determined by occupational specialty and based on assignment, rotation, 

and career development policies and personnel tempo goals governed by DoD Directive 1315.07 

(Reference (ah)). Manpower authorities shall consult military personnel officials to verify the 

validity of these requirements and ensure the numbers are determined using a formally approved 

process. 

10. CRITERION K - EXEMPTION FOR CIVILIAN/MILITARY CAREER DEVELOPMENT. 

Consistent with Reference (a), DoD Components shall provide reasonable opportunities for the 

development of both military and civilian personnel. This coding shall be centrally managed 

within the DoD Component. Decisions to code manpower “K” shall be made in conjunction 

with decisions to code manpower “H” and “J.” (See sections 7 and 9 of this enclosure.) 

 a. Civilian Career Development. Manpower authorities shall designate manpower in CAs in 

the infrastructure that perform work that could be considered for private sector performance as 

civilian code “K” if it is needed to provide career-broadening opportunities for civilian 

329 DCMA Administrative Record for FY 2013 Furlough Appeals
personnel. This shall be done when the number of manpower coded “A” through “J” does not 

provide adequate developmental assignments and day-to-day work experiences necessary to 

produce competent leaders, administrators, and personnel with skills critical to the Department of 

Defense. To be coded “K,” the manpower must provide career-broadening assignments for 

developing critical technical or leadership skills (competencies) that cannot be taught or directly 

acquired, or acquired in sufficient numbers from the private sector. Manpower authorities shall 

consult DoD Component HR authorities to verify the validity of these requirements and ensure 

the numbers are determined using a formally approved process. 

 b. Military Career Development. Manpower authorities shall designate manpower in CAs in 

the infrastructure that do not otherwise require military incumbents as military code “K” if it is 

needed to provide career paths for development of military-unique competencies. This shall be 

done when the number of manpower coded “A” through “J” does not provide adequate career 

development opportunities for the military coded “A,” “B,” “D,” “F, “and “I.” This manpower is 

designated military and exempted from private sector performance because it is needed to 

provide developmental assignments and day-to-day work experiences necessary to produce 

military leaders and develop military-unique knowledge and skills. Manpower authorities shall 

consult military personnel authorities to verify the validity of these requirements and to ensure 

they are determined by military occupational specialty using a formally approved process that 

considers options for combining occupational specialties and restructuring grade requirements. 

11. CRITERION L - EXEMPTED BY LAW, E.O., TREATY, OR IA 

 a. Law and E.o. Military and civilian manpower shall be coded “L” if the activity is not IG 

or exempt from private sector performance for reasons covered by criteria A through K but is 

restricted from private sector performance due to a law or E.o., including: 

 (1) Manpower that performs firefighting and security guard functions at DoD military 

installations/facilities covered by section 2465 of Reference (h), that are not coded “A” through 

“K.” 

 (2) Manpower that performs depot-level maintenance and repairs functions necessary to 

provide a “Core Logistics Capability” or comply with the “50 percent rule” as specified in 

sections 2464 and 2466 of Reference (h), that are not coded “A” through “K.” 

 (3) Manpower in activities that are not coded “A” through “K” with access to trade 

secrets that cannot be properly protected from contractors as required by section 1905 of title 18, 

U.S.C. (Reference (ai)). 

 (4) Manpower in activities that are not coded “A” through “K” that performs CAs 

because HN laws prevent the use of contract support or performance by U.S. or foreign national 

(FN) civilians. 

 (5) Dual-status military technicians that are not coded “A” through “K,” but are required 

to meet Congressional end-strength floors in section 115 of Reference (h). 

330 DCMA Administrative Record for FY 2013 Furlough Appeals
 b. Treaties and IAs 

 (1) Manpower shall be designated FN civilian and coded “L” if the terms of a treaty or 

IA specifically require the United States to use direct- or indirect-hire FNs, or make it 

impractical to convert from FN support. For example, under the Army’s cost-sharing 

agreements with the governments of Korea and Japan, 70 percent and 100 percent of the costs of 

the FN workforces are borne by the Korean and Japanese governments, respectively. 

 (2) Manpower shall be designated U.S. civilian and coded “L” if, due to a SOFA, using 

other than U.S. civilians would require increasing FN authorizations beyond what is required. 

(The U.S. and FN civilian workforce mix is agreed upon in each SOFA and varies by country.) 

 (3) Manpower shall be designated military or DoD civilian and coded “L” if, due to a 

treaty, SOFA, or other IA, private sector contract support may not be used and military or DoD 

civilian performance is required. 

12. CRITERION M - EXEMPTED BY DoD MANAGEMENT DECISION. Manpower 

authorities shall code military and civilian manpower “M” if a DoD official who exercises 

management authority over a functional area has exempted the manpower from private sector 

performance for reasons not covered by criteria A through L. This authority is vested in the 

Heads of the DoD Components as listed in section 2 above the signature of this Instruction. 

Under Secretaries of Defense with subordinate Assistant Secretaries of Defense can delegate this 

authority to those Assistant Secretaries of Defense or equivalent levels; however, this authority 

shall not be delegated below the Assistant Secretaries of Defense or equivalent level. 

 a. Pending a Final DoD Decision. Manpower that has been exempted from private sector 

performance based on a formally approved DoD Component exemption that is not covered by 

criteria A through L and has not yet been formally reviewed by OSD shall be coded “M.” This 

restriction is temporary, pending a formal DoD review. Supporting documentation for the 

decision must be maintained by the DoD Component. 

 (1) CAs that could be performed by civilian personnel may be designated for military 

performance and coded “M” on an exception basis if the DoD Component manpower authority 

has determined that the required work must be performed by military personnel for reasons not 

covered by criteria A through L. In such cases, there must be sufficient justification and 

appropriate documentation to support the decision. These designations shall be reviewed at least 

every 2 years to ensure the validity of the exemption. 

 (2) IG work that is normally performed by civilian personnel may be designated for 

military performance and coded “M” on an exception basis if the manpower authority has 

documentation to show that the required work must be performed by military personnel for 

reasons not covered by criteria A through L. For example, IG work that is performed in a remote 

location where a sufficient number of civilians with the appropriate knowledge, skills, and 

abilities are not available and cannot be recruited and trained may be designated for military 

331 DCMA Administrative Record for FY 2013 Furlough Appeals
performance. These designations shall be reviewed at least every 2 years to ensure the validity 

of the exemption. 

 b. Pending Resolution of the Workforce Mix During a Crisis. Manpower in activities that 

are established on an emergency basis shall be coded “M” pending final resolution of the 

appropriate workforce mix. For instance, manpower may be designated M on an emergency 

basis to respond to increased threat levels; to address a time-sensitive, high-priority national 

defense need; or as a safeguard against premature loss or interruption of an essential support 

function during a mobilization or other national emergency. 

 c. Pending Change of Authorized Military End Strength. If the Department of Defense is 

unable to obtain immediate relief from floors set on military personnel strengths in section 115 

of Reference (h) or the annual National Defense Authorization Act, manpower authorities shall 

code the manpower “M.” 

13. SUBJECT TO REVIEW FOR PRIVATE SECTOR PERFORMANCE OR DIVESTITURE. 

DoD Components shall designate all other manpower in CAs by using codes “P,” “R,” “W,” or 

“X” as provided in this enclosure. DoD Components shall periodically review the work to 

determine if it can be more efficiently or cost-effectively performed by another source or 

eliminated. 

14. CRITERION P - PENDING RESTRUCTURING OF CAs. DoD Components shall use 

code “P” for all DoD military or civilian manpower in CAs that are pending the results of an 

approved major restructuring initiative that has been approved in writing. This code is limited to 

major restructuring initiatives, such as base closures; functional realignments; functional 

assessments; or consolidation actions. Coding for this manpower is temporary, normally not to 

exceed 3 years, pending the schedule of the formally approved restructuring initiative. 

15. CRITERION R - SUBJECT TO REVIEW FOR PUBLIC-PRIVATE COMPETITION. 

DoD Components shall use code “R” for military or civilian manpower performing CAs if: 

 a. The DoD civilian and/or military manpower is performing the activity as a result of a 

public-private competition that was performed in accordance with Reference (f). 

 b. The DoD civilian and/or military manpower is performing work in an activity that has a 

performance decision pending in a public-private competition. 

 c. The DoD Component has determined, based on a comparison of the costs (as provided by 

Reference (j)), that a new, expanded, or contracted requirement for a CA can be performed at 

less cost by DoD civilian employees than by the private sector. 

332 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

45 ENCLOSURE 4 

 d. If the DoD Competitive Sourcing Official has determined, based on a review of 

documentation provided by the contracting officer, that there is not satisfactory commercial 

source following the procedures in Reference (f). 

 e. The DoD Component has determined that the civilian and/or military manpower may be 

considered for a future public-private competition pending the outcome of a management 

determination. 

16. CRITERION W - NON-PACKAGEABLE CA. DoD Components shall designate 

manpower performing CAs with code “W” when a competition is not possible because the work 

has been certified as not packageable for competition with the private sector by the DoD 

Component’s Competitive Sourcing Official. This criterion differs from criterion H, which 

applies to CAs that are closely associated with IG functions (see subparagraph 7.b.(3) of this 

enclosure). 

17. CRITERION X – ALTERNATIVE TO PUBLIC-PRIVATE COMPETITION. DoD 

Components shall designate manpower with code “X” if the CA can be contracted without 

performing a public-private competition. This includes certain aspects of research and 

development as provided by section 114 (note) of Reference (h); architecture and engineering as 

provided by section 4540 of Reference (h) and section 609 of title 40, U.S.C. (Reference (aj)); 

and natural resources management planning as provided by section 670(a) of title 16, U.S.C. 

(Reference (ak)). This also includes manpower performing CAs that have undergone, or are 

identified to undergo, a public-private partnership, divestiture, privatization initiative, or intragovernmental support agreement with a non-DoD agency. CAs are also coded “X” if they have 

been designated in writing as a high-performing organization by the DoD CSO, or if the military 

manpower in a CA has been identified for future conversion from military to civilian 

performance. This criterion differs from criterion L, which applies if a law, E.o., treaty, or IA 

prohibits any means of contracting. 

333 DCMA Administrative Record for FY 2013 Furlough Appeals
ENCLOSURE 5

GUIDANCE FOR RISK ASSESSMENTS

1. RISKS TO OVERSIGHT/CONTROL OF IG AND CAs. The degree of government 

involvement and expertise necessary to keep sufficient oversight and control of government 

operations will vary by function and situation, depending on such factors as delegation of 

approval authority, complexity of operation, geographic dispersion of the activity, regulatory 

authority, and consequence of default. The following factors should be considered when 

conducting risk assessments to preclude ceding governmental control and authority of IG 

functions to the private sector where there is insufficient public accountability and transparency. 

This list is not all-inclusive and should be expanded to address the specific activity under review. 

These factors should be considered when determining the source of support for functions in both 

the operating forces and support establishment. 

 a. Contract Advisory Assistance 

 (1) Need for Informed, Independent Judgment. Discretionary decisions made by 

government officials must be based on informed, independent judgments, and must not be 

unduly influenced or controlled by private contractors who are beyond management controls 

applicable to public employees and who might not have objectives in concert with the public’s 

best interests. Although a DoD official may consider a contractor’s advice when making a 

decision, the official may not rely solely or so extensively on a contractor’s recommendations 

that, by so doing, the decision no longer reflects an independent judgment. For example, 

although a contractor may develop options for a government decision maker, or develop options 

for expanding decisions already made by government officials, the contractor may not be given 

the authority to decide on a course of action for the government. DoD Components shall: 

 (a) Ensure contract advisory assistance is not used to support a government decision 

without thorough knowledge and understanding of the work submitted by the contractor and 

recognition of the need to apply independent judgment in the use of the work products. 

 (b) Take steps to ensure that a contractor’s involvement on a project is not so 

extensive or so far advanced that the government does not have the ability (sufficient time, 

information, or resources) to develop and consider options other than those provided by the 

contractor (such as during staff coordination of products developed by contractors). 

 (c) Ensure that contractors do not have undue influence in the final decision to 

include determining which, and how, options or recommendations are provided to Defense 

officials for a final decision; or why an option is recommended to the deciding official as the 

government’s preferred alternative. 

 (2) Government Oversight. To safeguard the government’s authority, when plans and 

recommendations are developed by a PSC or by joint public-private teams, government 

personnel alone shall be responsible for a final review, revision, or comment on the product. 

334 DCMA Administrative Record for FY 2013 Furlough Appeals
Defense officials shall conduct risk assessments to determine whether there are a sufficient 

number of knowledgeable and experienced government employees available to maintain 

sufficient oversight of the project; to determine whether the contractor has met the terms of the 

contract and provided a complete and objective product; and review and revise the contractor’s 

recommendations to the extent necessary to ensure the decision expresses the views of the 

Department of Defense, conforms to Defense policy, complies with the law, and supports public 

interests; and to provide an alternative point of view or recommendation to the deciding official. 

 b. Contract Support Services 

 (1) Discretionary Decisions. As provided at paragraph 1.b. of Enclosure 3 of this 

Instruction, IG functions include, among other things, activities that require either the exercise of 

substantial discretion when applying Federal Government authority, or value judgments when 

making decisions for the Federal Government. Although some support services involve 

discretionary decisions, not all discretionary decisions are IG. For a decision to be IG, it must 

commit the government to a course of action when two or more alternative courses of action 

exist and have sufficient consequence to the Department of Defense to warrant government 

control. Consistent with Reference (f), decisions are not IG if they can be limited or guided by 

existing policies, procedures, directions, orders, or other guidance that identify specific ranges of 

acceptable decisions or conduct and where the decisions can be subjected to final approval or 

regular oversight by agency officials. DoD officials shall review projects in enough detail to 

determine the risks and consequences to contracting the service. As a part of this review, they 

must determine if the consequences of the discretionary decision (to include possible unintended 

consequences) are of sufficient significance to the Department of Defense to warrant government 

control. This shall include determining whether the way the function is performed would result 

in inappropriate contract relationship (e.g., personal services), inappropriately affect assignment 

of liability, or inappropriately circumvent the Federal Government’s standards of conduct. 

 (2) Personal Services. Some support services require a level of government supervision 

and control that is inappropriate in a contractual arrangement. Subpart 37.104 of Reference (g) 

states that contracts for personal services shall not be awarded unless specifically authorized by 

statute, i.e., authorized by sections 129b and 1091 of Reference (h). A personal services contract 

is characterized by the employer-employee relationship it creates between the government and 

the contractor’s personnel. This kind of relationship occurs when, due to the terms of the 

contract or the manner of its administration during performance, contractor personnel are subject 

to the relatively continuous supervision and control of a government officer or employee. 

Particular attention should be paid to services that are closely associated with IG functions since 

they often require the type of continuous supervision or control that is prohibited under section 

37.104 of Reference (g). The following should be used as a guide in assessing whether or not the 

work is personal in nature: 

 (a) Due to the inherent nature of the service or the manner in which it is provided, 

government direction or supervision of the employees is required (directly or indirectly) in order 

to adequately protect the government’s interest; retain control of the function involved; or retain 

full personal responsibility for the function supported in a duly authorized Federal officer or 

employee. 

335 DCMA Administrative Record for FY 2013 Furlough Appeals
 (b) Services are applied directly to the integral effort of the DoD Component in 

furtherance of assigned function or mission. 

 (c) Comparable services, meeting comparable needs, are performed in the same or 

similar situations using military or DoD civilian personnel. 

 (d) The service is performed on-site; the government furnishes principal tools and 

equipment; and the need for the service can reasonably be expected to last beyond 1 year. 

 (3) Contract Support Services Involving Discretionary Decisions. Contractors may 

provide a support service if the required level of performance or quality of service is specified in 

the contract in quantifiable and measurable terms and is not left to the discretion of the 

contractor, and a DoD official has final approval of the product or service through a government 

review or test. Support services shall not be contracted if discretionary decision making is 

involved which cannot be adequately covered by the terms of the contract or cannot be separated 

from the services provided (i.e., it is an inherent part of the service provided). Particular 

attention should be paid to services that are closely associated with IG functions since they often 

involve discretionary decisions that cannot be adequately covered by the terms of the contract. 

DoD Components shall conduct risk assessments to verify if the DoD official, in the 

administration of the contract, would have to: 

 (a) Regularly address policy issues not covered, or not adequately covered, by DoD 

issuances, doctrine, or other formally approved document. 

 (b) Regularly or routinely provide guidance on procedural matters of a discretionary 

nature because the Department of Defense does not have established practices or procedures or a 

clear vision for how to accomplish the work. 

 (c) Regularly change how the service is performed to match evolving law, policy, 

doctrine, or tactics because the situation is so fluid that revisions are needed on a recurring basis 

(such as security services performed in uncontrolled, unpredictable, unstable high-risk 

environments). 

 (d) Supervise and control the daily activities of the contractor as opposed to 

reviewing or testing the final product because how the services are performed and with what 

consistency is critical to an acceptable outcome. 

 (e) Retain the right to add or remove employees from the project for other than 

security or misconduct reasons, as opposed to specifying performance standards, because the 

activity is too complicated to specify how or what should be accomplished or ranges of 

acceptable actions (such as time-sensitive projects where a short suspense drives decisions about 

the scope of work and what can reasonably be accomplished in the allotted timeframe). 

 (f) Intervene in operations involving FN individuals or other Federal agencies not 

governed by the same laws, treaties, E.o.s, rules, regulations, or policies as DoD personnel (e.g., 

336 DCMA Administrative Record for FY 2013 Furlough Appeals
Central Intelligence Agency agents) in order to mediate policy or procedural differences, or 

prevent other parties from usurping DoD authority. 

 (4) Maintaining a Core Capability for Critical Operations. Even if a support function 

does not entail discretionary decisions or personal services, DoD Components shall review the 

function to verify whether the work should be performed by government personnel to provide a 

core capability for readiness or risk mitigation purposes, or for continuity of operations as 

addressed at sections 2, 3, 7, and 8 of Enclosure 4 of this Instruction. 

2. RISKS TO COMMAND AND OPERATIONAL CONTROL. The following should be used 

to assess the risks of using military, DoD civilian, and private sector contractor personnel to 

accomplish Defense missions. 

 a. Readiness Reporting. If commanders do not have visibility of the readiness of critical 

support elements, they may not be able to judge the readiness of the military forces to conduct 

and/or sustain military operations. The less information the commander has to assess the 

readiness of DoD civilians and Defense contractors who are responsible for providing critical 

support functions, the greater the risk. The following should be considered when assessing 

whether to use DoD civilians and Defense contractors to provide critical support in operational 

environments: 

 (1) Whether readiness reporting is addressed to the commander’s satisfaction by the 

contractor under the terms of the contract. 

 (2) Whether there are historical records/studies indicating whether Defense contractors 

or DoD civilian E-E employees perform satisfactorily under environmental conditions, threat 

levels, and for the length of time required. 

 b. Replacing Lost Support. The fewer options the Defense officials have for replacing lost 

support, the greater the risk. When conducting risk assessments, the following should be 

considered: 

 (1) Whether an alternative source of support can be obtained from an alternative private 

sector provider in sufficient time. The higher the number of contractors that can provide the 

support service, the lower the risk of using contract support. 

 (2) Whether an alternative source of in-house support can be obtained in sufficient time. 

The higher the number of in-house sources, the lower the risk of using contract support. 

 c. Continuity of Operations During Hostilities 

 (1) Sustainability. Contractors that cannot replace contractor employees who are killed, 

injured, or otherwise lost; rotate personnel during a protracted conflict; or replace equipment, 

supplies, and tools, represent an inappropriate risk to combat operations. The higher the number 

of contract personnel or resources needed to sustain a conflict, the higher the risk. 

337 DCMA Administrative Record for FY 2013 Furlough Appeals
 (2) Surge Capability. Contractors might be able to perform a support function during 

peacetime but lack the resources or technology to increase or surge operations during a crisis. 

Contractors that have a limited capacity (e.g., adequate facilities) or capability (e.g., adequate 

equipment, tools, or trained personnel) to increase or surge operations to the required operating 

tempo (OPTEMPO), represent a risk to military operations. The higher the increase in 

OPTEMPO required for a mobilization or other national emergency, the higher the risk. 

 (3) Information Assurance. Military commanders should verify whether contractors can 

safeguard information and information systems consistent with policy in DoD Directive 8500.1E 

(Reference (al)). If they cannot, there is a risk that disrupted communications could delay or 

prevent timely delivery of critical services or supplies and adversely impact military operations. 

 d. Operational Control in Hostile Environments 

 (1) Risk of Non-Performance. Section 802(a)(10) of Reference (h) states that in time of 

declared war or a qualifying contingency operation, persons serving with or accompanying an 

armed force in the field are subject to the UCMJ. However, because desertion (covered under 

Article 85 of the UCMJ) and absence without leave (covered under Article 86 of the UCMJ) both 

apply to “a member of the armed force,” neither UCMJ offense is likely to apply to a civilian 

who is serving with or accompanying the armed forces in the field during a declared war or 

qualifying contingency operation, but who is not actually a member of the armed force. As a 

result, DoD civilian and DoD contractor employees arguably may quit their jobs or not perform 

their duties without risk of criminal prosecution under the UCMJ. If the risk of non-performance 

is high enough to adversely impact the readiness status of the unit, commanders should switch to 

an alternate source of support. 

 (2) Misbehavior Before the Enemy. Section 899 of Reference (h) punishes “misbehavior 

before the enemy,” to include, among other things, running away and cowardly conduct in the 

presence of the enemy and not affording all practicable relief and assistance to other troops when 

engaged in battle. Section 899 of Reference (h) only applies to members of the armed forces. 

Therefore, this offense is not likely to apply to a civilian who is serving with or accompanying 

the armed forces in the field during a declared war or a qualifying contingency operation, but 

who is not actually a member of the armed forces. Depending on the scenario, heavy 

dependence on DoD civilian or contractor personnel could represent an inappropriate risk. 

 (3) Reconstitution of Support Functions and Cross-Utilization of Personnel. If support 

units are attacked or sustain damage, the military commander may require direct control and 

unconstrained use of all available personnel to reconstitute essential support functions. The 

ability of field commanders to reconstitute support functions and/or sustain operations is 

maximized if personnel can be cross-utilized to perform more than one function. 

 (a) Flexibility. Commanders often cannot compel DoD civilians or contractor 

employees to perform work or assume risks that were not agreed upon under the terms of their 

employment or covered in the terms of the contract. In emergency situations, a military 

commander may direct DoD civilians to take lawful actions. However, a military commander 

338 DCMA Administrative Record for FY 2013 Furlough Appeals
may only direct contractor employees to take lawful actions so long as those actions do not 

require them to assume IG responsibilities and the actions are covered by the terms of the 

contract. Because contract personnel may not perform IG duties, use of contractors may limit 

the commander’s flexibility in crisis situations and represent an inappropriate risk. 

 (b) Responsiveness. Generally, contractor employees (unlike U.S. and foreign 

national civilian and military personnel) are not under the direct supervision of the military 

commander. The contracting officer, or designee, serves as the liaison between the commander 

and the defense contractor for directing or controlling the contractor’s performance. Separate 

command and contractual lines of authority could hamper or overly complicate the commander’s 

control and constitute an inappropriate risk. 

 (4) Disciplinary Authority. Defense contractors are responsible for ensuring that their 

employees perform under the terms of the contract and comply with applicable laws, directives, 

regulations, and orders. During a declared war or a qualifying contingency operation, UCMJ 

jurisdiction over DoD contractor personnel serving with or accompanying the armed forces 

overseas is governed by Reference (h), Executive Order 12473 (Reference (am)), and the 

Secretary of Defense Memorandum (Reference (an)). Limits in Reference (an) could overly 

complicate operations in high-risk situations. 

 (5) Restrictions Due to Laws and IAs. Laws and IAs often restrict how DoD civilians 

and DoD contractors can be utilized. 

 (a) Law of War. During international armed conflicts, if civilians who are authorized 

to accompany armed forces are captured, they are entitled to POW status under Reference (y). It 

is not a violation of the law of war for DoD civilians and Defense contractor employees who are 

authorized to accompany the armed forces in the field during hostilities to be issued a weapon on 

the authority of the Combatant Commander for individual self-defense as addressed in 

References (n), (o), and (t). However, while supporting military operations, DoD civilians and 

contractor employees may be at risk of injury or death incidental to enemy actions while 

supporting military operations. Also, under the law of war, civilians accompanying the armed 

forces may be directly targeted for such time as they take a direct part in hostilities but, if 

captured, do not lose their entitlement to POW status. 

 (b) Local National (LN) and HN Laws and IAs. Absent a SOFA or other IA or 

international law to the contrary, contractor employees might be subject to the domestic criminal 

laws of the HN. For example, use of force by contractor employees may be strictly limited by 

LN and HN law and not protected by IAs and SOFA provisions. Contractor personnel who 

exceed the limits imposed by applicable laws and agreements may be subject to prosecution and 

civil liability. In addition, in certain situations, IAs and HN support agreements might restrict 

services that can be contracted by limiting contracted services to HN contractors or by 

prohibiting contractor use altogether. 

 (c) U.S. Law and U.S. Government Regulations. U.S. law and U.S. Government 

regulations also impose restrictions on the use of Defense contractors. For example, IG 

functions may not be contracted and the Department of Defense may not award a personal 

339 DCMA Administrative Record for FY 2013 Furlough Appeals
service contract except when authorized by statute. (See subparagraph 1.b.(2) of this enclosure 

concerning personal services.) Also, U.S. laws restrict the types of weapons that can be exported 

or procured for use by the private sector. 

 (6) Rules Governing Security Services. Consistent with subpart 52.225-19 of Reference 

(g) and subpart 252.225-7040 of Reference (l), contractor personnel performing security 

functions are authorized to use deadly force in self-defense and when use of such force is 

consistent with the terms and conditions contained in the contract or with their job description 

and terms of employment. 

 (a) Consistent with Reference (n), geographic CCDRs issue rules on the use of force 

that govern the use of weapons by civilians. Rules on the use of force that govern PSCs are 

different from the rules of engagement applicable to military forces. Rules of engagement may 

authorize military forces to respond offensively. Although rules on the use of force may 

authorize PSCs to use deadly force in defense of hostile acts or demonstrated hostile intentions, 

they may not authorize PSCs to use offensive tactics as a means of achieving their 

mission/contract objective. Security that requires the type of tactics that are authorized only to 

military forces (as discussed in paragraph 1.d. of Enclosure 4 of this Instruction) should not be 

contracted because the security entails IG responsibilities that are uniquely military. 

 (b) Threat levels are neither static nor uniform across all regions of a conflict. Even 

though it may be appropriate for PSCs to provide security services at certain times and in certain 

regions of a conflict, contract security services may have to be curtailed or suspended if the level 

of hostilities increases significantly. They also may have to be curtailed if the terms or 

conditions contained in the contract no longer apply or it appears that the contractor can no 

longer fulfill the terms of the contract without assuming IG responsibilities. Commanders must 

use judgment when making these decisions and err on the side of caution to avoid the inadvertent 

transfer of IG responsibilities to the private sector. According to Reference (f), in order to avoid 

transferring IG authority to a contractor, government officials must consider the provider’s 

authority to take action that will significantly and directly affect life, liberty, or property of 

individual members of the public. Requiring officials must consider the likelihood of the 

provider’s need to resort to force in support of a police or judicial activity; whether the provider 

is more likely to use force, especially deadly force; and the degree to which the provider may 

have to exercise force in public or relatively uncontrolled areas. 

 e. Risk of Active Duty Service Determinations for Civilian or Contractual Groups. 

Commanders shall not hire or plan to use DoD civilians or contractor employees in a manner that 

could qualify as active military service. Consistent with DoD Directive 1000.20 (Reference 

(ao)), active duty service is considered to be equal to active military service for purposes of 

qualifying for Department of Veterans Affairs benefits, based on the extent to which the group 

was under the control of the U.S. armed forces in support of a military operation or mission 

during an armed conflict. A determination of active duty service that is considered to be 

equivalent to active military service is made based on the extent to which the group was under 

control of the U.S. Armed Forces in support of a military operation or mission during an armed 

conflict. The extent of control must be similar to that exerted over military personnel and is 

determined based on the uniqueness of service; organizational authority over the group; 

340 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

53 ENCLOSURE 5 

integration into military organization; subjection to military discipline; subjection to military 

justice; prohibition against members of the group joining the armed forces; and receipt of 

military training and/or achievement of military capability. This issue is particularly relevant to 

PSCs operating in hostile environments that are at risk of performing IG responsibilities. 

 f. Operational/Logistic Footprint. Manpower analysts shall verify whether use of civilians 

or contractors would increase the size of the operational “footprint” (e.g., personnel numbers or 

physical security needs) or the logistic “footprint” (e.g., medical support, mess, transportation, or 

supplies) beyond that required by military personnel. A large operational/logistic footprint could 

limit the commander’s flexibility in certain situations and represent an inappropriate risk. 

 g. Use of Indigenous Personnel. Military commanders shall verify whether contractors plan 

to employ indigenous personnel to fulfill contract needs and the concomitant threat to the 

security of U.S. personnel. The use of local workers during a fluid counterinsurgency mission or 

the use of members of one ethnic group to the exclusion of others could create unrest and raise 

the risk of sabotage. For example, use of indigenous personnel as linguists for support when 

interrogating prisoners may invite problems when personnel from one ethnic or religious group 

are asked to translate conversations involving prisoners from another ethnic or religious group. 

 h. Operational Security. Defense officials do not have visibility into the contractor’s hiring 

practices and background checks and should assess the risk of using contractors for operations 

that entail operational security. 

3. RISKS TO FISCAL RESPONSIBILITIES. When assessing the merits of contracting 

functions, manpower authorities shall also assess whether it would require more manpower to 

develop the statement of work; award and execute the contract; and assess the quality of the final 

product or service, than it would take to perform the service with government personnel. These 

costs should be considered when conducting cost comparisons required by Reference (j). 

341 DCMA Administrative Record for FY 2013 Furlough Appeals
GLOSSARY

PART I. ACRONYMS AND ABBREVIATIONS

CA commercial activity 

CCDR Commanders of the Combatant Commands 

CI civilian internee 

CS combat support 

CSS combat service support 

E-E emergency essential 

E.o. Executive order 

EPW enemy prisoner of war 

FN foreign national 

FOIA Freedom of Information Act 

HN host nation 

HR human resources 

IA international agreement 

IG inherently governmental 

IGCA Inherently Governmental Commercial Activities 

LN local national 

OMB Office of Management and Budget 

POW prisoner of war 

PSC private security contractor 

RP retained person 

SELRES Selected Reserve 

SOFA status of forces agreement 

T&E test and evaluation 

UCMJ Uniform Code of Military Justice 

USD(AT&L) Under Secretary of Defense for Acquisition, Technology and Logistics 

USD(P&R) Under Secretary of Defense for Personnel and Readiness 

USD(I) Under Secretary of Defense for Intelligence 

342 DCMA Administrative Record for FY 2013 Furlough Appeals
DoDI 1100.22, April 12, 2010 

55 GLOSSARY 

PART II. DEFINITIONS

Unless otherwise noted, these terms and their definitions are for the purposes of this Instruction. 

combat. When determining what is IG, an authorized, deliberate, destructive, and/or disruptive 

action against the armed forces or other military objectives of another sovereign government or 

other armed actors on behalf of the United States (i.e., planning, preparing, and executing 

operations to actively seek out, close with, and disrupt and/or destroy an enemy, hostile force, or 

other military objective). Includes employing firepower and/or other destructive/disruptive 

capabilities to the foregoing ends. This definition is not intended and should not be construed to 

limit in any way the inherent right of an individual to act in self-defense. 

combat power. Defined in Joint Publication 1-02 (Reference (ap)). 

commander’s intent. A clear, concise statement of what the force must do to succeed with 

respect to the enemy and the terrain and the desired end state. It provides the link between the 

mission and concept of operations by stating the key tasks that, along with the mission, are the 

basis for subordinates to exercise initiative when unanticipated opportunities arise or when the 

original concept of operations no longer applies. 

concept of operations. Defined in Reference (ap). 

hostile act. Defined in Reference (ap). 

hostile environment. Defined in Reference (ap). 

hostile force. Defined in Reference (ap). 

hostile intent. Defined in Reference (ap). 

operating forces. Defined in Reference (ap). 

operation. Defined in Reference (ap). 

preemptive attack. Defined in Reference (ap). 

qualifying contingency operation. Military contingency operation conducted for the purpose of 

engaging an enemy or a hostile force in combat. Disciplinary authority over civilians under 

Article 2(a)(10) of the UCMJ is governed by References (h), (al), and (am). 

rules of engagement. Defined in Reference (ap). 

343 DCMA Administrative Record for FY 2013 Furlough Appeals