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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2736 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2736

          To ensure efficient performance of agency functions.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              June 4, 2009

   Mr. Sarbanes (for himself, Mr. Clay, Mr. Hastings of Florida, Mr. 
     Carnahan, Ms. Linda T. Sanchez of California, Mr. Filner, Mr. 
 Ruppersberger, Ms. Norton, Ms. DeLauro, Mr. Michaud, Mrs. Napolitano, 
Mr. Ellison, Mr. Hinchey, Ms. Woolsey, Ms. Richardson, Mr. Hall of New 
  York, Mr. Costello, Mr. Cummings, Mr. Baca, Mr. Rush, Mr. Brady of 
 Pennsylvania, Mr. Johnson of Georgia, Mr. Mollohan, Mr. Pallone, Mr. 
Delahunt, Mr. Holt, Mr. Serrano, Mr. Schauer, Mr. Walz, Mr. Kagen, Ms. 
 Corrine Brown of Florida, Mr. Gene Green of Texas, Mr. Langevin, Mr. 
 Peters, Ms. Shea-Porter, Mr. Conyers, Mr. Van Hollen, Mr. Payne, Ms. 
 Giffords, Mr. Al Green of Texas, Mr. Tim Murphy of Pennsylvania, Mr. 
 Miller of North Carolina, Mr. Grijalva, Mr. Space, Mrs. Maloney, Ms. 
 Tsongas, Mr. Tierney, Ms. Titus, Mr. Levin, Mrs. Davis of California, 
 and Mr. Nye) introduced the following bill; which was referred to the 
              Committee on Oversight and Government Reform

_______________________________________________________________________

                                 A BILL

 
          To ensure efficient performance of agency functions.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Correction of 
Long-Standing Errors in Agencies' Unsustainable Procurements Act of 
2009'' or the ``CLEAN-UP Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Findings.
Sec. 4. Purposes.
Sec. 5. General personnel policy.
Sec. 6. Consideration of in-house performance required for new work.
Sec. 7. Transition to Federal employee performance of certain 
                            functions.
Sec. 8. Establishment of inventories and reviews of contracts for 
                            services.
Sec. 9. Identifying and addressing shortages of Federal employees.
Sec. 10. Expedited hiring authority for performance of certain 
                            functions by Federal employees.
Sec. 11. Establishment of business process reengineering projects as a 
                            preferred alternative to the OMB Circular 
                            A-76 process.
Sec. 12. Reforms to the OMB Circular A-76 process.
Sec. 13. Establishment of temporary suspension on use of OMB Circular 
                            A-76 process until reforms required in this 
                            Act have been substantially implemented.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Inherently governmental functions.--The term 
        ``inherently governmental functions'' has the meaning given the 
        term under section 5 of the Federal Activities Inventory Act of 
        1998 (31 U.S.C. 501 note) and subpart 7.5 of part 7 of the 
        Federal Acquisition Regulation.
            (2) Functions closely associated with inherently 
        governmental functions.--The term ``functions closely 
        associated with inherently governmental functions'' means the 
        functions described in section 7.503(d) of the Federal 
        Acquisition Regulation that are recurring.
            (3) Mission-essential functions.--The term ``mission-
        essential functions'' refers to functions that, although 
        neither necessarily inherently governmental nor necessarily 
        closely related to an inherently governmental function, are 
        nevertheless considered by executive agency officials to be 
        more appropriate for performance by Federal employees.
            (4) Business process reengineering project.--The term 
        ``business process reengineering project'' refers to a process 
        whereby an existing organization is reinvented, consolidated, 
        or expanded to result in a new organization whose performance 
        exceeds that of previous and comparable performers, whether 
        performed by Federal employees or contractors or a combination 
        of Federal employees and contractors.
            (5) Executive agency.--The term ``executive agency'' has 
        the meaning given the term in section 4 of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 403).
            (6) Personal services contract.--The term ``personal 
        services contract'' has the meaning given to the term under 
        section 37.104 of the Federal Acquisition Regulation, unless 
        the functions to be performed under the contract are included 
        in statutory exceptions, including sections 1296 and 1091 of 
        title 10, United States Code.
            (7) Standard study.--The term ``standard study'' has the 
        meaning given to the specific type of cost-comparison study 
        outlined in attachment B in the OMB Circular A-76 process, as 
        revised in May 2003.

SEC. 3. FINDINGS.

    Congress makes the following findings:
            (1) Functions that should have been performed by Federal 
        employees because they are inherently governmental functions, 
        functions that are closely related to inherently governmental 
        functions and recurring, or mission-essential functions have 
        been wrongly outsourced, including preparing budgets, 
        developing policy, supporting acquisition, developing and 
        interpreting regulations, developing reorganizations, and 
        developing and implementing ``competitive sourcing'' plans.
            (2) Federal agencies have been pushed to outsource 
        significant amounts of work with little competition, while 
        Federal employees, despite having won 83 percent of the OMB 
        Circular A-76 privatization reviews conducted since the 
        circular was revised in 2003, are rarely given opportunities to 
        perform new work or outsourced work.
            (3) The capacity of the Federal Government to oversee 
        contractors and the OMB Circular A-76 privatization process 
        continues to decline, as demonstrated in scandals involving 
        reconstruction efforts in Iraq, Hurricane Katrina recovery 
        efforts, and conditions at Walter Reed Army Medical Center. The 
        Government Accountability Office (GAO), in two 2008 reports on 
        the use of ``competitive sourcing'' in different agencies, 
        determined that costs of A-76 privatization reviews often 
        exceeded savings because of systematically bad direction from 
        the Office of Management and Budget. In the latter report, on 
        the Department of Labor, GAO wrote, ``Without a better system 
        to assess performance and track all of the costs associated 
        with competitive sourcing, DoL cannot reliably assess whether 
        competitive sourcing truly provides the best deal for the 
        taxpayers.''.
            (4) The OMB Circular A-76 process retains fundamental 
        inequities. The minimum cost differential fails to take into 
        account the quantifiable costs (such as hiring consultants and 
        diverting Federal employees from their regular duties) of 
        carrying out A-76 privatization studies. All in-house bids are 
        charged 12 percent of their personnel costs for overhead costs, 
        even though a Department of Defense Inspector General study 
        revealed that overhead costs may not differ significantly, if 
        at all, whether the functions are kept in-house or contracted 
        out, even in the case of studies of large numbers of Federal 
        employees. Despite time limits established in law and as part 
        of the OMB Circular process A-76 process, privatization studies 
        are allowed to continue indefinitely. The longer an A-76 
        privatization study lasts, the more it costs to conduct, the 
        less likely there are to be savings from that study, and the 
        more likely it will cost taxpayers more than it will save. In 
        fact, given the costs and controversies associated with the OMB 
        Circular A-76 privatization process, OMB should be encouraging 
        agencies to use internal reengineering efforts, as OMB finally 
        did, during the last year of George W. Bush's presidency.

SEC. 4. PURPOSES.

    The purposes of this Act are as follows:
            (1) To build upon the foundation established by the 110th 
        Congress that suspended the use of the OMB Circular A-76 
        privatization process, required all executive agencies to 
        develop policies to promote the insourcing of new work and 
        outsourced work, and required the Department of Defense to 
        develop a comprehensive inventory of its service contracts.
            (2) To establish a policy that provides that--
                    (A) Federal employees must perform inherently 
                governmental functions, functions closely related to 
                inherently governmental functions, and mission 
                essential functions;
                    (B) other functions may be performed by Federal 
                employees or contractors, depending on the needs of 
                executive agencies and all relevant public-private 
                competition requirements; and
                    (C) Federal employees should not be subject to 
                headcounts, personnel ceilings, or constraints, which 
                force executive agencies to contract out functions 
                without public-private competition.
            (3) To prevent executive agencies from contracting out new 
        functions if those new functions should be performed by Federal 
        employees and require agencies to explain in annual reports to 
        Congress why functions ultimately contracted out were not 
        considered for performance by Federal employees.
            (4) To require executive agencies--
                    (A) to determine which of their functions must 
                actually be performed by Federal employees because the 
                work is inherently governmental, closely related to 
                inherently governmental work, or mission essential, and 
                how many contractor employees are currently performing 
                those functions;
                    (B) to report on how wrongly contracted out work 
                will be insourced; and
                    (C) to incrementally insource over several years 70 
                percent of the wrongly contracted out workload.
            (5) To require civilian agencies to establish inventories 
        to track the cost and quality, among other features, of 
        specific contracts, based on the inventory that the 110th 
        Congress required the Department of Defense to establish.
            (6) To require executive agencies to determine if they are 
        now experiencing or will experience shortages of Federal 
        employees and what their plans are for addressing these 
        personnel shortfalls.
            (7) To encourage the use of a regulated alternative to the 
        often costly and controversial OMB Circular A-76 process, 
        including business process reengineering, which is commonly 
        used by executive agencies to generate efficiencies through 
        internal reorganizations.
            (8) To direct the President to undertake several reforms of 
        the OMB Circular A-76 privatization process, including imposing 
        time limitations on how long privatization studies can last, 
        charging in-house bids only for actual overhead costs, and 
        considering quantifiable costs of conducting A-76 privatization 
        studies in the minimum differential.
            (9) To impose a temporary suspension on the use of the OMB 
        Circular A-76 privatization process until the reforms required 
        by this Act have been substantially implemented, consistent 
        with the temporary suspension on the same process enacted in 
        the 110th Congress.

SEC. 5. GENERAL PERSONNEL POLICY.

    (a) Required Performance of Inherently Governmental Functions by 
Federal Employees.--The head of each executive agency shall ensure that 
inherently governmental functions, functions closely related to 
inherently governmental functions, and mission-essential functions are 
performed by Federal employees.
    (b) Performance of Other Functions by More Efficient Workforce in 
Accordance With Public-Private Competition Requirements.--The head of 
each executive agency shall ensure that functions that are not 
inherently governmental functions, functions closely related to 
inherently governmental functions, or mission-essential functions are 
performed by the more efficient form of personnel, whether Federal 
employees, contractors, or, in the case of the Department of Defense, 
military personnel, consistent with requirements for quality and 
reliability and other needs of that executive agency and with all 
public-private competition requirements.
    (c) Use of Most Efficient Workforce.--Notwithstanding any other 
provision of law, the heads of executive agencies shall not be 
constrained by any in-house personnel ceiling, headcount, or staffing 
limitation in ensuring that functions are performed in the most 
efficient manner possible.
    (d) Shifting Functions Between Workforces.--In developing personnel 
authorization requests to Congress and in carrying out personnel 
policies generally, the head of each executive agency shall consider 
particularly the advantages of converting from one form of personnel 
(Federal or private contract personnel, or in the case of the 
Department of Defense, Federal, private contract, or military 
personnel) to another form of personnel for the performance of 
functions that are not inherently governmental functions, functions 
closely related to inherently governmental functions, or mission-
essential functions using any relevant public-private competition 
processes.

SEC. 6. CONSIDERATION OF IN-HOUSE PERFORMANCE REQUIRED FOR NEW WORK.

    (a) Finding.--Pursuant to section 739 of the Financial Services and 
General Government Appropriations Act, 2008 (division D of Public Law 
110-161; 31 U.S.C. 501 note) each covered executive agency is required 
to devise and implement guidelines and procedures to ensure that 
consideration is given to using, on a regular basis, Federal employees 
to perform new functions.
    (b) Certification Required Before Awarding a Service Contract.--The 
Chief Acquisition Officer of each executive agency, or, if no such 
position exists, the executive agency's representative on the Chief 
Acquisition Officers Council, shall, with respect to each service 
contract entered into by such agency for the performance of a function 
or functions, including the award or placement of a task or delivery 
order or the exercise of an option under an existing contract, certify, 
together with supporting rationales, that--
            (1) each function to be performed under such contract is 
        not an inherently governmental function, a function closely 
        related to an inherently governmental function, or a mission-
        essential function;
            (2) the contract is not actually an unauthorized personal 
        services contract; and
            (3) performance by employees of the agency of the function 
        to be performed by a contractor was explicitly considered, with 
        particular consideration given if such function is comparable 
        to functions already performed by Federal employees in the 
        executive agency or another executive agency, either currently 
        or within the last 10 years.
    (c) Reports Required.--
            (1) In general.--Not later than November 1, 2009, and 
        annually thereafter, the head of each covered executive agency 
        shall submit to the Director of the Office of Management and 
        Budget a report on each of the service contracts for new work 
        entered into during the previous fiscal year.
            (2) Content.--Each report submitted under paragraph (1) 
        shall describe the following:
                    (A) Each function or functions performed under a 
                contract with a contractor, the approximate number of 
                employees used by contractors under each such contract, 
                the date each such contract was entered into, the 
                duration of each contract, and each certification 
                required under subsection (b).
                    (B) Each new function that was assigned by the 
                executive agency to employees of the agency, including, 
                for each function, a brief description of the work, a 
                determination of the dollar value, and the number of 
                new Federal employees who were hired or transferred 
                from the performance of other functions.
                    (C) Any obstacles to assigning new functions to 
                Federal employees, as well as recommendations for 
                legislation to overcome those obstacles.
    (d) Publication of Reports Required.--The Director of the Office of 
Management and Budget shall promptly publish in the Federal Register 
information about obtaining each report prepared under subsection (c), 
including the names, addresses, and telephone numbers of the officials 
from whom the reports may be obtained. The reports shall also be made 
available on a publicly available Internet website. The Director shall 
remove proprietary and confidential information from reports made 
available pursuant to this section.

SEC. 7. TRANSITION TO FEDERAL EMPLOYEE PERFORMANCE OF CERTAIN 
              FUNCTIONS.

    (a) Report on Functions That Should Be Performed by Federal 
Employees.--
            (1) Report required.--Not later than 180 days after the 
        date of the enactment of this Act, the head of each executive 
        agency shall submit to the Director of the Office of Management 
        and Budget a report, to be known as the ``Functions At Risk 
        Report'', that--
                    (A) describes any function that is, in whole or in 
                part, an inherently governmental function, a function 
                closely related to an inherently governmental function, 
                or a mission-essential function and which, despite the 
                requirement that such function only be performed by 
                Federal employees, is actually performed, in whole or 
                in part, by a contractor (in this section referred to 
                as an ``at-risk function'');
                    (B) describes the number of contractor employees 
                performing the function, in whole or in part, and the 
                nature of their work;
                    (C) includes a plan for ensuring that the function 
                is performed by Federal employees;
                    (D) identifies any impediments to carrying out such 
                plan; and
                    (E) includes any recommendations for additional 
                legislation necessary to implement this section.
            (2) Limitation on designee.--The head of an affected 
        executive agency may not assign responsibility for compliance 
        with the report requirement established by this subsection 
        below the level of an assistant secretary.
            (3) Publication of reports required.--The Director of the 
        Office of Management and Budget shall promptly publish in the 
        Federal Register information about obtaining each report 
        prepared under paragraph (1), including the names, addresses, 
        and telephone numbers of the officials from whom the reports 
        may be obtained. The reports shall also be made available on a 
        publicly available Internet website. The Director shall remove 
        proprietary and confidential information from reports made 
        available pursuant to this section.
    (b) Requirement To Reduce Number of At-Risk Functions.--The head of 
each executive agency shall reduce the total number of contractor 
employees reported in that executive agency's Functions At Risk Report 
by--
            (1) 5 percent within 1 year after the date of the enactment 
        of this Act;
            (2) 10 percent within 2 years after the date of the 
        enactment of this Act;
            (3) 20 percent within 3 years after the date of the 
        enactment of this Act;
            (4) 40 percent within 4 years after the date of the 
        enactment of this Act;
            (5) 60 percent within 5 years after the date of the 
        enactment of this Act; and
            (6) 70 percent within 6 years after the date of the 
        enactment of this Act.
    (c) Evaluation of Schedule.--The Comptroller General of the United 
States shall--
            (1) evaluate the success of the incremental schedule 
        required under subsection (b) in ensuring that functions that 
        should be performed by Federal employees are actually performed 
        by Federal employees; and
            (2) provide recommendations for future legislation, 
        particularly with respect to addresses remaining at-risk 
        functions.
    (d) Suspension of Reduction Schedule Requirement.--The Director of 
the Office of Management and Budget may suspend the requirement to 
reduce positions pursuant to subsection (b) for a particular executive 
agency for a specific period of time upon certifying to the Committee 
on Oversight and Government Reform of the House of Representatives and 
the Committee on Homeland Security and Governmental Affairs of the 
Senate that compliance during that specific period of time would 
undermine national security, homeland security, or patient care.

SEC. 8. ESTABLISHMENT OF INVENTORIES AND REVIEWS OF CONTRACTS FOR 
              SERVICES.

    (a) In General.--Not later than June 30, 2010, and annually 
thereafter, the head of each executive agency subject to the Federal 
Activities Inventory Reform Act of 1998 (Public Law 105-270; 31 U.S.C. 
501 note), other than the Department of Defense, shall submit to the 
Director of the Office of Management and Budget an annual inventory of 
the activities performed during the preceding fiscal year pursuant to 
contracts for services for or on behalf of such agency.
    (b) Content.--The entry for an activity on an inventory under this 
section shall include, for the fiscal year covered by such entry, the 
following:
            (1) The functions performed by the contractor.
            (2) Information regarding the contractor, the part of the 
        executive agency administering the contract, and the part of 
        the agency whose requirements are being met through contractor 
        performance of the function.
            (3) The funding source for the contract under which the 
        function is performed.
            (4) The fiscal year for which the activity first appeared 
        on an inventory under this section.
            (5) The number of full-time contractor employees (or its 
        equivalent) compensated for the performance of the activity.
            (6) Whether the contract has been performed pursuant to a 
        contract awarded on a noncompetitive basis, either originally 
        or upon a subsequent renewal.
            (7) Whether the contract has been performed poorly, as 
        determined by a contracting officer, during the 5-year period 
        preceding the date of such determination, because of excessive 
        costs or inferior quality.
    (c) Form.--The inventory required under this section shall be 
submitted in unclassified form, but may include a classified annex.
    (d) Publication.--The Director of the Office of Management and 
Budget shall promptly publish in the Federal Register information about 
obtaining each report prepared under subsection (a), including the 
names, addresses, and telephone numbers of the officials from whom the 
reports may be obtained. The reports shall be made available on a 
publicly available Internet website. The Director shall remove 
proprietary information from reports made available pursuant to this 
subsection.
    (e) Review and Planning Requirements.--Not later than 90 days after 
the date on which an inventory is submitted under subsection (a), the 
head of each executive agency or an official designated personally by 
the agency head shall--
            (1) review the contracts and activities in the inventory;
            (2) ensure that--
                    (A) each contract on the list that is a personal 
                services contract has been entered into, and is being 
                performed, in accordance with applicable laws and 
                regulations;
                    (B) the activities on the list do not include any 
                inherently governmental functions; and
                    (C) to the maximum extent practicable, the 
                activities on the list do not include any functions 
                closely associated with inherently governmental 
                functions;
            (3) identify activities that should be considered for 
        conversion to performance by civilian employees of the 
        executive agency pursuant to section 739 of the Financial 
        Services and General Government Appropriations Act, 2008 
        (division D of Public Law 110-161; 31 U.S.C. 501 note); and
            (4) develop a plan to provide for appropriate consideration 
        of the conversion by June 30 of the following year of the 
        activities identified under paragraph (3), which shall be 
        included as an attachment to the next required annual 
        inventory.
    (f) Rule of Construction.--Nothing in this section shall be 
construed to authorize the performance of personal services by a 
contractor except as otherwise provided by law.
    (g) Priority of Contractor Inventory.--Notwithstanding any other 
provision of law, prior to the submission to the Office of Management 
and Budget of an inventory pursuant to the Federal Activities Inventory 
Reform Act of 1998 (Public Law 105-270; 31 U.S.C. 501 note), OMB 
Circular A-76, or any other related administrative regulation, 
directive, or policy, or to publication in the Federal Register, the 
head of an executive agency shall submit the inventory required under 
this section to Congress and the Director of the Office of Management 
and Budget and shall publish the inventory required under this section 
in the Federal Register.

SEC. 9. IDENTIFYING AND ADDRESSING SHORTAGES OF FEDERAL EMPLOYEES.

    (a) Annual Strategic Human Capital Plan Required.--Not later than 1 
year after the date of the enactment of this Act, and annually 
thereafter, the head of each executive agency shall submit to the 
Director of the Office of Management and Budget a strategic human 
capital plan to ensure the capability of the Federal employee workforce 
of the executive agency to perform its functions.
    (b) Content.--Each strategic human capital plan submitted under 
subsection (a) shall include the following:
            (1) An assessment of--
                    (A) the critical skills and competencies in the 
                Federal employee workforce that will be needed to 
                perform the executive agency's functions over the next 
                10 years, based on expected losses due to retirement 
                and other attrition; and
                    (B) gaps in the capability of the Federal employee 
                workforce, both existing and projected, to perform the 
                executive agency's functions over that period.
            (2) A plan of action for developing the Federal employee 
        workforce of the executive agency to address the current or 
        anticipated gaps, including--
                    (A) specific hiring, promoting, and retention 
                schedules, including the funding needed to achieve such 
                schedules; and
                    (B) specific strategies for developing, training, 
                and promoting the Federal employee workforce of the 
                executive agency, including the funding needed to 
                implement such strategies.
    (c) Enhancement of Human Capital Planning.--All human capital 
planning efforts should be considered through any existing labor-
management partnership arrangements.
    (d) Addressing Gaps in Federal Workforces.--
            (1) In general.--The head of an executive agency may not 
        conduct a public-private competition under Office of Management 
        and Budget Circular A-76 or any other provision of law of any 
        function that has been identified in the strategic human 
        capital plan of such agency as one that either is experiencing 
        or will experience a gap in its Federal employee workforce.
            (2) Shortcomings constituting gaps in workforce.--For 
        purposes of this section, gaps in the workforce include 
        shortcomings--
                    (A) in the skills and competencies of employees;
                    (B) in the number of employees possessing such 
                skills and competencies; and
                    (C) in the skills and competencies of employees or 
                in the number of employees that would make it difficult 
                to effectively supervise a contractor and intelligently 
                oversee its performance or reconstitute that function 
                for performance within the agency in the event of 
                contractor nonperformance.
    (e) Publication.--The Director of the Office of Management and 
Budget shall promptly publish in the Federal Register information about 
obtaining each report prepared under subsection (a), including the 
names, addresses, and telephone numbers of the officials from whom the 
reports may be obtained. The reports shall be made available on a 
publicly available Internet website.

SEC. 10. EXPEDITED HIRING AUTHORITY FOR PERFORMANCE OF CERTAIN 
              FUNCTIONS BY FEDERAL EMPLOYEES.

    (a) Expedited Hiring Authority.--For purposes of sections 3304, 
5333, and 5753 of title 5, United States Code, the head of an executive 
agency may--
            (1) designate any category of professional positions within 
        the agency as shortage category positions; and
            (2) utilize the authorities in such sections to recruit and 
        appoint highly qualified persons directly to positions so 
        designated,
in order to comply with the requirements of this Act, and section 739 
of the Financial Services and General Government Appropriations Act, 
2008 (division D of Public Law 110-161; 31 U.S.C. 501 note), which 
requires each covered executive agency to devise and implement 
guidelines and procedures to ensure that consideration is given to 
using, on a regular basis, Federal employees to perform new functions 
as well as functions that are currently performed by contractors.
    (b) Veterans Preference.--In using the authority provided under 
this section, the head of an executive agency shall apply the 
principles of preference for the hiring of veterans and other persons 
established in subchapter 1 of chapter 33 of title 5, United States 
Code.
    (c) Termination of Authority.--Expedited hiring authority may not 
be used to appoint a person to a position of employment under this 
section after the date that is 6 years after the date of the enactment 
of this Act.
    (d) Report on the Use of Expedited Hiring Authority.--Not later 
than December 31, 2009, and annually thereafter for 3 years, the Office 
of Personnel Management shall submit to the Committee on Oversight and 
Government Reform of the House of Representatives and the Committee on 
Homeland Security and Governmental Affairs of the Senate a report on 
the use by executive agencies of the expedited hiring authority under 
this section consistent with merit principles, including 
recommendations for how authority for expedited hiring might be 
improved.

SEC. 11. ESTABLISHMENT OF BUSINESS PROCESS REENGINEERING PROJECTS AS A 
              PREFERRED ALTERNATIVE TO THE OMB CIRCULAR A-76 PROCESS.

    (a) Statement of Policy.--Each executive agency should constantly 
strive to generate efficiencies and improvements through business 
process reengineering, even if such efforts reduce or increase the need 
for Federal employees and contractors.
    (b) Guidelines.--The Director of the Office of Management and 
Budget shall develop guidelines for the establishment of business 
process reengineering projects. Such guidelines shall ensure 
consideration and assessment of the following:
            (1) The number of Federal employees and contractor 
        employees to be affected by the initiative, and how they will 
        be affected.
            (2) The resources needed to conduct the initiative.
            (3) The location or locations where the initiative will be 
        performed, and the location of the affected Federal and 
        contractor employees if different from the initiative location 
        or locations.
            (4) The functions to be included in the initiative.
            (5) The timeline for development and implementation of the 
        initiative.
            (6) The estimated duration of the initiative if such 
        initiative is deemed to be temporary.
            (7) The anticipated budget savings and programmatic 
        improvements.
    (c) Pre-Implementation Report.--Not later than 45 days before 
beginning implementation of a business process reengineering project, 
the head of the executive agency shall submit to the Committee on 
Oversight and Government Reform of the House of Representatives and the 
Committee on Homeland Security and Governmental Affairs of the Senate a 
report on the proposed project, including the information described in 
subsection (b).
    (d) Consistency With Existing Law.--All business process 
reengineering projects shall be implemented in a manner that is 
consistent with paragraphs (2) and (3) of section 7106(b) of title 5, 
United States Code. Such projects shall not result in a change of the 
collective bargaining status of affected Federal employees in the 
executive agency or in the representation status of a labor 
organization with exclusive representation status, as provided under 
section 7114 of title 5, United States Code.
    (e) Enhancement of Federal Employee Buy-In.--The head of an 
executive agency shall, in order to promote the active cooperation of 
affected Federal employees--
            (1) consider all business process reengineering projects 
        through any labor-management partnership arrangements;
            (2) provide any reports required under subsection (c) to 
        any labor organization with national consultation rights under 
        section 7113 of title 5, United States Code, at least 60 days 
        before they are provided to Congress under such subsection; and
            (3) involve discussions and bargaining over the impact of 
        implementation of any projects upon any bargaining unit with 
        the exclusive representatives of the executive agency's Federal 
        workforce, as provided under section 7114 and sections 
        7106(b)(2) and (b)(3) of title 5, United States Code.
    (f) Personnel Increases or Reductions.--Any personnel increases or 
reductions in the Federal employee or contractor workforces must be 
based on the requirements of a specific business process reengineering 
project and not on unrelated or predetermined cost and savings 
assumptions.
    (g) Annual Evaluation.--Not later than October 31, 2010, and 
annually thereafter, the Director of the Office of Management and 
Budget shall conduct a performance review of ongoing business process 
reengineering projects and submit a report on such review to the 
Committee on Oversight and Government Reform of the House of 
Representatives and the Committee on Homeland Security and Governmental 
Affairs of the Senate. Each business process reengineering project 
shall be evaluated with respect to the level of performance in the 
following areas:
            (1) Costs, savings, and overall financial performance of 
        the organization.
            (2) Organic knowledge, skills or expertise.
            (3) Efficiency and effectiveness of key functions or 
        processes.
            (4) Efficiency and effectiveness of the overall 
        organization.

SEC. 12. REFORMS TO THE OMB CIRCULAR A-76 PROCESS.

    (a) Sense of Congress.--It is the sense of Congress that, with 
respect to Office of Management and Budget Circular A-76 or any other 
related administrative regulation, directive, or policy, the following 
policies and procedures should be implemented:
            (1) A standard study shall last no longer than 2 years, 
        from the beginning of the preliminary planning process to the 
        rendering of the award decision, which period shall be 
        calculated as follows:
                    (A) Any days during which a standard study is 
                suspended because of bid protests on behalf of the 
                affected Federal employees shall not be included when 
                determining the length of a standard study.
                    (B) However, any days during which a standard study 
                is extended because of additional activity that is 
                either required by the Government Accountability 
                Office, directed by the contracting officer subsequent 
                to an appeal to the Government Accountability Office or 
                the dismissal or denial of a protest to the Government 
                Accountability Office shall be included when 
                determining the length of a standard study.
                    (C) No executive agency may stop and restart a 
                standard study in order to avoid compliance with this 
                paragraph. Similarly, an executive agency may not 
                subject a function to a standard study if it was 
                earlier subjected to a standard study that had to be 
                stopped because of the length limitation under this 
                paragraph.
            (2) The conversion differential shall be--
                    (A) significantly increased in order to include the 
                large costs that are currently excluded from 
                consideration, including preliminary planning costs, 
                consultants costs, costs of Federal employees diverted 
                from their actual jobs to work on studies, transition 
                costs, post-competition reviews costs, and proportional 
                costs for agencies' privatization bureaucracies 
                (including both Federal employees and contractors); and
                    (B) doubled when a standard study begins its 
                thirteenth month, which period shall be calculated as 
                follows:
                            (i) Any days during which a standard study 
                        is suspended because of bid protests on behalf 
                        of the affected Federal employees shall not be 
                        included when determining the length of a 
                        standard study for purposes of doubling the 
                        cost differential.
                            (ii) However, any days during which a 
                        standard study is extended because of 
                        additional activity that is either required by 
                        the Government Accountability Office, directed 
                        by the contracting officer subsequent to an 
                        appeal to the Government Accountability Office 
                        or the dismissal or denial of a protest to the 
                        Government Accountability Office shall be 
                        included when determining the length of a 
                        standard study.
            (3) Bids or tenders filed on behalf of Federal employees 
        shall include only the overhead costs actually incurred for 
        those Federal employees performing the specific functions being 
        reviewed, and may not include an assessment of an automatic 
        charge for overhead.
            (4) A reliable system to track costs, savings, and quality 
        from OMB Circular A-76 studies that has been implemented, 
        tested, and determined to be accurate and reliable over a long-
        term and a short-term period should be established. The system 
        established should also take into account the possibility for 
        greater efficiencies and programmatic improvements that can be 
        generated through business process reengineering projects, 
        pursuant to section 10.
            (5) No recompetition required.--No Federal employee 
        workforce should be recompeted under OMB Circular A-76 unless 
        the head of the relevant executive agency, without delegation--
                    (A) has signed a certification that such workforce 
                failed to fulfill the terms of the letter of obligation 
                or other agreement, as applicable, pursuant to an 
                earlier OMB Circular A-76 study; and
                    (B) published that certification on fedbizopps.gov 
                before the end of the expiration of the performance 
                period.
    (b) GAO Report.--
            (1) Report required.--Not later than 18 months after the 
        date of the enactment of this Act, the Comptroller General of 
        the United States shall submit to the Committee on Oversight 
        and Government Reform of the House of Representatives and the 
        Committee on Homeland Security and Governmental Affairs of the 
        Senate a report with recommendations for executive agencies 
        (other than the Office of Management and Budget) to more 
        fairly, effectively, expeditiously, transparently, and 
        apolitically oversee studies conducted under the Office of 
        Management and Budget Circular A-76 or any other related 
        administrative regulation, directive, or policy, and enforce 
        the rules that govern those studies.
            (2) Clarification of scope of report.--This subsection does 
        not require the Government Accountability Office to examine the 
        rule-making authority of the Office of Management and Budget 
        with regard to OMB Circular A-76 or any other related 
        administrative regulation, directive, or policy.
            (3) Consultation with agencies and stakeholders.--In 
        preparing the report under this subsection, the Comptroller 
        General of the United States should consult with personnel of 
        the Office of Management and Budget, staffing and manpower 
        personnel of other executive agencies, personnel in the offices 
        of other agencies' inspectors general, and representatives from 
        Federal employee unions and contractor associations.

SEC. 13. ESTABLISHMENT OF TEMPORARY SUSPENSION ON USE OF OMB CIRCULAR 
              A-76 PROCESS UNTIL REFORMS REQUIRED IN THIS ACT HAVE BEEN 
              SUBSTANTIALLY IMPLEMENTED.

    No study or public-private competition regarding the conversion to 
contractor performance of any function performed by Federal employees 
pursuant to Office of Management and Budget Circular A-76 or any other 
administrative regulation, directive, or policy, may be prepared for, 
announced, undertaken, continued, or finished until the Director of the 
Office of Management and Budget, in consultation with the inspectors 
general of the 5 largest Federal departments in terms of annual budgets 
as of the date of the enactment of this Act, determines that--
            (1) at least three-fourths of all executive agencies have 
        made substantial progress in the implementation of all the 
        reforms--
                    (A) required in sections 6, 7, 8, and 9 of this 
                Act; and
                    (B) enacted pursuant to section 739 of the 
                Financial Services and General Government 
                Appropriations Act, 2008 (division D of Public Law 110-
                161; 31 U.S.C. 501 note), under which each covered 
                executive agency is required to devise and implement 
                guidelines and procedures to ensure that consideration 
                is given to using, on a regular basis, Federal 
                employees to perform new functions as well as functions 
                that are currently performed by contractors; and
            (2) the Office of Management and Budget has implemented the 
        reforms to the OMB Circular A-76 described under section 12.
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