H. R. 1585—57 
available to the workers who are to be employed to perform 
the function under the contract; 
‘‘(ii) offering to such workers an employer-sponsored 
health benefits plan that requires the employer to con-
tribute less towards the premium or subscription share 
than the amount that is paid by the Department of Defense 
for health benefits for civilian employees of the Department 
under chapter 89 of title 5; or 
‘‘(iii) offering to such workers a retirement benefit that, 
in any year, costs less than the annual retirement cost 
factor applicable to civilian employees of the Department 
of Defense under chapter 84 of title 5; and’’. 
(b) 
CONFORMING
AMENDMENTS.—Such 
title 
is 
further 
amended— 
(1) by striking section 2467; and 
(2) in section 2461— 
(A) by redesignating subsections (b) through (d) as 
subsections (c) through (e), respectively; and 
(B) by inserting after subsection (a) the following new 
subsection (b): 
‘‘(b) REQUIREMENT TO CONSULT DOD EMPLOYEES.—(1) Each 
officer or employee of the Department of Defense responsible for 
determining under Office of Management and Budget Circular A– 
76 whether to convert to contractor performance any function of 
the Department of Defense— 
‘‘(A) shall, at least monthly during the development and 
preparation of the performance work statement and the 
management efficiency study used in making that determina-
tion, consult with civilian employees who will be affected by 
that determination and consider the views of such employees 
on the development and preparation of that statement and 
that study; and 
‘‘(B) may consult with such employees on other matters 
relating to that determination. 
‘‘(2)(A) In the case of employees represented by a labor organiza-
tion accorded exclusive recognition under section 7111 of title 5, 
consultation with representatives of that labor organization shall 
satisfy the consultation requirement in paragraph (1). 
‘‘(B) In the case of employees other than employees referred 
to in subparagraph (A), consultation with appropriate representa-
tives of those employees shall satisfy the consultation requirement 
in paragraph (1). 
‘‘(C) The Secretary of Defense shall prescribe regulations to 
carry out this subsection. The regulations shall include provisions 
for the selection or designation of appropriate representatives of 
employees referred to in subparagraph (B) for purposes of the 
consultation required by paragraph (1).’’. 
(c) TECHNICAL AMENDMENTS.—Section 2461 of such title, as 
amended by this section, is further amended— 
(1) in subsection (a)(1)— 
(A) in subparagraph (B), by inserting after ‘‘2003’’ the 
following: ‘‘, or any successor circular’’; and 
(B) in subparagraph (D), by striking ‘‘and reliability’’ 
and inserting ‘‘, reliability, and timeliness’’; and 
(2) in subsection (c)(2), as redesignated by subsection (b)(2), 
by inserting ‘‘of’’ after ‘‘examination’’.
H. R. 1585—58 
(d) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 146 of such title is amended by striking the item 
relating to section 2467. 
SEC. 323. PUBLIC-PRIVATE COMPETITION AT END OF PERIOD SPECI-
FIED IN PERFORMANCE AGREEMENT NOT REQUIRED. 
Section 2461(a) of title 10, United States Code, is amended 
by adding at the end the following new paragraph: 
‘‘(4) A military department or Defense Agency may not be 
required to conduct a public-private competition under Office of 
Management and Budget Circular A–76 or any other provision 
of law at the end of the performance period specified in a letter 
of obligation or other agreement entered into with Department 
of Defense civilian employees pursuant to a public-private competi-
tion for any function of the Department of Defense performed by 
Department of Defense civilian employees.’’. 
SEC. 324. GUIDELINES ON INSOURCING NEW AND CONTRACTED OUT 
FUNCTIONS. 
(a) CODIFICATION AND REVISION OF REQUIREMENT FOR GUIDE-
LINES.— 
(1) IN GENERAL.—Chapter 146 of title 10, United States 
Code, is amended by inserting after section 2462 the following 
new section: 
‘‘§ 2463. Guidelines and procedures for use of civilian 
employees to perform Department of Defense func-
tions 
‘‘(a) GUIDELINES
REQUIRED.—(1) The Under Secretary of 
Defense for Personnel and Readiness shall devise and implement 
guidelines and procedures to ensure that consideration is given 
to using, on a regular basis, Department of Defense civilian 
employees to perform new functions and functions that are per-
formed by contractors and could be performed by Department of 
Defense civilian employees. The Secretary of a military department 
may prescribe supplemental regulations, if the Secretary determines 
such regulations are necessary for implementing such guidelines 
within that military department. 
‘‘(2) The guidelines and procedures required under paragraph 
(1) may not include any specific limitation or restriction on the 
number of functions or activities that may be converted to perform-
ance by Department of Defense civilian employees. 
‘‘(b) SPECIAL CONSIDERATION
FOR CERTAIN FUNCTIONS.—The 
guidelines and procedures required under subsection (a) shall pro-
vide for special consideration to be given to using Department 
of Defense civilian employees to perform any function that— 
‘‘(1) is performed by a contractor and— 
‘‘(A) has been performed by Department of Defense 
civilian employees at any time during the previous 10 
years; 
‘‘(B) is a function closely associated with the perform-
ance of an inherently governmental function; 
‘‘(C) has been performed pursuant to a contract 
awarded on a non-competitive basis; or 
‘‘(D) 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; or
H. R. 1585—59 
‘‘(2) is a new requirement, with particular emphasis given 
to a new requirement that is similar to a function previously 
performed by Department of Defense civilian employees or is 
a function closely associated with the performance of an inher-
ently governmental function. 
‘‘(c) EXCLUSION OF CERTAIN FUNCTIONS FROM COMPETITIONS.— 
The Secretary of Defense may not conduct a public-private competi-
tion under this chapter, Office of Management and Budget Circular 
A–76, or any other provision of law or regulation before— 
‘‘(1) in the case of a new Department of Defense function, 
assigning the performance of the function to Department of 
Defense civilian employees; 
‘‘(2) in the case of any Department of Defense function 
described in subsection (b), converting the function to perform-
ance by Department of Defense civilian employees; or 
‘‘(3) in the case of a Department of Defense function per-
formed by Department of Defense civilian employees, expanding 
the scope of the function. 
‘‘(d) USE OF FLEXIBLE HIRING AUTHORITY.—(1) The Secretary 
of Defense may use the flexible hiring authority available to the 
Secretary under the National Security Personnel System, as estab-
lished pursuant to section 9902 of title 5, to facilitate the perform-
ance by Department of Defense civilian employees of functions 
described in subsection (b). 
‘‘(2) The Secretary shall make use of the inventory required 
by section 2330a(c) of this title for the purpose of identifying func-
tions that should be considered for performance by Department 
of Defense civilian employees pursuant to subsection (b). 
‘‘(e) DEFINITIONS.—In this section the term ‘functions closely 
associated with inherently governmental functions’ has the meaning 
given that term in section 2383(b)(3) of this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sections at the 
beginning of such chapter is amended by inserting after the 
item relating to section 2462 the following new item: 
‘‘2463. Guidelines and procedures for use of civilian employees to perform Depart-
ment of Defense functions.’’. 
(3) DEADLINE FOR ISSUANCE OF GUIDELINES AND PROCE-
DURES.—The Secretary of Defense shall implement the guide-
lines and procedures required under section 2463 of title 10, 
United States Code, as added by paragraph (1), by not later 
than 60 days after the date of the enactment of this Act. 
(b) INSPECTOR GENERAL REPORT.—Not later than 180 days 
after the date of the enactment of this Act, the Inspector General 
of the Department of Defense shall submit to the congressional 
defense committees a report on the implementation of this section 
and the amendments made by this section. 
(c) CONFORMING REPEAL.—The National Defense Authorization 
Act for Fiscal Year 2006 (Public Law 109–163) is amended by 
striking section 343. 
SEC. 325. RESTRICTION ON OFFICE OF MANAGEMENT AND BUDGET 
INFLUENCE OVER DEPARTMENT OF DEFENSE PUBLIC-PRI-
VATE COMPETITIONS. 
(a) RESTRICTION ON OFFICE OF MANAGEMENT AND BUDGET.— 
The Office of Management and Budget may not direct or require 
the Secretary of Defense or the Secretary of a military department 
to prepare for, undertake, continue, or complete a public-private
H. R. 1585—60 
competition or direct conversion of a Department of Defense function 
to performance by a contractor under Office of Management and 
Budget Circular A–76, or any other successor regulation, directive, 
or policy. 
(b) RESTRICTION ON SECRETARY OF DEFENSE.—The Secretary 
of Defense or the Secretary of a military department may not 
prepare for, undertake, continue, or complete a public-private com-
petition or direct conversion of a Department of Defense function 
to performance by a contractor under Office of Management and 
Budget Circular A–76, or any other successor regulation, directive, 
or policy by reason of any direction or requirement provided by 
the Office of Management and Budget. 
(c) INSPECTOR GENERAL REVIEW.— 
(1) COMPREHENSIVE
REVIEW
REQUIRED.—The Inspector 
General of the Department of Defense shall conduct a com-
prehensive review of the compliance of the Secretary of Defense 
and the Secretaries of the military departments with the 
requirements of this section during calendar year 2008. The 
Inspector General shall submit to the congressional defense 
committees the following reports on the comprehensive review: 
(A) An interim report, to be submitted by not later 
than 90 days after the date of the enactment of this Act. 
(B) A final report, to be submitted by not later than 
December 31, 2008. 
(2) INSPECTOR GENERAL ACCESS.—For the purpose of deter-
mining compliance with the requirements of this section, the 
Secretary of Defense shall ensure that the Inspector General 
has access to all Department records of relevant communica-
tions between Department officials and officials of other depart-
ments and agencies of the Federal Government, whether such 
communications occurred inside or outside of the Department. 
SEC. 326. BID PROTESTS BY FEDERAL EMPLOYEES IN ACTIONS UNDER 
OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A–76. 
(a) ELIGIBILITY TO PROTEST PUBLIC-PRIVATE COMPETITIONS.— 
Section 3551(2) of title 31, United States Code, is amended to 
read as follows: 
‘‘(2) The term ‘interested party’— 
‘‘(A) with respect to a contract or a solicitation or 
other request for offers described in paragraph (1), means 
an actual or prospective bidder or offeror whose direct 
economic interest would be affected by the award of the 
contract or by failure to award the contract; and 
‘‘(B) with respect to a public-private competition con-
ducted under Office of Management and Budget Circular 
A–76 with respect to the performance of an activity or 
function of a Federal agency, or a decision to convert a 
function performed by Federal employees to private sector 
performance without a competition under Office of Manage-
ment and Budget Circular A–76, includes— 
‘‘(i) any official who submitted the agency tender 
in such competition; and 
‘‘(ii) any one individual who, for the purpose of 
representing the Federal employees engaged in the 
performance of the activity or function for which the 
public-private competition is conducted in a protest
H. R. 1585—61 
under this subchapter that relates to such public-pri-
vate competition, has been designated as the agent 
of the Federal employees by a majority of such 
employees.’’. 
(b) EXPEDITED ACTION.— 
(1) IN GENERAL.—Subchapter V of chapter 35 of such title 
is amended by adding at the end the following new section: 
‘‘§ 3557. Expedited action in protests of Public-Private com-
petitions 
‘‘For any protest of a public-private competition conducted 
under Office of Management and Budget Circular A–76 with respect 
to the performance of an activity or function of a Federal agency, 
the Comptroller General shall administer the provisions of this 
subchapter in the manner best suited for expediting the final resolu-
tion of the protest and the final action in the public-private competi-
tion.’’. 
(2) CLERICAL AMENDMENT.—The chapter analysis at the 
beginning of such chapter is amended by inserting after the 
item relating to section 3556 the following new item: 
‘‘3557. Expedited action in protests of public-private competitions.’’. 
(c) RIGHT
TO INTERVENE
IN CIVIL ACTION.—Section 1491(b) 
of title 28, United States Code, is amended by adding at the end 
the following new paragraph: 
‘‘(5) If an interested party who is a member of the private 
sector commences an action described in paragraph (1) with respect 
to a public-private competition conducted under Office of Manage-
ment and Budget Circular A–76 regarding the performance of an 
activity or function of a Federal agency, or a decision to convert 
a function performed by Federal employees to private sector 
performance without a competition under Office of Management 
and Budget Circular A–76, then an interested party described in 
section 3551(2)(B) of title 31 shall be entitled to intervene in that 
action.’’. 
(d) APPLICABILITY.—Subparagraph (B) of section 3551(2) of title 
31, United States Code (as added by subsection (a)), and paragraph 
(5) of section 1491(b) of title 28, United States Code (as added 
by subsection (c)), shall apply to— 
(1) a protest or civil action that challenges final selection 
of the source of performance of an activity or function of a 
Federal agency that is made pursuant to a study initiated 
under Office of Management and Budget Circular A–76 on 
or after January 1, 2004; and 
(2) any other protest or civil action that relates to a public- 
private competition initiated under Office of Management and 
Budget Circular A–76, or to a decision to convert a function 
performed by Federal employees to private sector performance 
without a competition under Office of Management and Budget 
Circular A–76, on or after the date of the enactment of this 
Act. 
SEC. 
327. 
PUBLIC-PRIVATE 
COMPETITION 
REQUIRED 
BEFORE 
CONVERSION TO CONTRACTOR PERFORMANCE. 
(a) IN GENERAL.—The Office of Federal Procurement Policy 
Act (41 U.S.C. 403 et seq.) is amended by adding at the end 
the following new section:
H. R. 1585—62 
‘‘SEC. 43. PUBLIC-PRIVATE COMPETITION REQUIRED BEFORE CONVER-
SION TO CONTRACTOR PERFORMANCE. 
‘‘(a) PUBLIC-PRIVATE COMPETITION.—(1) A function of an execu-
tive agency performed by 10 or more agency civilian employees 
may not be converted, in whole or in part, to performance by 
a contractor unless the conversion is based on the results of a 
public-private competition that— 
‘‘(A) formally compares the cost of performance of the func-
tion by agency civilian employees with the cost of performance 
by a contractor; 
‘‘(B) creates an agency tender, including a most efficient 
organization plan, in accordance with Office of Management 
and Budget Circular A–76, as implemented on May 29, 2003, 
or any successor circular; 
‘‘(C) includes the issuance of a solicitation; 
‘‘(D) determines whether the submitted offers meet the 
needs of the executive agency with respect to factors other 
than cost, including quality, reliability, and timeliness; 
‘‘(E) examines the cost of performance of the function by 
agency civilian employees and the cost of performance of the 
function by one or more contractors to demonstrate whether 
converting to performance by a contractor will result in savings 
to the Government over the life of the contract, including— 
‘‘(i) the estimated cost to the Government (based on 
offers received) for performance of the function by a con-
tractor; 
‘‘(ii) the estimated cost to the Government for perform-
ance of the function by agency civilian employees; and 
‘‘(iii) an estimate of all other costs and expenditures 
that the Government would incur because of the award 
of such a contract; 
‘‘(F) requires continued performance of the function by 
agency civilian employees unless the difference in the cost 
of performance of the function by a contractor compared to 
the cost of performance of the function by agency civilian 
employees would, over all performance periods required by 
the solicitation, be equal to or exceed the lesser of— 
‘‘(i) 10 percent of the personnel-related costs for 
performance of that function in the agency tender; or 
‘‘(ii) $10,000,000; and 
‘‘(G) examines the effect of performance of the function 
by a contractor on the agency mission associated with the 
performance of the function. 
‘‘(2) A function that is performed by the executive agency and 
is reengineered, reorganized, modernized, upgraded, expanded, or 
changed to become more efficient, but still essentially provides 
the same service, shall not be considered a new requirement. 
‘‘(3) In no case may a function being performed by executive 
agency personnel be— 
‘‘(A) modified, reorganized, divided, or in any way changed 
for the purpose of exempting the conversion of the function 
from the requirements of this section; or 
‘‘(B) converted to performance by a contractor to circumvent 
a civilian personnel ceiling. 
‘‘(b) REQUIREMENT TO CONSULT EMPLOYEES.—(1) Each civilian 
employee of an executive agency responsible for determining under
H. R. 1585—63 
Office of Management and Budget Circular A–76 whether to convert 
to contractor performance any function of the executive agency— 
‘‘(A) shall, at least monthly during the development and 
preparation of the performance work statement and the 
management efficiency study used in making that determina-
tion, consult with civilian employees who will be affected by 
that determination and consider the views of such employees 
on the development and preparation of that statement and 
that study; and 
‘‘(B) may consult with such employees on other matters 
relating to that determination. 
‘‘(2)(A) In the case of employees represented by a labor organiza-
tion accorded exclusive recognition under section 7111 of title 5, 
United States Code, consultation with representatives of that labor 
organization shall satisfy the consultation requirement in paragraph 
(1). 
‘‘(B) In the case of employees other than employees referred 
to in subparagraph (A), consultation with appropriate representa-
tives of those employees shall satisfy the consultation requirement 
in paragraph (1). 
‘‘(C) The head of each executive agency shall prescribe regula-
tions to carry out this subsection. The regulations shall include 
provisions for the selection or designation of appropriate representa-
tives of employees referred to in paragraph (2)(B) for purposes 
of consultation required by paragraph (1). 
‘‘(c) CONGRESSIONAL NOTIFICATION.—(1) Before commencing a 
public-private competition under subsection (a), the head of an 
executive agency shall submit to Congress a report containing the 
following: 
‘‘(A) The function for which such public-private competition 
is to be conducted. 
‘‘(B) The location at which the function is performed by 
agency civilian employees. 
‘‘(C) The number of agency civilian employee positions 
potentially affected. 
‘‘(D) The anticipated length and cost of the public-private 
competition, and a specific identification of the budgetary line 
item from which funds will be used to cover the cost of the 
public-private competition. 
‘‘(E) A certification that a proposed performance of the 
function by a contractor is not a result of a decision by an 
official of an executive agency to impose predetermined con-
straints or limitations on such employees in terms of man 
years, end strengths, full-time equivalent positions, or max-
imum number of employees. 
‘‘(2) The report required under paragraph (1) shall include 
an examination of the potential economic effect of performance 
of the function by a contractor on— 
‘‘(A) agency civilian employees who would be affected by 
such a conversion in performance; and 
‘‘(B) the local community and the Government, if more 
than 50 agency civilian employees perform the function. 
‘‘(3)(A) A representative individual or entity at a facility where 
a public-private competition is conducted may submit to the head 
of the executive agency an objection to the public-private competi-
tion on the grounds that the report required by paragraph (1)
H. R. 1585—64 
has not been submitted or that the certification required by para-
graph (1)(E) is not included in the report submitted as a condition 
for the public-private competition. The objection shall be in writing 
and shall be submitted within 90 days after the following date: 
‘‘(i) In the case of a failure to submit the report when 
required, the date on which the representative individual or 
an official of the representative entity authorized to pose the 
objection first knew or should have known of that failure. 
‘‘(ii) In the case of a failure to include the certification 
in a submitted report, the date on which the report was sub-
mitted to Congress. 
‘‘(B) If the head of the executive agency determines that the 
report required by paragraph (1) was not submitted or that the 
required certification was not included in the submitted report, 
the function for which the public-private competition was conducted 
for which the objection was submitted may not be the subject 
of a solicitation of offers for, or award of, a contract until, respec-
tively, the report is submitted or a report containing the certification 
in full compliance with the certification requirement is submitted. 
‘‘(d) EXEMPTION FOR THE PURCHASE OF PRODUCTS AND SERVICES 
OF
THE BLIND
AND OTHER SEVERELY HANDICAPPED PERSONS.— 
This section shall not apply to a commercial or industrial type 
function of an executive agency that— 
‘‘(1) is included on the procurement list established pursu-
ant to section 2 of the Javits-Wagner-O’Day Act (41 U.S.C. 
47); or 
‘‘(2) is planned to be changed to performance by a qualified 
nonprofit agency for the blind or by a qualified nonprofit agency 
for other severely handicapped persons in accordance with that 
Act. 
‘‘(e) INAPPLICABILITY DURING WAR OR EMERGENCY.—The provi-
sions of this section shall not apply during war or during a period 
of national emergency declared by the President or Congress.’’. 
(b) CLERICAL AMENDMENT.—The table of sections in section 
1(b) of such Act is amended by adding at the end the following 
new item: 
‘‘Sec. 43. Public-private competition required before conversion to contractor per-
formance.’’. 
SEC. 328. EXTENSION OF AUTHORITY FOR ARMY INDUSTRIAL FACILI-
TIES TO ENGAGE IN COOPERATIVE ACTIVITIES WITH NON- 
ARMY ENTITIES. 
(a) EXTENSION OF AUTHORITY.—Section 4544 of title 10, United 
States Code, is amended— 
(1) in subsection (a), by adding at the end the following: 
‘‘This authority may be used to enter into not more than eight 
contracts or cooperative agreements.’’; and 
(2) in subsection (k), by striking ‘‘2009’’ and inserting 
‘‘2014’’. 
(b) REPORTS.— 
(1) ANNUAL REPORT ON USE OF AUTHORITY.—The Secretary 
of the Army shall submit to Congress at the same time the 
budget of the President is submitted to Congress for fiscal 
years 2009 through 2016 under section 1105 of title 31, United 
States Code, a report on the use of the authority provided 
under section 4544 of title 10, United States Code.