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paragraph (2)(B) for purposes of consultation required by
paragraph (1).
‘‘(c) CONGRESSIONAL NOTIFICATION.—(1) Before com-
mencing 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 per-
formed by agency civilian employees.
‘‘(C) The number of agency civilian employee po-
sitions potentially affected.
‘‘(D) The anticipated length and cost of the pub-
lic-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 competi-
tion.
‘‘(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 im-
pose predetermined constraints or limitations on such
employees in terms of man years, end strengths, full-
time equivalent positions, or maximum number of
employees.
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‘‘(2) The report required under paragraph (1) shall in-
clude an examination of the potential economic effect of per-
formance of the function by a contractor on—
‘‘(A) agency civilian employees who would be af-
fected 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 fa-
cility where a public-private competition is conducted may
submit to the head of the executive agency an objection to
the public private competition on the grounds that the re-
port required by paragraph (1) has not been submitted or
that the certification required by paragraph (1)(E) is not
included in the report submitted as a condition for the pub-
lic 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.
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‘‘(ii) In the case of a failure to include the cer-
tification in a submitted report, the date on which the
report was submitted to Congress.
‘‘(B) If the head of the executive agency deter-
mines 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, respectively, the report is submitted or
a report containing the certification in full compli-
ance 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 estab-
lished pursuant 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 handi-
capped persons in accordance with that Act.
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‘‘(e) INAPPLICABILITY
DURING
WAR
OR
EMER-
GENCY.—The provisions of this section shall not apply dur-
ing 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. 368. PERFORMANCE OF CERTAIN WORK BY FEDERAL
GOVERNMENT EMPLOYEES.
(a) GUIDELINES.—
(1) IN GENERAL.—The Under Secretary of De-
fense for Personnel and Readiness shall prescribe
guidelines and procedures for ensuring that consider-
ation is given to using Federal Government employees
on a regular basis for new work and work that is per-
formed under Department of Defense contracts and
could be performed by Federal Government employees.
(2) CRITERIA.—The guidelines and procedures
prescribed under paragraph (1) shall provide for spe-
cial consideration to be given to contracts that—
(A) have been performed by Federal Govern-
ment employees at any time on or after October
1, 1980;
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(B) are associated with the performance of
inherently governmental functions;
(C) have been performed by a contractor
pursuant to a contract that was awarded on a
noncompetitive basis, either a contract for a
function once performed by Federal employees
that was awarded without the conduct of a pub-
lic-private competition or a contract that was
last awarded without the conduct of an actual
competition between contractors; or
(D) have been performed poorly by a con-
tractor because of excessive costs or inferior qual-
ity, as determined by a contracting officer with-
in the last five years .
(3) DEADLINE FOR ISSUANCE OF GUIDELINES.—
The Secretary of Defense shall implement the guide-
lines required under paragraph (1) by not later than
60 days after the date of the enactment of this Act.
(4) ESTABLISHMENT
OF
CONTRACTOR
INVEN-
TORY.—The Secretary of Defense shall establish an
inventory of Department of Defense contracts to deter-
mine which contracts meet the criteria set forth in
paragraph (2).
(b) NEW REQUIREMENTS.—
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(1) LIMITATION ON REQUIRING PUBLIC-PRIVATE
COMPETITION.—No public-private competition may be
required for any Department of Defense function
before—
(A) the commencement of the performance
by civilian employees of the Department of De-
fense of a new Department of Defense function;
(B) the commencement of the performance
by civilian employees of the Department of De-
fense of any Department of Defense function de-
scribed in subparagraphs (B) through (D) of sub-
section (a)(2); or
(C) the expansion of the scope of any De-
partment of Defense function performed by civil-
ian employees of the Department of Defense.
(2) CONSIDERATION OF FEDERAL GOVERNMENT
EMPLOYEES.—The Secretary of Defense shall, to the
maximum extent practicable, ensure that Federal
Government employees are fairly considered for the
performance of new requirements, with special consid-
eration given to new requirements that include func-
tions that—
(A) are similar to functions that have been
performed by Federal Government employees at
any time on or after October 1, 1980; or
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(B) are associated with the performance of
inherently governmental functions.
(c) USE OF FLEXIBLE HIRING AUTHORITY.—The Sec-
retary may use the flexible hiring authority available to
the Secretary under the National Security Personnel Sys-
tem, as established pursuant to section 9902 of title 5,
United States Code, to facilitate the performance by civilian
employees of the Department of Defense of functions de-
scribed in subsection (b).
(d) INSPECTOR GENERAL REPORT.—Not later than
180 days after the enactment of this Act, the Inspector Gen-
eral of the Department of Defense shall submit to the Com-
mittees on Armed Services of the Senate and the House of
Representatives a report on the compliance of the Secretary
of Defense with the requirements of this section.
(e) DEFINITIONS.—In this section:
(1) The term ‘‘National Security Personnel Sys-
tem’’ means the human resources management system
established under the authority of section 9902 of title
5, United States Code.
(2) The term ‘‘inherently governmental function’’
has the meaning given that term in section 5 of the
Federal Activities Inventory Reform Act of 1998
(Public Law 105–270; 112 Stat. 2384; 31 U.S.C. 501
note).
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(f) CONFORMING REPEAL.—The National Defense Au-
thorization Act for Fiscal Year 2006 (Public Law 109–163)
is amended by striking section 343.
SEC. 369. RESTRICTION ON OFFICE OF MANAGEMENT AND
BUDGET INFLUENCE OVER DEPARTMENT OF
DEFENSE PUBLIC-PRIVATE 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, con-
tinue, or complete a public-private competition or direct
conversion of a Department of Defense function to perform-
ance 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 depart-
ment may not prepare for, undertake, continue, or complete
a public-private competition or direct conversion of a De-
partment of Defense function to performance by a con-
tractor 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.
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SEC. 370. PUBLIC-PRIVATE COMPETITION AT END OF PE-
RIOD SPECIFIED IN PERFORMANCE AGREE-
MENT 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 com-
petition under Office of Management and Budget Cir-
cular A–76 or any other provision of law at the end
of the period specified in the performance agreement
entered into in accordance with this section for any
function of the Department of Defense performed by
Department of Defense civilian employees.’’.
TITLE IV—MILITARY PERSONNEL
AUTHORIZATIONS
Subtitle A—Active Forces
SEC. 401. END STRENGTHS FOR ACTIVE FORCES.
The Armed Forces are authorized strengths for active
duty personnel as of September 30, 2008, as follows:
(1) The Army, 525,400.
(2) The Navy, 328,400.
(3) The Marine Corps, 189,000.
(4) The Air Force, 328,600.
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Subtitle B—Reserve Forces
SEC. 411. END STRENGTHS FOR SELECTED RESERVE.
(a) IN GENERAL.—The Armed Forces are authorized
strengths for Selected Reserve personnel of the reserve com-
ponents as of September 30, 2008, as follows:
(1) The Army National Guard of the United
States, 351,300.
(2) The Army Reserve, 205,000.
(3) The Navy Reserve, 67,800.
(4) The Marine Corps Reserve, 39,600.
(5) The Air National Guard of the United
States, 106,700.
(6) The Air Force Reserve, 67,500.
(7) The Coast Guard Reserve, 10,000.
(b) ADJUSTMENTS.—The end strengths prescribed by
subsection (a) for the Selected Reserve of any reserve compo-
nent shall be proportionately reduced by—
(1) the total authorized strength of units orga-
nized to serve as units of the Selected Reserve of such
component which are on active duty (other than for
training) at the end of the fiscal year; and
(2) the total number of individual members not
in units organized to serve as units of the Selected
Reserve of such component who are on active duty
(other than for training or for unsatisfactory partici-
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pation in training) without their consent at the end
of the fiscal year.
Whenever such units or such individual members are re-
leased from active duty during any fiscal year, the end
strength prescribed for such fiscal year for the Selected Re-
serve of such reserve component shall be increased propor-
tionately by the total authorized strengths of such units and
by the total number of such individual members.
SEC. 412. END STRENGTHS FOR RESERVES ON ACTIVE
DUTY IN SUPPORT OF THE RESERVES.
Within the end strengths prescribed in section 411(a),
the reserve components of the Armed Forces are authorized,
as of September 30, 2008, the following number of Reserves
to be serving on full-time active duty or full-time duty, in
the case of members of the National Guard, for the purpose
of organizing, administering, recruiting, instructing, or
training the reserve components:
(1) The Army National Guard of the United
States, 29,204.
(2) The Army Reserve, 15,870.
(3) The Navy Reserve, 11,579.
(4) The Marine Corps Reserve, 2,261.
(5) The Air National Guard of the United
States, 13,936.
(6) The Air Force Reserve, 2,721.
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SEC. 413. END STRENGTHS FOR MILITARY TECHNICIANS
(DUAL STATUS).
The minimum number of military technicians (dual
status) as of the last day of fiscal year 2008 for the reserve
components of the Army and the Air Force (notwith-
standing section 129 of title 10, United States Code) shall
be the following:
(1) For the Army Reserve, 8,249.
(2) For the Army National Guard of the United
States, 26,502.
(3) For the Air Force Reserve, 9,909.
(4) For the Air National Guard of the United
States, 22,553.
SEC. 414. FISCAL YEAR 2008 LIMITATION ON NUMBER OF
NON-DUAL STATUS TECHNICIANS.
(a) LIMITATIONS.—
(1) NATIONAL
GUARD.—Within the limitation
provided in section 10217(c)(2) of title 10, United
States Code, the number of non-dual status techni-
cians employed by the National Guard as of Sep-
tember 30, 2008, may not exceed the following:
(A) For the Army National Guard of the
United States, 1,600.
(B) For the Air National Guard of the
United States, 350.
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(2) ARMY RESERVE.—The number of non-dual
status technicians employed by the Army Reserve as
of September 30, 2008, may not exceed 595.
(3) AIR FORCE RESERVE.—The number of non-
dual status technicians employed by the Air Force
Reserve as of September 30, 2008, may not exceed 90.
(b) NON-DUAL STATUS TECHNICIANS DEFINED.—In
this section, the term ‘‘non-dual status technician’’ has the
meaning given that term in section 10217(a) of title 10,
United States Code.
SEC. 415. MAXIMUM NUMBER OF RESERVE PERSONNEL AU-
THORIZED TO BE ON ACTIVE DUTY FOR
OPERATIONAL SUPPORT.
During fiscal year 2008, the maximum number of
members of the reserve components of the Armed Forces who
may be serving at any time on full-time operational sup-
port duty under section 115(b) of title 10, United States
Code, is the following:
(1) The Army National Guard of the United
States, 17,000.
(2) The Army Reserve, 13,000.
(3) The Navy Reserve, 6,200.
(4) The Marine Corps Reserve, 3,000.
(5) The Air National Guard of the United
States, 16,000.
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(6) The Air Force Reserve, 14,000.
SEC. 416. REVISION OF AUTHORIZED VARIANCES IN END
STRENGTHS FOR SELECTED RESERVE PER-
SONNEL.
(a) INCREASE.—Section 115(f)(3) of title 10, United
States Code, is amended by striking ‘‘2 percent’’ and insert-
ing ‘‘3 percent’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on October 1, 2007, and shall
apply with respect to fiscal years beginning on or after that
date.
Subtitle C—Authorization of
Appropriations
SEC. 421. MILITARY PERSONNEL.
Funds are hereby authorized to be appropriated for fis-
cal year 2008 for military personnel, in amounts as follows:
(1) For the Army, $34,952,762,000.
(2) For the Navy, $23,300,841,000.
(3) For the Marine Corps, $11,065,542,000.
(4) For the Air Force, $24,091,993,000.
(5) For the Army Reserve, $3,701,197,000.
(6) For the Navy Reserve, $1,766,408,000.
(7) For the Marine Corps Reserve, $593,961,000.
(8) For the Air Force Reserve, $1,356,618,000.
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(9) 
For 
the 
Army 
National 
Guard,
$5,914,979,000.
(10) 
For 
the 
Air 
National 
Guard,
$2,607,456,000.
TITLE V—MILITARY PERSONNEL
POLICY
Subtitle A—Officer Personnel Policy
SEC. 501. INCREASE IN AUTHORIZED STRENGTHS FOR
ARMY OFFICERS ON ACTIVE DUTY IN THE
GRADE OF MAJOR TO MEET FORCE STRUC-
TURE REQUIREMENTS.
The table in section 523(a)(1) of title 10, United States
Code, is amended by striking the items under the heading
‘‘Major’’ in the portion of the table relating to the Army
and inserting the following new items:
‘‘7,768
8,689
9,611
10,532
11,454
12,375
13,297
14,218
15,140
16,061
16,983
17,903
18,825
19,746
20,668
21,589
22,511
24,354
26,197
28,040
35,412’’.
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SEC. 502. INCREASE IN AUTHORIZED STRENGTHS FOR
NAVY OFFICERS ON ACTIVE DUTY IN GRADES
OF LIEUTENANT COMMANDER, COMMANDER,
AND CAPTAIN TO MEET FORCE STRUCTURE
REQUIREMENTS.
(a) IN GENERAL.—The table in section 523(a)(2) of
title 10, United States Code, is amended to read as follows:
‘‘Total number of
commissioned offi-
cers (excluding of-
ficers in categories
specified in sub-
section (b)) on ac-
tive duty:
Number of officers who may be serving on active duty in
the grade of:
Lieutenant Com-
mander
Commander
Captain
Navy:
30,000
7,698
5,269
2,222
33,000
8,189
5,501
2,334
36,000
8,680
5,733
2,447
39,000
9,172
5,965
2,559
42,000
9,663
6,197
2,671
45,000
10,155
6,429
2,784
48,000
10,646
6,660
2,896
51,000
11,136
6,889
3,007
54,000
11,628
7,121
3,120
57,000
12,118
7,352
3,232
60,000
12,609
7,583
3,344
63,000
13,100
7,813
3,457
66,000
13,591
8,044
3,568
70,000
14,245
8,352
3,718
90,000
17,517
9,890
4,467’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on October 1, 2007.
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SEC. 503. EXPANSION OF EXCLUSION OF MILITARY PERMA-
NENT PROFESSORS FROM STRENGTH LIMITA-
TIONS FOR OFFICERS BELOW GENERAL AND
FLAG GRADES.
(a) INCLUSION OF PERMANENT PROFESSORS OF THE
NAVY.—Section 523(b)(8) of title 10, United States Code,
is amended—
(1) by striking ‘‘Naval Academy’’ and inserting
‘‘Navy’’; and
(2) by inserting ‘‘or service’’ before the period at
the end.
(b) EXPANSION
OF EXCLUSION GENERALLY.—Such
section is further amended by striking ‘‘50’’ and inserting
‘‘85’’.
SEC. 504. MANDATORY RETIREMENT AGE FOR ACTIVE-DUTY
GENERAL AND FLAG OFFICERS CONTINUED
ON ACTIVE DUTY.
Section 637(b)(3) of title 10, United States Code, is
amended by striking ‘‘but such period may not (except as
provided under section 1251(b) of this title) extend beyond
the date of the officer’s sixty-second birthday’’ and inserting
‘‘except as provided under section 1253 of this title’’.
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SEC. 505. AUTHORITY FOR REDUCED MANDATORY SERVICE
OBLIGATION FOR INITIAL APPOINTMENTS OF
OFFICERS IN CRITICALLY SHORT HEALTH
PROFESSIONAL SPECIALTIES.
Section 651 of title 10, United States Code, is amended
by adding at the end the following new subsection:
‘‘(c)(1) The Secretary of Defense may waive the service
required by subsection (a) for initial appointments of com-
missioned officers in such critically short health profes-
sional specialties as the Secretary shall specify for purposes
of this subsection.
‘‘(2) The minimum period of obligated service for an
officer under a waiver under this subsection shall be the
greater of—
‘‘(A) two years; or
‘‘(B) in the case of an officer who has accepted
an accession bonus or executed a contract or agree-
ment for the multiyear receipt of special pay for serv-
ice in the armed forces, the period of obligated service
specified in such contract or agreement.’’.
SEC. 506. INCREASE IN AUTHORIZED NUMBER OF PERMA-
NENT PROFESSORS AT THE UNITED STATES
MILITARY ACADEMY.
Paragraph (4) of section 4331(b) of title 10, United
States Code, is amended to read as follows:
‘‘(4) Twenty-eight permanent professors.’’.
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SEC. 507. EXPANSION OF AUTHORITY FOR REENLISTMENT
OF OFFICERS IN THEIR FORMER ENLISTED
GRADE.
(a) REGULAR ARMY.—Section 3258 of title 10, United
States Code, is amended—
(1) in subsection (a)—
(A) by striking ‘‘a Reserve officer’’ and in-
serting ‘‘an officer’’; and
(B) by striking ‘‘a temporary appointment’’
and inserting ‘‘an appointment’’; and
(2) in subsection (b)—
(A) in paragraph (1), by striking ‘‘a Re-
serve officer’’ and inserting ‘‘an officer’’; and
(B) in paragraph (2), by striking ‘‘the Re-
serve commission’’ and inserting ‘‘the commis-
sion’’.
(b) REGULAR AIR FORCE.—Section 8258 of such title
is amended—
(1) in subsection (a)—
(A) by striking ‘‘a reserve officer’’ and in-
serting ‘‘an officer’’; and
(B) by striking ‘‘a temporary appointment’’
and inserting ‘‘an appointment’’; and
(2) in subsection (b)—
(A) in paragraph (1), by striking ‘‘a Re-
serve officer’’ and inserting ‘‘an officer’’; and
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(B) in paragraph (2), by striking ‘‘the Re-
serve commission’’ and inserting ‘‘the commis-
sion’’.
SEC. 508. ENHANCED AUTHORITY FOR RESERVE GENERAL
AND FLAG OFFICERS TO SERVE ON ACTIVE
DUTY.
Section 526(d) of title 10, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ before ‘‘The limitations’’;
and
(2) by adding at the end the following new para-
graph:
‘‘(2) The limitations of this section also do not apply
to a number, as specified by the Secretary of the military
department concerned, of reserve component general or flag
officers authorized to serve on active duty for a period of
not more than 365 days. The number so specified for an
armed force may not exceed the number equal to ten percent
of the authorized number of general or flag officers, as the
case may be, of that armed force under section 12004 of
this title. In determining such number, any fraction shall
be rounded down to the next whole number, except that such
number shall be at least one.’’.
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SEC. 509. PROMOTION OF CAREER MILITARY PROFESSORS
OF THE NAVY.
(a) PROMOTION.—
(1) IN
GENERAL.—Chapter 603 of title 10,
United States Code, is amended—
(A) by redesignating section 6970 as section
6970a; and
(B) by inserting after section 6969 the fol-
lowing new section 6970:
‘‘§ 6970. Permanent professors: promotion
‘‘(a) PROMOTION.—An officer serving as a permanent
professor may be recommended for promotion to the grade
of captain or colonel, as the case may be, under regulations
prescribed by the Secretary of the Navy. The regulations
shall include a competitive selection board process to iden-
tify those permanent professors best qualified for promotion.
An officer so recommended shall be promoted by appoint-
ment to the higher grade by the President, by and with the
advice and consent of the Senate.
‘‘(b) EFFECTIVE DATE OF PROMOTION.—If made, the
promotion of an officer under subsection (a) shall be effec-
tive not earlier than three years after the selection of the
officer as a permanent professor as described in that sub-
section.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 603 of such title is
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amended by striking the item relating to section 6970
and inserting the following new items:
‘‘6970. Permanent professors: promotion.
‘‘6970a. Permanent professors: retirement for years of service; authority for defer-
ral.’’.
(b) CONFORMING AMENDMENTS.—Section 641(2) of
such title is amended—
(1) by striking ‘‘and the registrar’’ and inserting
‘‘, the registrar’’; and
(2) by inserting before the period at the end the
following: ‘‘, and permanent professors of the Navy
(as defined in regulations prescribed by the Secretary
of the Navy)’’.
Subtitle B—Enlisted Personnel
Policy
SEC. 521. INCREASE IN AUTHORIZED DAILY AVERAGE OF
NUMBER OF MEMBERS IN PAY GRADE E–9.
(a) INCREASE.—Section 517(a) of title 10, United
States Code, is amended by striking ‘‘1 percent’’ and insert-
ing ‘‘1.25 percent’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on October 1, 2007, and shall
apply with respect to fiscal years beginning on or after that
date.
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Subtitle C—Reserve Component
Management
SEC. 531. REVISED DESIGNATION, STRUCTURE, AND FUNC-
TIONS OF THE RESERVE FORCES POLICY
BOARD.
(a) MODIFICATION OF DESIGNATION, STRUCTURE, AND
FUNCTIONS OF RESERVE FORCES POLICY BOARD.—
(1) IN
GENERAL.—Section 10301 of title 10,
United States Code, is amended to read as follows:
‘‘§ 10301. Reserve Policy Advisory Board
‘‘(a) There is in the Office of the Secretary of Defense
a Reserve Policy Advisory Board.
‘‘(b)(1) The Board shall consist of a civilian chairman
and not more than 15 other members, each appointed by
the Secretary of Defense, of whom—
‘‘(A) not more than 4 members may be Govern-
ment civilian officials who must be from outside the
Department of Defense; and
‘‘(B) not more than 2 members may be members
of the armed forces.
‘‘(2) Each member appointed to serve on the Board
shall have—
‘‘(A) extensive knowledge, or experience with, re-
serve component matters, national security and na-
tional military strategies of the United States, or