a function closely related to an inherently govern-
mental 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 ex-
plicitly considered, with particular consideration 
given if such function is comparable to functions al-
ready performed by Federal employees in the execu-
tive agency or another executive agency, either cur-
rently 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 cov-
ered 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 approxi-
mate number of employees used by contractors 
under each such contract, the date each such 
contract was entered into, the duration of each 
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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 de-
scription 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 func-
tions to Federal employees, as well as rec-
ommendations for legislation to overcome those 
obstacles. 
(d) PUBLICATION OF REPORTS REQUIRED.—The Di-
rector 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. 
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SEC. 7. TRANSITION TO FEDERAL EMPLOYEE PERFORM-
ANCE OF CERTAIN FUNCTIONS. 
(a) REPORT ON FUNCTIONS THAT SHOULD BE PER-
FORMED 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 Re-
port’’, that— 
(A) describes any function that is, in whole 
or in part, an inherently governmental function, 
a function closely related to an inherently gov-
ernmental function, or a mission-essential func-
tion and which, despite the requirement that 
such function only be performed by Federal em-
ployees, 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 em-
ployees 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 
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(E) includes any recommendations for ad-
ditional legislation necessary to implement this 
section. 
(2) LIMITATION ON DESIGNEE.—The head of 
an affected executive agency may not assign respon-
sibility 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 Reg-
ister information about obtaining each report pre-
pared under paragraph (1), including the names, ad-
dresses, and telephone numbers of the officials from 
whom the reports may be obtained. The reports shall 
also be made available on a publicly available Inter-
net 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 re-
ported in that executive agency’s Functions At Risk Re-
port by— 
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(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 em-
ployees; and 
(2) provide recommendations for future legisla-
tion, particularly with respect to addresses remain-
ing at-risk functions. 
(d) SUSPENSION
OF REDUCTION SCHEDULE RE-
QUIREMENT.—The Director of the Office of Management 
and Budget may suspend the requirement to reduce posi-
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tions 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 Home-
land Security and Governmental Affairs of the Senate that 
compliance during that specific period of time would un-
dermine 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 Di-
rector 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 be-
half of such agency. 
(b) CONTENT.—The entry for an activity on an in-
ventory 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 con-
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tract, and the part of the agency whose require-
ments 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 employ-
ees (or its equivalent) compensated for the perform-
ance 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 re-
newal. 
(7) Whether the contract has been performed 
poorly, as determined by a contracting officer, dur-
ing the 5-year period preceding the date of such de-
termination, 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 
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prepared under subsection (a), including the names, ad-
dresses, 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 Di-
rector 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 execu-
tive agency or an official designated personally by the 
agency head shall— 
(1) review the contracts and activities in the in-
ventory; 
(2) ensure that— 
(A) each contract on the list that is a per-
sonal services contract has been entered into, 
and is being performed, in accordance with ap-
plicable 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 func-
tions closely associated with inherently govern-
mental functions; 
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(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 Ap-
propriations 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 para-
graph (3), which shall be included as an attachment 
to the next required annual inventory. 
(f) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to authorize the performance of 
personal services by a contractor except as otherwise pro-
vided by law. 
(g) PRIORITY OF CONTRACTOR INVENTORY.—Not-
withstanding any other provision of law, prior to the sub-
mission to the Office of Management and Budget of an 
inventory pursuant to the Federal Activities Inventory Re-
form Act of 1998 (Public Law 105–270; 31 U.S.C. 501 
note), OMB Circular A–76, or any other related adminis-
trative 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 Con-
gress and the Director of the Office of Management and 
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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 RE-
QUIRED.—Not later than 1 year after the date of the en-
actment 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 cap-
ital 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 func-
tions 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 pro-
jected, to perform the executive agency’s func-
tions over that period. 
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(2) A plan of action for developing the Federal 
employee workforce of the executive agency to ad-
dress the current or anticipated gaps, including— 
(A) specific hiring, promoting, and reten-
tion 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 PLAN-
NING.—All human capital planning efforts should be con-
sidered through any existing labor-management partner-
ship 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 cap-
ital plan of such agency as one that either is experi-
encing or will experience a gap in its Federal em-
ployee workforce. 
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(2) SHORTCOMINGS
CONSTITUTING
GAPS
IN 
WORKFORCE.—For purposes of this section, gaps in 
the workforce include shortcomings— 
(A) in the skills and competencies of em-
ployees; 
(B) in the number of employees possessing 
such skills and competencies; and 
(C) in the skills and competencies of em-
ployees or in the number of employees that 
would make it difficult to effectively supervise a 
contractor and intelligently oversee its perform-
ance or reconstitute that function for perform-
ance within the agency in the event of con-
tractor 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, ad-
dresses, 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. 
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SEC. 10. EXPEDITED HIRING AUTHORITY FOR PERFORM-
ANCE 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 posi-
tions within the agency as shortage category posi-
tions; and 
(2) utilize the authorities in such sections to re-
cruit 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 Govern-
ment Appropriations Act, 2008 (division D of Public Law 
110–161; 31 U.S.C. 501 note), which requires each cov-
ered 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 per-
formed by contractors. 
(b) VETERANS PREFERENCE.—In using the author-
ity provided under this section, the head of an executive 
agency shall apply the principles of preference for the hir-
ing of veterans and other persons established in sub-
chapter 1 of chapter 33 of title 5, United States Code. 
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(c) TERMINATION OF AUTHORITY.—Expedited hiring 
authority may not be used to appoint a person to a posi-
tion 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 an-
nually thereafter for 3 years, the Office of Personnel Man-
agement 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 sec-
tion consistent with merit principles, including rec-
ommendations for how authority for expedited hiring 
might be improved. 
SEC. 11. ESTABLISHMENT OF BUSINESS PROCESS RE-
ENGINEERING 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 im-
provements through business process reengineering, even 
if such efforts reduce or increase the need for Federal em-
ployees and contractors. 
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(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 con-
tractor employees to be affected by the initiative, 
and how they will be affected. 
(2) The resources needed to conduct the initia-
tive. 
(3) The location or locations where the initia-
tive will be performed, and the location of the af-
fected Federal and contractor employees if different 
from the initiative location or locations. 
(4) The functions to be included in the initia-
tive. 
(5) The timeline for development and imple-
mentation of the initiative. 
(6) The estimated duration of the initiative if 
such initiative is deemed to be temporary. 
(7) The anticipated budget savings and pro-
grammatic improvements. 
(c) PRE-IMPLEMENTATION REPORT.—Not later than 
45 days before beginning implementation of a business 
process reengineering project, the head of the executive 
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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 busi-
ness 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 bar-
gaining status of affected Federal employees in the execu-
tive agency or in the representation status of a labor orga-
nization 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 employ-
ees— 
(1) consider all business process reengineering 
projects through any labor-management partnership 
arrangements; 
(2) provide any reports required under sub-
section (c) to any labor organization with national 
consultation rights under section 7113 of title 5, 
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