I
106TH CONGRESS
2D SESSION
H. R. 4722
To impose a temporary moratorium on the privatization and outsourcing
of Department of Defense functions that are currently being performed
by Department of Defense civilian employees.
IN THE HOUSE OF REPRESENTATIVES
JUNE 22, 2000
Mr. SAXTON (for himself and Mr. HOSTETTLER) introduced the following bill;
which was referred to the Committee on Armed Services
A BILL
To impose a temporary moratorium on the privatization and
outsourcing of Department of Defense functions that
are currently being performed by Department of Defense
civilian employees.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Department of Defense
Privatization and Outsourcing Moratorium Act’’.
SEC. 
2. 
MORATORIUM 
ON 
PRIVATIZATION 
AND
OUTSOURCING 
OF 
DEPARTMENT 
OF 
DE-
FENSE FUNCTIONS.
(a) FINDINGS.—Congress finds the following:
(1) There is conflicting evidence that the cur-
rent privatization and outsourcing efforts of the De-
partment of Defense, including the Departments of
the Army, Navy, and Air Force, are reducing the
cost of support functions within the Department.
(2) 
Typically, 
these 
privatization 
and
outsourcing efforts result in contractors simply re-
placing civilian employees of the Department at
lower initial costs, but higher longer-term costs,
while stagnating organizational improvements that
would otherwise result in greater efficiencies and ef-
fectiveness.
(3) Recent and current privatization and
outsourcing efforts in some cases appear to have cre-
ated serious oversight and accountability problems
for the Department.
(4) The Department, as a general practice, has
adjusted the operating budgets of the Armed Forces
and specific military installations to reflect savings
anticipated as a result of Office of Management and
Budget Circular A–76 studies and subsequent pri-
vatization and outsourcing activities.
(5) The massive drawdowns in the size of the
Armed Forces during the 1990’s and the restruc-
turing of military installations through the base clo-
sure process have created a climate in which making
accurate decisions concerning privatization and
outsourcing are further complicated due to the dy-
namic nature of the civilian workforce of the Depart-
ment.
(6) The Department should pursue alternatives
to the privatization and outsourcing approach con-
ducted under the A–76 process, such as ‘‘Strategic
Sourcing’’, to find its most efficient organization to
perform commercial or industrial type functions.
(b) MORATORIUM.—(1) Chapter 146 of title 10,
United States Code, is amended by adding at the end the
following new section:
‘‘§ 2475. Moratorium on privatization and outsourcing
‘‘(a) MORATORIUM.—(1) During the period specified
in subsection (b), any commercial or industrial type func-
tion of the Department of Defense that, as of the date
of the enactment of this section, is being performed by
Department of Defense civilian employees may not be
changed to performance by the private sector.
‘‘(2) The moratorium applies to a function even
though, as of the date of the enactment of this section,
the function—
‘‘(A) is the subject of a study or report under
section 2461 of this title for conversion to contractor
performance; or
‘‘(B) is being considered for such conversion
under the procedures and requirements of Office of
Management and Budget Circular A–76.
‘‘(3) As part of the moratorium, the Secretary of De-
fense shall order the suspension of any study being con-
ducted under section 2461 of this title or Office of Man-
agement and Budget Circular A–76 regarding a commer-
cial or industrial type function of the Department. New
studies regarding such a function at a military installation
may not be commenced under such section or circular dur-
ing the period of the moratorium.
‘‘(b) DURATION OF MORATORIUM.—The moratorium
imposed under subsection (a) begins on the date of the
enactment of this section and shall continue until the end
of the five-year period beginning on the date the Secretary
of Defense certifies to Congress that all actions necessary
to carry out the 1995 round of base closures and realign-
ments have been completed under the Defense Base Clo-
sure and Realignment Act of 1990 (part A of title XXIX
of Public Law 101–510; 10 U.S.C. 2687 note).
‘‘(c) EXCEPTION.—The moratorium imposed under
subsection (a) does not apply to a commercial or industrial
type function of the Department of Defense that is being
converted, or is being considered for conversion, to per-
formance by the private sector under a Strategic Sourcing
or Business Process and Re-engineering plan of the De-
partment.
‘‘(d) REPORT EVALUATING CONVERSION TO CON-
TRACTOR PERFORMANCE.—(1) Not later than 18 months
after the date of the enactment of this section, the Sec-
retary of Defense shall submit to Congress a report
evaluating—
‘‘(A) each conversion of a commercial or indus-
trial type function of the Department of Defense to
contractor performance that was carried out, in
whole or in part, since October 1, 1996; and
‘‘(B) each commercial or industrial type func-
tion of the Department that was considered, since
that date, for conversion to contractor performance
under section 2461 of this title or Office of Manage-
ment and Budget Circular A–76, but that was not
converted.
‘‘(2) At a minimum, the report shall contain the fol-
lowing information for each function covered by the re-
port:
‘‘(A) The code, title, and actual functions per-
formed by civilian employees of the Department.
‘‘(B) The cost to study the function for possible
conversion.
‘‘(C) The number of civilian employees affected.
‘‘(D) The personnel cost of the conversion, in-
cluding costs resulting from reduction in force, re-
tirement, retraining and other movement and sepa-
ration costs.
‘‘(E) The cost and identity of materials, equip-
ment and facilities provided contractors in conver-
sion to contractor performance.
‘‘(F) The cost of the initial contract, the num-
ber of employees expected to perform the function,
and variants in each thereafter.
‘‘(3) The report shall also contain the following ag-
gregate information for the functions covered by the re-
port:
‘‘(A) The average annual costs or savings asso-
ciated with all Department conversions to contractor
performance.
‘‘(B) The overall average annual costs or sav-
ings resulting from efficiencies achieved in Depart-
ment functions described in paragraph (1)(B).
‘‘(e) EFFECT
OF
MORATORIUM
ON
OPERATING
BUDGETS.—On account of the moratorium imposed under
subsection (a), the Secretary of Defense shall provide for
an adjustment in the operating budgets of the armed
forces and military installations to compensate for the fact
that the operating budgets of the armed forces and many
military installations were reduced, before the start of the
moratorium, to reflect future savings anticipated as a re-
sult of completing the A–76 competitive study process and
converting to contractor performance those commercial
and industrial type functions of the Department of De-
fense that are now subject to the moratorium.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘2475. Moratorium on privatization and outsourcing.’’.
Æ