Federal Activities Inventory Reform Act Amendments of 2000

SECTION 1. SHORT TITLE; REFERENCES TO FAIR ACT OF 1998.

    (a) Short Title.--This Act may be cited as the ``Federal Activities 
Inventory Reform Act Amendments of 2000''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Federal Activities Inventory Reform Act of 1998 (Public Law 105-270; 
112 Stat. 2382; 31 U.S.C. 501 note).

SEC. 2. ANNUAL LISTS OF GOVERNMENT ACTIVITIES.

    (a) Lists To Include Inherently Governmental Activities.--
Subsection (a) of section 2 is amended by inserting before the period 
at the end of the first sentence the following: ``and those activities 
performed by Federal Government sources for the executive agency that, 
in that official's judgment, are inherently governmental functions''.
    (b) Descriptive and Explanatory Matters To Be Included.--Such 
subsection is further amended--
            (1) by redesignating paragraph (3) as paragraph (5);
            (2) by inserting after paragraph (2) the following new 
        paragraphs (3) and (4):
            ``(3) A description of the activity, including--
                    ``(A) a narrative description of the activity;
                    ``(B) the product or service code, if any, that 
                would be assigned to the activity under the Federal 
                Procurement Data System if the activity were performed 
                in the private sector; and
                    ``(C) the Standard Industrial Classification code, 
                if any, that would be assigned to the activity if the 
                activity were performed in the private sector.
            ``(4) The organization within the executive agency that is 
        performing the activity, or for which the activity is 
        performed, and the location of that organization.''; and
            (3) by adding at the end the following:
            ``(6) The identity of any provision of law or other 
        authority that, except for subsection (f), would expressly or 
        impliedly exempt the executive agency from the requirements of 
        this section or of Office of Management and Budget Circular A-
        76 with respect to any activity that is not an inherently 
        governmental activity, together with a discussion of the 
        rationale for that exemption.''.
    (c) Deadlines for Publication of Lists and Changes.--Subsection (c) 
of such section is amended--
            (1) in paragraph (1)(B), by striking ``promptly'' and 
        inserting ``, not later than 30 working days after receiving 
        the list,''; and
            (2) in paragraph (2)(B), by inserting after ``(B)'' the 
        following: ``not later than 30 working days after the date of 
        the final decision to make the change,''.

SEC. 3. NOTIFICATION OF AFFECTED EMPLOYEES.

    Section 2 is further amended by adding at the end the following:
    ``(f) Notification of Affected Employees.--At the same time that 
the Director of the Office of Management and Budget publishes a notice 
of the availability of a list of an executive agency under subsection 
(c)(1), the head of the executive agency shall notify each employee of 
the executive agency employed in an activity listed as not being an 
inherently governmental function that the activity may be converted to 
performance by a private sector source.''.

SEC. 4. COMPETITION REQUIREMENTS.

    (a) Use of Competitive Procedures.--
            (1) Requirement.--The second sentence of section 2(d) is 
        amended by striking ``use a competitive process'' and all that 
        follows and inserting ``select the source using competitive 
        procedures applicable to the executive agency's procurements.''
            (2) Competitive procedures defined.--Section 5 is amended 
        by adding at the end the following:
            ``(3) Competitive procedures.--The term `competitive 
        procedures' has the meaning given that term in section 2302(2) 
        of title 10, United States Code, and section 309(b) of the 
        Federal Property and Administrative Services Act of 1949 (41 
        U.S.C. 259(b)).''.
    (b) Cost Comparisons.--Section 2(e) is amended to read as follows:
    ``(e) Cost Comparisons.--
            ``(1) Realistic and fair cost comparisons.--Before 
        determining to contract with a private sector source for the 
        performance of an executive agency activity on the basis of a 
        comparison of the costs of procuring services from such a 
        source with the cost of performing that activity by the 
        executive agency, the head of the executive agency shall ensure 
        that--
                    ``(A) the cost comparison was conducted in 
                accordance with--
                            ``(i) Office of Management and Budget 
                        Circular A-76; and
                            ``(ii) any provision of law that is 
                        applicable to the cost comparison, including 
                        (if applicable) title IX of the Federal 
                        Property and Administrative Services Act of 
                        1949 (40 U.S.C. 541 et seq.) relating to 
                        architectural and engineering services 
                        (including surveying and mapping services);
                    ``(B) all costs have been considered, including the 
                costs of quality assurance, technical monitoring of the 
                performance of such activity, liability insurance, 
                employee retirement and disability benefits, and all 
                other overhead costs; and
                    ``(C) the costs considered are realistic and fair.
            ``(2) Exemption.--Notwithstanding any other provision of 
        law, the performance of an activity that is not an inherently 
        governmental function may be converted to performance by a 
        private sector source without a cost comparison if the activity 
        is performed by fewer than 10 full-time employees of the United 
        States (or the equivalent in part-time employees or in a 
        combination of full-time and part-time employees).''.

SEC. 5. INAPPLICABILITY OF EXEMPTIONS IN OTHER LAWS.

    Section 2 is amended by adding at the end the following:
    ``(f) Exemptions Inapplicable.--The head of each executive agency 
shall carry out this Act notwithstanding any other provision of law 
that expressly or impliedly exempts that executive agency from 
developing an inventory of activities that are not inherently 
governmental functions and are performed by the executive agency or by 
Federal Government sources for the executive agency. The head of the 
executive agency shall include in the annual list prepared under 
subsection (a) a notation of each such exemption that, except for the 
preceding sentence, would otherwise apply to the executive agency or 
any such function.''.

SEC. 6. PERFORMANCE FOR OTHER GOVERNMENTAL ORGANIZATIONS.

    (a) Limitations.--Section 2, as amended by section 5, is further 
amended by adding at the end the following:
    ``(g) Limitations on Performance for Other Governmental 
Organizations.--
            ``(1) Federal agencies.--An activity that is not an 
        inherently governmental function may not be performed for an 
        executive agency by another Federal Government source under 
        section 1535 of title 31, United States Code, unless, within 
        three years before the order for that activity is placed with 
        the other Federal Government source under that section, 
        performance of that activity by the executive agency has been 
        justified pursuant to a competition carried out under Office of 
        Management and Budget Circular A-76.
            ``(2) State and local governments.--The head of an 
        executive agency may not take any action under section 6505 of 
        title 31, United State Code, to perform for the benefit of an 
        agency of a State or a political subdivision of a State an 
        activity that is not an inherently governmental function unless 
        the head of the executive agency has first--
                    ``(A) solicited offers for the performance of that 
                activity in accordance with section 18 of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 416) and 
                section 8(e) of the Small Business Act (15 U.S.C. 
                637(e)); and
                    ``(B) determined on the basis of the response to 
                the solicitation that no responsible private sector 
                source is available to meet the needs of the executive 
                agency for the performance of that activity for the 
                executive agency.''.
    (b) State Defined.--Section 5, as amended by section 4(a)(2) of 
this Act, is further amended by adding at the end the following:
            ``(4) State.--The term `State', includes the District of 
        Columbia, the Commonwealth of Puerto Rico, and the United 
        States Virgin Islands.''.

SEC. 7. CHALLENGES TO THE LIST.

    (a) Matters Subject to Challenge.--Section 3(a) is amended by 
striking ``or an inclusion of a particular activity on,'' and inserting 
``an inclusion of a particular activity on, or the classification of 
any activity on''.
    (b) Revision of Deadlines.--Section 3 is amended--
            (1) in subsection (c), by striking ``30 days'' and 
        inserting ``90 working days'';
            (2) in subsection (d), by striking ``28 days'' and 
        inserting ``28 working days''; and
            (3) in subsection (e)(2), by striking ``10 days'' and 
        inserting ``10 working days''.
    (c) Publication of Resolution of Challenges.--Section 3 is amended 
by adding at the end the following:
    ``(f) Publication of Resolution of Challenges.--Not later than 30 
working days after the head of an executive agency makes a decision on 
an appeal under subsection (e), the head of the executive agency shall 
publish in the Federal Register the following:
            ``(1) Final list.--A final version of the list that was 
        challenged.
            ``(2) Schedule for review of list.--A schedule for the 
        review to be conducted of such list under section 2(d), 
        together with a description of the intended review.''.
    (d) Working Days Defined.--Section 5, as amended by section 6(b) of 
this Act, is further amended by adding at the end the following:
            ``(5) Working day.--The term `working day', in the 
        administration of sections 2 and 3 with respect to a list of an 
        executive agency, means a day on which the headquarters of the 
        executive agency is open for the conduct of the executive 
        agency's business.''.

SEC. 8. PROHIBITION ON CONVERSION TO PERFORMANCE BY FEDERAL PRISON 
              INDUSTRIES.

    Section 4 is amended by adding at the end the following:
    ``(c) Prohibited Conversion.--The performance of an activity of an 
executive agency that is not an inherently government function may not 
be converted to performance by a government corporation provided for 
under chapter 307 of title 18, United States Code.''.

SEC. 9. INHERENTLY GOVERNMENTAL FUNCTION NOT TO INCLUDE RESEARCH AND 
              DEVELOPMENT.

    Section 5(2)(C) is amended--
            (1) by striking ``or'' at the end of clause (i);
            (2) by striking the period at the end of clause (ii) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                            ``(iii) the conduct of research and 
                        development.''.

SEC. 10. PRIVATE SECTOR SOURCE DEFINED.

    Section 5, as amended by section 7(d) of this Act, is further 
amended by adding at the end the following:
            ``(6) Private sector source.--The term `private sector 
        source' means a person lawfully engaged in business for profit 
        in the United States.''.

SEC. 11. REPORT ON PORTABILITY OF FEDERAL PENSION BENEFITS.

    (a) Requirement.--Not later than 180 days after the date of the 
enactment of this Act, the Director of the Office of Management and 
Budget shall submit to Congress a report on the portability of Federal 
pension benefits. The report shall contain--
            (1) an evaluation of current Federal law, policies, and 
        procedures relating to the conversion by Federal Government 
        employees of their Federal pension benefits to private sector 
        pension plans upon the transition of such employees from 
        Federal Government employment to private sector employment;
            (2) a discussion of any impediments to the conversion of 
        Federal pension benefits as described in paragraph (1);
            (3) an analysis of the scoring, under the Congressional 
        Budget Act of 1974, of the conversion of Federal pension 
        benefits as so described; and
            (4) recommendations of the Director for any legislation 
        required to permit the ready conversion of Federal pension 
        benefits as so described.
    (b) Consultation.--The Director of the Office of Management and 
Budget shall consult with the Director of the Office of Personnel 
Management and other appropriate interested parties in preparing the 
report required by subsection (a).

Summary: Requires notification to agency employees who are engaged in an activity listed as not being inherently governmental that such activity may be converted to performance by a private source.
Requires competitive procedures to be used when considering contracting with a private source for the performance of an activity that is not inherently governmental.
Requires OMB Circular A-76 and applicable Federal laws to be followed in cost comparisons of performing a function within the executive agency versus through a private source. Allows an activity not inherently governmental to be performed by a private source without a cost comparison if the activity is currently performed by fewer than ten full-time Federal employees.
Prohibits an agency activity not inherently governmental from being performed by another Federal source unless, within three years prior, performance of such activity has been justified pursuant to Federal competitive procedures. Prohibits the performance within State or local agencies of an activity not inherently governmental unless the head of such agency has first: (1) solicited offers for performance of such activity under Federal procurement requirements; and (2) determined that no responsible private source is available to meet the agency's needs with respect to that activity.
Allows an interested party to submit to an executive agency a challenge of the classification of any activity on a list for which a notice of public availability has been published. Revises publication deadlines.
Prohibits the conversion of agency performance of an activity not inherently governmental to performance by a Federal Prison Industries government corporation.
Excludes research and development from consideration as an inherently governmental function.
Requires the OMB Director to report to Congress on the portability of Federal pension benefits.