SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Activities Inventory Reform 
Act of 1998''.
SEC. 2. ANNUAL LISTS OF GOVERNMENT ACTIVITIES NOT INHERENTLY 
GOVERNMENTAL IN NATURE.
    (a) Lists Required.--Not later than the end of the third quarter of 
each fiscal year, the head of each executive agency shall submit to the 
Director of the Office of Management and Budget a list of activities 
performed by Federal Government sources for the executive agency that, 
in the judgment of the head of the executive agency, are not inherently 
governmental functions. The entry for an activity on the list shall 
include the following:
        (1) The fiscal year for which the activity first appeared on a 
    list prepared under this section.
        (2) The number of full-time employees (or its equivalent) that 
    are necessary for the performance of the activity by a Federal 
    Government source.
        (3) The name of a Federal Government employee responsible for 
    the activity from whom additional information about the activity 
    may be obtained.
    (b) OMB Review and Consultation.--The Director of the Office of 
Management and Budget shall review the executive agency's list for a 
fiscal year and consult with the head of the executive agency regarding 
the content of the final list for that fiscal year.
    (c) Public Availability of Lists.--
        (1) Publication.--Upon the completion of the review and 
    consultation regarding a list of an executive agency--
            (A) the head of the executive agency shall promptly 
        transmit a copy of the list to Congress and make the list 
        available to the public; and
            (B) the Director of the Office of Management and Budget 
        shall promptly publish in the Federal Register a notice that 
        the list is available to the public.
        (2) Changes.--If the list changes after the publication of the 
    notice as a result of the resolution of a challenge under section 
    3, the head of the executive agency shall promptly--
            (A) make each such change available to the public and 
        transmit a copy of the change to Congress; and
            (B) publish in the Federal Register a notice that the 
        change is available to the public.
    (d) Competition Required.--Within a reasonable time after the date 
on which a notice of the public availability of a list is published 
under subsection (c), the head of the executive agency concerned shall 
review the activities on the list. Each time that the head of the 
executive agency considers contracting with a private sector source for 
the performance of such an activity, the head of the executive agency 
shall use a competitive process to select the source (except as may 
otherwise be provided in a law other than this Act, an Executive order, 
regulations, or any executive branch circular setting forth 
requirements or guidance that is issued by competent executive 
authority). The Director of the Office of Management and Budget shall 
issue guidance for the administration of this subsection.
    (e) Realistic and Fair Cost Comparisons.--For the purpose of 
determining whether to contract with a source in the private sector for 
the performance of an executive agency activity on the list on the 
basis of a comparison of the costs of procuring services from such a 
source with the costs of performing that activity by the executive 
agency, the head of the executive agency shall ensure that all costs 
(including the costs of quality assurance, technical monitoring of the 
performance of such function, liability insurance, employee retirement 
and disability benefits, and all other overhead costs) are considered 
and that the costs considered are realistic and fair.

SEC. 3. CHALLENGES TO THE LIST.

    (a) Challenge Authorized.--An interested party may submit to an 
executive agency a challenge of an omission of a particular activity 
from, or an inclusion of a particular activity on, a list for which a 
notice of public availability has been published under section 2.
    (b) Interested Party Defined.--For the purposes of this section, 
the term ``interested party'', with respect to an activity referred to 
in subsection (a), means the following:
        (1) A private sector source that--
            (A) is an actual or prospective offeror for any contract, 
        or other form of agreement, to perform the activity; and
            (B) has a direct economic interest in performing the 
        activity that would be adversely affected by a determination 
        not to procure the performance of the activity from a private 
        sector source.
        (2) A representative of any business or professional 
    association that includes within its membership private sector 
    sources referred to in paragraph (1).
        (3) An officer or employee of an organization within an 
    executive agency that is an actual or prospective offeror to 
    perform the activity.
        (4) The head of any labor organization referred to in section 
    7103(a)(4) of title 5, United States Code, that includes within its 
    membership officers or employees of an organization referred to in 
    paragraph (3).
    (c) Time for Submission.--A challenge to a list shall be submitted 
to the executive agency concerned within 30 days after the publication 
of the notice of the public availability of the list under section 2.
    (d) Initial Decision.--Within 28 days after an executive agency 
receives a challenge, an official designated by the head of the 
executive agency shall--
        (1) decide the challenge; and
        (2) transmit to the party submitting the challenge a written 
    notification of the decision together with a discussion of the 
    rationale for the decision and an explanation of the party's right 
    to appeal under subsection (e).
    (e) Appeal.--
        (1) Authorization of appeal.--An interested party may appeal an 
    adverse decision of the official to the head of the executive 
    agency within 10 days after receiving a notification of the 
    decision under subsection (d).
        (2) Decision on appeal.--Within 10 days after the head of an 
    executive agency receives an appeal of a decision under paragraph 
    (1), the head of the executive agency shall decide the appeal and 
    transmit to the party submitting the appeal a written notification 
    of the decision together with a discussion of the rationale for the 
    decision.

SEC. 4. APPLICABILITY.

    (a) Executive Agencies Covered.--Except as provided in subsection 
(b), this Act applies to the following executive agencies:
        (1) Executive department.--An executive department named in 
    section 101 of title 5, United States Code.
        (2) Military department.--A military department named in 
    section 102 of title 5, United States Code.
        (3) Independent establishment.--An independent establishment, 
    as defined in section 104 of title 5, United States Code.
    (b) Exceptions.--This Act does not apply to or with respect to the 
following:
        (1) General accounting office.--The General Accounting Office.
        (2) Government corporation.--A Government corporation or a 
    Government controlled corporation, as those terms are defined in 
    section 103 of title 5, United States Code.
        (3) Nonappropriated funds instrumentality.--A part of a 
    department or agency if all of the employees of that part of the 
    department or agency are employees referred to in section 2105(c) 
    of title 5, United States Code.
        (4) Certain depot-level maintenance and repair.--Depot-level 
    maintenance and repair of the Department of Defense (as defined in 
    section 2460 of title 10, United States Code).

SEC. 5. DEFINITIONS.

    In this Act:
        (1) Federal government source.--The term ``Federal Government 
    source'', with respect to performance of an activity, means any 
    organization within an executive agency that uses Federal 
    Government employees to perform the activity.
        (2) Inherently governmental function.--
            (A) Definition.--The term ``inherently governmental 
        function'' means a function that is so intimately related to 
        the public interest as to require performance by Federal 
        Government employees.
            (B) Functions included.--The term includes activities that 
        require either the exercise of discretion in applying Federal 
        Government authority or the making of value judgments in making 
        decisions for the Federal Government, including judgments 
        relating to monetary transactions and entitlements. An 
        inherently governmental function involves, among other things, 
        the interpretation and execution of the laws of the United 
        States so as--
                (i) to bind the United States to take or not to take 
            some action by contract, policy, regulation, authorization, 
            order, or otherwise;
                (ii) to determine, protect, and advance United States 
            economic, political, territorial, property, or other 
            interests by military or diplomatic action, civil or 
            criminal judicial proceedings, contract management, or 
            otherwise;
                (iii) to significantly affect the life, liberty, or 
            property of private persons;
                (iv) to commission, appoint, direct, or control 
            officers or employees of the United States; or
                (v) to exert ultimate control over the acquisition, 
            use, or disposition of the property, real or personal, 
            tangible or intangible, of the United States, including the 
            collection, control, or disbursement of appropriated and 
            other Federal funds.
            (C) Functions excluded.--The term does not normally 
        include--
                (i) gathering information for or providing advice, 
            opinions, recommendations, or ideas to Federal Government 
            officials; or
                (ii) any function that is primarily ministerial and 
            internal in nature (such as building security, mail 
            operations, operation of cafeterias, housekeeping, 
            facilities operations and maintenance, warehouse 
            operations, motor vehicle fleet management operations, or 
            other routine electrical or mechanical services).

SEC. 6. EFFECTIVE DATE.

    This Act shall take effect on October 1, 1998.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
Output: Federal Activities Inventory Reform Act of 1998 - Directs the head of each executive agency to submit to the Director of the Office of Management and Budget, not later than the end of the third quarter of each fiscal year, a list of activities performed by Federal Government sources for the agency that, in the judgment of the head of the executive agency, are not inherently governmental functions. 
Requires:  (1) the Director to review the agency's list and consult with the agency head regarding the contents of the final list for the fiscal year; (2) the agency head to transmit a copy of the list to the Congress and make the list publicly available; (3) the Director to publish in the Federal Register a notice that the list is publicly available; and (4) the agency head to publish a notice regarding, make available to the public, and transmit to the Congress, any subsequent change to the list. 
Requires the agency head to:  (1) review the activities on the list within a reasonable time after such a notice of its availability is published; and (2) use a competitive process (with specified exceptions) and ensure that all costs are considered each time that he or she considers contracting with a private sector source for the performance of an activity on the list. 
(Sec. 3) Permits an interested party to submit to an agency a challenge of an omission of a particular activity from, or an inclusion of a particular activity on, a list for which a notice has been published.  Sets forth procedures governing filing challenges, agency decisions on challenges, appealing such decisions, and agency decisions on such appeals. 
(Sec. 4) Provides that this Act shall not apply to or with respect to:  (1) the General Accounting Office; (2) Government corporations and Government controlled corporations; (3) a part of a department or agency if all of the employees of that part are employees paid from nonappropriated funds of certain instrumentalities of the United States under the jurisdiction of the armed forces; and (4) depot-level maintenance and repair of the Department of Defense.