CHAPTER 146-CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR INDUSTRIAL TYPE FUNCTIONS Sec. 2461. 2462. 2463. 2464. 2465. 2466. 2467. 2468. 2469. 2470. 2471. Commercial or industrial type functions: required studies and reports be- Contracting for certain supplies and services required when cost is lower. Prohibition on contracts for performance of firefighting or security-guard Limitations on the performance of depot-level maintenance of materiel. Cost comparisons: requirements with respect to retirement costs and consultation with employees. Military installations: authority of base commanders over contracting for Contracts to perform workloads previously performed by depot-level activi- § 2461. Commercial or industrial type functions: required studies and reports before conversion to contractor performance (a) REQUIRED NOTICE TO CONGRESS.-A commercial or industrial type function of the Department of Defense that on October 1, 1980, was being performed by Department of Defense civilian employees may not be converted to performance by a private contractor unless the Secretary of Defense provides to Congress in a timely manner (1) notification of any decision to study such function for possible performance by a private contractor; (2) a detailed summary of a comparison of the cost of performance of such function by Department of Defense civilian employees and by private contractor which demonstrates that the performance of such function by a private contractor will result in a cost savings to the Government over the life of the contract and a certification that the entire cost comparison is available; (3) a certification that the Government calculation for the cost of performance of such function by Department of Defense civilian employees is based on an estimate of the most efficient and cost effective organization for performance of such function by Department of Defense civilian employees; and (4) a report, to be submitted with the certification required by paragraph (3), showing (A) the potential economic effect on employees affected, and the potential economic effect on the local community and Federal Government if more than 75 employ ees are involved, of contracting for performance of such function; (B) the effect of contracting for performance of such function on the military mission of such function; and (C) the amount of the bid accepted for the performance of such function by the private contractor whose bid is accepted and the cost of performance of such function by Department of Defense civilian employees, together with costs and expenditures which the Government will incur because of the contract. (b) CONGRESSIONAL NOTIFICATION OF DECISION TO CONVERT.If, after completion of the studies required for completion of the certification and report required by paragraphs (3) and (4) of subsection (a), a decision is made to convert the function to contractor performance, the Secretary of Defense shall notify Congress of such decision. (c) ANNUAL REPORTS.-Not later than February 1 of each fiscal year, the Secretary of Defense shall submit to Congress a written report describing the extent to which commercial and industrial type functions were performed by Department of Defense contractors during the preceding fiscal year. The Secretary shall include in each such report an estimate of the percentage of commercial and industrial type functions of the Department of Defense that will be performed by Department of Defense civilian employees, and the percentage of such functions that will be performed by private contractors, during the fiscal year during which the report is submitted. (d) WAIVER FOR SMALL FUNCTIONS.-Subsections (a) through (c) shall not apply to a commercial or industrial type function of the Department of Defense that is being performed by 45 or fewer Department of Defense civilian employees. (e) WAIVER FOR THE PURCHASE OF PRODUCTS AND SERVICES OF THE BLIND AND OTHER SEVERELY HANDICAPPED PERSONS.-Subsections (a) through (c) shall not apply to a commercial or industrial type function of the Department of Defense that— (1) is included on the procurement list established pursuant to section 2 of the Act of June 25, 1938 (41 U.S.C. 47), popularly referred to as the Wagner-O'Day Act; or (2) is planned to be converted to performance by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely handicapped persons in accordance with that Act. (f) ADDITIONAL LIMITATIONS.-(1) A commercial or industrial type function of the Department of Defense that on October 1, 1980, was being performed by Department of Defense civilian employees may not be converted to performance by a private contractor to circumvent a civilian personnel ceiling. (2) In no case may a commercial or industrial type function being performed by Department of Defense personnel be modified, reorganized, divided, or in any way changed for the purpose of exempting from the requirements of subsection (a) the conversion of all or any part of such function to performance by a private contractor.1 (g) INAPPLICABILITY DURING WAR OR EMERGENCY.-The provisions of this section shall not apply during war or during a period of national emergency declared by the President or Congress. (Added P.L. 100–370, § 2(a)(1), July 19, 1988, 102 Stat. 851, and amended P.L. 101–189, § 1132, Nov. 29, 1989, 103 Stat. 1561.) § 2462. Contracting for certain supplies and services required when cost is lower (a) IN GENERAL.-Except as otherwise provided by law, the Secretary of Defense shall procure each supply or service necessary for or beneficial to the accomplishment of the authorized functions of the Department of Defense (other than functions which the Secretary of Defense determines must be performed by military or Government personnel) from a source in the private sector if such a source can provide such supply or service to the Department at a cost that is lower (after including any cost differential required by law, Executive order, or regulation) than the cost at which the Department can provide the same supply or service. (b) REALISTIC AND FAIR COST COMPARISONS.-For the purpose of determining whether to contract with a source in the private sector for the performance of a Department of Defense function on the basis of a comparison of the costs of procuring supplies or services from such a source with the costs of providing the same supplies or services by the Department of Defense, the Secretary of Defense shall ensure that all costs considered (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 realistic and fair. (Added P.L. 100–370, § 2(a)(1), July 19, 1988, 102 Stat. 853.) § 2463. Reports on savings or costs from increased use of DOD civilian personnel (a) IN GENERAL.-Whenever during a fiscal year to which this section applies the performance of a commercial or industrial type activity of the Department of Defense that is being performed by 50 or more employees of a private contractor is changed to performance by civilian employees of the Department of Defense, the Secretary of Defense shall maintain data in which a comparison is made of the estimated costs of (1) continued performance of such activity by private contractor employees, and (2) performance of such activity by civilian employees of the Department of Defense. 1 Section 8020 of the Department of Defense Appropriations Act, 1995 (P.L. 103–335, 108 Stat. 2621), provides: SEC. 8020. None of the funds appropriated by this Act shall be available to convert to contractor performance an activity or function of the Department of Defense that, on or after the date of enactment of this Act, is performed by more than ten Department of Defense civilian employees until a most efficient and cost-effective organization analysis is completed on such activity or function and certification of the analysis is made to the Committees on Appropriations of the House of Representatives and the Senate: Provided, That this section shall not apply to a commercial or industrial type function of the Department of Defense that: (1) is included on the procurement list established pursuant to section 2 of the Act of June 25, 1938 (41 U.S.C. 47), popularly referred to as the Javits-Wagner O'Day Act; (2) is planned to be converted to performance by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely handicapped individuals in accordance with that Act; or (3) is planned to be converted to performance by a qualified firm under 51 percent Native American ownership. (b) APPLICABILITY OF SECTION.-This section applies only with respect to a fiscal year during which there is no statutory limit (commonly known as an "end strength") on the number of civilian employees that may be employed by the Department of Defense as of the last day of that fiscal year. (Added P.L. 100-370, 2(aX1), July 19, 1988, 102 Stat. 853, and amended P.L. 101-189, §1622(c)(7), Nov. 29, 1989, 103 Stat. 1604; P.L. 101–510, § 1301(14), Nov. 5, 1990, 104 Stat. 1668.) § 2464. Core logistics functions (a) NECESSITY FOR CORE LOGISTICS CAPABILITY.-(1) It is essential for the national defense that Department of Defense activities maintain a logistics capability (including personnel, equipment, and facilities) to ensure a ready and controlled source of technical competence and resources necessary to ensure effective and timely response to a mobilization, national defense contingency situations, and other emergency requirements. (2) The Secretary of Defense shall identify those logistics activities that are necessary to maintain the logistics capability described in paragraph (1). (b) LIMITATION ON CONTRACTING. (1) Except as provided in paragraph (2), performance of a logistics activity identified by the Secretary under subsection (a)(2), and performance of a function of the Department of Defense described in section 1231(b) of the Department of Defense Authorization Act, 1986 (Public Law 99–145; 99 Stat. 731), may not be contracted for performance by non-Government personnel under the procedures and requirements of Office of Management and Budget Circular A-76 or any successor administrative regulation or policy (hereinafter in this section referred to as OMB Circular A-76). (2) The Secretary of Defense may waive paragraph (1) in the case of any such logistics activity or function and provide that performance of such activity or function shall be considered for conversion to contractor performance in accordance with OMB Circular A-76. Any such waiver shall be made under regulations prescribed by the Secretary and shall be based on a determination by the Secretary that Government performance of the activity or function is no longer required for national defense reasons. Such regulations shall include criteria for determining whether Government performance of any such activity or function is no longer required for national defense reasons. (3) A waiver under paragraph (2) may not take effect until(A) the Secretary submits a report on the waiver to the Committees on Armed Services and the Committees on Appropriations of the Senate and House of Representatives; and (B) a period of 20 days of continuous session of Congress or 40 calendar days has passed after the receipt of the report by those committees. (4) For purposes of paragraph (3)(B), the continuity of a session of Congress is broken only by an adjournment sine die, and the days on which either House is not in session because of an adjournment of more than three days to a day certain are excluded in the computation of such 20-day period. (Added P.L. 100-370, §2(a)(i), July 19, 1988, 102 Stat. 853, and amended P.L. 101-189, § 1622(c)(7), Nov. 29, 1989, 103 Stat. 1604.) § 2465. Prohibition on contracts for performance of firefighting or security-guard functions 2 (a) Except as provided in subsection (b), funds appropriated to the Department of Defense may not be obligated or expended for the purpose of entering into a contract for the performance of firefighting or security-guard functions at any military installation or facility. (b) The prohibition in subsection (a) does not apply— (1) to a contract to be carried out at a location outside the United States (including its commonwealths, territories, and possessions) at which members of the armed forces would have to be used for the performance of a function described in subsection (a) at the expense of unit readiness; (2) to a contract to be carried out on a Government-owned but privately operated installation; or (3) to a contract (or the renewal of a contract) for the performance of a function under contract on September 24, 1983. (Added as § 2693 P.L. 99-661, § 1222(a), Nov. 14, 1986, 100 Stat. 3976, and amended, P.L. 100180, § 1112 (a), (b)(1), (2), Dec. 4, 1987, 101 Stat. 1147; transferred and redesignated § 2465, P.L. 100-370, § 2(b)(1), July 19, 1988, 102 Stat. 854.) § 2466. Limitations on the performance of depot-level maintenance of materiel (a) PERCENTAGE LIMITATION.-Not more than 40 percent of the funds made available in a fiscal year to a military department or a Defense Agency for depot-level maintenance and repair workload may be used to contract for the performance by non-Federal Government personnel of such workload for the military department or the Defense Agency. Any such funds that are not used for such a contract shall be used for the performance of depot-level maintenance and repair workload by employees of the Department of Defense. (b) PROHIBITION ON MANAGEMENT BY END STRENGTH.-The civilian employees of the Department of Defense involved in the depot-level maintenance and repair of materiel may not be managed on the basis of any end-strength constraint or limitation on the number of such employees who may be employed on the last day of a fiscal year. Such employees shall be managed solely on the basis of the available workload and the funds made available for such depot-level maintenance and repair. 2 Section 816 of the National Defense Authorization Act for Fiscal Year 1995 (P.L. 103–337; 108 Stat. 2820) provides: SEC. 816. DEMONSTRATION PROJECT ON PURCHASE OF FIRE, SECURITY, POLICE, PUBLIC WORKS, AND UTILITY SERVICES FROM LOCAL GOVERNMENT AGENCIES. (a) DEMONSTRATION PROJECT.-The Secretary of Defense may conduct a demonstration project, beginning October 1, 1994, at Monterey, California, under which any fire-fighting, security-guard, police, public works, utility, or other municipal services needed for operation of any Department of Defense asset in Monterey County, California, may be purchased from government agencies located within the county of Monterey. The purchase of such services for the demonstration project may be made notwithstanding section 2465 of title 10, United States Code. (b) EVALUATION OF PROJECT.-Not later than December 31, 1996, the Secretary of Defense shall submit to Congress a report evaluating the results of the project and making any recommendations the Secretary considers appropriate, including recommendations on whether the purchase authorities used in conducting the project could be used to provide similar services at other locations. |