(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(a)(1), 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.

(c) WAIVER OF LIMITATION.-The Secretary of the military department concerned and, with respect to a Defense Agency, the Secretary of Defense may waive the applicability of subsection (a) for a fiscal year, to a particular workload, or to a particular depotlevel activity if the Secretary determines that the waiver is necessary for reasons of national security and notifies Congress regarding the reasons for the waiver.

(d) EXCEPTION.-Subsection (a) shall not apply with respect to the Sacramento Army Depot, Sacramento, California.

(e) REPORT.-Not later than January 15, 1995, the Secretary of Defense shall submit to Congress a report identifying, for each military department and Defense Agency, the percentage of funds referred to in subsection (a) that was used during fiscal year 1994 to contract for the performance by non-Federal Government personnel of depot-level maintenance and repair workload.

(Added P.L. 100-456, §326(a), Sept. 29, 1988, 102 Stat. 1955, and amended P.L. 101-189, §313, Nov. 29, 1989, 103 Stat. 1412; P.L. 102-190, § 314(a), Dec. 5, 1991, 105 Stat. 1336; P.L. 102484, §352(a)-(c), Oct. 23, 1992, 106 Stat. 2378; P.L. 103-337, § 332, Oct. 5, 1994, 108 Stat. 2715.)

§ 2467. Cost comparisons: requirements with respect to retirement costs and consultation with employees

(a) REQUIREMENT TO INCLUDE RETIREMENT COSTS.—(1) In any comparison conducted by the Department of Defense under Office of Management and Budget Circular A-76 (or any successor administrative regulation or policy) of the cost of performing commercial activities by Department of Defense personnel and the cost of performing such activities by contractor personnel, the Secretary of Defense shall include retirement system costs (as described in paragraphs (2) and (3)) of both the Department of Defense and the contractor.

(2) The retirement system costs of the Department of Defense shall include (to the extent applicable) the following:

(A) The cost of the Federal Employees' Retirement System, valued by using the normal-cost percentage (as defined by section 8401(23) of title 5, United States Code).

(B) The cost of the Civil Service Retirement System under subchapter III of chapter 83 of such title 5.

(C) The cost of the thrift savings plan under subchapter III of chapter 84 of such title 5.

(D) The cost of the old age, survivors, and disability insurance taxes imposed under section 3111 (a) of the Internal Revenue Code of 1986.

(3) The retirement system costs of the contractor shall include the cost of the old age, survivors, and disability insurance taxes imposed under section 3111(a) of the Internal Revenue Code of 1986, the cost of thrift or other retirement savings plans, and other relevant retirement costs.

(b) REQUIREMENT TO CONSULT DOD EMPLOYEES. (1) Each officer or employee of the Department of Defense responsible for determining under Office of Management and Budget Circular A-76 whether to convert to contractor performance any commercial activity of the Department

(A) shall, at least monthly during the development and preparation of the performance work statement and the man

agement efficiency study used in making that determination, consult with civilian employees who will be affected by that determination and consider the views of such employees on the development and preparation of that statement and that study; and

(B) may consult with such employees on other matters relating to that determination.

(2)(A) In the case of employees represented by a labor organization accorded exclusive recognition under section 7111 of title 5, United States Code, consultation with representatives of that labor organization shall satisfy the consultation requirement in paragraph (1).

(B) In the case of employees other than employees referred to in subparagraph (A), consultation with appropriate representatives of those employees shall satisfy the consultation requirement in paragraph (1).

(3) The Secretary of Defense shall prescribe regulations to carry out this subsection. The regulations shall include provisions for the selection or designation of appropriate representatives of employees referred to in paragraph (2)(B) for purposes of consultation required by paragraph (1).

(Added P.L. 100-456, § 331(a), Sept. 29, 1988, 102 Stat. 1957.)

§ 2468. Military installations: authority of base commanders over contracting for commercial activities

(a) AUTHORITY OF BASE COMMANDER.-The Secretary of Defense shall direct that the commander of each military installation shall have the authority and the responsibility to enter into contracts in accordance with this section for the performance of a commercial activity on the military installation.

(b) YEARLY DUTIES OF BASE COMMANDER.-To enter into a contract under subsection (a) for a fiscal year, the commander of a military installation shall

(1) prepare an inventory for that fiscal year of commercial activities carried out by Government personnel on the military installation;

(2) decide which commercial activities shall be reviewed under the procedures and requirements of Office of Management and Budget Circular A-76 (or any successor administrative regulation or policy); and

(3) conduct a solicitation for contracts for the performance of those commercial activities selected for conversion to contractor performance under the Circular A-76 process.

(c) LIMITATIONS. (1) The Secretary of Defense shall prescribe regulations under which the commander of each military installation may exercise the authority and responsibility provided under subsection (a).

(2) The authority and responsibility provided under subsection (a) are subject to the authority, direction, and control of the Secretary.

(d) ASSISTANCE TO DISPLACED EMPLOYEES.-If the commander of a military installation enters into a contract under subsection (a), the commander shall, to the maximum extent practicable, as

sist in finding suitable employment for any employee of the Department of Defense who is displaced because of that contract.

(e) MILITARY INSTALLATION DEFINED.-In this section, the term "military installation" means a base, camp, post, station, yard, center, or other activity under the jurisdiction of the Secretary of a military department which is located within the United States, the Commonwealth of Puerto Rico, or Guam.

(f) TERMINATION OF AUTHORITY.-The authority provided to commanders of military installations by subsection (a) shall terminate on September 30, 1995.

(Added P.L. 101-189, § 1131(a)(1), Nov. 29, 1989, 103 Stat. 1560, and amended P.L. 101-510, $921, Nov. 5, 1990, 104 Stat. 1627; P.L. 102-190, 8315(a), Dec. 5, 1991, 105 Stat. 1337; P.L. 103-160, §370(c), Nov. 30, 1993, 107 Stat. 1634; P.L. 103–337, § 386(c), Oct. 5, 1994, 108 Stat. 2742.)

§ 2469. Contracts to perform workloads previously performed by depot-level activities of the Department of Defense: requirement of competition

(a) REQUIREMENT FOR COMPETITION.-The Secretary of Defense shall ensure that the performance of a depot-level maintenance or repair workload described in subsection (b) is not changed to performance by a contractor or by another depot-level activity of the Department of Defense unless the change is made using

(1) merit-based selection procedures for competitions among all depot-level activities of the Department of Defense;

or

(2) competitive procedures for competitions among private and public sector entities.

(b) SCOPE.-Subsection (a) applies to any depot-level maintenance or repair workload that has a value of not less than $3,000,000 and is being performed by a depot-level activity of the Department of Defense.

(c) INAPPLICABILITY OF OMB CIRCULAR A-76.-Office of Management and Budget Circular A-76 (or any successor administrative regulation or policy) does not apply to a performance change to which subsection (a) applies.

(Added P.L. 102-484, § 353(a), Oct. 23, 1992, 106 Stat. 2378, and amended P.L. 103-160, §346, Nov. 30, 1993, 107 Stat. 1625; P.L. 103–337, § 338, Oct. 5, 1994, 108 Stat. 2718.)

§ 2470. Depot-level activities of the Department of Defense: authority to compete for maintenance and repair workloads of other Federal agencies

A depot-level activity of the Department of Defense shall be eligible to compete for the performance of any depot-level maintenance and repair workload of a Federal agency for which competitive procedures are used to select the entity to perform the workload.

(Added P.L. 103–337, § 335(a), Oct. 5, 1994, 108 Stat. 2716.)

§ 2471. Persons outside the Department of Defense: lease of excess depot-level equipment and facilities by

(a) AUTHORITY TO LEASE EXCESS EQUIPMENT AND FACILITIES.-Subject to subsection (b), the Secretary of a military department and, with respect to a Defense Agency, the Secretary of Defense, may lease excess equipment and facilities of a depot-level ac