Historical and Revision Notes

Section is based on Pub. L. 96–342, title V, §502, Sept. 8, 1980, 94 Stat. 1086, as amended by Pub. L. 97–252, title XI, §1112(a), Sept. 8, 1982, 96 Stat. 747; Pub. L. 99–145, title XII, §1234(a), Nov. 8, 1985, 99 Stat. 734; Pub. L. 99–661, div. A, title XII, §1221, Nov. 14, 1986, 100 Stat. 3976.

Amendments

2013—Subsec. (a)(5)(E)(i). Pub. L. 113–66 struck out "a" before "public-private competition".

Subsec. (d)(2). Pub. L. 112–239 substituted "such section" for "that Act".

2011—Subsec. (a)(5)(E). Pub. L. 112–81, §937(1)(A)–(E), in introductory provisions, substituted "competition shall be conducted in accordance with guidance and procedures that shall be issued and maintained by the Under Secretary of Defense for Personnel and Readiness and shall begin on the date on which a component of the Department of Defense first obligates funds specifically for the acquisition of contract support for the preliminary planning effort" for "competition, begins on the date on which the Department of Defense obligates funds for the acquisition of contract support".

Subsec. (a)(5)(E)(i). Pub. L. 112–81, §937(1)(F), inserted "a public-private" before "competition".

Subsec. (a)(5)(F). Pub. L. 112–82, §937(2), substituted "military department or Defense Agency shall submit to Congress written notice of the actions intended to be taken during the preliminary planning process and shall provide public notice of such actions by announcing such date on an appropriate Internet website and through other means as determined necessary. The date of such announcement shall be used for the purpose" for "military department shall submit to Congress written notice of such date and shall provide public notice by announcing such date on an appropriate Internet website. Such date is the first day of preliminary planning for a public-private competition for the purpose".

Subsec. (d)(1). Pub. L. 111–350, which directed substitution of "section 8503 of title 41" for "section 2 of the Javits-Wagner-O'Day Act (41 U.S.C. 47)" in subsec. (c)(1), was executed by making the substitution in subsec. (d)(1) to reflect the probable intent of Congress and the amendment by Pub. L. 110–181, §322(b)(2). See 2008 Amendment note below.

2009—Subsec. (a)(1). Pub. L. 111–84, §321(a), in introductory provisions, substituted "No function" for "A function" and "may be converted" for "may not be converted" and struck out "10 or more" before "Department of Defense civilian employees".

Subsec. (a)(5). Pub. L. 111–84, §322(a), added par. (5).

Subsec. (c)(3)(A). Pub. L. 111–84, §1073(a)(25), substituted "the public-private competition" for "the public private competition" in two places in introductory provisions.

2008—Subsec. (a)(1)(B). Pub. L. 110–181, §322(c)(1)(A), inserted ", or any successor circular" after "2003".

Subsec. (a)(1)(D). Pub. L. 110–181, §322(c)(1)(B), substituted ", reliability, and timeliness" for "and reliability".

Subsec. (a)(1)(G), (H). Pub. L. 110–181, §322(a), added subpar. (G) and redesignated former subpar. (G) as (H).

Subsec. (a)(4). Pub. L. 110–181, §323, added par. (4).

Subsecs. (b), (c). Pub. L. 110–181, §322(b)(2), added subsec. (b) and redesignated former subsec. (b) as (c). Former subsec. (c) redesignated (d).

Subsec. (c)(2). Pub. L. 110–181, §322(c)(2), inserted "of" after "examination" in introductory provisions.

Subsecs. (d), (e). Pub. L. 110–181, §322(b)(2), redesignated subsecs. (c) and (d) as (d) and (e), respectively.

2006—Pub. L. 109–163, §341(g)(2)(A), substituted "Public-private competition required" for "Commercial or industrial type functions: required studies and reports" in section catchline.

Subsec. (a). Pub. L. 109–163, §341(a), amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: "A commercial or industrial type function of the Department of Defense that, as of October 1, 1980, was being performed by Department of Defense civilian employees may not be changed to performance by the private sector until the Secretary of Defense fully complies with the reporting and analysis requirements specified in subsections (b) and (c)."

Subsec. (b). Pub. L. 109–163, §341(g)(2)(B), substituted "Congressional Notification" for "Notification and Elements of Analysis" in heading.

Subsec. (b)(1). Pub. L. 109–163, §341(b)(1)(A), in introductory provisions, substituted "a public-private competition under subsection (a)" for "to analyze a commercial or industrial type function described in subsection (a) for possible change to performance by the private sector".

Subsec. (b)(1)(A). Pub. L. 109–163, §341(b)(1)(B), substituted "for which such public-private competition is to be conducted" for "to be analyzed for possible change".

Subsec. (b)(1)(C). Pub. L. 109–163, §341(b)(1)(C), inserted "Department of Defense" before "civilian employee".

Subsec. (b)(1)(D). Pub. L. 109–163, §341(b)(1)(D), substituted "the public-private competition" for "the analysis" in two places.

Subsec. (b)(1)(E). Pub. L. 109–163, §341(b)(1)(E), struck out "commercial or industrial type" before "function" and substituted "a contractor" for "persons who are not civilian employees of the Department of Defense".

Subsec. (b)(2). Pub. L. 109–163, §341(b)(2), added par. (2) and struck out former par. (2) which read as follows: "The duty to prepare a report under paragraph (1) may be delegated. A report prepared below the major command or claimant level of a military department, or below the equivalent level in a Defense Agency, pursuant to any such delegation shall be reviewed at the major command, claimant level, or equivalent level, as the case may be, before submission to Congress."

Subsec. (b)(3). Pub. L. 109–163, §341(b)(2), (3), redesignated par. (4) as (3) and struck out former par. (3) which related to analysis of a commercial or industrial type function for possible change to performance by the private sector.

Subsec. (b)(3)(A). Pub. L. 109–163, §341(b)(4)(A), in introductory provisions, substituted "where a public-private competition is conducted" for "where a commercial or industrial type function is analyzed for possible change in performance" and "the public private competition" for "the analysis" in two places.

Subsec. (b)(3)(B). Pub. L. 109–163, §341(b)(4)(B), substituted "the function for which the public-private competition was conducted for which the objection was submitted" for "the commercial or industrial type function covered by the analysis to which objected".

Subsec. (b)(4). Pub. L. 109–163, §341(b)(3), redesignated par. (4) as (3).

Subsec. (c). Pub. L. 109–163, §341(g)(1), substituted "This section" for "Subsections (a) through (c) and subsection (g)".

Pub. L. 109–163, §341(c)(3), substituted "Exemption" for "Waiver" in heading.

Pub. L. 109–163, §341(c)(2), redesignated subsec. (e) as (c) and struck out former subsec. (c) which related to submission of analysis results by the Secretary of Defense.

Subsecs. (d) to (h). Pub. L. 109–163, §341(c)(2), redesignated subsecs. (e) and (h) as (c) and (d), respectively, and struck out former subsecs. (d), (f), and (g) which related, respectively, to waiver for small functions, additional limitations, and annual reports.

2002—Subsec. (c). Pub. L. 107–314 amended heading and text of subsec. (c) generally. Prior to amendment, text related to the report to Congress by the Secretary of Defense upon a decision to change the commercial or industrial type function that was the subject of the analysis to performance by the private sector, with requirements for contents of the report and submission of the report prior to the change of the function to contractor performance.

2001—Subsec. (g). Pub. L. 107–107 substituted "June 30" for "February 1".

2000—Subsec. (b)(1)(D). Pub. L. 106–398, §1 [[div. A], title III, §351(a)], inserted before period ", and a specific identification of the budgetary line item from which funds will be used to cover the cost of the analysis".

Subsec. (c)(1). Pub. L. 106–398, §1 [[div. A], title III, §351(b)], added subpars. (A), (D), (E), and (G) and redesignated former subpars. (A), (B), (C), (D), and (E) as (B), (C), (F), (H), and (I), respectively.

Subsec. (c)(2), (3). Pub. L. 106–398, §1 [[div. A], title III, §352], added par. (2) and redesignated former par. (2) as (3).

1999—Subsec. (b)(3)(B)(ii). Pub. L. 106–65 substituted "50 employees" for "75 employees".

1998—Subsec. (a). Pub. L. 105–261, §342(a)(2), added subsec. (a) and struck out former subsec. (a) which provided that commercial or industrial type functions of the Department of Defense that on Oct. 1, 1980, were being performed by Department of Defense civilian employees could not be converted to performance by private contractors unless the Secretary of Defense provided certain notices, information, certifications, and reports to Congress.

Subsec. (b). Pub. L. 105–261, §342(a)(2), added subsec. (b) and struck out heading and text of former subsec. (b). Text read as follows: "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. The notification shall include the timetable for completing conversion of the function to contractor performance."

Subsec. (c). Pub. L. 105–261, §342(a)(2), added subsec. (c). Former subsec. (c) redesignated (g).

Subsec. (d). Pub. L. 105–261, §342(b), (c)(1), substituted "50" for "20" and inserted "and subsection (g)" after "Subsections (a) through (c)".

Subsec. (e). Pub. L. 105–261, §342(c)(1), (2), inserted "and subsection (g)" after "Subsections (a) through (c)" in introductory provisions and substituted "changed" for "converted" in par. (2).

Subsec. (f). Pub. L. 105–261, §342(c)(2), (3), substituted "changed" for "converted" in par. (1) and "change" for "conversion" in par. (2).

Subsecs. (g), (h). Pub. L. 105–261, §342(a)(1), redesignated subsecs. (c) and (g) as (g) and (h), respectively.

1997—Subsec. (a)(1). Pub. L. 105–85, §384(a), inserted "and the anticipated length and cost of the study" before semicolon at end.

Subsec. (b). Pub. L. 105–85, §384(b), inserted at end "The notification shall include the timetable for completing conversion of the function to contractor performance."

Subsec. (d). Pub. L. 105–85, §384(c), substituted "20 or fewer" for "45 or fewer".

1996—Subsec. (e)(1). Pub. L. 104–106 substituted "the Javits-Wagner-O'Day Act (41 U.S.C. 47)" for "the Act of June 25, 1938 (41 U.S.C. 47), popularly referred to as the Wagner-O'Day Act".

1989—Subsecs. (e) to (g). Pub. L. 101–189 added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively.

Effective Date of 2009 Amendment

Pub. L. 111–84, div. A, title III, §321(b), Oct. 28, 2009, 123 Stat. 2250, provided that: "The amendments made by subsection (a) [amending this section] shall apply with respect to a function for which a public-private competition is commenced on or after the date of the enactment of this Act [Oct. 28, 2009]."

Pub. L. 111–84, div. A, title III, §322(b), Oct. 28, 2009, 123 Stat. 2252, provided that: "Paragraph (5) of section 2461(a) of title 10, United States Code, as added by subsection (a), shall apply with respect to a public-private competition covered by such section that is initiated on or after the date of the enactment of this Act [Oct. 28, 2009]."

Effective Date of 1998 Amendment

Pub. L. 105–261, div. A, title III, §342(d), Oct. 17, 1998, 112 Stat. 1976, provided that: "The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Oct. 17, 1998], but the amendments shall not apply with respect to a conversion of a function of the Department of Defense to performance by a private contractor concerning which the Secretary of Defense provided to Congress, before the date of the enactment of this Act, a notification under paragraph (1) of section 2461(a) of title 10, United States Code, as in effect on the day before the date of the enactment of this Act."

Effective Date of 1996 Amendment

For effective date and applicability of amendment by Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 2302 of this title.

Restriction on Office of Management and Budget Influence Over Department of Defense Public-Private Competitions

Pub. L. 110–181, div. A, title III, §325, Jan. 28, 2008, 122 Stat. 61, provided that:

"(a) Restriction on Office of Management and Budget.—The Office of Management and Budget may not direct or require the Secretary of Defense or the Secretary of a military department to prepare for, undertake, continue, or complete a public-private competition or direct conversion of a Department of Defense function to performance by a contractor under Office of Management and Budget Circular A–76, or any other successor regulation, directive, or policy.

"(b) Restriction on Secretary of Defense.—The Secretary of Defense or the Secretary of a military department may not prepare for, undertake, continue, or complete a public-private competition or direct conversion of a Department of Defense function to performance by a contractor under Office of Management and Budget Circular A–76, or any other successor regulation, directive, or policy by reason of any direction or requirement provided by the Office of Management and Budget.

"(c) Inspector General Review.—

"(1) Comprehensive review required.—The Inspector General of the Department of Defense shall conduct a comprehensive review of the compliance of the Secretary of Defense and the Secretaries of the military departments with the requirements of this section during calendar year 2008. The Inspector General shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] the following reports on the comprehensive review:

"(A) An interim report, to be submitted by not later than 90 days after the date of the enactment of this Act [Jan. 28, 2008].

"(B) A final report, to be submitted by not later than December 31, 2008.

"(2) Inspector general access.—For the purpose of determining compliance with the requirements of this section, the Secretary of Defense shall ensure that the Inspector General has access to all Department records of relevant communications between Department officials and officials of other departments and agencies of the Federal Government, whether such communications occurred inside or outside of the Department."

Pilot Program on Commercial Fee-for-Service Air Refueling Support for the Air Force

Pub. L. 111–84, div. A, title X, §1082, Oct. 28, 2009, 123 Stat. 2481, provided that:

"(a) Multiyear Contracts Authorized.—The Secretary of the Air Force may enter into one or more multiyear contracts, beginning with the fiscal year 2011 program year, for purposes of conducting the pilot program on utilizing commercial fee-for-service air refueling tanker aircraft for Air Force operations required by section 1081 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110–181; 122 Stat. 335) [set out below].

"(b) Compliance With Law Applicable to Multiyear Contracts.—Any contract entered into under subsection (a) shall be entered into in accordance with the provisions of section 2306c of title 10, United States Code, except that—

"(1) the term of the contract may not be more than 8 years; and

"(2) notwithstanding section 2306c(b) of such title, the authority under section 2306c(a) of such title shall apply to the fee-for-service air refueling pilot program.

"(c) Compliance With Law Applicable to Service Contracts.—A contract entered into under subsection (a) shall be entered into in accordance with the provisions of section 2401 of title 10, United States Code, except that—

"(1) the Secretary shall not be required to certify to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] that the contract is the most cost-effective means of obtaining commercial fee-for-service air refueling tanker aircraft for Air Force operations; and

"(2) the Secretary shall not be required to certify to the congressional defense committees that there is no alternative for meeting urgent operational requirements other than making the contract.

"(d) Limitation on Amount.—The amount of a contract under subsection (a) may not exceed $999,999,999.

"(e) Provision of Government Insurance.—A commercial air operator contracting with the Department of Defense under the pilot program referred to in subsection (a) shall be eligible to receive Government-provided insurance pursuant to chapter 443 of title 49, United States Code, if commercial insurance is unavailable on reasonable terms and conditions."

Pub. L. 110–181, div. A, title X, §1081, Jan. 28, 2008, 122 Stat. 335, as amended by Pub. L. 111–84, div. A, title X, §1081, Oct. 28, 2009, 123 Stat. 2481; Pub. L. 113–291, div. A, title X, §1061, Dec. 19, 2014, 128 Stat. 3503, provided that:

"(a) Pilot Program Required.—The Secretary of the Air Force shall conduct, as soon as practicable after the date of the enactment of this Act [Jan. 28, 2008], a pilot program to assess the feasibility and advisability of utilizing commercial fee-for-service air refueling tanker aircraft for Air Force operations, unless the Secretary of Defense submits notification to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] that pursuing such a program is not in the national interest. The duration of the pilot program shall be at least five years after commencement of the program.

"(b) Purpose.—

"(1) In general.—The pilot program required by subsection (a) shall evaluate the feasibility of fee-for-service air refueling to support, augment, or enhance the air refueling mission of the Air Force by utilizing commercial air refueling providers on a fee-for-service basis.

"(2) Elements.—In order to achieve the purpose of the pilot program, the Secretary of the Air Force shall—

"(A) demonstrate and validate a comprehensive strategy for air refueling on a fee-for-service basis by evaluating all mission areas, including testing support, training support to receiving aircraft, homeland defense support, deployment support, air bridge support, aeromedical evacuation, and emergency air refueling; and

"(B) integrate fee-for-service air refueling described in paragraph (1) into Air Mobility Command operations during the evaluation and execution phases of the pilot program.

"(c) Annual Report.—The Secretary of the Air Force shall provide to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] an annual report on the fee-for-service air refueling program, which includes—

"(1) information with respect to—

"(A) missions flown;

"(B) mission areas supported;

"(C) aircraft number, type, model series supported;

"(D) fuel dispensed;

"(E) departure reliability rates; and

"(F) the annual and cumulative cost to the Government for the program, including a comparison of costs of the same service provided by the Air Force;

"(2) an assessment of the impact of outsourcing air refueling on the Air Force's flying hour program and aircrew training; and

"(3) any other data that the Secretary determines is appropriate for evaluating the performance of the commercial air refueling providers participating in the pilot program."

Inapplicability of Subsection (a)(1)(E) to Best-Value Source Selection Pilot Program

Pub. L. 109–163, div. A, title III, §341(e), Jan. 6, 2006, 119 Stat. 3199, as amended by Pub. L. 109–364, div. A, title X, §1071(e)(1), Oct. 17, 2006, 120 Stat. 2401, provided that: "Subsection (a)(1)(F) of section 2461 of title 10, United States Code, as amended by subsection (a), shall not apply with respect to the pilot program for best-value source selection for performance of information technology services authorized by section 336 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108–136; 117 Stat. 1444; 10 U.S.C. 2461 note)."

Performance of Certain Work by Federal Government Employees

Pub. L. 109–163, div. A, title III, §343, Jan. 6, 2006, 119 Stat. 3200, which provided that the Secretary of Defense was to prescribe guidelines and procedures for ensuring that consideration be given to using Federal Government employees for work that was currently performed or would otherwise be performed under Department of Defense contracts, and that the Secretary was to include the use of the flexible hiring authority available through the National Security Personnel System in order to facilitate performance by Federal Government employees of new requirements and work that was performed under Department of Defense contracts, was repealed and restated in section 2463 of this title by Pub. L. 110–181, div. A, title III, §324(a)(1), (c), Jan. 28, 2008, 122 Stat. 60, 61.

Pilot Program for Purchase of Certain Municipal Services for Military Installations

Pub. L. 108–375, div. A, title III, §325, Oct. 28, 2004, 118 Stat. 1847, as amended by Pub. L. 110–181, div. B, title XXVIII, §2826, Jan. 28, 2008, 122 Stat. 546; Pub. L. 110–417, [div. A], title X, §1061(b)(16), Oct. 14, 2008, 122 Stat. 4613, which authorized a pilot program to procure certain municipal services for a military installation from the county or municipality in which the installation is located, was repealed by Pub. L. 115–232, div. A, title VIII, §812(b)(48), Aug. 13, 2018, 132 Stat. 1850.

Limitations on Conversion of Work Performed by Department of Defense Civilian Employees to Contractor Performance

Pub. L. 108–375, div. A, title III, §327, Oct. 28, 2004, 118 Stat. 1849, which generally required the Secretary of Defense to maintain the continued performance of certain activities and functions by civilian employees unless the competitive sourcing official determined that the cost of performance of the activity or function by a contractor would be less costly by an amount that equaled or exceeded the lesser of $10,000,000 or 10 percent of the most efficient organization's personnel-related costs for performance of the activity or function by civilian employees, was repealed by Pub. L. 109–163, div. A, title III, §341(g)(3), Jan. 6, 2006, 119 Stat. 3200.

Delayed Implementation of Revised Office of Management and Budget Circular A–76 By Department of Defense

Pub. L. 108–136, div. A, title III, §335, Nov. 24, 2003, 117 Stat. 1443, provided that:

"(a) Limitation Pending Report.—No studies or competitions may be conducted under the policies and procedures contained in the revised Office of Management and Budget Circular A–76 dated May 29, 2003 (68 Fed. Reg. 32134), relating to the possible contracting out of commercial activities being performed, as of such date, by employees of the Department of Defense, until the end of the 45-day period beginning on the date on which the Secretary of Defense submits to Congress a report on the effects of the revisions.

"(b) Content of Report.—The report required by subsection (a) shall contain, at a minimum, specific information regarding the following:

"(1) The extent to which the revised circular will ensure that employees of the Department of Defense have the opportunity to compete to retain their jobs.

"(2) The extent to which the revised circular will provide appeal and protest rights to employees of the Department of Defense.

"(3) Identify safeguards in the revised circular to ensure that all public-private competitions are fair, appropriate, and comply with requirements of full and open competition.

"(4) The plans of the Department to ensure an appropriate phase-in period for the revised circular, as recommended by the Commercial Activities Panel of the Government [General] Accounting Office [now Government Accountability Office] in its April 2002 report to Congress, including recommendations for any legislative changes that may be required to ensure a smooth and efficient phase-in period.

"(5) The plans of the Department to provide training to employees of the Department of Defense regarding the revised circular, including how the training will be funded, how employees will be selected to receive the training, and the number of employees likely to receive the training.

"(6) The plans of the Department to collect and analyze data on the costs and quality of work contracted out or retained in-house as a result of a sourcing process conducted under the revised circular."

Pilot Program for Best-Value Source Selection for Performance of Information Technology Services

Pub. L. 108–136, div. A, title III, §336, Nov. 24, 2003, 117 Stat. 1444, which authorized a pilot program for best-value source selection for performance of information technology services, was repealed by Pub. L. 115–232, div. A, title VIII, §812(b)(49), Aug. 13, 2018, 132 Stat. 1850.

Pilot Manpower Reporting System in Department of the Army

Pub. L. 107–107, div. A, title III, §345(a)–(c), Dec. 28, 2001, 115 Stat. 1061, 1062, provided that, not later than Mar. 1 of each of the fiscal years 2002 through 2004, the Secretary of the Army was to submit to Congress a report describing the use during the previous fiscal year of non-Federal entities to provide services to the Department of the Army.

Pilot Program for Commercial Services

Pub. L. 106–65, div. A, title VIII, §814, Oct. 5, 1999, 113 Stat. 711, authorized the Secretary of Defense to carry out a pilot program to treat procurements of commercial services as procurements of commercial items, required the Secretary to issue guidance to procurement officials not later than 90 days after Oct. 5, 1999, and provided that the pilot program was to begin on the date that the Secretary issued the guidance and that it could continue for a period, not in excess of five years.

Public Availability of Operating Agreements Between Military Installations and Financial Institutions

Pub. L. 105–261, div. A, title III, §379, Oct. 17, 1998, 112 Stat. 1995, provided that: "With respect to an agreement between the commander of a military installation in the United States (or the designee of such an installation commander) and a financial institution that permits, allows, or otherwise authorizes the provision of financial services by the financial institution on the military installation, nothing in the terms or nature of such an agreement shall be construed to exempt the agreement from the provisions of sections 552 and 552a of title 5, United States Code."

Development of Standard Forms Regarding Performance Work Statement and Request for Proposal for Conversion of Certain Operational Functions of Military Installations

Pub. L. 105–85, div. A, title III, §389, Nov. 18, 1997, 111 Stat. 1714, as amended by Pub. L. 105–261, div. A, title X, §1069(b)(1), Oct. 17, 1998, 112 Stat. 2136, provided that:

"(a) Standardization of Requirements.—The Secretary of Defense is authorized and encouraged to develop standard forms (to be known as a 'standard performance work statement' and a 'standard request for proposal') for use in the consideration for conversion to contractor performance of commercial services and functions at military installations. A separate standard form shall be developed for each service and function.

"(b) Relationship to OMB Requirements.—A standard performance work statement or a standard request for proposal developed under subsection (a) must fulfill the basic requirements of the performance work statement or request for proposal otherwise required under the procedures and requirements of Office of Management and Budget Circular A–76 (or any successor administrative regulation or policy) in effect at the time the standard form will be used.

"(c) Priority Development of Certain Forms.—In developing standard performance work statements and standard requests for proposal, the Secretary shall give first priority to those commercial services and functions that the Secretary determines have been successfully converted to contractor performance on a repeated basis.

"(d) Incentive for Use.—Beginning not later than October 1, 1998, if a standard performance work statement or a standard request for proposal is developed under subsection (a) for a particular service and function, the standard form may be used in lieu of the performance work statement or request for proposal otherwise required under the procedures and requirements of Office of Management and Budget Circular A–76 in connection with the consideration for conversion to contractor performance of that service or function at a military installation.

"(e) Exclusion of Multifunction Conversion.—If a commercial service or function for which a standard form is developed under subsection (a) is combined with another service or function (for which such a form has not yet been developed) for purposes of considering the services and functions at the military installation for conversion to contractor performance, a standard performance work statement or a standard request for a proposal developed under subsection (a) may not be used in the conversion process in lieu of the procedures and requirements of Office of Management and Budget Circular A–76.

"(f) Effect on Other Laws.—Nothing in this section shall be construed to supersede any other requirements or limitations, specifically contained in chapter 146 of title 10, United States Code, on the conversion to contractor performance of activities performed by civilian employees of the Department of Defense.

"(g) GAO Report.—Not later than June 1, 1999, the Comptroller General shall submit to Congress a report reviewing the implementation of this section.

"(h) Military Installation Defined.—For purposes of this section, the term 'military installation' means a base, camp, post, station, yard, center, homeport facility for any ship, or other activity under the jurisdiction of the Department of Defense, including any leased facility."

[Pub. L. 105–261, div. A, title X, §1069(b), Oct. 17, 1998, 112 Stat. 2136, provided that the amendment made by section 1069(b)(1) to section 389 of Pub. L. 105–85, set out above, is effective as of Nov. 18, 1997, and as if included in the National Defense Authorization Act for Fiscal Year 1998, Pub. L. 105–85, as enacted.]

Private-Sector Operation of Certain Payroll, Finance, and Accounting Functions of Department of Defense; Plan; Report

Pub. L. 104–106, div. A, title III, §353(a), Feb. 10, 1996, 110 Stat. 267, which required the Secretary to submit and conditionally implement a plan for payroll functions for certain civilian employees to be performed by private-sector sources, was repealed by Pub. L. 115–232, div. A, title VIII, §812(b)(50), Aug. 13, 2018, 132 Stat. 1850.

Pilot Program for Private-Sector Operation of NAFI Functions

Pub. L. 104–106, div. A, title III, §353(b), Feb. 10, 1996, 110 Stat. 267, which required the Secretary to carry out a pilot program to test the performance by private-sector sources of payroll and other accounting and finance functions of nonappropriated fund instrumentalities, was repealed by Pub. L. 115–232, div. A, title VIII, §812(b)(51), Aug. 13, 2018, 132 Stat. 1850.

Demonstration Program To Identify Overpayments Made to Vendors

Pub. L. 105–85, div. A, title III, §388(c), Nov. 18, 1997, 111 Stat. 1714, provided that, not later than Dec. 31, 1998, the Comptroller General was to submit to Congress a report containing the results of a review by the Comptroller General of the demonstration program conducted under section 354 of Pub. L. 104–106, set out below.

Pub. L. 104–106, div. A, title III, §354, Feb. 10, 1996, 110 Stat. 268, as amended by Pub. L. 105–85, div. A, title III, §388(a), (b), Nov. 18, 1997, 111 Stat. 1713, 1714, provided that:

"(a) In General.—The Secretary of Defense shall conduct a demonstration program to evaluate the feasibility of using private contractors to audit accounting and procurement records of the Department of Defense in order to identify overpayments made to vendors by the Department.

"(b) Program Requirements.—(1) Under the demonstration program, the Secretary shall, by contract, provide for one or more persons to audit the accounting and procurement records relating to fiscal years after fiscal year 1993 of the working-capital funds and industrial, commercial, and support type activities managed through the Defense Business Operations Fund, except the Defense Logistics Agency to the extent such records have already been audited. The Secretary may enter into more than one contract under the program.

"(2) A contract under the demonstration program shall require the contractor to use data processing techniques that are generally used in audits of private-sector records similar to the records audited under the contract.

"(c) Audit Requirements.—In conducting an audit under the demonstration program, a contractor shall compare Department of Defense purchase agreements (and related documents) with invoices submitted by vendors under the purchase agreements. A purpose of the comparison is to identify, in the case of each audited purchase agreement, the following:

"(1) Any payments to the vendor for costs that are not allowable under the terms of the purchase agreement or by law.

"(2) Any amounts not deducted from the total amount paid to the vendor under the purchase agreement that should have been deducted from that amount on account of goods and services provided to the vendor by the Department.

"(3) Duplicate payments.

"(4) Unauthorized charges.

"(5) Other discrepancies between the amount paid to the vendor and the amount actually due the vendor under the purchase agreement.

"(d) Collection Method.—(1) In the case of an overpayment to a vendor identified under the demonstration program, the Secretary shall consider the use of the procedures specified in section 32.611 of the Federal Acquisition Regulation, regarding a setoff against existing invoices for payment to the vendor, as the first method by which the Department seeks to recover the amount of the overpayment (and any applicable interest and penalties) from the vendor.

"(2) The Secretary of Defense shall be solely responsible for notifying a vendor of an overpayment made to the vendor and identified under the demonstration program and for recovering the amount of the overpayment (and any applicable interest and penalties) from the vendor.

"(e) Fees for Contractor.—The Secretary shall pay to the contractor under the contract entered into under the demonstration program an amount not to exceed 25 percent of the total amount recovered by the Department (through the collection of overpayments and the use of setoffs) solely on the basis of information obtained as a result of the audits performed by the contractor under the program. When an overpayment is recovered through the use of a setoff, amounts for the required payment to the contractor shall be derived from funds available to the working-capital fund or industrial, commercial, or support type activity for which the overpayment is recovered."

Program for Improved Travel Process for Department of Defense

Pub. L. 104–106, div. A, title III, §356, Feb. 10, 1996, 110 Stat. 270, as amended by Pub. L. 105–85, div. A, title X, §1073(d)(1)(B), Nov. 18, 1997, 111 Stat. 1905, which required the Secretary to evaluate options to improve the Department of Defense travel process and conduct related tests, was repealed by Pub. L. 115–232, div. A, title VIII, §812(b)(52), Aug. 13, 2018, 132 Stat. 1850.

Increased Reliance on Private-Sector Sources for Commercial Products and Services

Pub. L. 104–106, div. A, title III, §357, Feb. 10, 1996, 110 Stat. 271, provided that:

"(a) In General.—The Secretary of Defense shall endeavor to carry out through a private-sector source any activity to provide a commercial product or service for the Department of Defense if—

"(1) the product or service can be provided adequately through such a source; and

"(2) an adequate competitive environment exists to provide for economical performance of the activity by such a source.

"(b) Applicability.—(1) Subsection (a) shall not apply to any commercial product or service with respect to which the Secretary determines that production, manufacture, or provision of that product or service by the Government is necessary for reasons of national security.

"(2) A determination under paragraph (1) shall be made in accordance with regulations prescribed under subsection (c).

"(c) Regulations.—The Secretary shall prescribe regulations to carry out this section. Such regulations shall be prescribed in consultation with the Director of the Office of Management and Budget.

"(d) Report.—(1) The Secretary shall identify activities of the Department (other than activities specified by the Secretary pursuant to subsection (b)) that are carried out by employees of the Department to provide commercial-type products or services for the Department.

"(2) Not later than April 15, 1996, the Secretary shall transmit to the congressional defense committees [Committees on Armed Services and on Appropriations of the Senate and Committees on National Security and Appropriations of the House of Representatives] a report on opportunities for increased use of private-sector sources to provide commercial products and services for the Department.

"(3) The report required by paragraph (2) shall include the following:

"(A) A list of activities identified under paragraph (1) indicating, for each activity, whether the Secretary proposes to convert the performance of that activity to performance by private-sector sources and, if not, the reasons why.

"(B) An assessment of the advantages and disadvantages of using private-sector sources, rather than employees of the Department, to provide commercial products and services for the Department that are not essential to the warfighting mission of the Armed Forces.

"(C) A specification of all legislative and regulatory impediments to converting the performance of activities identified under paragraph (1) to performance by private-sector sources.

"(D) The views of the Secretary on the desirability of terminating the applicability of OMB Circular A–76 to the Department.

"(4) The Secretary shall carry out paragraph (1) in consultation with the Director of the Office of Management and Budget and the Comptroller General of the United States. In carrying out that paragraph, the Secretary shall consult with, and seek the views of, representatives of the private sector, including organizations representing small businesses."