Requires each agency head to submit to the Director of the Office of Management and Budget (OMB): (1) an annual report on service contracts for new work; (2) a Functions At Risk Report that describes those functions required to be performed by federal employees that are actually performed by contractors (requires agencies to reduce the total number of contractor employees described in that Report by 70% within six years); and (3) a strategic human capital plan to ensure the capability of the agency's federal employee workforce to perform agency functions. Prohibits an agency from conducting a public-private competition for any function that such plan identifies as experiencing a gap in its federal employee workforce.

Requires agencies subject to the Federal Activities Inventory Reform Act of 1998 (other than the Department of Defense [DOD]) to: (1) submit an annual inventory of activities performed pursuant to contracts for services; (2) review those contracts and identify activities that should be considered for conversion to performance by civilian employees; and (3) develop a plan for such conversion by June 30 of the following year.

Authorizes agency heads to expedite the hiring of certain professionals in shortage category positions.

Requires the Director to: (1) develop guidelines for the establishment of business process re-engineering projects; and (2) conduct annual performance reviews of such projects that are ongoing.

Sets forth revisions, requirements, and restrictions applicable to studies and public-private competitions for the conversion of agency functions to contractor performance pursuant to OMB Circular A-76.