[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[House]
[Pages H9446-H9452]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL ACTIVITIES INVENTORY REFORM ACT OF 1998
Mr. SESSIONS. Mr. Speaker, I move to suspend the rules and pass the
Senate bill (S. 314) to provide a process for identifying the functions
of the Federal Government that are not inherently governmental
functions, and for other purposes.
[[Page H9447]]
The Clerk read as follows:
S. 314
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
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.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Sessions) and the gentleman from Ohio (Mr. Kucinich) each
will control 20 minutes.
The Chair recognizes the gentleman from Texas (Mr. Sessions).
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
[[Page H9448]]
(Mr. SESSIONS asked and was given permission to revise and extend his
remarks.)
Mr. SESSIONS. Mr. Speaker, this legislation will require agencies to
identify their commercial activities and to review those activities.
Current policy in these areas state, number one, that agencies ought to
rely on private sources for commercial activities and on government
sources for inherently governmental activities; number two, that
agencies should not initiate new commercial activities if they can get
a contractor to perform that activity; and number three, that agencies
will subject their in-house commercial activities to competition.
The government should not be in the business of competition with
private business. In the private sector, specialization in competition
has reduced costs and improved performance and consumer choice. The
most competitive sectors of the economy are also the most innovative.
We need to bring home value to taxpayers. This legislation is a tool to
do a favor for every U.S. taxpayer.
Mr. Speaker, I yield whatever time he may consume to the gentleman
from Virginia (Mr. Bateman), for a colloquy.
Mr. BATEMAN. Mr. Speaker, I thank the very able gentleman from Texas
(Mr. Sessions) for yielding time for this colloquy.
Mr. Speaker, although the Committee on National Security did not have
the opportunity to formally review S. 314, it is my understanding that
the bill in its final form attempts to address the committee's concerns
in two areas. First, section 4(b)(4) of the bill would exclude all
depot level repair and maintenance activities as defined in section
2460 of Title X, United States Code from the requirements of this
legislation.
Secondly, the bill would not change or supersede existing statutory
requirements regarding competitive procedures used by the Department of
Defense, as provided by section 2461 of Title X, United States Code.
Mr. SESSIONS. Mr. Speaker, will the gentleman yield?
Mr. BATEMAN. I am happy to yield to the gentleman from Texas.
Mr. SESSIONS. Mr. Speaker, I would like to state to the honorable
gentleman from Virginia, the subcommittee chairman, that he is correct,
this is exactly as the language is and as stated. The Committee on
Government Reform and Oversight is well aware of the extensive work by
the Committee on National Security over the years in addressing the
contracting out process within the Department of Defense.
I agree with the assertion of the gentleman from Virginia (Mr.
Bateman) that this bill specifically excludes the Department of
Defense's depot maintenance function from the new procedures
established by the bill and does nothing to alter or supersede existing
statutory requirements with regard to the contracting out of the
Department of Defense commercial or industrial activities.
Mr. BATEMAN. Mr. Speaker, I thank my friend, the gentleman from Texas
(Mr. Sessions), and also the gentleman from Ohio (Mr. Kucinich).
Mr. SESSIONS. Mr. Speaker, I thank the gentleman from Virginia (Mr.
Bateman) also.
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want to say that I have worked with the minority on
this legislation, and I want to state very clearly that the gentleman
from Ohio (Mr. Kucinich) and I have not only worked on this, but have a
good working relationship.
Mr. Speaker, I reserve the balance of my time.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to the bill. I think that this is
the time for some plain speaking. Everyone should be aware that S. 314,
the Federal Activities Inventory Reform Act of 1998, is the first step
down the road towards privatizing much of the Federal Government.
The goals of the sponsor of this bill are plain from the legislative
history. S. 314, as originally introduced in both the House and the
Senate, would have required the Federal Government to privatize all the
activities it performed which could be done by the private sector. I
believe it was a recipe for the wholesale dismantling of much of the
Federal Government as it now exists.
The bill before us, much to the credit of the gentleman from Texas
(Mr. Sessions), has been moderated from its inception, but the goals
remain the same. The means are incremental, but the ends are unchanged.
The purpose of the bill is to force the Federal Government to identify
likely targets for privatization or contracting out. The Federal
contractors would like the government to help them identify new
business opportunities.
This legislation raises fundamental issues which have a profound and
lasting impact on the structure of the Federal Government, on Federal
employees, and on the American public. Unfortunately, the bill assumes
that the debate on the proper role of government has already been
settled. Its aim is to drive more and more of the services, the Federal
Government provides to taxpayers, into the private sector by
contracting out.
Supporters of this bill say that government should not be in
competition with business. Well, that certainly sounds right in a free
enterprise economy, but the fact of the matter is, from the beginning
of this Nation, our Founders recognized an appropriate role for
government. Our Founders thought that government would be here to form
a more perfect union, to establish justice, to ensure domestic
tranquility, to provide for the common defense, to promote the general
welfare and to secure the blessings of liberty to ourselves and our
posterity.
Based on those principles, we established and ordained a
Constitution, Mr. Speaker. Based on those principles, the Government of
the United States today provides for Social Security for tens of
millions of Americans; for health care in the form of Medicare and
Medicaid, a whole range of programs, for tens of millions of Americans;
for education for our young people; and, yes, for the defense of our
Nation.
There is a proper role for government in our society, and we have to
be aware that in describing the role of government we are speaking of
the commonwealth of this Nation; not only at a national level, but at a
State and local level as well.
People across this country understand that government does play a
vital role. In an area that I am personally familiar with, that of
municipal electric systems, there are over 2,000 municipally-owned
electric systems in the United States of America; part of a long legacy
of public power.
{time} 1615
We have public parks, we have public recreation centers, we have
public sewer systems. We have all these things which belong to the
people because they have paid for it with their money.
There is a proper role for the government in society. This is
something that always comes up in the debate over privatization. The
roles of the Federal Government and the private sector are distinct.
The role of the government is to provide a service. The taxpayers of
our Nation pay a lot of money to make sure they get those services.
They also rightly expect that the people providing those services be
held accountable to them through our system of democratically elected
representatives.
That is another point about privatization. Who is accountable when we
privatize government services? In a system where government provides
the services, elected representatives must be accountable. But in a
privatized system, accountability is obscured.
The words of James Madison inscribed on the Library of Congress are
instructive: ``The safety and happiness of society are the objects at
which all political institutions aim and to which all such institutions
must be sacrificed.''
Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield such time as he may consume to the
gentleman from Tennessee (Mr. Duncan) who is the sponsor of this bill.
Mr. DUNCAN. Mr. Speaker, I rise in strong support of S. 314. I thank
the gentleman from Texas (Mr. Sessions) for yielding me this time. This
legislation is now called the Federal Activities Inventory Reform Act.
It is, I think, a bipartisan and I believe a very noncontroversial
bill. In fact, the administration issued a statement on
[[Page H9449]]
Friday saying, quote, this bill is consistent with administration
efforts to reform Federal procurement and ensure that the taxpayers
receive the best value.
This bill was introduced by my good friend Senator Thomas in the
Senate, and I introduced the companion, H.R. 716, which was cosponsored
by 69 Members of this body. The legislation passed in the Senate
unanimously. It passed by unanimous consent. I want to thank the
gentleman from Texas (Mr. Sessions) for his very hard work on this
legislation and the positive contributions he has made and also the
contributions by the gentleman from California (Mr. Horn), the
chairman.
S. 314 is supported, Mr. Speaker, by the Administration and by over
100 organizations, including the U.S. Chamber of Commerce, the National
Federation of Independent Business, the Small Business Legislative
Council and many, many others. This legislation will help eliminate
some government competition with small businesses.
When the last White House Conference on Small Businesses met, it
listed government competition as one of its very top concerns. S. 314
will address this problem. It requires that each Federal agency
annually compile a list of commercial activities currently being
performed by Federal employees and to submit this list to the Office of
Management and Budget. It then gives Federal agencies the authority to
contract out to private sector sources the commercial activities which
are currently performed by Federal employees. This bill would not
require the Federal Government to contract out everything. Let me
repeat that, Mr. Speaker. It would not require or force the Federal
Government to contract everything out, or anything, really. Only when
the private sector can show it can provide a good or service more cost
effectively and efficiently would a function be contracted out. This
will ensure that the taxpayers receive the very best service from their
government at the lowest possible cost.
For many years the Federal Government has been providing commercial
goods and services which are available in the private sector. This is
not a new problem. In fact, since the Eisenhower administration in
1955, it has been U.S. policy that ``the Federal Government will not
start or carry on any commercial activity to provide a service or
product for its own use if such product or service can be procured from
private enterprise through ordinary business channels.''
I think every administration since the Eisenhower administration has
agreed with or issued statements similar to that issued in 1955 by the
Eisenhower administration. Yet every day in almost every congressional
district, big government agencies are competing with small businesses.
It is difficult enough for small businesses to survive against ordinary
competition. But when they have to take on the Federal Government, too,
it is simply too much.
In 1987, the Congressional Budget Office estimated that 1.4 million
Federal employees were engaged in so-called commercial activities. The
Heritage Foundation has estimated that if we contracted out these
commercial activities to private industry, we could save taxpayers at
least $9 billion a year. I have seen other estimates that this
legislation could result in saving as much as $40 billion a year.
This bill will require that Federal agencies get out of private
industry and stick to performing those functions that only government
can do well. At the same time it will allow our great private
enterprise system to do those things it does best, providing commercial
goods and services in a competitive environment.
S. 314 is a very modest proposal. It does not require the government
to contract everything out. I realize that the government performs a
number of functions that only the government should do. In fact, this
legislation specifically exempts those functions which are inherently
governmental in nature. If the government can do something cheaper and
better than the private sector, then it will be allowed to continue to
do it under this legislation.
This is a small step, Mr. Speaker, in the overall big picture.
However, this legislation will be a significant step in helping our
small businesses to survive.
Before I conclude, I would like to once again thank Senator Craig
Thomas, the gentleman from California (Mr. Horn) and the gentleman from
Texas (Mr. Sessions). I want them to know that I appreciate their
efforts on this legislation. I urge support for this noncontroversial
legislation which will help shrink the size of the Federal Government,
encourage growth in the private sector and save taxpayers potentially
billions of dollars.
Mr. SESSIONS. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from California (Mr. Horn), the chairman of the
subcommittee.
Mr. HORN. Mr. Speaker, I thank the gentleman from Texas, the vice
chairman of the subcommittee, for yielding time. He has done an
outstanding job just as the gentleman from Tennessee (Mr. Duncan) who
is chairman of the House's Subcommittee on Aviation. This would not
have happened without them and the fine staffs that support all of us.
Mr. Speaker, I am pleased that the House is poised to pass S. 314,
the Federal Activities Inventory Reform, or FAIR Act. This legislation
has become a consensus compromise bill. It is an important step in the
process of ensuring that the component agencies of the Federal
Government deliver performance to the taxpayers they serve. This
legislation combined with the Government Performance and Results Act,
the Chief Financial Officers Act and other procurement and fiscal
management reforms will result in an improved Federal Government.
Mr. Speaker, it is high time we passed this legislation. It is long
overdue. We can do a lot for our constituents and a real favor for them
in the pocketbook by voting for S. 314.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
As someone who stands about 5'6\1/2\", I am not here to talk about
being in defense of anything big, and particularly big government. As
someone who has worked in local government, I can understand the
difficulties which people can have in dealing with big bureaucracies
and things like that.
I was struck by my good colleague the gentleman from Tennessee's
remarks about the small business being attacked by big government. Back
in Cleveland, Ohio, where I am from, the neighborhoods where I live, I
do not think small business has been under attack by big government as
much as they have been under attack by big business.
For example, to my good colleague, look at what is happening across
this country with the old mom-and-pop drug stores. Do you know of any
that exist in the country anymore in the face of the Rite-Aids and the
CVS and all the other drug store chains that just come into
neighborhoods and destroy them? Government never does anything like
that. But big business does.
Look at the supermarkets. Remember the little mom-and-pop stores that
you had in your neighborhood where you could go buy your milk and bread
and whatever you needed for your family? Find those in America anymore.
They have not been wiped out by government. They have been wiped out by
the big supermarket chains.
Look at the gas stations. Remember the independent gas station
owners? Find one today, anywhere. They were not wiped out by
government. They were wiped out by big oil companies. Go to the five-
and-dime, wiped out by the Wal-Marts of the world.
We have to stand here to debate a bill, but I also think that it is
important to put it in its proper context. The difficulties that small
businesses have today in this country are of concern to all of us. They
have a problem with high utility rates, they have problems with taxes
which we try to address, they certainly have some problems with
regulations which we have talked about. But I do not think their
problem is that they are under attack by the combined efforts of
government to provide service for the people.
Now, the private sector has goals and the public sector has goals and
sometimes their aims are mutually exclusive. The private sector is
there to make a profit. I think that is all well and good, because, let
us face it, money makes the world go around. People in business want to
make money. That is
[[Page H9450]]
what America is all about. That is what capitalism is all about. We
have been doing that in this country for many years and everybody ought
to have a chance to take part of that American dream of being able to
make something of themselves, make a good living, support their family,
have the good things in life. But the goal of the private sector is to
make a profit. It is not to transmit democratic values. We cannot go to
the private sector and ask them to do what we want them to do because
it is private business. That is what we are told. It is none of our
business. It is private business. We respect that. That is the system.
But government has a legitimate role in providing service. Government
has to make sure that the safety and happiness of the society are
considered. That does not have to be the aims of the private sector.
Business generally operates on one motive, the profit motive. There may
be a little role in some places for the private sector in participation
with the government.
I remember back in Cleveland years ago we did not have enough
snowplows to deal with a snowstorm. We could not wait to order the
plows in order to serve the people. We had to contract it out. We
contracted the snowplowing out so we could get the snow off the ground.
That is common sense. That is an area where the private sector was able
to help. There are areas where the private sector can help. But we must
remember that the private sector is motivated by very different goals.
This bill seems to proceed from a number of assumptions that must be
challenged. First of all, it proceeds from the assumption that the
Federal workforce is too large. Yet the current administration has made
great strides in making the Federal Government more efficient through
the longest running reform effort in American history. These policies
have already saved American taxpayers over $130 billion. The size of
the Federal workforce has been reduced through attrition and buyouts by
over 320,000 employees. We now have the smallest Federal workforce
since John F. Kennedy was President. As a percentage of the total
workforce, the Federal Government is the smallest, Mr. Speaker, since
1931.
Another false assumption this bill makes is that the Federal
Government is not contracting out enough. Let us look at this. The fact
is we spend more on the contracting of services, close to $120 billion
in fiscal year 1997, than we spend on pay and retirement for the entire
civilian workforce. In fact, some of the more recently created Federal
agencies like the Department of Energy, the National Aeronautics and
Space Administration and the EPA have relied from the start on
contracting out services rather than performing them directly.
{time} 1630
Those two are subjects for debate, but it is a fact that it is
happening. A 1994 OMB report found contracting out for services to be
the fastest growing area of federal procurement.
Now on one hand I do not agree with the administration's approach in
contracting out. I have a difference of opinion on that. I believe
there is a role for government in the society. On the other hand, we
cannot say that contracting out does not exist because this
administration has been a strong supporter of contracting out, and so,
therefore, one has to wonder why we need a bill that lays the
groundwork for contracting out even more.
Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I have great respect for the gentleman from Ohio and his
arguments. I think that they have been brought forth not only in the
discussions that we have had in subcommittee, but also in private,
about not only the nature of is S. 314, but also the spirit of
bipartisanship that we have worked out, and I would like to advise the
gentleman from Ohio (Mr. Kucinich) at this time that I do not have any
further speakers.
Mr. Speaker, I reserve the balance of my time.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want to also echo the comments of the gentleman from
Texas (Mr. Sessions), because it has been very gratifying to have a
chance to work with him on this. We do have a difference of opinion,
but I have a great deal of respect for his political acumen and his
dedication to people, and I want to thank him for the chance to work
with him.
Mr. Speaker, I yield 3 minutes to the gentleman from Minnesota (Mr.
Vento).
(Mr. VENTO asked and was given permission to revise and extend his
remarks.)
Mr. VENTO. Mr. Speaker, I rise with some concerns about this measure,
S. 314. I was not aware that it was scheduled for the suspension
calendar. I am a little surprised to see it here because it takes on a
profound policy. I know my colleague from Tennessee and others have
been working on this matter, but it is not like the national government
does not contract anything out in terms of enlisting the talents of the
private sector and the free market in our economy to serve the
functions and provide the services that the national government holds
itself out to provide. In fact, we do $110 billion worth of contracting
out annually.
As I see it, there are some concerns here, and one has to do with
this would have an impact upon the OMB circular A-76 policy, the cost
comparison study system. Currently Federal employees regularly lose the
competitions conducted under this OMB circular 76. Only a few years ago
Federal employees lost almost 70 percent of all those contracts. The
various provisions that are inherent in A-76 which provides the ability
to appeal and to challenge these types of contracting out are impacted
by this measure regard the list anticipated by this measure.
Private competition of work and government tasks which are inherently
governmental represent a serious problem. This measure would allow
contractors to protest agency decisions through this listing process.
In addition the bill would allow contractors and employee groups to
challenge agency listing in Federal courts so we could end up with a
lot of court challenges that are not meaningful.
The whole concept to require public private competitions under a
policy with so called cost comparison studies regardless of how well
Federal employees are actually performing these jobs is flawed.
The savings generated from such a disruptive system of competitions
would surely be short lived and could very well disappear. Contracted
out work is unlikely to ever be brought back ``in House'' because of
the expense of recapitalizing in house capacity and re-assembling and
retraining necessary staff.
This concept fails in a number of ways. I understand the
administration favors this, but I am underwhelmed by that. Most
administrations want all the flexibility in all the funds they can get.
I think those of us in Congress have learned through experience that
this is not a matter of personalities or party, it is a matter of sound
practices.
Federal employees have already made significant positive efforts.
They have experienced severe cut backs of employees and cooperated in
much of the downsizing and many of the other activities that have gone
on. As my colleague from Ohio pointed out, we have 320,000 fewer
employees today than when President Clinton and Al Gore, our vice
president, took office. I think that speaks to the fact that we have
been making these decisions, and that these changes have been done in a
cooperative way. I do not think that this legislation frankly at this
time however reconfigured is needed.
Mr. Speaker, I rise with some concerns about this measure, S. 314. I
am surprised to see this bill on the suspension calendar because it
challenges and takes on a profound policy. I know my colleague from
Tennessee and others have been working on this matter for some time.
During this period, the bill's language has been streamlined down
several times. However, it is not like the national government does not
contract anything out in terms of soliciting the talents of the private
sector and the free market in our economy that serve the functions and
provide the services that the national government holds itself to
provide. In fact, we contract out $110 billion annually. Federal
employees across my state of Minnesota and our nation have already
participated and contributed greatly in conjunction with the Vice
President's reinventing government program. I am concerned that this
bill further jeopardizes the role of federal employees in competing for
jobs. We should provide
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adequate resources and tools necessary our valued federal employees.
This bill simply requires federal agencies produce each year a list
of all activities which are not inherently governmental, but which are
performed by federal employees. The lists are to be submitted to the
Office of Management and Budget (OMB), which would make the list
publicly available. Furthermore, the bill requires agencies to review
the activities on the list and whenever the agency head considers using
a private sector company to perform an activity on the list, a
competitive process must be used to select the firm to perform the
activity.
I understand the Administration favors this bill. Most
Administrations want all the flexibility in all the funds they can get.
I think those of us in Congress have learned through experience that
this is not a matter of personalities or party, it is a matter of sound
practices of having and rewarding. Federal employees are already
subjected to severe cuts and have cooperated in much of the downsizing
and many of the other activities that have taken place. We have 320,000
fewer federal employees today than when President Clinton and Vice
President Gore took office. I think that speaks the fact that they have
been making these tries, and that has been done in a cooperative
vantage. I do not think that this legislation frankly at this time is
needed.
Mr. KUCINICH. Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would once again state that what we are attempting to
do here is to completely discuss S. 314. I have been engaged in,
involved in a lot of discussions with the gentleman from Ohio and would
like to state that some of the things which I have just heard from the
gentleman from Minnesota (Mr. Vento) I do not believe are actually
included in the actual bill that would be presented today for
agreement.
Mr. Speaker, at this time I very respectfully reserve the balance of
my time.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this homily that we would make to privatization today
deserves some closer inspection because the Federal Government is
already spending vast amounts of money on service contracts.
Unfortunately in many cases that money is not being well spent.
According to both the Office of Management and Budget and the General
Accounting Office contract administration is one of the highest risk
activities which the government engages in.
Examples abound. Senate hearings uncovered 27 billion a year in
Medicare fraud. In 1995 25 billion in payments to defense contractors
could not be matched to invoices, and in many cases the Department of
Defense relies on contractors themselves to identify overpayments. At
one Department of Energy site a contractor poured toxic waste on
radioactive wastes into the ground and stored more in leaky drums.
Whether from outright theft, charges of unallowable costs, lack of top
level management, attention to contract management or ineffective
contract administration and auditing, the Federal Government is losing
billions of dollars a year, and it seems to me that this bill puts the
cart before the horse. If we are truly interested in more cost-
effective management, we should drastically improve contract management
before moving to contract out billions more in services. Yet
unfortunately the legislation does not speak to this.
The legislation before us also seems to have a one-sided approach
which favors contractors at the expense of Federal employees and the
American public. Although it requires agencies to conduct inventories
of services performed by Federal employees, no such inventory is
required of work by contractors.
The intent of this bill is to identify activities which might be
privatized, yet we have no idea how much of the Federal government's
activities are already being performed by the private sector or how big
the contractor work force is. Such an inventory would also be useful in
helping agencies control waste, fraud and abuse.
Now, finally, Mr. Speaker, the bill will inevitably and
inappropriately politicize the outsourcing process.
At the conclusion of a constitutional convention Benjamin Franklin
was asked, ``What have you?"
And he answered:
``A republic, if you can keep it.''
And I say outsourcing and privatization is a piecemeal dismantling of
our republic.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am grateful for the opportunity of this vote being
scheduled today. I want to also openly thank my colleague, the
gentleman from Ohio (Mr. Kucinich) who most ably has not only
represented a perspective of not only a perspective that he has but
that many Americans have. I have great respect for that. Now more than
ever there are dialogs and discussions that ensue all across our
country, ones that Mr. Kucinich and I and others in our subcommittee
and all over Congress that we talk about. I believe today that we have
a bill that is a strong balance, a balanced one that has not only been
negotiated, but one that has been very carefully moved through, and I
want to thank my colleague as well as the gentleman from Tennessee (Mr.
Duncan) for their support in what we are doing today.
Mr. Speaker, I urge my colleagues to support S. 314.
Mr. HEFLEY. Mr. Speaker, as Chairman of the Subcommittee on Military
Installation and Facilities for the National Security Committee, I
would like to thank Chairman Horn and Mr. Sessions for their hard work
and persistence on S. 314, the ``Federal Activities Inventory Reform
Act of 1998'' or the ``FAIR Act''. It is legislation of the utmost
importance to the taxpayers and commercial contractors of America.
I am very pleased that this Congress has passed legislation in which
the Congress clearly states its policy toward commercial activities to
augment the current and extensive OMB Circular A-76, already in place.
This legislative initiative is an important step toward the promotion
of public-private competition that will ultimately result in enhanced
quality and performance, reductions in costs, and increased choices in
the government contracting arena.
The FAIR Act rightfully and deliberately provides for the protection
of those activities that are inherently governmental and that should be
precluded from being contracted out at anytime or under any
circumstances. However, it appears to me and other Members that this
legislation's intent also is to promote competition to ensure that the
American taxpayers get the biggest ``bang for their buck''. Where the
private sector can show that they can do it better, quicker, and
cheaper, the government must step aside.
Myself, Chairman Horn, Mr. Sessions, and other Members have heard
from concerned American businesses who relay example after example of
Federal agencies aggressively and proactively attempting to infringe
upon their established market base when the agencies are not capable of
performing the same commercial activities better, quicker, and cheaper.
One example of such unfair encroachment against the private sector by
a Federal agency is occurring within the Department of Defense's (DoD)
Defense Logistics Agency (DLA), specifically in its Defense Automated
Printing Services (DAPS). It has come to my and other Members'
attention that DAPS is embarking on a high-technology military
specification collection and subscription service which is in direct
competition with services currently offered by private, tax-paying
businesses. These businesses have invested decades of capital in this
highly technical area. They have a proven track record worldwide of
successfully developing, updating, servicing, and marketing these
subscription based military product offerings to their customers.
It is unclear to me why DAPS, an in-house government service should
be attempting to replace services currently and successfully provided
by the private sector. And in addition, targeting these businesses'
markets with the very same tax dollars paid in by these businesses.
In this vein, I would like to document for the record what I believe
is the intent of S. 314:
(1) To halt these unfair practices by the Federal agencies in the
instances when they do not have the competitive edge over their
commercial contractors and are not inherently governmental in nature.
(2) To prohibit funds appropriated to the Defense Logistics Agency or
Defense Automated Printing Services to offer or sell technical document
subscriptions delivered via online means such as internet delivery or
provided on CD-Rom in Portable Document Form and including free Adobe
software with a value added index/search engine (a/k/a the ASSIST
database), such activities being flagrant examples of government
aggressively competing with established private sector businesses
currently in this market?
I would also like to document for the record my hope that since the
House did not adopt the original version of this legislation, which
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provided even tougher safeguards against unfair government practices
toward the commercial sector, that Chairman Horn and his Subcommittee
revisit this issue next year, hold hearings on this subject, and pursue
passage of legislation that furthers these goals.
Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time.
Mr. KUCINICH. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Barrett of Nebraska). The question is on
the motion offered by the gentleman from Texas (Mr. Sessions) that the
House suspend the rules and pass the Senate bill, S. 314.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the Senate bill was passed.
A motion to reconsider was laid on the table.
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