[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

[[Page H9451]]

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

[[Page H9452]]

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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