[105th Congress Public Law 270]
[From the U.S. Government Printing Office]


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[DOCID: f:publ270.105]


[[Page 2381]]

             FEDERAL ACTIVITIES INVENTORY REFORM ACT OF 1998

[[Page 112 STAT. 2382]]

Public Law 105-270
105th Congress

                                 An Act


 
   To provide a process for identifying the functions of the Federal 
Government that are not inherently governmental functions, and for other 
             purposes. <<NOTE: Oct. 19, 1998 -  [S. 314]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Federal 
Activities Inventory Reform Act of 1998. 31 USC 501 note.>> 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Activities Inventory Reform 
Act of 1998''.
SEC. 2. <<NOTE: Records.>>  ANNUAL LISTS OF GOVERNMENT ACTIVITIES 
                    NOT INHERENTLY GOVERNMENTAL IN NATURE.

    (a) <<NOTE: Deadline.>> 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) <<NOTE: Federal Register, Publication.>> 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

[[Page 112 STAT. 2383]]

                    (B) <<NOTE: Federal Register, Publication.>> 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.

[[Page 112 STAT. 2384]]

    (d) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>> 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.

[[Page 112 STAT. 2385]]

                    (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.

    Approved October 19, 1998.

LEGISLATIVE HISTORY--S. 314:
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SENATE REPORTS: No. 105-269 (Comm. on Governmental Affairs).
CONGRESSIONAL RECORD, Vol. 144 (1998):
            July 30, considered and passed Senate.
            Oct. 5, considered and passed House.

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