[[Page 112 STAT. 2382]] Public Law 105-270 105th Congress
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
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
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(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
(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.
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(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
(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
(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
(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.
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(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
(iii) to significantly affect the life, liberty, or property of
(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