S 991

112th CONGRESS
1st Session

S. 991

To ensure efficient performance of agency functions.

IN THE SENATE OF THE UNITED STATES

May 12, 2011

Ms. MIKULSKI introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs


A BILL

To ensure efficient performance of agency functions.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title- This Act may be cited as the `Correction of Long-Standing Errors in Agencies' Unsustainable Procurements Act of 2011' or the `CLEAN-UP Act'.

    (b) Table of Contents- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Definitions.

      Sec. 3. Findings.

      Sec. 4. Purposes.

      Sec. 5. General personnel policy.

      Sec. 6. Consideration of in-house performance required for new work.

      Sec. 7. Transition to Federal employee performance of certain functions.

      Sec. 8. Establishment of inventories and reviews of contracts for services.

      Sec. 9. Identifying and addressing shortages of Federal employees.

      Sec. 10. Expedited hiring authority for performance of certain functions by Federal employees.

      Sec. 11. Establishment of business process reengineering projects as a preferred alternative to the OMB Circular A-76 process.

      Sec. 12. Reforms to the OMB Circular A-76 process.

      Sec. 13. Establishment of temporary suspension on use of OMB Circular A-76 process until reforms required in this Act have been substantially implemented.

SEC. 2. DEFINITIONS.

    In this Act:

      (1) INHERENTLY GOVERNMENTAL FUNCTIONS- The term `inherently governmental functions' has the meaning given the term under section 5 of the Federal Activities Inventory Act of 1998 (31 U.S.C. 1501 note) and subpart 7.5 of part 7 of the Federal Acquisition Regulation.

      (2) FUNCTIONS CLOSELY ASSOCIATED WITH INHERENTLY GOVERNMENTAL FUNCTIONS- The term `functions closely associated with inherently governmental functions' means the functions described in section 7.503(d) of the Federal Acquisition Regulation that are recurring.

      (3) MISSION-ESSENTIAL FUNCTIONS- The term `mission-essential functions' refers to functions that, although neither necessarily inherently governmental nor necessarily closely related to an inherently governmental function, are nevertheless considered by executive agency officials to be more appropriate for performance by Federal employees.

      (4) BUSINESS PROCESS REENGINEERING PROJECT- The term `business process reengineering project' refers to a process whereby an existing organization is reinvented, consolidated, or expanded to result in a new organization whose performance exceeds that of previous and comparable performers, whether performed by Federal employees or contractors or a combination of Federal employees and contractors.

      (5) EXECUTIVE AGENCY- The term `executive agency' has the meaning given the term in section 133 of title 41, United States Code.

      (6) PERSONAL SERVICES CONTRACT- The term `personal services contract' has the meaning given to the term under section 37.104 of the Federal Acquisition Regulation, unless the functions to be performed under the contract are included in statutory exceptions, including sections 129b and 1091 of title 10, United States Code.

      (7) STANDARD STUDY- The term `standard study' has the meaning given to the specific type of cost-comparison study outlined in attachment B in the OMB Circular A-76 process, as revised in May 2003.

SEC. 3. FINDINGS.

    Congress makes the following findings:

      (1) Functions that should have been performed by Federal employees because they are inherently governmental functions, functions that are closely related to inherently governmental functions and recurring, or mission-essential functions have been wrongly outsourced, including preparing budgets, developing policy, supporting acquisition, developing and interpreting regulations, developing reorganizations, and developing and implementing `competitive sourcing' plans.

      (2) Federal agencies have been pushed to outsource significant amounts of work with little competition, while Federal employees, despite having won 83 percent of the OMB Circular A-76 privatization reviews conducted since the circular was revised in 2003, are rarely given opportunities to perform new work or outsourced work.

      (3) The capacity of the Federal Government to oversee contractors and the OMB Circular A-76 privatization process continues to decline, as demonstrated in scandals involving reconstruction efforts in Iraq, Hurricane Katrina recovery efforts, and conditions at Walter Reed Army Medical Center. The Government Accountability Office (GAO), in two 2008 reports on the use of `competitive sourcing' in different agencies, determined that costs of A-76 privatization reviews often exceeded savings because of systematically bad direction from the Office of Management and Budget. In the latter report, on the Department of Labor, GAO wrote, `Without a better system to assess performance and track all of the costs associated with competitive sourcing, DoL cannot reliably assess whether competitive sourcing truly provides the best deal for the taxpayers.'.

      (4) The OMB Circular A-76 process retains fundamental inequities. The minimum cost differential fails to take into account the quantifiable costs (such as hiring consultants and diverting Federal employees from their regular duties) of carrying out A-76 privatization studies. All in-house bids are charged 12 percent of their personnel costs for overhead costs, even though a Department of Defense Inspector General study revealed that overhead costs may not differ significantly, if at all, whether the functions are kept in-house or contracted out, even in the case of studies of large numbers of Federal employees. Despite time limits established in law and as part of the OMB Circular process A-76 process, privatization studies are allowed to continue indefinitely. The longer an A-76 privatization study lasts, the more it costs to conduct, the less likely there are to be savings from that study, and the more likely it will cost taxpayers more than it will save. In fact, given the costs and controversies associated with the OMB Circular A-76 privatization process, OMB should be encouraging agencies to use internal reengineering efforts, as OMB finally did, during the last year of George W. Bush's presidency.

SEC. 4. PURPOSES.

    The purposes of this Act are as follows:

      (1) To build upon the foundation established by the 110th Congress that suspended the use of the OMB Circular A-76 privatization process, required all executive agencies to develop policies to promote the insourcing of new work and outsourced work, and required the Department of Defense to develop a comprehensive inventory of its service contracts.

      (2) To establish a policy that provides that--

        (A) Federal employees must perform inherently governmental functions, functions closely related to inherently governmental functions, and mission essential functions;

        (B) other functions may be performed by Federal employees or contractors, depending on the needs of executive agencies and all relevant public-private competition requirements; and

        (C) Federal employees should not be subject to headcounts, personnel ceilings, or constraints, which force executive agencies to contract out functions without public-private competition.

      (3) To prevent executive agencies from contracting out new functions if those new functions should be performed by Federal employees and require agencies to explain in annual reports to Congress why functions ultimately contracted out were not considered for performance by Federal employees.

      (4) To require executive agencies--

        (A) to determine which of their functions must actually be performed by Federal employees because the work is inherently governmental, closely related to inherently governmental work, or mission essential, and how many contractor employees are currently performing those functions;

        (B) to report on how wrongly contracted out work will be insourced; and

        (C) to incrementally insource over several years 70 percent of the wrongly contracted out workload.

      (5) To require civilian agencies to establish inventories to track the cost and quality, among other features, of specific contracts, based on the inventory that the 110th Congress required the Department of Defense to establish.

      (6) To require executive agencies to determine if they are now experiencing or will experience shortages of Federal employees and what their plans are for addressing these personnel shortfalls.

      (7) To encourage the use of a regulated alternative to the often costly and controversial OMB Circular A-76 process, including business process reengineering, which is commonly used by executive agencies to generate efficiencies through internal reorganizations.

      (8) To direct the President to undertake several reforms of the OMB Circular A-76 privatization process, including imposing time limitations on how long privatization studies can last, charging in-house bids only for actual overhead costs, and considering quantifiable costs of conducting A-76 privatization studies in the minimum differential.

      (9) To impose a temporary suspension on the use of the OMB Circular A-76 privatization process until the reforms required by this Act have been substantially implemented, consistent with the temporary suspension on the same process enacted in the 110th Congress.

SEC. 5. GENERAL PERSONNEL POLICY.

    (a) Required Performance of Inherently Governmental Functions by Federal Employees- The head of each executive agency shall ensure that inherently governmental functions, functions closely related to inherently governmental functions, and mission-essential functions are performed by Federal employees.

    (b) Performance of Other Functions by More Efficient Workforce in Accordance With Public-Private Competition Requirements- The head of each executive agency shall ensure that functions that are not inherently governmental functions, functions closely related to inherently governmental functions, or mission-essential functions are performed by the more efficient form of personnel, whether Federal employees, contractors, or, in the case of the Department of Defense, military personnel, consistent with requirements for quality and reliability and other needs of that executive agency and with all public-private competition requirements.

    (c) Use of Most Efficient Workforce- Notwithstanding any other provision of law, the heads of executive agencies shall not be constrained by any in-house personnel ceiling, headcount, or staffing limitation in ensuring that functions are performed in the most efficient manner possible.

    (d) Shifting Functions Between Workforces- In developing personnel authorization requests to Congress and in carrying out personnel policies generally, the head of each executive agency shall consider particularly the advantages of converting from one form of personnel (Federal or private contract personnel, or in the case of the Department of Defense, Federal, private contract, or military personnel) to another form of personnel for the performance of functions that are not inherently governmental functions, functions closely related to inherently governmental functions, or mission-essential functions using any relevant public-private competition processes.

SEC. 6. CONSIDERATION OF IN-HOUSE PERFORMANCE REQUIRED FOR NEW WORK.

    (a) Finding- Pursuant to section 739 of the Financial Services and General Government Appropriations Act, 2008 (division D of Public Law 110-161; 31 U.S.C. 501 note) each covered executive agency is required to devise and implement guidelines and procedures to ensure that consideration is given to using, on a regular basis, Federal employees to perform new functions.

    (b) Certification Required Before Awarding a Service Contract- The Chief Acquisition Officer of each executive agency, or, if no such position exists, the executive agency's representative on the Chief Acquisition Officers Council, shall, with respect to each service contract entered into by such agency for the performance of a function or functions, including the award or placement of a task or delivery order or the exercise of an option under an existing contract, certify, together with supporting rationales, that--

      (1) each function to be performed under such contract is not an inherently governmental function, a function closely related to an inherently governmental function, or a mission-essential function;

      (2) the contract is not actually an unauthorized personal services contract; and

      (3) performance by employees of the agency of the function to be performed by a contractor was explicitly considered, with particular consideration given if such function is comparable to functions already performed by Federal employees in the executive agency or another executive agency, either currently or within the last 10 years.

    (c) Reports Required-

      (1) IN GENERAL- Not later than November 1, 2011, and annually thereafter, the head of each covered executive agency shall submit to the Director of the Office of Management and Budget a report on each of the service contracts for new work entered into during the previous fiscal year.

      (2) CONTENT- Each report submitted under paragraph (1) shall describe the following:

        (A) Each function or functions performed under a contract with a contractor, the approximate number of employees used by contractors under each such contract, the date each such contract was entered into, the duration of each contract, and each certification required under subsection (b).

        (B) Each new function that was assigned by the executive agency to employees of the agency, including, for each function, a brief description of the work, a determination of the dollar value, and the number of new Federal employees who were hired or transferred from the performance of other functions.

        (C) Any obstacles to assigning new functions to Federal employees, as well as recommendations for legislation to overcome those obstacles.

    (d) Publication of Reports Required- The Director of the Office of Management and Budget shall promptly publish in the Federal Register information about obtaining each report prepared under subsection (c), including the names, addresses, and telephone numbers of the officials from whom the reports may be obtained. The reports shall also be made available on a publicly available Internet website. The Director shall remove proprietary and confidential information from reports made available pursuant to this section.

SEC. 7. TRANSITION TO FEDERAL EMPLOYEE PERFORMANCE OF CERTAIN FUNCTIONS.

    (a) Report on Functions That Should Be Performed by Federal Employees-

      (1) REPORT REQUIRED- Not later than 180 days after the date of the enactment of this Act, the head of each executive agency shall submit to the Director of the Office of Management and Budget a report, to be known as the `Functions At Risk Report', that--

        (A) describes any function that is, in whole or in part, an inherently governmental function, a function closely related to an inherently governmental function, or a mission-essential function and which, despite the requirement that such function only be performed by Federal employees, is actually performed, in whole or in part, by a contractor (in this section referred to as an `at-risk function');

        (B) describes the number of contractor employees performing the function, in whole or in part, and the nature of their work;

        (C) includes a plan for ensuring that the function is performed by Federal employees;

        (D) identifies any impediments to carrying out such plan; and

        (E) includes any recommendations for additional legislation necessary to implement this section.

      (2) LIMITATION ON DESIGNEE- The head of an affected executive agency may not assign responsibility for compliance with the report requirement established by this subsection below the level of an assistant secretary.

      (3) PUBLICATION OF REPORTS REQUIRED- The Director of the Office of Management and Budget shall promptly publish in the Federal Register information about obtaining each report prepared under paragraph (1), including the names, addresses, and telephone numbers of the officials from whom the reports may be obtained. The reports shall also be made available on a publicly available Internet website. The Director shall remove proprietary and confidential information from reports made available pursuant to this section.

    (b) Requirement To Reduce Number of At-Risk Functions- The head of each executive agency shall reduce the total number of contractor employees reported in that executive agency's Functions At Risk Report by--

      (1) 5 percent within 1 year after the date of the enactment of this Act;

      (2) 10 percent within 2 years after the date of the enactment of this Act;

      (3) 20 percent within 3 years after the date of the enactment of this Act;

      (4) 40 percent within 4 years after the date of the enactment of this Act;

      (5) 60 percent within 5 years after the date of the enactment of this Act; and

      (6) 70 percent within 6 years after the date of the enactment of this Act.

    (c) Evaluation of Schedule- The Comptroller General of the United States shall--

      (1) evaluate the success of the incremental schedule required under subsection (b) in ensuring that functions that should be performed by Federal employees are actually performed by Federal employees; and

      (2) provide recommendations for future legislation, particularly with respect to addresses remaining at-risk functions.

    (d) Suspension of Reduction Schedule Requirement- The Director of the Office of Management and Budget may suspend the requirement to reduce positions pursuant to subsection (b) for a particular executive agency for a specific period of time upon certifying to the Committee on Government Oversight and Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate that compliance during that specific period of time would undermine national security, homeland security, or patient care.

SEC. 8. ESTABLISHMENT OF INVENTORIES AND REVIEWS OF CONTRACTS FOR SERVICES.

    (a) In General- Not later than June 30, 2012, and annually thereafter, the head of each executive agency subject to the Federal Activities Inventory Reform Act of 1998 (Public Law 105-270; 31 U.S.C. 1501 note), other than the Department of Defense, shall submit to the Director of the Office of Management and Budget an annual inventory of the activities performed during the preceding fiscal year pursuant to contracts for services for or on behalf of such agency.

    (b) Content- The entry for an activity on an inventory under this section shall include, for the fiscal year covered by such entry, the following:

      (1) The functions performed by the contractor.

      (2) Information regarding the contractor, the part of the executive agency administering the contract, and the part of the agency whose requirements are being met through contractor performance of the function.

      (3) The funding source for the contract under which the function is performed.

      (4) The fiscal year for which the activity first appeared on an inventory under this section.

      (5) The number of full-time contractor employees (or its equivalent) compensated for the performance of the activity.

      (6) Whether the contract has been performed pursuant to a contract awarded on a noncompetitive basis, either originally or upon a subsequent renewal.

      (7) Whether the contract has been performed poorly, as determined by a contracting officer, during the 5-year period preceding the date of such determination, because of excessive costs or inferior quality.

    (c) Form- The inventory required under this section shall be submitted in unclassified form, but may include a classified annex.

    (d) Publication- The Director of the Office of Management and Budget shall promptly publish in the Federal Register information about obtaining each report prepared under subsection (a), including the names, addresses, and telephone numbers of the officials from whom the reports may be obtained. The reports shall be made available on a publicly available Internet website. The Director shall remove proprietary information from reports made available pursuant to this subsection.

    (e) Review and Planning Requirements- Not later than 90 days after the date on which an inventory is submitted under subsection (a), the head of each executive agency or an official designated personally by the agency head shall--

      (1) review the contracts and activities in the inventory;

      (2) ensure that--

        (A) each contract on the list that is a personal services contract has been entered into, and is being performed, in accordance with applicable laws and regulations;

        (B) the activities on the list do not include any inherently governmental functions; and

        (C) to the maximum extent practicable, the activities on the list do not include any functions closely associated with inherently governmental functions;

      (3) identify activities that should be considered for conversion to performance by civilian employees of the executive agency pursuant to section 739 of the Financial Services and General Government Appropriations Act, 2008 (division D of Public Law 110-161; 31 U.S.C. 501 note); and

      (4) develop a plan to provide for appropriate consideration of the conversion by June 30 of the following year of the activities identified under paragraph (3), which shall be included as an attachment to the next required annual inventory.

    (f) Rule of Construction- Nothing in this section shall be construed to authorize the performance of personal services by a contractor except as otherwise provided by law.

    (g) Priority of Contractor Inventory- Notwithstanding any other provision of law, prior to the submission to the Office of Management and Budget of an inventory pursuant to the Federal Activities Inventory Reform Act of 1998 (Public Law 105-270; 31 U.S.C. 1501 note), OMB Circular A-76, or any other related administrative regulation, directive, or policy, or to publication in the Federal Register, the head of an executive agency shall submit the inventory required under this section to Congress and the Director of the Office of Management and Budget and shall publish the inventory required under this section in the Federal Register.

SEC. 9. IDENTIFYING AND ADDRESSING SHORTAGES OF FEDERAL EMPLOYEES.

    (a) Annual Strategic Human Capital Plan Required- Not later than 1 year after the date of the enactment of this Act, and annually thereafter, the head of each executive agency shall submit to the Director of the Office of Management and Budget a strategic human capital plan to ensure the capability of the Federal employee workforce of the executive agency to perform its functions.

    (b) Content- Each strategic human capital plan submitted under subsection (a) shall include the following:

      (1) An assessment of--

        (A) the critical skills and competencies in the Federal employee workforce that will be needed to perform the executive agency's functions over the next 10 years, based on expected losses due to retirement and other attrition; and

        (B) gaps in the capability of the Federal employee workforce, both existing and projected, to perform the executive agency's functions over that period.

      (2) A plan of action for developing the Federal employee workforce of the executive agency to address the current or anticipated gaps, including--

        (A) specific hiring, promoting, and retention schedules, including the funding needed to achieve such schedules; and

        (B) specific strategies for developing, training, and promoting the Federal employee workforce of the executive agency, including the funding needed to implement such strategies.

    (c) Enhancement of Human Capital Planning- All human capital planning efforts should be considered through any existing labor-management partnership arrangements.

    (d) Addressing Gaps in Federal Workforces-

      (1) IN GENERAL- The head of an executive agency may not conduct a public-private competition under Office of Management and Budget Circular A-76 or any other provision of law of any function that has been identified in the strategic human capital plan of such agency as one that either is experiencing or will experience a gap in its Federal employee workforce.

      (2) SHORTCOMINGS CONSTITUTING GAPS IN WORKFORCE- For purposes of this section, gaps in the workforce include shortcomings--

        (A) in the skills and competencies of employees;

        (B) in the number of employees possessing such skills and competencies; and

        (C) in the skills and competencies of employees or in the number of employees that would make it difficult to effectively supervise a contractor and intelligently oversee its performance or reconstitute that function for performance within the agency in the event of contractor nonperformance.

    (e) Publication- The Director of the Office of Management and Budget shall promptly publish in the Federal Register information about obtaining each report prepared under subsection (a), including the names, addresses, and telephone numbers of the officials from whom the reports may be obtained. The reports shall be made available on a publicly available Internet website.

SEC. 10. EXPEDITED HIRING AUTHORITY FOR PERFORMANCE OF CERTAIN FUNCTIONS BY FEDERAL EMPLOYEES.

    (a) Expedited Hiring Authority- For purposes of sections 3304, 5333, and 5753 of title 5, United States Code, the head of an executive agency may--

      (1) designate any category of professional positions within the agency as shortage category positions; and

      (2) utilize the authorities in such sections to recruit and appoint highly qualified persons directly to positions so designated,

    in order to comply with the requirements of this Act, and section 739 of the Financial Services and General Government Appropriations Act, 2008 (division D of Public Law 110-161; 31 U.S.C. 501 note), which requires each covered executive agency to devise and implement guidelines and procedures to ensure that consideration is given to using, on a regular basis, Federal employees to perform new functions as well as functions that are currently performed by contractors.

    (b) Veterans Preference- In using the authority provided under this section, the head of an executive agency shall apply the principles of preference for the hiring of veterans and other persons established in subchapter 1 of chapter 33 of title 5, United States Code.

    (c) Termination of Authority- Expedited hiring authority may not be used to appoint a person to a position of employment under this section after the date that is 6 years after the date of the enactment of this Act.

    (d) Report on the Use of Expedited Hiring Authority- Not later than December 31, 2011, and annually thereafter for three years, the Office of Personnel Management shall submit to the Committee on Government Oversight and Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report on the use by executive agencies of the expedited hiring authority under this section consistent with merit principles, including recommendations for how authority for expedited hiring might be improved.

SEC. 11. ESTABLISHMENT OF BUSINESS PROCESS REENGINEERING PROJECTS AS A PREFERRED ALTERNATIVE TO THE OMB CIRCULAR A-76 PROCESS.

    (a) Statement of Policy- Each executive agency should constantly strive to generate efficiencies and improvements through business process reengineering, even if such efforts reduce or increase the need for Federal employees and contractors.

    (b) Guidelines- The Director of the Office of Management and Budget shall develop guidelines for the establishment of business process reengineering projects. Such guidelines shall ensure consideration and assessment of the following:

      (1) The number of Federal employees and contractor employees to be affected by the initiative, and how they will be affected.

      (2) The resources needed to conduct the initiative.

      (3) The location or locations where the initiative will be performed, and the location of the affected Federal and contractor employees if different from the initiative location or locations.

      (4) The functions to be included in the initiative.

      (5) The timeline for development and implementation of the initiative.

      (6) The estimated duration of the initiative if such initiative is deemed to be temporary.

      (7) The anticipated budget savings and programmatic improvements.

    (c) Pre-Implementation Report- Not later than 45 days before beginning implementation of a business process reengineering project, the head of the executive agency shall submit to the Committee on Government Oversight and Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report on the proposed project, including the information described in subsection (b).

    (d) Consistency With Existing Law- All business process reengineering projects shall be implemented in a manner that is consistent with paragraphs (2) and (3) of section 7106(b) of title 5, United States Code. Such projects shall not result in a change of the collective bargaining status of affected Federal employees in the executive agency or in the representation status of a labor organization with exclusive representation status, as provided under section 7114 of title 5, United States Code.

    (e) Enhancement of Federal Employee Buy-In- The head of an executive agency shall, in order to promote the active cooperation of affected Federal employees--

      (1) consider all business process reengineering projects through any labor-management partnership arrangements;

      (2) provide any reports required under subsection (c) to any labor organization with national consultation rights under section 7113 of title 5, United States Code, at least 60 days before they are provided to Congress under such subsection; and

      (3) involve discussions and bargaining over the impact of implementation of any projects upon any bargaining unit with the exclusive representatives of the executive agency's Federal workforce, as provided under section 7114 and sections 7106(b)(2) and (b)(3) of title 5, United States Code.

    (f) Personnel Increases or Reductions- Any personnel increases or reductions in the Federal employee or contractor workforces must be based on the requirements of a specific business process reengineering project and not on unrelated or predetermined cost and savings assumptions.

    (g) Annual Evaluation- Not later than October 31, 2012, and annually thereafter, the Director of the Office of Management and Budget shall conduct a performance review of ongoing business process reengineering projects and submit a report on such review to the Committee on Government Oversight and Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate. Each business process reengineering project shall be evaluated with respect to the level of performance in the following areas:

      (1) Costs, savings, and overall financial performance of the organization.

      (2) Organic knowledge, skills or expertise.

      (3) Efficiency and effectiveness of key functions or processes.

      (4) Efficiency and effectiveness of the overall organization.

SEC. 12. REFORMS TO THE OMB CIRCULAR A-76 PROCESS.

    (a) Sense of Congress- It is the sense of Congress that, with respect to Office of Management and Budget Circular A-76 or any other related administrative regulation, directive, or policy, the following policies and procedures should be implemented:

      (1) A standard study shall last no longer than 2 years, from the beginning of the preliminary planning process to the rendering of the award decision, which period shall be calculated as follows:

        (A) Any days during which a standard study is suspended because of bid protests on behalf of the affected Federal employees shall not be included when determining the length of a standard study.

        (B) However, any days during which a standard study is extended because of additional activity that is either required by the Government Accountability Office, directed by the contracting officer subsequent to an appeal to the Government Accountability Office or the dismissal or denial of a protest to the Government Accountability Office shall be included when determining the length of a standard study.

        (C) No executive agency may stop and restart a standard study in order to avoid compliance with this paragraph. Similarly, an executive agency may not subject a function to a standard study if it was earlier subjected to a standard study that had to be stopped because of the length limitation under this paragraph.

      (2) The conversion differential shall be--

        (A) significantly increased in order to include the large costs that are currently excluded from consideration, including preliminary planning costs, consultants costs, costs of Federal employees diverted from their actual jobs to work on studies, transition costs, post-competition reviews costs, and proportional costs for agencies' privatization bureaucracies (including both Federal employees and contractors); and

        (B) doubled when a standard study begins its thirteenth month, which period shall be calculated as follows:

          (i) Any days during which a standard study is suspended because of bid protests on behalf of the affected Federal employees shall not be included when determining the length of a standard study for purposes of doubling the cost differential.

          (ii) However, any days during which a standard study is extended because of additional activity that is either required by the Government Accountability Office, directed by the contracting officer subsequent to an appeal to the Government Accountability Office or the dismissal or denial of a protest to the Government Accountability Office shall be included when determining the length of a standard study.

      (3) Bids or tenders filed on behalf of Federal employees shall include only the overhead costs actually incurred for those Federal employees performing the specific functions being reviewed, and may not include an assessment of an automatic charge for overhead.

      (4) A reliable system to track costs, savings, and quality from OMB Circular A-76 studies that has been implemented, tested, and determined to be accurate and reliable over a long-term and a short-term period should be established. The system established should also take into account the possibility for greater efficiencies and programmatic improvements that can be generated through business process reengineering projects, pursuant to section 10.

      (5) NO RECOMPETITION REQUIRED- No Federal employee workforce should be recompeted under OMB Circular A-76 unless the head of the relevant executive agency, without delegation--

        (A) has signed a certification that such workforce failed to fulfill the terms of the letter of obligation or other agreement, as applicable, pursuant to an earlier OMB Circular A-76 study; and

        (B) published that certification on fedbizopps.gov before the end of the expiration of the performance period.

    (b) GAO Report-

      (1) REPORT REQUIRED- Not later than 18 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Government Oversight and Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report with recommendations for executive agencies (other than the Office of Management and Budget) to more fairly, effectively, expeditiously, transparently, and apolitically oversee studies conducted under the Office of Management and Budget Circular A-76 or any other related administrative regulation, directive, or policy, and enforce the rules that govern those studies.

      (2) CLARIFICATION OF SCOPE OF REPORT- This subsection does not require the Government Accountability Office to examine the rule-making authority of the Office of Management and Budget with regard to OMB Circular A-76 or any other related administrative regulation, directive, or policy.

      (3) CONSULTATION WITH AGENCIES AND STAKEHOLDERS- In preparing the report under this subsection, the Comptroller General of the United States should consult with personnel of the Office of Management and Budget, staffing and manpower personnel of other executive agencies, personnel in the offices of other agencies' inspectors general, and representatives from Federal employee unions and contractor associations.

SEC. 13. ESTABLISHMENT OF TEMPORARY SUSPENSION ON USE OF OMB CIRCULAR A-76 PROCESS UNTIL REFORMS REQUIRED IN THIS ACT HAVE BEEN SUBSTANTIALLY IMPLEMENTED.

    No study or public-private competition regarding the conversion to contractor performance of any function performed by Federal employees pursuant to Office of Management and Budget Circular A-76 or any other administrative regulation, directive, or policy, may be prepared for, announced, undertaken, continued, or finished until the Director of the Office of Management and Budget, in consultation with the inspectors general of the 5 largest Federal departments in terms of annual budgets as of the date of the enactment of this Act, determines that--

      (1) at least three-fourths of all executive agencies have made substantial progress in the implementation of all the reforms--

        (A) required in sections 6, 7, 8, and 9 of this Act; and

        (B) enacted pursuant to section 739 of the Financial Services and General Government Appropriations Act, 2008 (division D of Public Law 110-161; 31 U.S.C. 501 note), under which each covered executive agency is required to devise and implement guidelines and procedures to ensure that consideration is given to using, on a regular basis, Federal employees to perform new functions as well as functions that are currently performed by contractors; and

      (2) the Office of Management and Budget has implemented the reforms to the OMB Circular A-76 described under section 12.

END