National Defense Authorization Act for Fiscal Year 2010/Division A/Title III/Subtitle C

SUBTITLE C — WORKPLACE AND DEPOT ISSUES

Sec. 321. Public-private competition required before conversion of any Department of Defense function performed by civilian employees to contractor performance.

(a) Requirement.—Paragraph (1) of section 2461 (a) of title 10, United States Code, is amended—

(1) by striking "A function" and inserting "No function";

(2) by striking "10 or more"; and

(3) by striking "may not be converted" and inserting "may be converted".

(b) Effective Date.—The amendments made by subsection (a) shall apply with respect to a function for which a public-private competition is commenced on or after the date of the enactment of this Act.

Sec. 322. Time limitation on duration of public-private competitions.

(a) Time Limitation.—Section 2461 (a) of title 10, United States Code, as amended by section 321, is further amended by adding at the end the following new paragraph:

"(5) (A) Except as provided in subparagraph (B), the duration of a public-private competition conducted pursuant to Office of Management and Budget Circular A-76 or any other provision of law for any function of the Department of Defense performed by Department of Defense civilian employees may not exceed a period of 24 months, commencing on the date on which the preliminary planning for the public-private competition begins and ending on the date on which a performance decision is rendered with respect to the function.

"(B) (i) The Secretary of Defense may specify an alternative period of time for a public-private competition, which may not exceed 33 months, if the Secretary—

"(I) determines that the competition is of such complexity that it cannot be completed within 24 months; and

"(II) submits to Congress, as part of the formal congressional notification of a public-private competition pursuant to subsection (c), written notification that explains the basis of such determination.

"(ii) The notification under clause (i)(II) shall also address each of the following:

"(I) Any efforts of the Secretary to break up the study geographically or functionally.

"(II) The Secretary's justification for undertaking a public-private competition instead of using internal reengineering alternatives.

"(III) The cost savings that the Secretary expects to achieve as a result of the public-private competition.

"(iii) If the Secretary specifies an alternative time period under this subparagraph, the alternative time period shall be binding on the Department in the same manner and to the same extent as the limitation provided in subparagraph (A).

"(C) The time period specified in subparagraph (A) for a public-private competition does not include any day during which the public-private competition is delayed by reason of the filing of a protest before the Government Accountability Office or a complaint in the United States Court of Federal Claims up until the day the decision or recommendation of either authority becomes final. In the case of a protest before the Government Accountability Office, the recommendation becomes final after the period of time for filing a request for reconsideration, or if a request for reconsideration is filed, on the day the Government Accountability Office issues a decision on the reconsideration.

"(D) If a protest with respect to a public-private competition before the Government Accountability Office or the United States Court of Federal Claims is sustained, and the recommendation is final as described in subparagraph (C), and if such protest and recommendation result in an unforeseen delay in implementing a final performance decision, the Secretary of Defense may terminate the public-private competition or extend the period of time specified for the public-private competition under subparagraph (A) or subparagraph (B). If the Secretary decides not to terminate a competition, the Secretary shall submit to Congress written notice of such decision. Any such notification shall include a justification for the Secretary's decision and a new time limitation for the competition, which shall not exceed 12 months from the final decision and shall be binding on the Department.

"(E) For the purposes of this paragraph, preliminary planning with respect to a public-private competition, begins on the date on which the Department of Defense obligates funds for the acquisition of contract support, or formally assigns Department of Defense personnel, to carry out any of the following activities:

"(i) Determining the scope of the competition.

"(ii) Conducting research to determine the appropriate grouping of functions for the competition.

"(iii) Assessing the availability of workload data, quantifiable outputs of functions, and agency or industry performance standards applicable to the competition.

"(iv) Determining the baseline cost of any function for which the competition is conducted.

"(F) To effectively establish the date that is the first day of preliminary planning for a public-private competition, the head of a military department shall submit to Congress written notice of such date and shall provide public notice by announcing such date on an appropriate Internet website. Such date is the first day of preliminary planning for a public-private competition for the purpose of computing the duration of the public-private competition for purposes of this section.

"(G) The Secretary of Defense shall submit to the congressional defense committees an annual report on the use, during the year covered by the report, of alternative time periods for public-private competitions under this section, and the explanations of the Secretary for such alternative time periods."

(b) Effective Date.—Paragraph (5) of section 2461 (a) of title 10, United States Code, as added by subsection (a), shall apply with respect to a public-private competition covered by such section that is initiated on or after the date of the enactment of this Act.

(c) Comptroller General Reviews.—Not later than two years after the date of enactment of this Act, and three years thereafter, the Comptroller General shall submit to the congressional defense committees a report on the use by the Secretary of Defense of the alternative time period authority under section 2461 (a)(5)(B) of title 10, United States Code, and the appropriateness and thoroughness of the explanations of the Secretary for such use.

Sec. 323. Policy regarding installation of major modifications and upgrades.

It is the Sense of Congress that no changes should be made to—

(1) the policy of the Department of Defense that in the annual allocation of depot-level maintenance and repair required under section 2466 of title 10, United States Code, the installation of major modifications and upgrades are considered to be part of the definition of depot-level maintenance; and

(2) the interpretation and application of that policy as of the date of the enactment of this Act.

Sec. 324. Modification of authority for Army industrial facilities to engage in cooperative activities with non-Army entities.

(a) Clarification of Authority to Enter Into Cooperative Agreements.—The second sentence of section 4544 (a) of title 10, United States Code, as added by section 328 (a)(1) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 66), is amended by inserting after "not more than eight contracts or cooperative agreements" the following: "in addition to the contracts and cooperative agreements in place as of the date of the enactment of the National Defense Authorization Act for Fiscal Year 2008 {Public Law 110-181)".

(b) Additional Elements Required for Analysis of Use of Authority.—Section 328 (b)(2) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122. Stat. 67) is amended—

(1) by striking "a report assessing the advisability" and inserting the following:

"a report—

"(A) assessing the advisability"; and

(2) by striking "pursuant to such authority." and inserting the following:

"pursuant to such authority;

"(B) assessing the benefit to the Federal Government of using such authority;

"(C) assessing the impact of the use of such authority on the availability of facilities needed by the Army and on the private sector; and

"(D) describing the steps taken to comply with the requirements under section 4544 (g) of title 10, United States Code.".

Sec. 325. Temporary suspension of public-private competitions for conversion of Department of Defense functions to performance by a contractor.

(a) Temporary Suspension.—During the period beginning on the date of the enactment of this Act and ending on the date that is 30 days after the date on which the Secretary of Defense submits to the congressional defense committees the certification required under subsection (d), no study or competition regarding a public-private competition for the conversion to performance by a contractor for any function performed by Department of Defense civilian employees may be begun or announced pursuant to section 2461 of title 10, United States Code, or otherwise pursuant to Office of Management and Budget Circular A-76.

(b) Review and Report to Congress.—During fiscal year 2010, the Secretary of Defense, acting through the Under Secretary of Defense for Personnel Readiness, in consultation with the Under Secretary for Acquisition, Technology, and Logistics and the Comptroller of the Department of Defense, shall undertake a comprehensive review of the policies of the Department of Defense with respect to the conduct of public-private competitions. The Secretary shall submit to the congressional defense committees a report on such review not earlier than June 15, 2010. The review, at a minimum, shall address—

(1) the status of the compliance of the Department with the requirement of section 2461 (a)(1) of title 10, United States Code, as amended by section 321 of this Act;

(2) actions taken by the Secretary to address issues raised in the report of the Department of Defense Inspector General numbered D-2009-034 and dated December 15, 2008;

(3) the reliability of systems in effect as of the date of the enactment of this Act to provide comprehensive and reliable data to track and assess the cost and quality of the performance of functions that have been subjected to a public-private competition;

(4) the appropriateness of the cost differential in effect as of the date of the enactment of this Act for determining the quantifiable costs and the current overhead rates applied with respect to such functions; and

(5) the adequacy of the policies of the Department of Defense in implementing the requirements of section 2461 (a)(4) of title 10, United States Code.

(c) Comptroller General Review.—Not later than 90 days after the date on which the report required under subsection (b) is submitted to the congressional defense committees, the Comptroller General shall conduct an assessment of the review required under paragraph (b) and shall submit to the congressional defense committees a report on the findings of such assessment and any conclusions or recommendations of the Comptroller General based on such assessment.

(d) Certification Required.—The Secretary of Defense shall publish in the Federal Register and submit to the congressional defense committees certification that—

(1) the review required by subsection (b) has been completed, and that the 90-day period during which the assessment of the Comptroller General is to be completed under subsection (c) has expired;

(2) the Secretary of Defense has completed and submitted to the congressional defense committees a complete inventory of contracts for services, for or on behalf of the Department in compliance with the requirements of subsection (c) of section 2330a of title 10, United States Code;

(3) the Secretary of each military department and the head of each Defense Agency responsible for activities in the inventory is initiated the review and planning activities of subsection (e) of such section; and

(4) the Secretary of Defense has submitted budget information on contract services in compliance with the requirements of section 236 of title 10, United States Code.

Sec. 326. Requirement for debriefings related to conversion of functions from performance by Federal employees to performance by a contractor.

The Administrator for Federal Procurement Policy shall revise the Federal Acquisition Regulation to allow for debriefings of Federal employee representatives designated pursuant to section 3551 (2)(B) of title 31, United States Code, to the same extent and under the same circumstances as any offeror, in the case of a conversion of any function from performance by Federal employees to performance by a contractor. Such debriefings will conform to the requirements of section 2305 (b)(6)(A) of title 10, United States Code, section 303B (f) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253b (f)), and subparts 15.505 and 15.506 (as in effect on the date of the enactment of this Act) of the Federal Acquisition Regulation.

Sec. 327. Amendments to bid protest procedures by Federal employees and agency officials in conversions of functions from performance by Federal employees to performance by a contractor.

(a) Protest Jurisdiction of the Comptroller General.—Section 3551 (1) of title 31, United States Code, is amended by adding at the end the following new subparagraph:

"(E) Conversion of a function that is being performed by Federal employees to private sector performance.".

(b) Eligibility to Protest Public-Private Competitions.—Clause (i) of paragraph (2)(B) of section 3551 of title 31, United States Code, is amended to read as follows:

"(i) any official who is responsible for submitting the agency tender in such competition; and".

(c) Decisions on Protests.—Section 3554 (b) of title 31, United States Code, is amended—

(1) by redesignating subparagraphs (C) through (G) as subparagraphs (D) through (H), respectively;

(2) by inserting after subparagraph (B) the following new subparagraph (C):

"(C) cancel the solicitation issued pursuant to the public-private competition conducted under Office of Management and Budget Circular A-76 or any successor circular;"; and

(3) in subparagraph (G), as redesignated by paragraph (1), by striking ", and (E)" and inserting ", (E), and (F)".

(d) Applicability.—The amendments made by this section shall apply—

(1) to any protest or civil action that relates to a public-private competition conducted after the date of the enactment of this Act under Office of Management and Budget Circular A-76, or any successor circular; and

(2) to a decision made after the date of the enactment of this Act to convert a function performed by Federal employees to private sector performance without a competition under Office of Management and Budget Circular A-76.

Sec. 328. Improvement of inventory management practices.

(a) Inventory Management Practices Improvement Plan Required.—Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees a comprehensive plan for improving the inventory management systems of the military departments and the Defense Logistics Agency with the objective of reducing the acquisition and storage of secondary inventory that is excess to requirements.

(b) Elements.—The plan under subsection (a) shall include the following:

(1) A plan for a comprehensive review of demand-forecasting procedures to identify and correct any systematic weaknesses in such procedures, including the development of metrics to identify bias toward over-forecasting and adjust forecasting methods accordingly.

(2) A plan to accelerate the efforts of the Department of Defense to achieve total asset visibility, including efforts to link wholesale and retail inventory levels through multi-echelon modeling.

(3) A plan to reduce the average level of on-order secondary inventory that is excess to requirements, including a requirement for the systemic review of such inventory for possible contract termination.

(4) A plan for the review and validation of methods used by the military departments and the Defense Logistics Agency to establish economic retention requirements.

(5) A plan for an independent review of methods used by the military departments and the Defense Logistics Agency to establish contingency retention requirements.

(6) A plan to identify items stored in secondary inventory that require substantial amounts of storage space and shift such items, where practicable, to direct vendor delivery.

(7) A plan for a comprehensive assessment of inventory items on hand that have no recurring demands, including the development of—

(A) metrics to track years of no demand for items in stock; and

(B) procedures for ensuring the systemic review of such items for potential reutilization or disposal.

(8) A plan to more aggressively pursue disposal reviews and actions on stocks identified for potential reutilization or disposal.

(c) GAO Reports.—

(1) Assessment of Plan.—Not later than 60 days after the date on which the plan required by subsection (a) is submitted as specified in that subsection, the Comptroller General shall submit to the congressional defense committees a report setting forth an assessment of the extent to which the plan meets the requirements of this section.

(2) Assessment of Implementation.—Not later than 18 months after the date on which the plan required by subsection (a) is submitted, the Comptroller General shall submit to the congressional defense committees a report setting forth an assessment of the extent to which the plan has been effectively implemented by each military department and by the Defense Logistics Agency.

(d) Inventory That Is Excess to Requirements Defined.—In this section, the term "inventory that is excess to requirements" means inventory that—

(1) is excess to the approved acquisition objective concerned; and

(2) is not needed for the purposes of economic retention or contingency retention.

Sec. 329. Modification of date for submittal to Congress of annual report on funding for public and private performance of depot-level maintenance and repair workloads.

Section 2466 (d)(1) of title 10, United States Code, is amended by striking "April 1 of each year" and inserting "90 days after the date on which the budget of the President for a fiscal year is submitted to Congress pursuant to section 1105 of title 31".