§ 501. Office of Management and Budget

§ 501. Office of Management and Budget

The Office of Management and Budget is an office in the Executive Office of the President.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 886.)

Statutory Notes and Related Subsidiaries

Short Title of 2016 Amendment

Pub. L. 114–264, § 1, Dec. 14, 2016, 130 Stat. 1371, provided that: “This Act [enacting section 1126 of this title, amending section 503 of this title, and enacting provisions set out as notes under sections 503 and 1126 of this title] may be cited as the ‘Program Management Improvement Accountability Act’.”

Short Title of 1990 Amendment

Pub. L. 101–576, title I, § 101, Nov. 15, 1990, 104 Stat. 2838, provided that: “This Act [enacting sections 503, 504, 901 to 903, and 3515 of this title, amending sections 502, 1105, 3512, 3521, 9105, and 9106 of this title, sections 5313 to 5315 of Title 5, Government Organization and Employees, and section 3533 of Title 42, The Public Health and Welfare, renumbering sections 503 and 504 of this title as 505 and 506 of this title, respectively, enacting provisions set out as notes under this section and sections 901, 3511, 3515, and 3521 of this title, and amending provisions set out as a note under section 301 of Title 38, Veterans’ Benefits] may be cited as the ‘Chief Financial Officers Act of 1990’.”

Transfer of Functions

Pub. L. 104–53, title II, § 211, Nov. 19, 1995, 109 Stat. 535, as amended by Pub. L. 104–316, title II, § 203, Oct. 19, 1996, 110 Stat. 3845, provided that: “Personnel transferred pursuant to this section, as in effect immediately before the effective date of section 303 [203] of the General Accounting Office Act of 1996 [Pub. L. 104–316, Oct. 19, 1996], shall not be separated or reduced in classification or compensation for one year after any such transfer, except for cause.”

Disaster Resiliency Planning

Pub. L. 117–221, Dec. 5, 2022, 136 Stat. 2277, provided that: “SECTION 1. SHORT TITLE.“This Act may be cited as the ‘Disaster Resiliency Planning Act’. “SEC. 2. DEFINITIONS.“In this Act:“(1) Appropriate congressional committees.—The term ‘appropriate congressional committees’ means—“(A) the Committee on Homeland Security and Governmental Affairs of the Senate; and “(B) the Committee on Oversight and Reform [now Committee on Oversight and Accountability] of the House of Representatives. “(2) Agency.—The term ‘agency’ has the meaning given the term in section 306 of title 5, United States Code. “(3) Director.—The term ‘Director’ means the Director of the Office of Management and Budget. “(4) Real property.—The term ‘real property’ has the meaning given the term in section 1.856–10 of title 26, Code of Federal Regulations, or any successor thereto. “SEC. 3. GUIDANCE.“(a) In General.—Not later than 180 days after the date of enactment of this Act [Dec. 5, 2022], the Director shall establish guidance requiring the head of each agency to incorporate natural disaster resilience into real property asset management and investment decisions made by the agency. “(b) Contents.—The guidance required under subsection (a) shall direct each head of an agency to incorporate assessments of natural disaster risk information conducted by the agency, such as from vulnerability and other risk assessments, into real property asset management investment decisions made by the agency. “(c) Modification.—The Director may periodically update the guidance required under subsection (a) as the Director may determine necessary for the purpose of further enhancing natural disaster resilience. “(d) Consultation.—In developing the guidance required under subsection (a), the Director may consult with appropriate entities, including—“(1) the Comptroller General of the United States; “(2) the Administrator of the Federal Emergency Management Agency; and “(3) any other relevant entities, as determined by the Director. “(e) Report.—“(1) In general.—Not later than 1 year after the date of enactment of this Act, the Director shall submit to the appropriate congressional committees a report that describes the guidance required under subsection (a). “(2) Briefing.—Not later than 2 years after the date of enactment of this Act, the Director shall brief the appropriate congressional committees on the implementation of the guidance required under subsection (a) across agencies.”

Disaster Relief Funding Guidance

Pub. L. 115–123, div. B, title XII, § 21206(c), Feb. 9, 2018, 132 Stat. 108, provided that: “In order to proactively prepare for oversight of future disaster relief funding, not later than one year after the date of enactment of this Act [Feb. 9, 2018], the Director of the Office of Management and Budget shall issue standard guidance for Federal agencies to use in designing internal control plans for disaster relief funding. This guidance shall leverage existing internal control review processes and shall include, at a minimum, the following elements: “(1) Robust criteria for identifying and documenting incremental risks and mitigating controls related to the funding. “(2) Guidance for documenting the linkage between the incremental risks related to disaster funding and efforts to address known internal control risks.”

Publication of Certain Documents

Pub. L. 112–239, div. A, title XVI, § 1655, Jan. 2, 2013, 126 Stat. 2083, provided that: “Not later than 270 days after the date of the enactment of this part [Jan. 2, 2013], the Director of the Office of Management and Budget shall publish procedures and methodologies to be used by Federal agencies with respect to decisions to convert a function being performed by a small business concern to performance by a Federal employee, including procedures and methodologies for determining which contracts will be studied for potential conversion; procedures and methodologies by which a contract is evaluated as inherently governmental or as a critical agency function; and procedures and methodologies for estimating and comparing costs. Should a Federal agency develop any agency-specific methodologies for identifying critical agency functions or supplemental implementation guidance, such methodologies and guidance shall be published upon implementation.”

Service Contract Inventory

Pub. L. 111–117, div. C, title VII, § 743, Dec. 16, 2009, 123 Stat. 3216, as amended by Pub. L. 112–74, div. C, title VII, § 740, Dec. 23, 2011, 125 Stat. 939, provided that: “(a) Service Contract Inventory Requirement.—“(1) Guidance.—Not later than March 1, 2010, the Director of the Office of Management and Budget shall develop and disseminate guidance to aid executive agencies in establishing systems for the collection of information required to meet the requirements of this section and to ensure consistency of inventories across agencies. “(2) Report.—Not later than July 31, 2010, the Director of the Office of Management and Budget shall submit a report to Congress on the status of efforts to enable executive agencies to prepare the inventories required under paragraph (3), including the development, as appropriate, of guidance, methodologies, and technical tools. “(3) Inventory contents.—Not later than December 31, 2010, and annually thereafter, the head of each executive agency required to submit an inventory in accordance with the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note), other than the Department of Defense, shall submit to the Office of Management and Budget an annual inventory of service contracts awarded or extended through the exercise of an option, and task orders issued under any such contract, on or after April 1, 2010, for or on behalf of such agency. For each service contract, the entry for an inventory under this section shall include, for the preceding fiscal year, the following:“(A) A description of the services purchased by the executive agency and the role the services played in achieving agency objectives, regardless of whether such a purchase was made through a contract or task order. “(B) The organizational component of the executive agency administering the contract, and the organizational component of the agency whose requirements are being met through contractor performance of the service. “(C) The total dollar amount obligated for services under the contract and the funding source for the contract. “(D) The total dollar amount invoiced for services under the contract. “(E) The contract type and date of award. “(F) The name of the contractor and place of performance. “(G) The number and work location of contractor and subcontractor employees, expressed as full-time equivalents for direct labor, compensated under the contract. “(H) Whether the contract is a personal services contract. “(I) Whether the contract was awarded on a noncompetitive basis, regardless of date of award. “(b) Form.—Reports required under this section shall be submitted in unclassified form, but may include a classified annex. “(c) Publication.—Not later than 30 days after the date on which the inventory under subsection (a)(3) is required to be submitted to the Office of Management and Budget, the head of each executive agency shall—“(1) make the inventory available to the public; and “(2) publish in the Federal Register a notice that the inventory is available to the public. “(d) Government-wide Inventory Report.—Not later than 90 days after the deadline for submitting inventories under subsection (a)(3), and annually thereafter, the Director of the Office of Management and Budget shall submit to Congress and make publicly available on the Office of Management and Budget website a report on the inventories submitted. The report shall identify whether each agency required to submit an inventory under subsection (a)(3) has met such requirement and summarize the information submitted by each executive agency required to have a Chief Financial Officer pursuant to section 901 of title 31, United States Code. “(e) Review and Planning Requirements.—Not later than 180 days after the deadline for submitting inventories under subsection (a)(3) for an executive agency, the head of the executive agency, or an official designated by the agency head shall—“(1) review the contracts and information in the inventory; “(2) ensure that—“(A) each contract in the inventory that is a personal services contract has been entered into, and is being performed, in accordance with applicable laws and regulations; “(B) the agency is giving special management attention to functions that are closely associated with inherently governmental functions; “(C) the agency is not using contractor employees to perform inherently governmental functions; “(D) the agency has specific safeguards and monitoring systems in place to ensure that work being performed by contractors has not changed or expanded during performance to become an inherently governmental function; “(E) the agency is not using contractor employees to perform critical functions in such a way that could affect the ability of the agency to maintain control of its mission and operations; and “(F) there are sufficient internal agency resources to manage and oversee contracts effectively; “(3) identify contracts that have been poorly performed, as determined by a contracting officer, because of excessive costs or inferior quality; and “(4) identify contracts that should be considered for conversion to—“(A) performance by Federal employees of the executive agency in accordance with agency insourcing guidelines required under section 736 of the Financial Services and General Government Appropriations Act, 2009 (Public Law 111–8, division D) [amending provisions set out as a note below]; or “(B) an alternative acquisition approach that would better enable the agency to efficiently utilize its assets and achieve its public mission. “(f) Report on Actions Taken in Response to Annual Inventory.—Not later than one year after submitting an annual inventory under subsection (a)(3), the head of each executive agency submitting such an inventory shall submit to the Office of Management and Budget a report summarizing the actions taken pursuant to subsection (e), including any actions taken to consider and convert functions from contractor to Federal employee performance. The report shall be included as an attachment to the next annual inventory and made publicly available in accordance with subsection (c). “(g) Submission of Service Contract Inventory Before Public-private Competition.—Notwithstanding any other provision of law, beginning in fiscal year 2011, if an executive agency has not submitted to the Office of Management and Budget the inventory required under subsection (a)(3) for the prior fiscal year, the agency may not begin, plan for, or announce a 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 or directive until such time as the inventory is submitted for the prior fiscal year. “(h) GAO Reports on Implementation.—“(1) Report on guidance.—Not later than 120 days after submission of the report by the Director of the Office of Management and Budget required under subsection (a)(2), the Comptroller General of the United States shall report on the guidance issued and actions taken by the Director. The report shall be submitted to the Committee on Homeland Security and Governmental Affairs and the Committee on Appropriations of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] and the Committee on Appropriations of the House of Representatives. “(2) Reports on inventories.—“(A) Initial inventory.—Not later than September 30, 2011, the Comptroller General of the United States shall submit a report to the Committees named in the preceding paragraph on the initial implementation by executive agencies of the inventory requirement in subsection (a)(3) with respect to inventories required to be submitted by December 31, 2010. “(B) Second inventory.—Not later than September 30, 2012, the Comptroller General shall submit a report to the same Committees on annual inventories required to be submitted by December 31, 2011. “(3) Periodic briefings.—The Comptroller General shall provide periodic briefings, as may be requested by the Committees, on matters related to implementation of this section. “(i) Executive Agency Defined.—In this section, the term ‘executive agency’ has the meaning given the term in section 4 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 403) [see 41 U.S.C. 133].”

Requirement for Debriefings Related To Conversion of Functions From Performance by Federal Employees to Performance by a Contractor

Pub. L. 111–84, div. A, title III, § 326, Oct. 28, 2009, 123 Stat. 2254, provided that: “The Administrator for Federal Procurement Policy shall revise the Federal Acquisition Regulation to allow for debriefings of Federal employee representatives designated pursuant to 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 [now 10 U.S.C. 3305(a), (b)], section 303B(f) of the Federal Property and Administrative Services Act of 1949 ([former] 41 U.S.C. 253b(f)) [now 41 U.S.C. 3705], and subparts 15.505 and 15.506 (as in effect on the date of the enactment of this Act [Oct. 28, 2009]) of the Federal Acquisition Regulation.”

Comprehensive Analysis and Development of Single Government-Wide Definition of Inherently Governmental Function and Criteria for Critical Functions

Pub. L. 110–417, [div. A], title III, § 321, Oct. 14, 2008, 122 Stat. 4411, provided that: “(a) Development and Implementation.—The Director of the Office of Management and Budget, in consultation with appropriate representatives of the Chief Acquisition Officers Council under section 16A of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 414b) [now 41 U.S.C. 1311 et seq.] and the Chief Human Capital Officers Council under section 1401 of title 5, United States Code, shall—“(1) review the definitions of the term ‘inherently governmental function’ described in subsection (b) to determine whether such definitions are sufficiently focused to ensure that only officers or employees of the Federal Government or members of the Armed Forces perform inherently governmental functions or other critical functions necessary for the mission of a Federal department or agency; “(2) develop a single consistent definition for such term that would—“(A) address any deficiencies in the existing definitions, as determined pursuant to paragraph (1); “(B) reasonably apply to all Federal departments and agencies; and “(C) ensure that the head of each such department or agency is able to identify each position within that department or agency that exercises an inherently governmental function and should only be performed by officers or employees of the Federal Government or members of the Armed Forces; “(3) develop criteria to be used by the head of each such department or agency to—“(A) identify critical functions with respect to the unique missions and structure of that department or agency; and “(B) identify each position within that department or agency that, while the position may not exercise an inherently governmental function, nevertheless should only be performed by officers or employees of the Federal Government or members of the Armed Forces to ensure the department or agency maintains control of its mission and operations; “(4) in addition to the actions described under paragraphs (1), (2), and (3), provide criteria that would identify positions within Federal departments and agencies that are to be performed by officers or employees of the Federal Government or members of the Armed Forces to ensure that the head of each Federal department or agency—“(A) develops and maintains sufficient organic expertise and technical capability; “(B) develops guidance to implement the definition of inherently governmental as described in paragraph (2) and the criteria for critical functions as described in paragraph (3) in a manner that is consistent with agency missions and operational goals; and “(C) develops guidance to manage internal decisions regarding staffing in an integrated manner to ensure officers or employees of the Federal Government or members of the Armed Forces are filling critical management roles by identifying—“(i) functions, activities, or positions, or some combination thereof, or “(ii) additional mechanisms and factors, including the management or oversight of awarded contracts, statutory mandates, and international obligations; and “(5) solicit the views of the public regarding the matters identified in this section. “(b) Definitions of Inherently Governmental Function.—The definitions of inherently governmental function described in this subsection are the definitions of such term that are contained in—“(1) the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note); “(2) section 2383 of title 10, United States Code [now 10 U.S.C. 4508]; “(3) Office of Management and Budget Circular A–76; “(4) the Federal Acquisition Regulation; and “(5) any other relevant Federal law or regulation, as determined by the Director of the Office of Management and Budget in consultation with the Chief Acquisition Officers Council and the Chief Human Capital Officers Council. “(c) Report to Congress.—Not later than one year after the date of the enactment of this Act [Oct. 14, 2008], the Director of the Office of Management and Budget, in consultation with the Chief Acquisition Officers Council and the Chief Human Capital Officers Council, shall submit to the Committees on Armed Services of the Senate and House of Representatives, the Committee on Homeland Security and Governmental Affairs in the Senate, and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives a report on the actions taken by the Director under this section. Such report shall contain each of the following:“(1) A description of the actions taken by the Director under this section to develop a single definition of inherently governmental function and criteria for critical functions. “(2) Such legislative recommendations as the Director determines are necessary to further the purposes of this section. “(3) A description of such steps as may be necessary—“(A) to ensure that the single definition and criteria developed under this section are consistently applied through all Federal regulations, circulars, policy letters, agency guidance, and other documents; “(B) to repeal any existing Federal regulations, circular, policy letters, agency guidance and other documents determined to be superseded by the definition and criteria developed under this section; and “(C) to develop any necessary implementing guidance under this section for agency staffing and contracting decisions, along with appropriate milestones. “(d) Regulations.—Not later than 180 days after submission of the report required by subsection (c), the Director of the Office of Management and Budget shall issue regulations to implement actions taken under this section to develop a single definition of inherently governmental function and criteria for critical functions.”

Public-Private Competition

Pub. L. 110–161, div. D, title VII, § 739, Dec. 26, 2007, 121 Stat. 2029, as amended by Pub. L. 111–8, div. D, title VII, §§ 735, 736, Mar. 11, 2009, 123 Stat. 689, provided that: “(a) Requirement for Public-Private Competition.—“(1) Notwithstanding any other provision of law, none of the funds appropriated by this or any other Act shall be available to convert to contractor performance an activity or function of an executive agency that, on or after the date of enactment of this Act [Dec. 26, 2007], is performed by Federal employees unless—“(A) the conversion is based on the result of a public-private competition that includes a most efficient and cost effective organization plan developed by such activity or function; “(B) the Competitive Sourcing Official determines that, over all performance periods stated in the solicitation of offers for performance of the activity or function, the cost of performance of the activity or function by a contractor would be less costly to the executive agency by an amount that equals or exceeds the lesser of—“(i) 10 percent of the most efficient organization’s personnel-related costs for performance of that activity or function by Federal employees; or “(ii) $10,000,000; and “(C) the contractor does not receive an advantage for a proposal that would reduce costs for the Federal Government by—“(i) not making an employer-sponsored health insurance plan available to the workers who are to be employed in the performance of that activity or function under the contract; “(ii) offering to such workers an employer-sponsored health benefits plan that requires the employer to contribute less towards the premium or subscription share than the amount that is paid by the Federal Government for health benefits for civilian employees under chapter 89 of title 5, United States Code; or “(iii) offering to such workers a retirement benefit that in any year costs less than the annual retirement cost factor applicable to Federal employees under chapter 84 of title 5, United States Code. “(2) This paragraph shall not apply to—“(A) the Department of Defense; “(B) section 44920 of title 49, United States Code; “(C) a commercial or industrial type function that—“(i) is included on the procurement list established pursuant to section 2 of the Javits-Wagner-O’Day Act ([former] 41 U.S.C. 47) [now 41 U.S.C. 8503]; or “(ii) is planned to be converted to performance by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely handicapped individuals in accordance with that Act [now 41 U.S.C. 8501 et seq.]; “(D) depot contracts or contracts for depot maintenance as provided in sections 2469 and 2474 of title 10, United States Code; or “(E) activities that are the subject of an ongoing competition that was publicly announced prior to the date of enactment of this Act [Dec. 26, 2007]. “(b) Guidelines on Insourcing New and Contracted Out Functions.—“(1) Guidelines required.—(A) The heads of executive agencies subject to the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note) shall devise and implement guidelines and procedures to ensure that consideration is given to using, on a regular basis, Federal employees to perform new functions and functions that are performed by contractors and could be performed by Federal employees. “(B) The guidelines and procedures required under subparagraph (A) may not include any specific limitation or restriction on the number of functions or activities that may be converted to performance by Federal employees. “(2) Special consideration for certain functions.—The guidelines and procedures required under paragraph (1) shall provide for special consideration to be given to using Federal employees to perform any function that—“(A) is performed by a contractor and—“(i) has been performed by Federal employees at any time during the previous 10 years; “(ii) is a function closely associated with the performance of an inherently governmental function; “(iii) has been performed pursuant to a contract awarded on a non-competitive basis; or “(iv) 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; or “(B) is a new requirement, with particular emphasis given to a new requirement that is similar to a function previously performed by Federal employees or is a function closely associated with the performance of an inherently governmental function. “(3) Exclusion of certain functions from competitions.—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 or regulation before—“(A) in the case of a new agency function, assigning the performance of the function to Federal employees; “(B) in the case of any agency function described in paragraph (2), converting the function to performance by Federal employees; or “(C) in the case of an agency function performed by Federal employees, expanding the scope of the function. “(4) Deadline.—(A) The head of each executive agency shall implement the guidelines and procedures required under this subsection by not later than 120 days after the date of the enactment of this subsection [Mar. 11, 2009]. “(B) Not later than 210 days after the date of the enactment of this subsection, the Government Accountability Office shall submit a report on the implementation of this subsection to the Committees on Appropriations of the House of Representatives and the Senate, the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate. “(5) Definitions.—In this subsection:“(A) The term ‘inherently governmental functions’ has the meaning given such term in subpart 7.5 of part 7 of the Federal Acquisition Regulation. “(B) The term ‘functions closely associated with inherently governmental functions’ means the functions described in section 7.503(d) of the Federal Acquisition Regulation. “(6) Applicability.—This subsection shall not apply to the Department of Defense. “(c) Bid Protests by Federal Employees in Actions Under Office of Management and Budget Circular A–76.—“(1) Eligibility to protest.—“(A) [Amended section 3551 of this title.] “(B)(i) [Enacted section 3557 of this title.] “(ii) [Amended chapter analysis preceding section 3501 of this title.] “(2) [Amended section 1491 of title 28, Judiciary and Judicial Procedure.] “(3) Applicability.—Subparagraph (B) of section 3551(2) of title 31, United States Code (as added by paragraph (1)), and paragraph (5) of section 1491(b) of title 28, United States Code (as added by paragraph (2)), shall apply to—“(A) protests and civil actions that challenge final selections of sources of performance of an activity or function of a Federal agency that are made pursuant to studies initiated under Office of Management and Budget Circular A–76 on or after January 1, 2004; and “(B) any other protests and civil actions that relate to public-private competitions initiated under Office of Management and Budget Circular A–76, or a decision to convert a function performed by Federal employees to private sector performance without a competition under Office of Management and Budget Circular A–76, on or after the date of the enactment of this Act [Dec. 26, 2007]. “(d) Limitation.—(1) None of the funds available in this Act [titles I to III and V to VII of div. D of Pub. L. 110–161, see Tables for classification] may be used—“(A) by the Office of Management and Budget to direct or require another agency to take an action specified in paragraph (2); or “(B) by an agency to take an action specified in paragraph (2) as a result of direction or requirement from the Office of Management and Budget. “(2) An action specified in this paragraph is the preparation for, undertaking, continuation of, or completion of a public-private competition or direct conversion under Office of Management and Budget Circular A–76 or any other administrative regulation, directive, or policy. “(e) Applicability.—This section shall apply with respect to fiscal year 2008 and each succeeding fiscal year.”

Competitive Sourcing Activities

Pub. L. 108–199, div. F, title VI, § 647(b), (d), (f), Jan. 23, 2004, 118 Stat. 361, 362, provided that: “(b) Not later than 120 days following the enactment of this Act [Jan. 23, 2004] and not later than December 31 of each year thereafter, the head of each executive agency shall submit to Congress a report on the competitive sourcing activities on the list required under the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note) that were performed for such executive agency during the previous fiscal year by Federal Government sources. The report shall include—“(1) the total number of competitions completed; “(2) the total number of competitions announced, together with a list of the activities covered by such competitions; “(3) the total number (expressed as a full-time employee equivalent number) of the Federal employees studied under completed competitions; “(4) the total number (expressed as a full-time employee equivalent number) of the Federal employees that are being studied under competitions announced but not completed; “(5) the incremental cost directly attributable to conducting the competitions identified under paragraphs (1) and (2), including costs attributable to paying outside consultants and contractors; “(6) an estimate of the total anticipated savings, or a quantifiable description of improvements in service or performance, derived from completed competitions; “(7) actual savings, or a quantifiable description of improvements in service or performance, derived from the implementation of competitions completed after May 29, 2003; “(8) the total projected number (expressed as a full-time employee equivalent number) of the Federal employees that are to be covered by competitions scheduled to be announced in the fiscal year covered by the next report required under this section; and “(9) a general description of how the competitive sourcing decisionmaking processes of the executive agency are aligned with the strategic workforce plan of that executive agency. “(d) Hereafter, the head of an executive agency may expend funds appropriated or otherwise made available for any purpose to the executive agency under this or any other Act to monitor (in the administration of responsibilities under Office of Management and Budget Circular A–76 or any related policy, directive, or regulation) the performance of an activity or function of the executive agency that has previously been subjected to a public-private competition under such circular. “(f) In this section, the term ‘executive agency’ has the meaning given such term in section 4 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 403) [see 41 U.S.C. 133].”

Pub. L. 108–108, title III, § 340(a), (b), (f), Nov. 10, 2003, 117 Stat. 1315, 1317, as amended by Pub. L. 108–447, div. E, title III, § 332(c), Dec. 8, 2004, 118 Stat. 3100, provided that: “(a) Justification of Competitive Sourcing Activities.—(1) In each budget submitted by the President to Congress under section 1105 of title 31, United States Code, for a fiscal year, beginning with fiscal year 2005, amounts requested to perform competitive sourcing studies for programs, projects, and activities listed in paragraph (2) shall be set forth separately from other amounts requested. “(2) Paragraph (1) applies to programs, projects, and activities—“(A) of the Department of the Interior for which funds are appropriated by this Act [see Tables for classification]; “(B) of the Forest Service; and “(C) of the Department of Energy for which funds are appropriated by this Act.

[(b) Repealed. Pub. L. 108–447, div. E, title III, § 332(c), Dec. 8, 2004, 118 Stat. 3100.]

“(f) Competitive Sourcing Study Defined.—In this subsection [probably means “this section”], the term ‘competitive sourcing study’ means a study on subjecting work performed by Federal Government employees or private contractors to public-private competition or on converting the Federal Government employees or the work performed by such employees to private contractor performance under the Office of Management and Budget Circular A–76 or any other administrative regulation, directive, or policy.”

Study of Policies and Procedures for Transfer of Commercial Activities

[Pub. L. 106–398, § 1 [div. A], title VIII, § 832], Oct. 30, 2000, 114 Stat. 1654, 1654A–221, provided that the Comptroller General was to convene a panel of experts to study the policies and procedures governing the transfer of commercial activities for the Federal Government from Government personnel to Federal contractors and to appoint highly qualified and knowledgeable persons, from appropriate governmental agencies and private industry, to serve on the panel, whose chairman would be the Comptroller General or a designated individual within the GAO, and provided that interested parties would be allowed to participate, that the panel would have access to necessary information from Federal agencies, and that the Comptroller General was to submit a report of the panel on the results of the study to Congress no later than May 1, 2002.

Use of Private Enterprises

Pub. L. 106–53, title II, § 227, Aug. 17, 1999, 113 Stat. 298, provided that: “(a) In General.—The Secretary [of the Army] shall comply with the requirements of the Federal Activities Inventory Reform Act of 1998 (31 U.S.C. 501 note; Public Law 105–270). “(b) Compliance With Other Law.—“(1) Inventory and review.—In carrying out this section, the Secretary shall inventory and review all activities that are not inherently governmental in nature in accordance with the Federal Activities Inventory Reform Act of 1998. “(2) Architectural and engineering services.—Any review and conversion by the Secretary to performance by private enterprise of an architectural or engineering service (including a surveying or mapping service) shall be carried out in accordance with title IX of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 541 et seq.) [now sections 1101–1104 of title 40].”

Federal Activities Inventory Reform

Pub. L. 110–28, title VI, § 6201, May 25, 2007, 121 Stat. 171, provided that: “Hereafter, Federal employees at the National Energy Technology Laboratory shall be classified as inherently governmental for the purpose of the Federal Activities Inventory Reform Act of 1998 [Pub. L. 105–270] (31 U.S.C. 501 note).”

Pub. L. 110–28, title VI, § 6602(b), May 25, 2007, 121 Stat. 178, provided that: “Hereafter, Federal employees at the Mine Safety and Health Administration shall be classified as inherently governmental for the purpose of the Federal Activities Inventory Reform Act of 1998 [Pub. L. 105–270] (31 U.S.C. 501 note).”

Pub. L. 105–270, Oct. 19, 1998, 112 Stat. 2382, as amended by Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814; Pub. L. 109–115, div. A, title VIII, § 840, Nov. 30, 2005, 119 Stat. 2505, provided that: “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) Government accountability office.—The Government Accountability 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). “(5) Executive agencies with fewer than 100 full-time employees as of the first day of the fiscal year. However, such an agency shall be subject to section 2 to the extent it plans to conduct a public-private competition for the performance of an activity that is not inherently governmental. “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.”

Purpose of Amendments by Pub. L. 104–316

Pub. L. 104–316, title II, § 201, Oct. 19, 1996, 110 Stat. 3842, provided that: “The purpose of this title [see Tables for classification] is to amend provisions of law to reflect, update, and enact transfers and subsequent delegations of functions made under section 211 of the Legislative Branch Appropriations Act, 1996 (Public Law 104–53, 109 Stat. 535) [see Transfer of Functions note above], as in effect immediately before this title takes effect [Oct. 19, 1996].”

Department of Commerce Franchise Fund Pilot

Pub. L. 108–199, div. B, title II, § 206, Jan. 23, 2004, 118 Stat. 73, provided that: “Hereafter, the Secretary of Commerce may use the Commerce franchise fund for expenses and equipment necessary for the maintenance and operation of such administrative services as the Secretary determines may be performed more advantageously as central services, pursuant to section 403 of Public Law 103–356 [set out below]: Provided, That any inventories, equipment, and other assets pertaining to the services to be provided by such fund, either on hand or on order, less the related liabilities or unpaid obligations, and any appropriations made for the purpose of providing capital shall be used to capitalize such fund: Provided further, That such fund shall be paid in advance from funds available to the Department and other Federal agencies for which such centralized services are performed, at rates which will return in full all expenses of operation, including accrued leave, depreciation of fund plant and equipment, amortization of automated data processing software and systems (either acquired or donated), and an amount necessary to maintain a reasonable operating reserve, as determined by the Secretary: Provided further, That such fund shall provide services on a competitive basis: Provided further, That an amount not to exceed 4 percent of the total annual income to such fund may be retained in the fund for fiscal year 2004 and each fiscal year thereafter, to remain available until expended, to be used for the acquisition of capital equipment, and for the improvement and implementation of department financial management, automated data processing, and other support systems: Provided further, That such amounts retained in the fund for fiscal year 2004 and each fiscal year thereafter shall be available for obligation and expenditure only in accordance with section 605 of this Act [118 Stat. 93]: Provided further, That no later than 30 days after the end of each fiscal year, amounts in excess of this reserve limitation shall be deposited as miscellaneous receipts in the Treasury.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 108–7, div. B, title II, § 207, Feb. 20, 2003, 117 Stat. 77.

Pub. L. 107–77, title II, § 207, Nov. 28, 2001, 115 Stat. 778.

Pub. L. 106–553, § 1(a)(2) [title II, § 208], Dec. 21, 2000, 114 Stat. 2762, 2762A–79.

Pub. L. 106–113, div. B, § 1000(a)(1) [title II, § 209], Nov. 29, 1999, 113 Stat. 1535, 1501A–33.

Pub. L. 105–277, div. A, § 101(b) [title II, § 209], Oct. 21, 1998, 112 Stat. 2681–50, 2681–87.

Department of the Interior Franchise Fund Pilot

Pub. L. 104–208, div. A, title I, § 101(d) [title I, § 113], Sept. 30, 1996, 110 Stat. 3009–181, 3009–200, as amended by Pub. L. 108–7, div. F, title I, § 149, Feb. 20, 2003, 117 Stat. 245, provided that: “There is hereby established in the Treasury a franchise fund pilot, as authorized by section 403 of Public Law 103–356 [set out below], to be available as provided in such section for costs of capitalizing and operating administrative services as the Secretary determines may be performed more advantageously as central services: Provided, That any inventories, equipment, and other assets pertaining to the services to be provided by such fund, either on hand or on order, less the related liabilities or unpaid obligations, and any appropriations made prior to the current year for the purpose of providing capital shall be used to capitalize such fund: Provided further, That such fund may be paid in advance from funds available to the Department and other Federal agencies for which such centralized services are performed, at rates which will return in full all expenses of operation, including accrued leave, depreciation of fund plant and equipment, amortization of automatic data processing (ADP) software and systems (either acquired or donated) and an amount necessary to maintain a reasonable operating reserve, as determined by the Secretary: Provided further, That such fund shall provide services on a competitive basis: Provided further, That an amount not to exceed four percent of the total annual income to such fund may be retained in the fund for fiscal year 1997 and each fiscal year thereafter, to remain available until expended, to be used for the acquisition of capital equipment, and for the improvement and implementation of Department financial management, ADP, and other support systems: Provided further, That no later than thirty days after the end of each fiscal year amounts in excess of this reserve limitation shall be transferred to the Treasury: Provided further, That such franchise fund pilot shall terminate pursuant to section 403(f) of Public Law 103–356.”

Department of Veterans Affairs Franchise Fund Pilot

Pub. L. 108–447, div. I, title I, § 108, Dec. 8, 2004, 118 Stat. 3292, provided that: “Notwithstanding any other provision of law, the Department of Veterans Affairs shall continue the Franchise Fund pilot program authorized to be established by section 403 of Public Law 103–356 [set out below] until October 1, 2005: Provided, That the Franchise Fund, established by title I of Public Law 104–204 [set out as a note under section 301 of Title 38, Veterans’ Benefits] to finance the operations of the Franchise Fund pilot program, shall continue until October 1, 2005.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 108–199, div. G, title I, § 108, Jan. 23, 2004, 118 Stat. 369.

Pub. L. 108–7, div. K, title I, § 108, Feb. 20, 2003, 117 Stat. 481.

Pub. L. 107–73, title I, § 108, Nov. 26, 2001, 115 Stat. 658.

Department of Homeland Security Working Capital Fund

Pub. L. 115–31, div. F, title V, § 504, May 5, 2017, 131 Stat. 425, provided that: “The Department of Homeland Security Working Capital Fund, established pursuant to section 403 of Public Law 103–356 (31 U.S.C. 501 note), shall continue operations as a permanent working capital fund for fiscal year 2017: Provided, That none of the funds appropriated or otherwise made available to the Department of Homeland Security may be used to make payments to the Working Capital Fund, except for the activities and amounts allowed in the President’s fiscal year 2017 budget: Provided further, That funds provided to the Working Capital Fund shall be available for obligation until expended to carry out the purposes of the Working Capital Fund: Provided further, That all departmental components shall be charged only for direct usage of each Working Capital Fund service: Provided further, That funds provided to the Working Capital Fund shall be used only for purposes consistent with the contributing component: Provided further, That the Working Capital Fund shall be paid in advance or reimbursed at rates which will return the full cost of each service: Provided further, That the Committees on Appropriations of the Senate and the House of Representatives shall be notified of any activity added to or removed from the fund: Provided further, That for any activity added to the fund, the notification shall identify sources of funds by program, project, and activity: Provided further, That the Chief Financial Officer of the Department of Homeland Security shall submit a quarterly execution report with activity-level detail, not later than 30 days after the end of each quarter.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 114–113, div. F, title V, § 504, Dec. 18, 2015, 129 Stat. 2512.

Pub. L. 114–4, title V, § 504, Mar. 4, 2015, 129 Stat. 62.

Pub. L. 113–76, div. F, title V, § 504, Jan. 17, 2014, 128 Stat. 270.

Pub. L. 113–6, div. D, title V, § 504, Mar. 26, 2013, 127 Stat. 367.

Pub. L. 112–74, div. D, title V, § 504, Dec. 23, 2011, 125 Stat. 969.

Pub. L. 111–83, title V, § 504, Oct. 28, 2009, 123 Stat. 2169.

Pub. L. 110–329, div. D, title V, § 504, Sept. 30, 2008, 122 Stat. 3680.

Pub. L. 110–161, div. E, title V, § 524, Dec. 26, 2007, 121 Stat. 2074.

Pub. L. 109–295, title V, § 526, Oct. 4, 2006, 120 Stat. 1382.

Pub. L. 118–47, div. C, title V, § 504, Mar. 23, 2024, 138 Stat. 615, provided that: “(a) Section 504 of the Department of Homeland Security Appropriations Act, 2017 (division F of Public Law 115–31) [set out above], related to the operations of a working capital fund, shall apply with respect to funds made available in this Act [div. C of Pub. L. 118–47, see Tables for classification] in the same manner as such section applied to funds made available in that Act. “(b) Funds from such working capital fund may be obligated and expended in anticipation of reimbursements from components of the Department of Homeland Security.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 117–328, div. F, title V, § 504, Dec. 29, 2022, 136 Stat. 4749.

Pub. L. 117–103, div. F, title V, § 504, Mar. 15, 2022, 136 Stat. 335.

Pub. L. 116–260, div. F, title V, § 504, Dec. 27, 2020, 134 Stat. 1469.

Pub. L. 116–93, div. D, title V, § 504, Dec. 20, 2019, 133 Stat. 2526.

Pub. L. 116–6, div. A, title V, § 504, Feb. 15, 2019, 133 Stat. 38.

Pub. L. 115–141, div. F, title V, § 504, Mar. 23, 2018, 132 Stat. 626.

Pub. L. 109–13, div. A, title VI, § 6025, May 11, 2005, 119 Stat. 287, provided that: “The Department of Homeland Security shall henceforth provide an appropriations justification for the ‘Department of Homeland Security Working Capital Fund’ to the Committees on Appropriations of the Senate and House of Representatives: Provided, That an annual appropriations justification shall be submitted to the Congress as a part of the President’s budget as submitted under section 1105(a) of Title 31, United States Code, and shall contain the same level of detail as the Department’s Congressional appropriations justification in support of the President’s budget: Provided further, That the ‘Department of Homeland Security Working Capital Fund’ Congressional appropriations justification for fiscal year 2006 shall be submitted within 15 days of enactment of this Act [May 11, 2005]: Provided further, That the Chief Financial Officer shall ensure that all planned activities and amounts to be funded by the ‘Department of Homeland Security Working Capital Fund’, all reimbursable agreements, and all uses of the Economy Act [31 U.S.C. 1535] are explicitly identified in each Congressional appropriations justification in support of the President’s budget provided for each agency and component of the Department.”

Pub. L. 108–90, title V, § 506, Oct. 1, 2003, 117 Stat. 1153, provided in part: “That such fund [Federal Emergency Management Agency Working Capital Fund] shall hereafter be known as the ‘Department of Homeland Security Working Capital Fund’.”

Pub. L. 104–204, title III, Sept. 26, 1996, 110 Stat. 2915, as amended by Pub. L. 109–295, title VI, § 612(c), Oct. 4, 2006, 120 Stat. 1410, provided in part: “For the establishment of a working capital fund for the Federal Emergency Management Agency, to be available without fiscal year limitation, for expenses and equipment necessary for maintenance and operations of such administrative services as the Administrator determines may be performed more advantageously as central services: Provided, That any inventories, equipment, and other assets pertaining to the services to be provided by such fund, either on hand or on order, less the related liabilities or unpaid obligations, and any appropriations made hereafter for the purpose of providing capital, shall be used to capitalize such fund: Provided further, That such fund shall be reimbursed or credited with advance payments from applicable appropriations and funds of the Federal Emergency Management Agency, other Federal agencies, and other sources authorized by law for which such centralized services are performed, including supplies, materials, and services, at rates that will return in full all expenses of operation, including accrued leave, depreciation of fund plant and equipment, amortization of automated data processing (ADP) software and systems (either acquired or donated), and an amount necessary to maintain a reasonable operating reserve as determined by the Administrator: Provided further, That income of such fund may be retained, to remain available until expended, for purposes of the fund: Provided further, That fees for services shall be established by the Administrator at a level to cover the total estimated costs of providing such services, such fees to be deposited in the fund shall remain available until expended for purposes of the fund: Provided further, That such fund shall terminate in a manner consistent with section 403(f) of Public Law 103–356 [set out below].”

[For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.]

[For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.]

Franchise Fund Pilot Programs