text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Freedom From Government Competition 
  Act of 1997''.
  
  SEC. 2. FINDINGS.
  
      Congress finds and declares that--
              (1) private sector business concerns, which are free to 
          respond to the private or public demands of the marketplace, 
          constitute the strength of the American economic system;
              (2) competitive private sector enterprises are the most 
          productive, efficient, and effective sources of goods and 
          services;
              (3) government competition with the private sector of the 
          economy is detrimental to all businesses and the American 
          economic system;
              (4) government competition with the private sector of the 
          economy is at an unacceptably high level, both in scope and in 
          dollar volume;
              (5) when a government engages in entrepreneurial activities 
          that are beyond its core mission and compete with the private 
          sector--
                      (A) the focus and attention of the government are 
                  diverted from executing the basic mission and work of 
                  that government; and
                      (B) those activities constitute unfair government 
                  competition with the private sector;
              (6) current laws and policies have failed to address 
          adequately the problem of government competition with the 
          private sector of the economy;
              (7) the level of government competition with the private 
          sector, especially with small businesses, has been a priority 
          issue of each White House Conference on Small Business;
              (8) reliance on the private sector is consistent with the 
          goals of the Government Performance and Results Act of 1993 
          (Public Law 103-62);
              (9) reliance on the private sector is necessary and 
          desirable for proper implementation of the Federal Workforce 
          Restructuring Act of 1994 (Public Law 103-226);
              (10) it is in the public interest that the Federal 
          Government establish a consistent policy to rely on the private 
          sector of the economy to provide goods and services that are 
          necessary for or beneficial to the operation and management of 
          Federal Government agencies and to avoid Federal Government 
          competition with the private sector of the economy; and
              (11) it is in the public interest for the private sector to 
          utilize employees who are adversely affected by conversions to 
          use of private sector entities for providing goods and services 
          on behalf of the Federal Government.
  
  SEC. 3. RELIANCE ON THE PRIVATE SECTOR.
  
      (a) General Policy.--Notwithstanding any other provision of law, 
  except as provided in subsection (c), each agency shall procure from 
  sources in the private sector all goods and services that are necessary 
  for or beneficial to the accomplishment of authorized functions of the 
  agency.
      (b) Prohibitions Regarding Transactions in Goods and Services.--
              (1) Provision by government generally.--No agency may begin 
          or carry out any activity to provide any products or services 
          that can be provided by the private sector.
              (2) Transactions between governmental entities.--No agency 
          may obtain any goods or services from or provide any goods or 
          services to any other governmental entity.
      (c) Exceptions.--Subsections (a) and (b) do not apply to goods or 
  services necessary for or beneficial to the accomplishment of 
  authorized functions of an agency under the following conditions:
              (1) Either--
                      (A) the goods or services are inherently 
                  governmental in nature within the meaning of section 
                  6(b); or
                      (B) the Director of the Office of Management and 
                  Budget determines that the provision of the goods or 
                  services is otherwise an inherently governmental 
                  function.
              (2) The head of the agency determines that the goods or 
          services should be produced, provided, or manufactured by the 
          Federal Government for reasons of national security.
              (3) The Federal Government is determined to be the best 
          value source of the goods or services in accordance with 
          regulations prescribed pursuant to section 4(a)(2)(C).
              (4) The private sector sources of the goods or services, or 
          the practices of such sources, are not adequate to satisfy the 
          agency's requirements.
  
  SEC. 4. ADMINISTRATIVE PROVISIONS.
  
      (a) Regulations.--
              (1) OMB responsibility.--The Director of the Office of 
          Management and Budget shall prescribe regulations to carry out 
          this Act.
              (2) Content.--
                      (A) Private sector preference.--Consistent with the 
                  policy and prohibitions set forth in section 3, the 
                  regulations shall emphasize a preference for the 
                  provision of goods and services by private sector 
                  sources.
                      (B) Fairness for federal employees.--In order to 
                  ensure the fair treatment of Federal Government 
                  employees, the regulations--
                              (i) shall not contravene any law or 
                          regulation regarding Federal Government 
                          employees; and
                              (ii) shall provide for the Director of the 
                          Office of Management and Budget, in 
                          consultation with the Director of the Office of 
                          Personnel Management, to furnish information on 
                          relevant available benefits and assistance to 
                          Federal Government employees adversely affected 
                          by conversions to use of private sector 
                          entities for providing goods and services.
                      (C) Best value sources.--
                              (i) Standards and procedures.--The 
                          regulations shall include standards and 
                          procedures for determining whether it is a 
                          private sector source or an agency that 
                          provides certain goods or services for the best 
                          value.
                              (ii) Factors considered.--The standards and 
                          procedures shall include requirements for 
                          consideration of analyses of all direct and 
                          indirect costs (performed in a manner 
                          consistent with generally accepted cost-
                          accounting principles), the qualifications of 
                          sources, the past performance of sources, and 
                          any other technical and noncost factors that 
                          are relevant.
                              (iii) Consultation requirement.--The 
                          Director shall consult with persons from the 
                          private sector and persons from the public 
                          sector in developing the standards and 
                          procedures.
                      (D) Appropriate governmental activities.--The 
                  regulations shall include a methodology for determining 
                  what types of activities performed by an agency should 
                  continue to be performed by the agency or any other 
                  agency.
      (b) Compliance and Implementation Assistance.--
              (1) OMB center for commercial activities.--The Director of 
          the Office of Management and Budget shall establish a Center 
          for Commercial Activities and Privatization within the Office 
          of Management and Budget.
              (2) Responsibilities.--The Center--
                      (A) shall be responsible for the implementation of 
                  and compliance with the policies, standards, and 
                  procedures that are set forth in this Act or are 
                  prescribed to carry out this Act; and
                      (B) shall provide agencies and private sector 
                  entities with guidance, information, and other 
                  assistance appropriate for facilitating conversions to 
                  use of private sector entities for providing goods and 
                  services on behalf of the Federal Government.
  
  SEC. 5. STUDY AND REPORT ON COMMERCIAL ACTIVITIES OF THE GOVERNMENT.
  
      (a) Annual Performance Plan.--Section 1115(a) of title 31, United 
  States Code, is amended--
              (1) by striking ``and'' at the end of paragraph (5);
              (2) by striking the period at the end of paragraph (6) and 
          inserting ``; and''; and
              (3) by adding at the end the following:
              ``(7) include--
                      ``(A) the identity of each program activity that is 
                  performed for the agency by a private sector entity in 
                  accordance with the Freedom From Government Competition 
                  Act of 1997; and
                      ``(B) the identity of each program activity that is 
                  not subject to the Freedom From Government Competition 
                  Act of 1997 by reason of an exception set forth in that 
                  Act, together with a discussion specifying why the 
                  activity is determined to be covered by the 
                  exception.''.
      (b) Annual Performance Report.--Section 1116(d)(3) of title 31, 
  United States Code, is amended--
              (1) by striking ``explain and describe,'' in the matter 
          preceding subparagraph (A);
              (2) in subparagraph (A), by inserting ``explain and 
          describe'' after ``(A)'';
              (3) in subparagraph (B)--
                      (A) by inserting ``explain and describe'' after 
                  ``(B)''; and
                      (B) by striking ``and'' at the end;
              (4) in subparagraph (C)--
                      (A) by inserting ``explain and describe'' after 
                  ``infeasible,''; and
                      (B) by inserting ``and'' at the end; and
              (5) by adding at the end the following:
              ``(D) in the case of an activity not performed by a private 
          sector entity--
                      ``(i) explain and describe whether the activity 
                  could be performed for the Federal Government by a 
                  private sector entity in accordance with the Freedom 
                  From Government Competition Act of 1997; and
                      ``(ii) if the activity could be performed by a 
                  private sector entity, set forth a schedule for 
                  converting to performance of the activity by a private 
                  sector entity;''.
  
  SEC. 6. DEFINITIONS.
  
      (a) Agency.--As used in this Act, the term ``agency'' means the 
  following:
              (1) Executive department.--An executive department as 
          defined by section 101 of title 5, United States Code.
              (2) Military department.--A military department as defined 
          by section 102 of such title.
              (3) Independent establishment.--An independent 
          establishment as defined by section 104(1) of such title.
      (b) Inherently Governmental Goods and Services.--
              (1) Performance of inherently governmental functions.--For 
          the purposes of section 3(c)(1)(A), goods or services are 
          inherently governmental in nature if the providing of such 
          goods or services is an inherently governmental function.
              (2) Inherently governmental functions described.--
                      (A) Functions included.--For the purposes of 
                  paragraph (1), a function shall be considered an 
                  inherently governmental function if the function is so 
                  intimately related to the public interest as to mandate 
                  performance by Federal Government employees. Such 
                  functions include 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 to--
                              (i) bind the United States to take or not 
                          to take some action by contract, policy, 
                          regulation, authorization, order, or otherwise;
                              (ii) determine, protect, and advance its 
                          economic, political, territorial, property, or 
                          other interests by military or diplomatic 
                          action, civil or criminal judicial proceedings, 
                          contract management, or otherwise;
                              (iii) significantly affect the life, 
                          liberty, or property of private persons;
                              (iv) commission, appoint, direct, or 
                          control officers or employees of the United 
                          States; or
                              (v) exert ultimate control over the 
                          acquisition, use, or disposition of the 
                          property, real or personal, tangible or 
                          intangible, of the United States, including the 
                          control or disbursement of appropriated and 
                          other Federal funds.
                      (B) Functions excluded.--For the purposes of 
                  paragraph (1), inherently governmental functions do not 
                  normally include--
                              (i) gathering information for or providing 
                          advice, opinions, recommendations, or ideas to 
                          Federal Government officials;
                              (ii) any function that is primarily 
                          ministerial or internal in nature (such as 
                          building security, mail operations, operation 
                          of cafeterias, laundry and housekeeping, 
                          facilities operations and maintenance, 
                          warehouse operations, motor vehicle fleet 
                          management and operations, or other routine 
                          electrical or mechanical services); or
                              (iii) any good or service which is 
                          currently or could reasonably be produced or 
                          performed, respectively, by an entity in the 
                          private sector.
target: Freedom From Government Competition Act of 1997 - Requires Federal agencies to obtain all goods and services necessary for or beneficial to the accomplishment of their authorized functions by procurement from private sources, unless except as specified. 
  (Sec. 4) Directs the Director of the Office of Management and Budget (OMB) to establish a Center for Commercial Activities and Privatization within OMB to:  (1) be responsible for the implementation of and compliance with the policies, standards, and procedures that are set forth in this Act or are prescribed to carry out this Act; and (2) provide agencies and private sector entities with guidance, information, and other assistance appropriate for facilitating conversions to use of private sector entities for providing goods and services on behalf of the Federal Government. 
  (Sec. 5) Amends Federal law to require that each agency shall include in its annual performance plan the identity of each program activity that is:  (1) performed for the agency by a private sector entity in accordance with this Act; and (2) not subject to this Act by reason of an exception, together with a discussion specifying why the activity is determined to be covered by the exception. 
  Revises requirements regarding program performance reports to require each agency, in its annual program performance report, in the case of an activity not performed by a private sector entity, to:  (1) explain and describe whether an activity not performed by a private sector entity could be performed by a private sector entity in accordance with this Act; and (2) if the activity could be performed by a private sector entity, set forth a schedule for converting to performance of the activity by a private sector entity.
feat_title: Freedom From Government Competition Act of 1997