10 U.S.C. § 2463 — Guidelines and procedures for use of civil-

Page 1945 TITLE 10—ARMED FORCES § 2463 resentatives of the private sector, including organiza- tions representing small businesses.’’ § 2461a. Development and implementation of sys- tem for monitoring cost saving resulting from public-private competitions (a) SYSTEM FOR MONITORING PERFORMANCE.— (1) The Secretary of Defense shall monitor the performance, including the cost of performance, of each function of the Department of Defense that, after October 30, 2000, is the subject of a public-private competition conducted under sec- tion 2461 of this title. (2) In carrying out paragraph (1), the Sec- retary shall— (A) compare the cost of performing the func- tion before the public-private competition to the cost of performing the function after the implementation of the results of the public- private competition; and (B) identify any actual savings of the De- partment of Defense after the implementation of the results of the public-private competi- tion and compare such savings to the esti- mated savings identified pursuant to section 2461(a)(1)(E) of this title for that public-pri- vate competition; (3) The monitoring of a function shall con- tinue under this section for at least five years after the conversion, reorganization, or re- engineering of the function pursuant to such a public-private competition. (b) CONSIDERATION IN PREPARATION OF FUTURE- YEARS DEFENSE PROGRAM.—In preparing the fu- ture-years defense program under section 221 of this title, the Secretary of Defense shall, for the fiscal years covered by the program, estimate and take into account the costs to be incurred and the savings to be derived from the perform- ance of functions by workforces selected in pub- lic-private competitions conducted under sec- tion 2461 of this title. The Secretary shall con- sider the results of the monitoring under this section in making the estimates. (Added Pub. L. 106–398, § 1 [[div. A], title III, § 354(a)], Oct. 30, 2000, 114 Stat. 1654, 1654A–73; amended Pub. L. 107–107, div. A, title X, § 1048(a)(21), (c)(11), Dec. 28, 2001, 115 Stat. 1224, 1226; Pub. L. 109–163, div. A, title III, § 341(d), (g)(2)(C), Jan. 6, 2006, 119 Stat. 3199, 3200.) Editorial Notes AMENDMENTS 2006—Pub. L. 109–163, § 341(g)(2)(C), substituted ‘‘De- velopment and implementation of system for moni- toring cost saving resulting from public-private com- petitions’’ for ‘‘Development of system for monitoring cost savings resulting from workforce reductions’’ in section catchline. Subsec. (a). Pub. L. 109–163, § 341(d)(1), (2), redesig- nated subsec. (b) as (a) and struck out former subsec. (a) which defined ‘‘workforce review’’. Subsec. (a)(1). Pub. L. 109–163, § 341(d)(3)(A), sub- stituted ‘‘monitor’’ for ‘‘establish a system for moni- toring’’ and ‘‘a public-private competition conducted under section 2461 of this title’’ for ‘‘a workforce re- view’’. Subsec. (a)(2). Pub. L. 109–163, § 341(d)(3)(B), added par. (2) and struck out former par. (2) which established re- quirements for the monitoring system. Subsec. (a)(3). Pub. L. 109–163, § 341(d)(3)(C), inserted ‘‘pursuant to such a public-private competition’’ after ‘‘reengineering of the function’’. Subsec. (b). Pub. L. 109–163, § 341(d)(4), substituted ‘‘public-private competitions conducted under section 2461 of this title’’ for ‘‘workforce reviews’’. Pub. L. 109–163, § 341(d)(2), redesignated subsec. (e) as (b). Former subsec. (b) redesignated (a). Subsecs. (c) to (e). Pub. L. 109–163, § 341(d)(1), (2), re- designated subsec. (e) as (b) and struck out former sub- secs. (c) and (d) which related to waiver for certain workforce reviews and annual report, respectively. 2001—Subsec. (a)(2). Pub. L. 107–107, § 1048(a)(21), sub- stituted ‘‘efficiency’’ for ‘‘effeciency’’. Subsec. (b)(1). Pub. L. 107–107, § 1048(c)(11), substituted ‘‘October 30, 2000,’’ for ‘‘the date of the enactment of this section,’’. [§ 2462. Repealed. Pub. L. 113–291, div. A, title X, § 1060(a)(2)(A), Dec. 19, 2014, 128 Stat. 3502] Section, added Pub. L. 100–370, § 2(a)(1), July 19, 1988, 102 Stat. 853; amended Pub. L. 109–163, div. A, title III, § 341(c)(1), Jan. 6, 2006, 119 Stat. 3197, related to reports on public-private competition. § 2463. Guidelines and procedures for use of civil- ian employees to perform Department of De- fense functions (a) GUIDELINES REQUIRED.—(1) The Under Sec- retary of Defense for Personnel and Readiness shall devise and implement guidelines and pro- cedures to ensure that consideration is given to using, on a regular basis, Department of Defense civilian employees to perform new functions and functions that are performed by contractors and could be performed by Department of Defense ci- vilian employees. The Secretary of a military department may prescribe supplemental regula- tions, if the Secretary determines such regula- tions are necessary for implementing such guidelines within that military department. (2) The guidelines and procedures required under paragraph (1) may not include any specific limitation or restriction on the number of func- tions or activities that may be converted to per- formance by Department of Defense civilian em- ployees. (b) SPECIAL CONSIDERATION FOR CERTAIN FUNC- TIONS.—The guidelines and procedures required under subsection (a) shall provide for special consideration to be given to using Department of Defense civilian employees to perform any function that— (1) is performed by a contractor and— (A) is a critical function that— (i) is necessary to maintain sufficient Government expertise and technical capa- bilities; or (ii) entails operational risk associated with contractor performance; (B) is an acquisition workforce function; (C) is a function closely associated with the performance of an inherently govern- mental function; (D) has been performed by Department of Defense civilian employees at any time dur- ing the previous 10-year period; (E) has been performed pursuant to a con- tract awarded on a non-competitive basis; or (F) has been performed poorly, as deter- mined by a contracting officer during the 5- year period preceding the date of such deter- mination, because of excessive costs or infe- rior quality; or (2) is a new requirement, with particular em- phasis given to a new requirement that is Page 1946 TITLE 10—ARMED FORCES § 2463 similar to a function previously performed by Department of Defense civilian employees or is a function closely associated with the per- formance of an inherently governmental func- tion. (c) EXCLUSION OF CERTAIN FUNCTIONS FROM COMPETITIONS.—The Secretary of Defense may not conduct a public-private competition under this chapter, Office of Management and Budget Circular A–76, or any other provision of law or regulation before— (1) in the case of a new Department of De- fense function, assigning the performance of the function to Department of Defense civilian employees; (2) in the case of any Department of Defense function described in subsection (b), con- verting the function to performance by De- partment of Defense civilian employees; or (3) in the case of a Department of Defense function performed by Department of Defense civilian employees, expanding the scope of the function. (d) USE OF FLEXIBLE HIRING AUTHORITY.—(1) The Secretary of Defense may use the flexible hiring authority available to the Secretary pur- suant to section 9902 of title 5, to facilitate the performance by Department of Defense civilian employees of functions described in subsection (b). (2) The Secretary shall make use of the inven- tory required by section 4505(c) of this title for the purpose of identifying functions that should be considered for performance by Department of Defense civilian employees pursuant to sub- section (b). (e) DETERMINATIONS RELATING TO THE CONVER- SION OF CERTAIN FUNCTIONS.—(1) Except as pro- vided in paragraph (2), in determining whether a function should be converted to performance by Department of Defense civilian employees, the Secretary of Defense shall— (A) develop methodology for determining costs based on the guidance outlined in the Di- rective-Type Memorandum 09–007 entitled ‘‘Es- timating and Comparing the Full Costs of Ci- vilian and Military Manpower and Contractor Support’’ or any successor guidance for the de- termination of costs when costs are the sole basis for the determination; (B) take into consideration any supple- mental guidance issued by the Secretary of a military department for determinations af- fecting functions of that military department; and (C) ensure that the difference in the cost of performing the function by a contractor com- pared to the cost of performing the function by Department of Defense civilian employees would be equal to or exceed the lesser of— (i) 10 percent of the personnel-related costs for performance of that function; or (ii) $10,000,000. (2) Paragraph (1) shall not apply to any func- tion that is inherently governmental or any function described in subparagraph (A), (B), or (C) of subsection (b)(1). (f) NOTIFICATION RELATING TO THE CONVERSION OF CERTAIN FUNCTIONS.—The Secretary of De- fense shall establish procedures for the timely notification of any contractor who performs a function that the Secretary plans to convert to performance by Department of Defense civilian employees pursuant to subsection (a). The Sec- retary shall provide a copy of any such notifica- tion to the congressional defense committees. (g) DEFINITIONS.—In this section: (1) The term ‘‘functions closely associated with inherently governmental functions’’ has the meaning given that term in section 4508(b)(3) of this title. (2) The term ‘‘acquisition function’’ has the meaning given that term under section 1721(a) of this title. (3) The term ‘‘inherently governmental func- tion’’ has the meaning given that term in the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note). (Added Pub. L. 110–181, div. A, title III, § 324(a)(1), Jan. 28, 2008, 122 Stat. 60; amended Pub. L. 111–383, div. A, title III, § 353, Jan. 7, 2011, 124 Stat. 4194; Pub. L. 112–81, div. A, title IX, § 938, Dec. 31, 2011, 125 Stat. 1547; Pub. L. 116–283, div. A, title XVIII, § 1883(b)(2), Jan. 1, 2021, 134 Stat. 4294.) Editorial Notes PRIOR PROVISIONS Provisions similar to those in this section were con- tained in Pub. L. 109–163, div. A, title III, § 343, Jan. 6, 2006, 119 Stat. 3200, which was set out as a note under section 2461 of this title, prior to repeal by Pub. L. 110–181, div. A, title III, § 324(c), Jan. 28, 2008, 122 Stat. 61. A prior section 2463, added Pub. L. 100–370, § 2(a)(1), July 19, 1988, 102 Stat. 853; amended Pub. L. 101–189, div. A, title XVI, § 1622(c)(7), Nov. 29, 1989, 103 Stat. 1604; Pub. L. 101–510, div. A, title XIII, § 1301(14), Nov. 5, 1990, 104 Stat. 1668; Pub. L. 105–85, div. A, title III, § 385(a), Nov. 18, 1997, 111 Stat. 1712, related to collection and re- tention of cost information data on the conversion of services and functions of the Department of Defense to or from contractor performance, prior to repeal by Pub. L. 109–163, div. A, title III, § 341(f), Jan. 6, 2006, 119 Stat. 3199. AMENDMENTS 2021—Subsec. (d)(2). Pub. L. 116–283 substituted ‘‘sec- tion 4505(c)’’ for ‘‘section 2330a(c)’’. Subsec. (g)(1). Pub. L. 116–283 substituted ‘‘section 4508(b)(3)’’ for ‘‘section 2383(b)(3)’’. 2011—Subsec. (b)(1). Pub. L. 112–81, § 938(1), added sub- pars. (A), (B), and (D), redesignated former subpars. (B), (C), and (D) as (C), (E), and (F), and struck out former subpar. (A) which read as follows: ‘‘has been performed by Department of Defense civilian employees at any time during the previous 10 years;’’. Subsec. (d)(1). Pub. L. 111–383 struck out ‘‘under the National Security Personnel System, as established’’ before ‘‘pursuant to section 9902 of title 5’’. Subsecs. (e), (f). Pub. L. 112–81, § 938(3), added subsecs. (e) and (f). Former subsec. (e) redesignated (g). Subsec. (g). Pub. L. 112–81, § 938(4), substituted ‘‘this section:’’ for ‘‘this section the term ‘functions closely associated with inherently governmental functions’ has the meaning given that term in section 2383(b)(3) of this title.’’ and added pars. (1) to (3). Pub. L. 112–81, § 938(2), redesignated subsec. (e) as (g). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation Page 1947 TITLE 10—ARMED FORCES § 2464 and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title. PROHIBITION ON ESTABLISHING GOALS OR QUOTAS FOR CONVERSION OF FUNCTIONS TO PERFORMANCE BY DE- PARTMENT OF DEFENSE CIVILIAN EMPLOYEES Pub. L. 111–383, div. A, title III, § 323, Jan. 7, 2011, 124 Stat. 4184, as amended by Pub. L. 117–81, div. A, title XVII, § 1702(b)(2), Dec. 27, 2021, 135 Stat. 2155, provided that: ‘‘(a) PROHIBITION.—The Secretary of Defense may not establish, apply, or enforce any numerical goal, target, or quota for the conversion of Department of Defense functions to performance by Department of Defense ci- vilian employees, unless such goal, target, or quota is based on considered research and analysis, as required by section 2463, 3137 [sic, probably should refer to former section 235], or 4505 of title 10, United States Code. ‘‘(b) DECISIONS TO INSOURCE.—In deciding which func- tions should be converted to performance by Depart- ment of Defense civilian employees pursuant to section 2463 of title 10, United States Code, the Secretary of De- fense shall use the costing methodology outlined in the Directive-Type Memorandum 09–007 (Estimating and Comparing the Full Costs of Civilian and Military Man- power and Contractor Support) or any successor guid- ance for the determination of costs when costs are the sole basis for the decision. The Secretary of a military department may issue supplemental guidance to assist in such decisions affecting functions of that military department. ‘‘(c) REPORTS.— ‘‘(1) REPORT TO CONGRESS.—Not later than March 31, 2011, the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the deci- sions with respect to the conversion of functions to performance by Department of Defense civilian em- ployees made during fiscal year 2010. Such report shall identify, for each such decision— ‘‘(A) the agency or service of the Department in- volved in the decision; ‘‘(B) the basis and rationale for the decision; and ‘‘(C) the number of contractor employees whose functions were converted to performance by De- partment of Defense civilian employees. ‘‘(2) COMPTROLLER GENERAL REVIEW.—Not later than 120 days after the submittal of the report under para- graph (1), the Comptroller General of the United States shall submit to the congressional defense com- mittees an assessment of the report. ‘‘(d) CONSTRUCTION.—Nothing in this section shall be construed— ‘‘(1) to preclude the Secretary of Defense from es- tablishing, applying, and enforcing goals for the con- version of acquisition functions and other critical functions to performance by Department of Defense civilian employees, where such goals are based on considered research and analysis; or ‘‘(2) to require the Secretary of Defense to conduct a cost comparison before making a decision to con- vert any acquisition function or other critical func- tion to performance by Department of Defense civil- ian employees, where factors other than cost serve as a basis for the Secretary’s decision.’’ DEADLINE FOR ISSUANCE OF GUIDELINES AND PROCEDURES Pub. L. 110–181, div. A, title III, § 324(a)(3), Jan. 28, 2008, 122 Stat. 61, provided that: ‘‘The Secretary of De- fense shall implement the guidelines and procedures re- quired under section 2463 of title 10, United States Code, as added by paragraph (1), by not later than 60 days after the date of the enactment of this Act [Jan. 28, 2008].’’ § 2464. Core logistics capabilities (a) NECESSITY FOR CORE LOGISTICS CAPABILI- TIES.—(1) It is essential for the national defense that the Department of Defense maintain a core logistics capability that is Government-owned and Government-operated (including Govern- ment personnel and Government-owned and Government-operated equipment and facilities) to ensure a ready and controlled source of tech- nical competence and resources necessary to en- sure effective and timely response to a mobiliza- tion, national defense contingency situations, and other emergency requirements. (2) The Secretary of Defense shall identify the core logistics capabilities described in para- graph (1) and the workload required to maintain those capabilities. (3) The core logistics capabilities identified under paragraphs (1) and (2) shall include those capabilities that are necessary to maintain and repair the weapon systems and other military equipment (including mission-essential weapon systems or materiel not later than four years after achieving initial operational capability, but excluding systems and equipment under spe- cial access programs, nuclear aircraft carriers, and commercial products or commercial serv- ices described in paragraph (5)) that are identi- fied by the Secretary, in consultation with the Chairman of the Joint Chiefs of Staff, as nec- essary to enable the armed forces to fulfill the strategic and contingency plans prepared by the Chairman of the Joint Chiefs of Staff under sec- tion 153(a) of this title. (4) The Secretary of Defense shall require the performance of core logistics workloads nec- essary to maintain the core logistics capabili- ties identified under paragraphs (1), (2), and (3) at Government-owned, Government-operated fa- cilities of the Department of Defense (including Government-owned, Government-operated fa- cilities of a military department) and shall as- sign such facilities sufficient workload to ensure cost efficiency and technical competence in peacetime while preserving the surge capacity and reconstitution capabilities necessary to sup- port fully the strategic and contingency plans referred to in paragraph (3). (5) The commercial products or commercial services covered by paragraph (3) are commer- cial products (as defined in section 103 of title 41) or commercial services (as defined in section 103a of such title) that have been sold or leased in substantial quantities to the general public and are purchased without modification in the same form that they are sold in the commercial marketplace, or with minor modifications to meet Federal Government requirements. (b) LIMITATION ON CONTRACTING.—(1) Except as provided in paragraph (2), performance of work- load needed to maintain a logistics capability identified by the Secretary under subsection (a)(2) may not be contracted for performance by non-Government personnel under the procedures and requirements of Office of Management and Budget Circular A–76 or any successor adminis- trative regulation or policy (hereinafter in this section referred to as OMB Circular A–76). (2) The Secretary of Defense may waive para- graph (1) in the case of any such logistics capa-