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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

P. L. 108-375

House Conference Report 108-767

SEC. 804. CONTRACTOR PERFORMANCE OF ACQUISITION FUNCTIONS CLOSELY ASSOCIATED WITH INHERENTLY GOVERNMENTAL FUNCTIONS.

(a) LIMITATION. —

(1) Chapter 141 of title 10, United States Code, is amended by inserting after section 2382 the following new section:

     "§ 2383. Contractor performance of acquisition functions closely associated with inherently governmental functions

"(a) LIMITATION. — The head of an agency may enter into a contract for the performance of acquisition functions closely associated with inherently governmental functions only if the contracting officer for the contract ensures that —

"(1) appropriate military or civilian personnel of the Department of Defense cannot reasonably be made available to perform the functions;

"(2) appropriate military or civilian personnel of the Department of Defense are —

"(A) to supervise contractor performance of the contract; and

"(B) to perform all inherently governmental functions associated with the functions to be performed under the contract; and

"(3) the agency addresses any potential organizational conflict of interest of the contractor in the performance of the functions under the contract, consistent with subpart 9.5 of part 9 of the Federal Acquisition Regulation and the best interests of the Department of Defense.

"(b) DEFINITIONS. — In this section:

"(1) The term ‘head of an agency’ has the meaning given such term in section 2302(1) of this title, except that such term does not include the Secretary of Homeland Security or the Administrator of the National Oceanic and Atmospheric Administration. "

(2) The term ‘inherently governmental functions’ has the meaning given such term in subpart 7.5 of part 7 of the Federal Acquisition Regulation.

"(3) The term ‘functions closely associated with inherently governmental functions’ means the functions described in section 7.503(d) of the Federal Acquisition Regulation.

"(4) The term ‘organizational conflict of interest’ has the meaning given such term in subpart 9.5 of part 9 of the Federal Acquisition Regulation.’’.

(2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 2382 the following new item:

"2383. Contractor performance of acquisition functions closely associated with inherently governmental functions.".

(b) EFFECTIVE DATE. — Section 2383 of title 10, United States Code (as added by subsection (a)), shall apply to contracts entered into on or after the date of the enactment of this Act.

The Senate amendment contained a provision (sec. 867) that would limit contracting for functions closely associated with inherently governmental functions unless the Secretary of Defense determines that :  (1) appropriate military or covilian personnel are not available to perform such function; (2) appropriate military or civilian personnel are able to supervise and perform all inherently governmental functions; and (3) the contractor to perform the function does not have an organizational conflict of interest or the appearance of an organizational conflict of interest.

The House bill contained no similar provision.

The House recedes with an amendment that would clarify the applicability of the provision, and require the agency to address any potential contractor organizational conflict of interest consistent with subpart 9.5 of part 9 of the Federal Acquisition Regulation and the best interest of the Department of Defense.

Senate Report 108-260