1. (a) Policies and Procedures.— The Secretary of Defense shall establish policies and procedures for determining the most appropriate and cost efficient mix of military, civilian, and contractor personnel to perform the mission of the Department of Defense.
2. (b) Risk Mitigation Over Cost.— In establishing the policies and procedures under subsection (a), the Secretary shall clearly provide that attainment of a Department of Defense workforce sufficiently sized and comprised of the appropriate mix of personnel necessary to carry out the mission of the Department and the core mission areas of the armed forces (as identified pursuant to section 118b of this title) takes precedence over cost.

3. (c) Delegation of Responsibilities.— The Secretary shall delegate responsibility for implementation of the policies and procedures established under subsection (a) as follows:

   1. (1) The Under Secretary of Defense for Personnel and Readiness shall have overall responsibility for guidance to implement such policies and procedures.
   2. (2) The Secretaries of the military departments and the heads of the Defense Agencies shall have overall responsibility for the requirements determination, planning, programming, and budgeting for such policies and procedures.
   3. (3) The Under Secretary of Defense for Acquisition, Technology, and Logistics shall be responsible for ensuring that the defense acquisition system, as defined in section 2545 of this title, is consistent with such policies and procedures and with implementation pursuant to paragraph (1).
   4. (4) The Under Secretary of Defense (Comptroller) shall be responsible for ensuring that the budget for the Department of Defense is consistent with such policies and procedures. The Under Secretary shall notify the congressional defense committees of any deviations from such policies and procedures that are recommended in the budget.

4. (d) Use of Plan, Inventory, and List.— The policies and procedures established by the Secretary under subsection (a) shall specifically require the Department of Defense to use the following when making determinations regarding the appropriate workforce mix necessary to perform its mission:

   1. (1) The civilian strategic workforce plan (required by section 115b of this title).
   2. (2) The civilian positions master plan (required by section 1597(c) of this title).
   3. (3) The inventory of contracts for services required by section 2330a(c) of this title.
   4. (4) The list of activities required by the Federal Activities Inventory Reform Act of 1998 (Public Law 105–270; 31 U.S.C. 501 note).

5. (e) Considerations in Converting Performance of Functions.— If conversion of functions to performance by either Department of Defense civilian personnel or contractor personnel is considered, the Under Secretary of Defense for Personnel and Readiness shall ensure compliance with—

   1. (1) section 2463 of this title (relating to guidelines and procedures for use of civilian employees to perform Department of Defense functions); and
   2. (2) section 2461 of this title (relating to public-private competition required before conversion to contractor performance).

6. (f) Construction With Other Requirements.— Nothing in this title may be construed as authorizing—

   1. (1) a military department or Defense Agency to directly convert a function to contractor performance without complying with section 2461 of this title;
   2. (2) the use of contractor personnel for functions that are inherently governmental even if there is a military or civilian personnel shortfall in the Department of Defense;

   3. (3) restrictions on the use by a military department or Defense Agency of contractor personnel to perform functions closely associated with inherently governmental functions, provided that—

      1. (A) there are adequate resources to maintain sufficient capabilities within the Department in the functional area being considered for performance by contractor personnel; and
      2. (B) there is adequate Government oversight of contractor personnel performing such functions;
   4. (4) the establishment of numerical goals or budgetary savings targets for the conversion of functions to performance by either Department of Defense civilian personnel or for conversion to performance by contractor personnel; or
   5. (5) the imposition of a civilian hiring freeze that may inhibit the implementation of the policies and procedures established under subsection (a).

(Added Pub. L. 101–510, div. A, title XIV, § 1483(b)(2), Nov. 5, 1990, 104 Stat. 1715; amended Pub. L. 112–81, div. A, title IX, § 931(a), Dec. 31, 2011, 125 Stat. 1541.)

Prior Provisions Provisions similar to those in this section were contained in section 115(b)(5) of this title, prior to repeal by Pub. L. 101–510, § 1483(a).

Amendments 2011—Pub. L. 112–81 amended section generally. Prior to amendment, text read as follows: “The Secretary of Defense shall use the least costly form of personnel consistent with military requirements and other needs of the Department. In developing the annual personnel authorization requests to Congress and in carrying out personnel policies, the Secretary shall—

“(1) consider particularly the advantages of converting from one form of personnel (military, civilian, or private contract) to another for the performance of a specified job; and

“(2) include in each manpower requirements report submitted under section 115a of this title a complete justification for converting from one form of personnel to another.”

Savings To Be Achieved in Civilian Personnel Workforce and Service Contractor Workforce of the Department of Defense Pub. L. 112–239, div. A, title IX, § 955, Jan. 2, 2013, 126 Stat. 1896, provided that:

1. “(a) Required Plan.—

   1. “(1) In general.— The Secretary of Defense shall ensure that the civilian personnel workforce and service contractor workforce of the Department of Defense are appropriately sized to support and execute the National Military Strategy, taking into account military personnel and force structure levels. Not later than 90 days after the date of the enactment of this Act [Jan. 2, 2013], the Secretary of Defense shall develop and begin to execute an efficiencies plan for the civilian personnel workforce and service contractor workforce of the Department of Defense.
   2. “(2) Consistency with other policies and procedures.— The Secretary shall ensure the plan required under this subsection is consistent with the policies and procedures required under section 129a of title 10, United States Code, as implemented under the policies issued by the Under Secretary of Defense for Personnel and Readiness for determining the most appropriate and cost-efficient mix of military, civilian, and service contractor personnel to perform the missions of the Department of Defense.
2. “(b) Savings.— The plan required under subsection (a) shall achieve savings in the total funding for each workforce covered by such plan over the period from fiscal year 2012 through fiscal year 2017 that are not less, as a percentage of such funding, than the savings in funding for basic military personnel pay achieved from reductions in military end strengths over the same period of time.

3. “(c) Exclusions.— In developing and implementing the plan required by subsection (a) and achieving the savings percentages required by subsection (b), the Secretary of Defense may exclude expenses related to the performance of functions identified as core or critical to the mission of the Department, consistent with the workload analysis and risk assessments required by sections 129 and 129a of title 10, United States Code. In making a determination of core or critical functions, the Secretary shall consider at least the following:

   1. “(1) Civilian personnel expenses for personnel as follows:

      1. “(A) Personnel in Mission Critical Occupations, as defined by the Civilian Human Capital Strategic Plan of the Department of Defense and the Acquisition Workforce Plan of the Department of Defense.
      2. “(B) Personnel employed at facilities providing core logistics capabilities pursuant to section 2464 of title 10, United States Code.
      3. “(C) Personnel in the Offices of the Inspectors General of the Department of Defense.

   2. “(2) Service contractor expenses for personnel as follows:

      1. “(A) Personnel performing maintenance and repair of military equipment.
      2. “(B) Personnel providing medical services.
      3. “(C) Personnel performing financial audit services.
   3. “(3) Personnel expenses for personnel in the civilian personnel workforce or service contractor workforce performing such other critical functions as may be identified by the Secretary as requiring exemption in the interest of the national defense.

4. “(d) Reports.—

   1. “(1) Initial report.— Not later than 120 days after the date of the enactment of this Act [Jan. 2, 2013], 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 including a comprehensive description of the plan required by subsection (a).
   2. “(2) Status reports.— As part of the budget submitted by the President to Congress for each of fiscal years 2015 through 2018, the Secretary shall include a report describing the implementation of the plan during the prior fiscal year and any modifications to the plan required due to changing circumstances. Each such report shall include a summary of the savings achieved in such prior fiscal year through reductions in the military, civilian, and service contractor personnel workforces, and the number of military, civilian, and service contractor personnel reduced. In any case in which savings fall short of the annual target, the report shall include an explanation of the reasons for such shortfall.
   3. “(3) Exclusions.— Each report under paragraphs (1) and (2) shall specifically identify any exclusion granted by the Secretary under subsection (c) in the period of time covered by the report.
5. “(e) Limitation on Transfers of Functions.— The Secretary shall ensure that the savings required by this section are not achieved through unjustified transfers of functions between or among the military, civilian, and service contractor personnel workforces of the Department of Defense. Nothing in this section shall be construed to preclude the Secretary from exercising authority available to the Department under sections 129a, 2330a, 2461, and 2463 of title 10, United States Code.
6. “(f) Sense of Congress.— It is the sense of Congress that an amount equal to 30 percent of the amount of the reductions in appropriated funds attributable to reduced budgets for the civilian and service contractor workforces of the Department by reason of the plan required by subsection (a) should be made available for costs of assisting military personnel separated from the Armed Forces in the transition from military service.
7. “(g) Service Contractor Workforce Defined.— In this section, the term ‘service contractor workforce’ means contractor employees performing contract services, as defined in section 2330(c)(2) of title 10, United States Code, other than contract services that are funded out of amounts available for overseas contingency operations.
8. “(h) Comptroller General Review and Report.— For each fiscal year from fiscal year 2015 through fiscal year 2018, the Comptroller General of the United States shall review the status reports submitted by the Secretary as required by subsection (d)(2) to determine whether the savings required by subsection (b) are being achieved in the civilian personnel workforce and the service contractor workforce and whether the plan required under subsection (a) is being implemented consistent with sourcing and workforce management laws, including sections 129, 129a, 2330a, 2461, and 2463 of title 10, United States Code. The Comptroller General shall submit a report on the findings of each review to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] not later than 120 days after the end of each fiscal year covered by this subsection.”

Conversion of Military Positions to Civilian Positions Pub. L. 104–106, div. A, title X, § 1032, Feb. 10, 1996, 110 Stat. 429, as amended by Pub. L. 104–201, div. A, title XVI, § 1601, Sept. 23, 1996, 110 Stat. 2734, directed Secretary of Defense, by Sept. 30, 1996, to convert at least 3,000 military positions to civilian positions and, not later than Mar. 31, 1996, submit to Congress a plan for the implementation of conversion.

Prohibition on Use of Funds To Assign Supervisor’s Title or Grade Based Upon Number of People Supervised Pub. L. 104–61, title VIII, § 8031, Dec. 1, 1995, 109 Stat. 658, provided that:

“None of the funds appropriated during the current fiscal year and hereafter, may be used by the Department of Defense to assign a supervisor’s title or grade when the number of people he or she supervises is considered as a basis for this determination:

Provided, That savings that result from this provision are represented as such in future budget proposals.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 103–335, title VIII, § 8036, Sept. 30, 1994, 108 Stat. 2626.

Pub. L. 103–139, title VIII, § 8040, Nov. 11, 1993, 107 Stat. 1449.

Pub. L. 102–396, title IX, § 9053, Oct. 6, 1992, 106 Stat. 1914.

Pub. L. 102–172, title VIII, § 8055, Nov. 26, 1991, 105 Stat. 1184.

Pub. L. 101–511, title VIII, § 8063, Nov. 5, 1990, 104 Stat. 1888.

Pub. L. 101–165, title IX, § 9085, Nov. 21, 1989, 103 Stat. 1147.

Pub. L. 100–463, title VIII, § 8079, Oct. 1, 1988, 102 Stat. 2270–30.

Pub. L. 100–202, § 101(b) [title VIII, § 8105], Dec. 22, 1987, 101 Stat. 1329–43, 1329–81.