President Bush has signed into law two key Defense Department budget measures passed by Congress late last month that affect, among other things, contracting-out policy at DoD. The Defense appropriations bill (P.L. 109-148) specifies that where DoD functions employ 10 or more federal workers, the in-house bid must be based on a “most efficient organization” and a contract can be awarded only if the contractor shows a savings of at least 10 percent or $10 million. Similar language applying to most other agencies was enacted as part of a separate appropriations bill. The DoD measure also prohibits contractors from gaining an advantage through offering their employees health insurance with less of an employer contribution than federal employees get under the Federal Employees Health Benefits program.