To require that a conversion to contractor performance of an activity or function of the Federal Government may not result in the loss of employment of any Federal worker with a severe disability employed in that activity or function.

Disabled Federal Employees Protection Act - Prohibits the termination of employment of a disabled Federal employee due to a conversion to contractor performance of any activity or function of an executive agency under Office of Management and Budget Circular A-76 or any other Federal policy, directive, or regulation. Exempts certain nonprofit agencies for the blind or severely handicapped from this prohibition if the terminated Federal employee is offered an equivalent position in the Federal Government or with the nonprofit agency.