L. Elaine Halchin
Specialist in American National Government
Kate M. Manuel
Legislative Attorney
Shawn Reese
Analyst in Emergency Management and Homeland Security Policy
Moshe Schwartz
Specialist in Defense Acquisition
On March 31, 2010, the Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) issued a proposed policy letter on inherently governmental functions and other “work reserved for performance by federal government employees.” While not final, the policy letter represents the Obama Administration’s proposed guidance for agencies determining (1) whether particular functions are inherently governmental and (2) when functions closely associated with the performance of inherently governmental functions and critical functions should be performed by government personnel. Under existing law, agencies cannot contract out inherently governmental functions, and they must give “special consideration” to using government personnel in performing functions closely associated with the performance of inherently governmental functions. No limitations upon contracting out critical functions currently exist.
In keeping with the requirements of Section 321 of the Duncan Hunter National Defense Authorization Act for FY2009 (P.L. 110-417), which tasked OMB with developing a “single consistent definition” of “inherently governmental function,” the proposed policy letter adopts the definition of the Federal Activities Inventory Reform (FAIR) Act. The FAIR Act defines an “inherently governmental function” as one that is “so intimately related to the public interest as to require performance by Federal Government employees.” However, neither the proposed policy letter nor the notice from OFPP introducing it indicates whether or how the Obama Administration would amend the definitions of “inherently governmental function” in the Federal Acquisition Regulation, OMB Circular A-76, or other executive branch regulations and policy documents.
The proposed policy letter defines a “critical function” as one that is “necessary to the agency being able to effectively perform and maintain control of its mission and operations.” This definition, and the accompanying guidance on when critical functions and functions associated with the performance of inherently governmental functions should be performed in-house, also respond to the requirements of Section 321 of the Duncan Hunter National Defense Authorization Act. Among other things, Section 321 tasked OMB with developing criteria that agencies could use in identifying critical functions and positions that should be performed by government personnel to ensure that agencies develop and maintain “sufficient organic expertise and technical capacity.” President Obama’s March 4, 2009, memorandum on government contracting similarly charged OMB with clarifying when outsourcing is “appropriate.”
The proposed policy letter raises several legal and policy issues of potential interest to Congress, given recently enacted and proposed legislation regarding inherently governmental functions and other limitations upon contracting out (e.g., P.L. 111-8, P.L. 111-84, P.L. 111-117). Key among these issues are (1) the relationship between the proposed policy letter and other executive branch authorities on inherently governmental and related functions; (2) whether the proposed policy letter would necessarily result in changes in agencies’ use of contractors to perform certain functions that some Members of Congress and commentators claim are inherently governmental (e.g., security services during contingency operations); and (3) the potential demands of any new requirements upon the acquisition workforce.
The Office of Federal Procurement Policy has reportedly indicated that a final policy letter will be released “in early 2011.”
Date of Report: January 3, 2011
Number of Pages: 20
Order Number: R41209
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Specialist in American National Government
Kate M. Manuel
Legislative Attorney
Shawn Reese
Analyst in Emergency Management and Homeland Security Policy
Moshe Schwartz
Specialist in Defense Acquisition
On March 31, 2010, the Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) issued a proposed policy letter on inherently governmental functions and other “work reserved for performance by federal government employees.” While not final, the policy letter represents the Obama Administration’s proposed guidance for agencies determining (1) whether particular functions are inherently governmental and (2) when functions closely associated with the performance of inherently governmental functions and critical functions should be performed by government personnel. Under existing law, agencies cannot contract out inherently governmental functions, and they must give “special consideration” to using government personnel in performing functions closely associated with the performance of inherently governmental functions. No limitations upon contracting out critical functions currently exist.
In keeping with the requirements of Section 321 of the Duncan Hunter National Defense Authorization Act for FY2009 (P.L. 110-417), which tasked OMB with developing a “single consistent definition” of “inherently governmental function,” the proposed policy letter adopts the definition of the Federal Activities Inventory Reform (FAIR) Act. The FAIR Act defines an “inherently governmental function” as one that is “so intimately related to the public interest as to require performance by Federal Government employees.” However, neither the proposed policy letter nor the notice from OFPP introducing it indicates whether or how the Obama Administration would amend the definitions of “inherently governmental function” in the Federal Acquisition Regulation, OMB Circular A-76, or other executive branch regulations and policy documents.
The proposed policy letter defines a “critical function” as one that is “necessary to the agency being able to effectively perform and maintain control of its mission and operations.” This definition, and the accompanying guidance on when critical functions and functions associated with the performance of inherently governmental functions should be performed in-house, also respond to the requirements of Section 321 of the Duncan Hunter National Defense Authorization Act. Among other things, Section 321 tasked OMB with developing criteria that agencies could use in identifying critical functions and positions that should be performed by government personnel to ensure that agencies develop and maintain “sufficient organic expertise and technical capacity.” President Obama’s March 4, 2009, memorandum on government contracting similarly charged OMB with clarifying when outsourcing is “appropriate.”
The proposed policy letter raises several legal and policy issues of potential interest to Congress, given recently enacted and proposed legislation regarding inherently governmental functions and other limitations upon contracting out (e.g., P.L. 111-8, P.L. 111-84, P.L. 111-117). Key among these issues are (1) the relationship between the proposed policy letter and other executive branch authorities on inherently governmental and related functions; (2) whether the proposed policy letter would necessarily result in changes in agencies’ use of contractors to perform certain functions that some Members of Congress and commentators claim are inherently governmental (e.g., security services during contingency operations); and (3) the potential demands of any new requirements upon the acquisition workforce.
The Office of Federal Procurement Policy has reportedly indicated that a final policy letter will be released “in early 2011.”
Date of Report: January 3, 2011
Number of Pages: 20
Order Number: R41209
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
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