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_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

Inherently Governmental Functions and Other Work Reserved for Performance by Federal Government Employees: The Obama Administration’s Proposed Policy Letter

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

October 1, 2010

http://opencrs.com/document/R41209/2010-10-01/download/1013/

[full-text, 20 pages]

 

Summary

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, although legislation introduced in the 111th Congress (S. 924) would, if enacted,

require agency heads to ensure that “mission essential functions” are performed by government

employees. Some commentators consider mission-essential functions to be critical ones.

 

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, H.R. 1436,

H.R. 2142, H.R. 2177, H.R. 2682, H.R. 2736, H.R. 2868, S. 924, S. 3607, S. 3611, S. 3677). 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.

 

Contents

Introduction ...............................................................................................................................1

Existing Law..............................................................................................................................1

Proposed Policy Letter ................................................................................................................4

Inherently Governmental Functions.......................................................................................5

Functions Closely Associated with the Performance of Inherently Governmental

Functions ...........................................................................................................................6

Critical Functions..................................................................................................................7

Issues for Congress .....................................................................................................................7

Consistency with and Relationship to Other Executive Branch Authorities on

Inherently Governmental and Related Functions.................................................................8

Potential Treatment of Specific Functions Under the Proposed Letter ..................................10

Federal Building Security.............................................................................................. 11

Private Security Contractors..........................................................................................12

Demands of the Proposed Workload on the Acquisition Workforce......................................14

Possible Legislation ............................................................................................................15

Opportunities for Further Reforms?.....................................................................................16

Contacts

Author Contact Information ......................................................................................................17

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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