OMB Takes First Step To Define Inherently Governmental Functions

The anti-private sector ideology of the current administration is nowhere more in evidence than in the efforts to take away jobs performed by private contractors in support of the federal government and turn them into government positions, called insourcing. The idea is to ensure that those activities that are “inherently governmental” in nature are done by government employees. What is an inherently governmental function? The Federal Acquisition Regulation (FAR) gives a number of examples including collecting taxes, criminal prosecution, representing the country in foreign policy, command of military forces, overseeing private contractors, aspects of intelligence collection and committing the United States government in a contract.

The Obama Administration has set quantitative targets for insourcing jobs without providing the necessary guidance so that departments and agencies can distinguish between insourcing jobs that relate to inherently governmental activities from those that anyone can and should be allowed to perform. In their zeal to obey their “master’s voice,” government departments and agencies have begun insourcing with a vengeance. In many instances, their rationale for insourcing positions bear no relationship to the FAR guidance or any other sensible standard. Some of the reasons proposed by the Department of Defense for insourcing include: operational risk, wartime assignments, esprit de corps, rotation, career progression, continuity of operations and management decision. What kind of standard is esprit de corps? Using such a standard every private sector job is a candidate for insourcing.

Now the Office of Management and Budget’s Office of Federal Procurement Policy (OFPP) has published a draft policy letter that promises to return sanity to the situation. The proposed policy proposes a definition of inherently governmental as a function that is “so intimately related to the public interest as to mandate performance by Federal
Employees” and that “require the interpretation and execution of the law.” Examples of inherently governmental functions, according to OFPP are those with the following classes of responsibility: “1) To bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise; (2) To determine, protect, and advance United States economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise; (3) To significantly affect the life, liberty, or property of private persons; (4) To commission, appoint, direct, or control officers or employees of the United States; or (5) To exert ultimate control over the acquisition, use, or disposition of the property, real or personal, tangible or intangible, of the United States, including the collection, control, or disbursement of appropriations and other Federal funds.” The proposed definition explicitly excludes activities intended to provide information, advice, opinions, recommendations or ideas to government officials and any jobs that are primarily ministerial and internal in nature. This would suggest that most technical and engineering support activities are not inherently governmental in nature.

OFPP requires federal departments and agencies to have in place a sensible strategic human capital plan. It must take into account the need for competent people in positions of authority, particularly when exercising oversight over contractors and private contractors. The government must invest in training and education to ensure that those occupying inherently governmental positions have the requisite skills to perform their jobs. This suggests that where government employees lack the training and skills to perform a function, departments and agencies should be circumspect regarding the speed or breadth of their insourcing efforts.

With any luck, the draft OFPP policy letter will slow down the rush to insource.