{
  "id": "R42039",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R42039",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 391698,
      "date": "2011-10-05",
      "retrieved": "2016-04-07T00:31:37.440334",
      "title": "Performance of Inherently Governmental and Critical Functions: The Obama Administration\u2019s Final Policy Letter",
      "summary": "On September 12, 2011, the Office of Federal Procurement Policy (OFPP) within the Office of Management and Budget (OMB) issued its final policy letter on Performance of Inherently Governmental and Critical Functions. The policy letter is to guide executive branch agencies in (1) identifying inherently governmental and critical functions; (2) ensuring that only federal employees perform inherently governmental functions or work that \u201cotherwise needs to be reserved to the public sector;\u201d and (3) managing functions that are closely associated with inherently governmental functions and critical functions. The policy letter defines an \u201cinherently governmental function,\u201d in accordance with the Federal Activities Inventory Reform (FAIR) Act (P.L. 105-270), as \u201cone that is so intimately related to the public interest as to require performance by Federal Government employees.\u201d It also defines a critical function as one \u201cthat is necessary to the agency being able to effectively perform and maintain control of its mission and operations.\u201d The policy letter does not define functions closely associated with inherently governmental functions, but lists examples of such functions in an Appendix. \nThe policy letter was issued, in part, in response to Section 321 of the Duncan Hunter National Defense Authorization Act for FY2009 (P.L. 110-417), which tasked OMB with reviewing existing definitions of \u201cinherently governmental function\u201d and developing a \u201csingle consistent definition\u201d of this term which would address any deficiencies in existing definitions. President Obama\u2019s memorandum of March 4, 2009, on government contracting similarly charged OMB with clarifying when it is \u201cappropriate\u201d to contract out work. OFPP issued a proposed policy letter in response to these requirements on March 31, 2010. However, the proposed policy letter differed from the final one in focusing on \u201cwork reserved for performance by federal government employees\u201d and in other ways. \nBeyond defining \u201cinherently governmental function\u201d and \u201ccritical function,\u201d the final policy letter articulates that it is the \u201cpolicy of the Executive Branch to ensure that government action is taken as a result of informed, independent judgments made by government officials.\u201d In support of this policy, the letter directs agencies to (1) ensure that work which should be performed by federal employees is properly reserved for government performance; (2) take steps to employ and train an adequate number of government personnel to administer contracts when work is contracted out; and (3) as part of strategic human capital planning, dedicate a sufficient amount of work to performance by federal employees in order to build competencies, provide for continuity of operations, and retain institutional knowledge of operations. The policy letter establishes two tests for identifying inherently governmental functions, the \u201cnature of the function\u201d test and the \u201cexercise of discretion\u201d test, as well as lists examples of inherently governmental functions. These include certain security functions, but not routine building security. The policy letter also directs that, when agencies review outsourced work for potential insourcing, they should place a lower priority on reviewing certain work performed by small businesses, as well as give small businesses preference when determining who performs work that will remain in the private sector after related functions are insourced.\nCongressional interest in inherently governmental functions may persist notwithstanding the issuance of the final policy letter. The Commission on Wartime Contracting included recommendations based on perceived deficiencies in existing guidance on inherently governmental functions in its final report to Congress, and several Members of the 112th Congress have introduced legislation regarding inherently governmental functions (e.g., H.R. 1474; H.R. 1540; H.R. 1949; H.R. 2017; S. 709; S. 785; S. 991; S. 1253; S. 1254; S. 1546; S. 1573).",
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      "typeId": "REPORTS",
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      "topics": []
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  "topics": [
    "National Defense"
  ]
}