Public Contract Law Journal

Simplifying Inherently Governmental Functions: Creating a Principled Approach from Its Ad Hoc Beginnings

by Thomas J. Laubacher

Thomas J. Laubacher (tjlaubacher@gmail.com) serves as a Regulatory Counsel in the Food and Drug Administration’s Center for Tobacco Products. An earlier version of this Article was submitted in partial satisfaction of the requirements for the degree of Master of Laws in Government Procurement at The George Washington University Law School. The author wishes to thank his wife for her constant support and encouragement and the librarians for all their help in the completion of this Article. The author also wishes to acknowledge Professor Christopher Yukins for his insight and guidance in the development of this Article. The views expressed in this Article are solely those of the author and do not reflect the official policy or position of the Center for Tobacco Products, Food and Drug Administration, Department of Health and Human Services, or any other U.S. government agency.

I.   Introduction

In 1961, thousands of babies across Europe, the Middle East, and Canada were born with “flipperlike arms and legs and other defects.”1 But this massive problem was not occurring in the United States.2 Thanks to a U.S. Food and Drug Administration (FDA) employee, Dr. Frances Oldham Kelsey, the cause of these defects, thalidomide, had not been approved for sale in the United States to combat morning sickness.3 The company that sought approval for the drug, Merrell, complained to Dr. Kelsey’s supervisors and accused her of being a “petty bureaucrat.”After all, the drug’s availability across Europe should have equaled a straightforward approval.5 If the approval request had not landed on Dr. Kelsey’s desk but rather on the desk of a contractor working for FDA — looking to meet monthly approval quotas or fearing retaliation from his supervisors, this horrible drug might not have been kept off U.S. shelves.

Every day, Americans rely on the federal government for services. These services include ensuring the food they eat is free from poisons and hazardous chemicals, protecting citizens from criminals and foreign enemies, and overseeing travel across the United States. Providing these services across fifty states to over 300 million people takes an enormous bureaucracy and an annual budget in the trillions of dollars.6 But the U.S. government’s workforce is not enough to accomplish all these tasks so the federal government supplements its bureaucracy by spending hundreds of billions of dollars on goods and services each year.7

While obtaining goods and services through contracts allows the government to tap into the advantages of private industry, some services provided by the government are too important to be performed by an outside contractor. As shown by Dr. Kelsey and her withholding of thalidomide’s FDA approval,8 some functions of the government must go beyond making investors happy. These inherently governmental functions must be performed by government employees, who have sworn to uphold the Constitution.9

One can easily grasp the concept of an inherently governmental function as something too important for a non-federal employee to handle.10 However, the task of defining and identifying these inherently governmental functions proves to be more difficult. Over the past five decades, the federal government wrestled with the definition of inherently governmental functions. Several definitions of the term have been put forth and numerous lists of what are and what are not inherently governmental functions have been presented, codified, and rescinded.11 This hodgepodge of definitions, lists, and instructions on inherently governmental functions brought confusion and uncertainty to federal contracting, as agencies tried to complete their missions by outsourcing commercial functions without a clear idea of the division between commercial functions and inherently governmental functions.12 When the federal government tried to rein in inappropriate outsourcing in 2009, its procurement workforce often pushed back — arguing no adequate definition for inherently governmental function exists.13

In an attempt to clear up this confusion over inherently governmental functions, Congress directed the executive branch to come up with a single definition of inherently governmental functions.14 Following a Memorandum from President Obama, the Office of Management and Budget (OMB)’s Office of Federal Procurement Policy issued Policy Letter 11-01, which attempted to create a single definition of inherently governmental functions.15 The effectiveness of this definition and categorizations have been debated — some say the definition does not encompass enough functions and others say it does not draw a bright enough line between inherently governmental functions and functions closely related to inherently governmental functions.16 The Policy Letter also failed to establish what should be done if an agency violates the requirement not to contract out inherently governmental functions.17

In the past, when Congress believed the executive branch over-contracted and allowed non-government workers to perform inherently governmental functions, Congress would pass a law defining that function as inherently governmental or would remove its funding.18 However, persuading members of Congress to agree on anything slightly controversial in today’s political climate is nearly impossible,19 and even with agreement, it often takes years for ideas to become actual legislation.20 If the political party controlling Congress matches the party of the President, relying on Congress as a check against executive power is practically futile.21

The judiciary is better suited to answer questions over whether a particular function is inherently governmental or not. Courts not only can exercise injunctive power to immediately stop an executive agency from allowing contractors to perform inherently governmental functions but can also review facts of specific cases to apply previously derived standards.22 This authority makes the courts a more efficient and effective mechanism than relying on Congress to create simple, overarching legislation affecting inherently governmental functions — hoping that the executive branch follows the legislation as intended. A case can progress through the judiciary without politicians holding it hostage and using it as a political pawn. While courts may be better suited to hear, and decide, arguments over what is inherently governmental, case law surrounding this issue is rather sparse, and some courts decline to make a ruling based on the political question doctrine.23

Part II of this Article begins with an historical look at outsourcing work performed for the federal government and reviews the development of the term “inherently governmental functions” over the past half-century. Part III discusses the various forums available to prevent a federal agency from outsourcing inherently governmental functions. Part IV analyzes previous suggestions for changes to the area of inherently governmental functions in federal procurement. Part V proposes a simplified definition of inherently governmental functions.

II.  Background

A.  Brief History of Outsourcing

The federal government’s debt currently equals over $19 trillion.24 The government pays over $200 billion annually in interest alone.25 This trend cannot continue indefinitely without disastrous consequences.26 However, U.S. citizens still expect their government to provide a certain level of services, whether it is the Food and Drug Administration making sure the medications they take are not poisonous, the Department of Defense (DoD) protecting them from those who wish to do them harm, or the Department of Veterans Affairs caring for those who have risked their lives for their country.27

How these services are performed and obtained changed throughout the centuries. In this country’s early years, private firms provided many of these services.28 As this country grew, so did its bureaucracy, allowing government employees to directly perform more services.29 However, the government bureaucracy could not always keep up with the demand for goods and services; this was particularly apparent during the mobilization for World War II when the government needed to rely on the private sector to meet the nation’s defense requirements.30 During World War II, the informal links between private industry and public service formalized through grants and contracts from the federal government to private industry and universities.31

By the end of World War II, the United States witnessed the enormous potential of outsourcing. The war had shown what mobilization of the commercial sector could do for the federal government.32 Private industry was more agile, often had better resources, and could assume more risks than the federal government.33 By 1955, the federal government formally recognized these attributes and declared it would not compete with the private sector.34 This formal recognition of industry’s efficiency and ability to meet the government’s needs started a trend that would endure for fifty years.35 It created a status quo where the government paid private industry for goods and services because the private sector could, or at least appeared able to, provide them cheaper than the government could supply them itself.36 This trend became policy in 1966 with the publication of OMB Circular A-76.37

Circular A-76 originally established the process in which the government was to decide — by informal competition — if it could perform a function in house or if it would be more cost-beneficial to establish a contract with the private sector to perform the function.38 For the next several decades, when an agency needed something, it conducted a public-private competition in order to determine whether contracting the work out or keeping it in house was more beneficial.39

By the 1980s, a demand for smaller government was growing.40 Despite the desire for a smaller government, U.S. citizens did not want a decrease in the services the government provided nor did they want to see their taxes increased substantially.41 They perceived that the government could be more efficient and capable of performing more services at a lower cost.42

In 1993, President Clinton announced the National Performance Review, designed to make the federal government less expensive and more efficient.43 This performance review eliminated over 272,900 federal positions.44 As one means to increase government efficiency, the National Performance Review tried to streamline the procurement process.45 The government laid off many acquisition personnel because the government viewed them as simply “shoppers,” who could be replaced with “actual” government workers using a charge card.46 However, with these drastic cuts to personnel, agencies found themselves in the middle of a vicious cycle: decreased staff levels resulted in increased need to obtain services necessary to complete their missions through contracting.47 However, agencies also employed under- trained smaller procurement workforces that were unable to handle the enormous growth of contracts — particularly service contracts, which are more complex than supply contracts.48 This forced agencies to contract out some of their acquisition functions.49 Thus, the more contracts they created, the more contractors they needed to administer these contracts, leading to still more contracts.

At its peak in 2009, the federal government contracted for over $500 billion worth of goods and services.50 Just before federal acquisitions reached this peak in 2009, the tides started to turn away from outsourcing with the National Defense Authorization Act of 2008 — stating that the DoD was to look at using federal workers instead of contracting out.51 In response to growing concerns over the acquisition workforce being unable to keep up with the ever-growing number of contracts, President Obama sought to reverse the trend of outsourcing as much as possible.52 The Omnibus Appropriation Act of 2009 continued the trend away from outsourcing by establishing that no funds could be used for public-private competitions.53

Part of the push to move away from outsourcing during the Obama administration was the growing fear that: (1) over-reliance on government contracts might prevent an agency from fulfilling its mission if it should ever have to stop relying on government contractors, and (2) the belief that contractors were performing functions that should be reserved for federal government employees.54 To combat these concerns, OMB issued its Policy Letter 11-01, which attempted to lay out a single definition for inherently governmental functions and address concerns of agencies performing critical functions necessary to their mission.55

B.  What Is an Inherently Governmental Function?

The concept of an inherently governmental function is not new. In the 1930s, the Supreme Court reinforced the notion that some government actions are so important that they cannot be delegated to others outside the government.56 The Supreme Court held that legislative powers belonged solely to Congress and could not be delegated to industry, regardless of how practical the delegation might have been.57

The concern over inherently governmental functions in the contract arena took shape as the federal government entered into more contracts with private industry following World War II. The 1962 Bell Report contained the first use of the phrase “inherently governmental” as it applied to contracting.58 This report sought to explain the advantages of contracting for military research and development but warned that:

[a]ctivities closely related to governmental managerial decisions (such as those in support of contractor selection), or to activities inherently governmental (such as regulatory functions, or technical activities directly bound up with military operations), are likely to call for a direct federal capability and to be less successfully handled by contract.59

While the Bell Report outlined a policy to push the federal government toward obtaining goods and services from the private sector, it recognized that some functions should not be performed by private contractors. However, this concept was not articulated as policy until the third revision of OMB Circular A-76 in 1979.60

1. Circular A-76 (1966 and 1967)

Circular A-76 was originally published in 1966 to set forth the policies concerning when the federal government would contract for goods and services and when it would perform these functions in-house.61 The first two versions of Circular A-76, the 1966 and 1967 versions, did not mention inherently governmental functions and focused on how a federal agency should use costs to decide whether to contract for a commercial function or perform the function in-house.62

2.   Circular A-76 (1979)

The 1979 version of Circular A-76 specifically recognized that “[c]ertain functions are inherently governmental in nature, being so intimately related to the public interest as to mandate performance by [f]ederal employees.”63 It went on to define a “governmental function” as “a function which must be performed in-house due to a special relationship in executing governmental responsibilities.”64 It then listed three categories of governmental functions: (1) discretionary application of government authority, (2) monetary transactions and entitlements, and (3) in-house core capabilities.65 It included a list of examples with each category.66 The 1979 Circular’s summary explained that the definition of a governmental function “is primarily limited to those functions which inherently involve value judgments, and does not include ancillary and support activities.”67

In addition to these examples embedded directly in the definition of a governmental function, the Circular set forth a list of 98 activities deemed to be commercial and thus, not governmental.68

The 1979 Circular A-76 specifically stated that implementation of the circular did not apply to “governmental functions” and “[t]hese functions must be performed in-house by [g]overnment personnel.”69 It also excluded “consulting services of a purely advisory nature relating to the governmental functions of agency administration and management and program management” from its commercial acquisition requirement.70 It gave agencies the authority to determine appropriateness of using government staff or private sources to obtain these consulting services.71

Supplement No. 1 to the 1979 Circular A-76 included a Cost Comparison Handbook.72 This handbook laid out how to develop a comprehensive comparison of costs to determine if it would be more beneficial for the federal government to obtain a product or service by contract or providing it in-house.73

3.   Circular A-76 (1983)

Circular A-76 was again revised in 1983.74 It explained that inherently governmental functions do not involve the government competing with private industry and must be performed by government employees.75 The 1983 version used similar language to the 1979 circular and redefined a “[g]overnmental function” as “a function which is so intimately related to the public interest as to mandate performance by [g]overnment employees.”76 This version eliminated the characterization of governmental functions as having a “special relationship in executing governmental responsibilities.”77 It instead focused on the function’s relation to public interest — using the language originally found in the policy section of the 1979 Circular A-76 to redefine a “[g]overnmental function.”78 However, it did reiterate the two categories in which these government functions would fall: (1) the discretionary exercise of government authority and (2) monetary transactions and entitlements.79 The 1979 version included these same categories and similar sets of examples for each category.80 The 1983 version also eliminated the third category of governmental functions listed in the 1979 version — a function is governmental because it is needed to ensure in-house core capabilities.81

The 1983 version continued to include a non-exhaustive list of commercial functions that contained almost all the previously listed commercial activities and added some new ones.82 Just like the 1979 version, the 1983 Circular A-76 included a supplement, setting forth the procedures on how to conduct a public-private competition to determine if an activity should be performed through a contract or in-house.83

4.   1992 OMB Policy Letter

In 1992, OMB published a policy letter on inherently governmental functions.84 OMB did not intend to change anything about Circular A-76 with Policy Letter 92-1 (1992 Policy Letter), only to clarify the meaning of inherently governmental functions.85 It was created in response to many agencies requesting guidance regarding awarding contracts and inherently governmental functions, as well as claims that Circular A-76 lacked enough detail.86 

The 1992 Policy Letter reclassified “governmental functions,” described in previous versions of OMB Circular A-76, as “inherently governmental functions.”87 It provided the same definition for “inherently governmental functions” as the 1983 version of Circular A-76 had for “governmental functions.”88 However, the 1992 Policy Letter went on to describe inherently governmental functions as involving:

[T]he interpretation and execution of the laws of the United States so as to: (a) Bind the United States to take or not take some action by contract, policy, regulation, authorization, order, or otherwise; (b) Determine, protect, and advance its economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise;
(c) Significantly affect the life, liberty, or property of private persons; (d) Commission, appoint, direct, or control officers or employees of the United States; or
(e) 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 appropriated and other [f]ederal funds.89

The 1992 Policy Letter established a six-factor “totality of the circum- stances” test for determining if a function is inherently governmental or not.90 It provided both a list of inherently governmental functions and a list of functions that so closely support inherently governmental functions that they require special consideration and safeguards.91 As the Bell Report from three decades earlier warned, safeguards were needed not just against contracting out inherently governmental functions but also for contracting out those functions closely related to inherently governmental functions.92 The 1992 Policy Letter acknowledged this reality and sought to establish it as policy.

The 1992 Policy Letter also recognized that the circumstances surrounding various functions not in themselves inherently governmental can be so important that an agency still cannot contract them out.93 It specifically stated that contractors should not be used for “drafting of Congressional testimony, responses to Congressional correspondence, or agency responses to audit reports.”94

While the 1992 Policy Letter used the same definition for inherently governmental function as the previous Circular A-76 (1983),95 the 1992 Policy Letter explained that inherently governmental functions require the exercise of substantial discretion.96 The 1992 Policy Letter recognized that not all decisions by contractors create an inherently governmental function.97 Rather, a decision committing the federal government to a course of action when an alternative exists would be an exercise of substantial discretion and thus would be an inherently governmental function.98

5.   Federal Acquisition Regulation (FAR) Subpart 7.5

The 1992 Policy Letter explicitly called on the Federal Acquisition Regulatory Council to incorporate its policy on inherently governmental functions into the Federal Acquisition Regulation (FAR) within 210 days.99 The FAR was updated with the policy, but it took three-and-a-half years to do so.100 In 1996, FAR subpart 7.5 was added.101 It included a definition of inherently governmental function that practically mirrored the one found in the 1992 Policy Letter.102 It even included the same lists of inherently governmental functions and functions that were almost inherently governmental found in Appendices A and B of the 1992 Policy Letter.103 FAR subpart 7.5’s treatment of drafting congressional testimony, responses to congressional correspondence, and responses to audit reports were the only substantial deviations from the 1992 Policy Letter.104 The 1992 Policy Letter specifically stated these were not inherently governmental functions, but because of the appearance of private influence, the drafting of these items should not be contracted out.105 FAR subpart 7.5 simply included them in its list of inherently governmental functions.106

FAR subpart 7.5 has not changed significantly over the last two decades — apart from moving the definition of inherently governmental functions from section 7.501 to section 2.101, with the rest of the definitions in the FAR.107 The definition still mirrors the language from the 1992 Policy Letter.108

6.   FAIR Act

In 1998, the Federal Activities Inventory Reform Act (FAIR Act) was signed into law.109 The Act was designed to promote agency compliance with OMB Circular A-76.110 It required agencies to create a list of activities performed by the agency that are not inherently governmental and to submit that list to OMB and the public.111 It defined inherently governmental functions in substantially the same way as the 1992 Policy Letter and FAR subpart 7.5.112 However, where the 1992 Policy Letter and the FAR did not differentiate their definitions of inherently governmental function from their lengthy elaborations on activities included within these functions, the FAIR Act contained different subsections for the definition of an inherently governmental function and for its elaboration on the activities included in inherently governmental functions.113

7.   Circular A-76 (1999)

In 1999, OMB issued a revised Circular A-76.114 Other than updating the term from “[g]overnmental function” to “inherently [g]overnmental function” and inserting language about consistency with the FAIR Act and the 1992 Policy Letter, the definition of an inherently governmental function did not change from the 1983 version.115 The 1999 revision merely added new language to help implement the FAIR Act.116

8.   Circular A-76 (2003)

In 2003, OMB completely changed the format of Circular A-76. It reduced the main document to three pages with four attachments.117 The main body of the document laid out some generalized policies but did not include any definitions or substantive instructions.118 Instead, those were found in the attachments.119 The accompanying handbook, first introduced with the 1979 version, was also removed.120

Attachment A to the 2003 Circular A-76 explained the inventory process under which each federal agency was to submit a list of all of its commercial activities and all of its inherently governmental activities to OMB each year.121 It defined inherently governmental activities much like its predecessor, 1999 Circular A-76.122 However, the 2003 Circular streamlined the elaboration following the definition and, like the 1992 Policy Letter, added the word “substantial” to modify what type of discretion marks inherently governmental activities.123 The 2003 Circular A-76 also removed a reference to “the use of value judgments” when describing inherently governmental decision-making and instead focused on the exercise of substantial discretion as a hallmark of inherently governmental activity.124 Like the 1992 Policy Letter, Attachment A to the 2003 Circular A-76 included an illustrative list of inherently governmental functions.125 The 2003 Circular A-76 modified the definition of inherently governmental functions by removing “commission, appoint, direct, or control officers or employees of the United States.”126 Attachment A to the 2003 Circular A-76 (2003) also included the six factors originally seen in the 1992 Policy Letter that agencies should consider in order to avoid awarding a contract for an inherently governmental function.127

9.   2009 Duncan Hunter National Defense Authorization Act

The 2009 Duncan Hunter National Defense Authorization Act (2009 NDAA) did not provide a definition for inherently governmental functions but instead required the Director of the Office of Management and Budget (OMB) to develop a single definition of inherently governmental functions that would allow agency heads to ensure that only federal government employees or members of the armed forces performed inherently governmental functions.128

10.   2009 Presidential Memorandum

Approximately six months after enacting the 2009 NDAA, President Obama issued a memorandum for the heads of executive agencies regarding federal contracting.129 The memorandum stated that the line between inherently governmental activities and commercial activities had been “blurred and inadequately defined.”130 It called for the Director of OMB to “clarify when governmental outsourcing for services is and is not appropriate,” consistent with the 2009 NDAA’s requirement to create a single definition of inherently governmental functions.131

11.   OMB Policy Letter 11-01

In response to the 2009 NDAA and President Obama’s 2009 memorandum, OMB’s Office of Federal Procurement Policy (OFPP) issued Policy Letter 11-01, “Performance of Inherently Governmental and Critical Functions” (2011 Policy letter).132 The 2011 Policy Letter sought to provide a single definition of “inherently governmental function,” but in actuality largely returned to the definition previously used in the 2003 Circular A-76. It defined an inherently governmental function as “a function that is so intimately related to the public interest as to require performance by [f]ederal [g]overnment employees” and elaborated that inherently governmental functions “require either the exercise of discretion in applying [f]ederal [g]overnment authority or the making of value judgments in making decisions for the [f]ederal [g]overnment.”133 This is essentially the same definition that had been used since it was introduced in the 1983 Circular A-76 until the 2003 Circular A-76 attempted to streamline the definition and add the modifier “substantial” to the type of discretion being exercised.134

In addition to returning to the previous policy directives’ definitions, the 2011 Policy Letter included lists of inherently governmental functions and functions closely associated with the performance of inherently governmental functions.135 With few exceptions, both lists mirrored those published with the 1992 Policy Letter.136 The 2011 Policy Letter also brought back the concept of a critical function that an agency had to safeguard because it was vital to the agency’s mission. The 2011 Policy Letter did not categorize critical functions as inherently governmental, as the 1979 Circular A-76 had, but rather aligned them with functions closely associated with inherently governmental functions.138 The 2011 Policy Letter allowed both critical functions and functions closely associated with inherently governmental functions to be performed by contractors but required agencies to have sufficient controls in place to mitigate the risks involved with outsourcing them.139

The 2011 Policy Letter established two tests for identifying whether a function is inherently governmental.140 The first test examines the nature of the function. If the very nature of a function “involve[s] the exercise of sovereign powers of the United States,” it is inherently governmental.141 The 2011 Policy Letter provides a list of functions, such as “officially representing the United States in an inter-governmental forum or body, arresting a person, and sentencing a person convicted of a crime to prison,” as functions that are, by their nature, inherently governmental.142

The second test in the 2011 Policy Letter looks at the exercise of discretion in the function: “if the exercise of . . . discretion commits the government to a course of action where two or more alternative courses of action exist,” it is inherently governmental unless the decision-making is guided by specific ranges of acceptable discretion and is subject to meaningful oversight or final approval by agency officials.143 If the contractor “does not have the authority to decide the overall course of action” and the decision or action can be overridden by agency officials, it is not inherently governmental.144 However, if a contractor’s involvement or its work product would be so close to the final agency product that it would preempt an agency official’s decision-making, such a function cannot be performed by a contractor.145

III.  Who Can Stop the Government from Contracting Out Inherently Governmental Functions

A.   Checks Built into the Circular A-76 Framework

Circular A-76 — designed to state policy — did not provide for any specific redress if it was not followed. The 1979 Circular A-76 specifically stated that it did “not establish, and shall not be construed to create, any substantive or procedural basis for any person to challenge any agency action or inaction on the basis that such action was not in accordance with this Circular.”146 Similar language has been included in each revision of the circular since and in the 1992 and 2011 Policy Letters.147 Despite these documents stating that they did not create a substantive or procedural basis to challenge the agency, most established a procedure to challenge some aspect of an agency’s decision to contract out or perform in-house.148

The 1979 Circular A-76 allowed a directly affected party to challenge an agency decision whether to contract out or perform in-house.149 When an agency’s decision was challenged, the circular called for an “independent, objective review of the initial determination and rationale upon which the decision was based” by an official at the same level or higher than the original approver.150 It also limited this right of appeal to inside the agency and specifically did not authorize appeals outside the agency.151

The 1992 Policy Letter did not lay out an appeals process for interested parties but did clarify that an agency’s decision regarding whether a function is inherently governmental can be reviewed and modified by OMB.152

The FAIR Act of 1998 required agencies to publish activities they performed that were not inherently governmental.153 It allowed interested parties to challenge an agency’s determination to include an activity on the list or an agency’s omission of an activity from the list.154 The FAIR Act required the submission of these challenges to an agency within thirty days of the publication of the list and required an official, designated by the head of the agency, to decide the challenge within twenty-eight days.155 If the interested party wished to challenge this decision, that party could submit an appeal to the head of the agency, who would make a determination.156

The FAIR Act did not require a hearing for challenges to the list nor did it allow for challenges to progress beyond the head of an agency.157

The 1999 Circular A-76 Handbook described the processes for challenging an agency’s decision to outsource a function and an agency’s decision to categorize a function as inherently governmental.158 The Handbook limited the right to appeal the decision to eligible appellants.159 Appendix 2 of the Handbook also explained how to challenge an agency’s list of commercial activities that the agency was required to publish in accordance with the FAIR Act.160 The explanation provided greater details than the FAIR Act in regard to what the designated official has to provide to the interested party but used the same definition for interested party as found in the FAIR Act.161

The 2003 Circular A-76 continued the requirement for agencies to publish their lists of activities.162 However, it expanded agencies’ disclosure requirements by mandating that both inherently governmental and commercial activities be published.163 It also set out procedures for challenging an agency’s decision to characterize a function as commercial or inherently governmental.164 These procedures mirrored those found in the FAIR Act with the exception that the appeal authority is not the agency head; instead, it is someone at a level higher than the official hearing the original challenge.165

B.  Congressional Checks Against Outsourcing Inherently Governmental Functions

1.   Legislation

The three branches of the federal government are designed to serve as checks and balances against each other. With regards to inherently governmental functions, Congress has previously used its power to affect inherently governmental functions by declaring a function inherently governmental (or not) or removing funding from various programs that it felt did not correctly address inherently governmental functions.166 However, in today’s political climate, quick and effective action on any matter cannot be assumed. If the same party controls Congress and the Presidency, there will be little chance of Congress choosing to substantially check the executive branch.167 Contractors performing inherently governmental functions are a problem but rarely such an egregious problem warrants the full legislative process each time a contractor performs an inherently governmental function.168

2.   Government Accountability Office

The Government Accountability Office (GAO) is a legislative branch agency.169 It has two ways to influence the policy surrounding inherently governmental functions. The Competition in Contracting Act of 1984 (CICA) authorizes the GAO to hear federal procurement protests.170 The GAO also has the power to issue advisory opinions at the request of Congress or federal agencies.171

In federal procurement protests, GAO acts like a court in many respects. It applies executive branch policies and regulations to these protests in determining whether the procurement conforms with the agency’s governing rules and policies.172 However, GAO decisions, unlike a judicial decision, do not bind an executive agency.173 GAO decisions are considered advisory, but if an agency decides not to follow the decision, the agency must notify GAO within sixty days, and GAO, in turn, notifies four congressional committees, which may take action against the recalcitrant agency.174 That effective authority of GAO is important because occasionally a private party will bring a protest before GAO challenging an agency’s solicitation on the basis that it includes inherently governmental functions.175

GAO may hear bid protests under CICA when the protestor is an interested party.176 When a federal employee protests the privatization of a function, GAO previously held that the federal employee’s job must be at stake in order to qualify as an interested party to challenge an agency’s conversion of the employee’s function to performance by the private sector.177 GAO has applied its own political question doctrine, holding that it will generally not review an agency’s cancellation of a solicitation when the agency decided to perform the work in-house — treating such decisions as a policy matter re- served to the executive branch.178

With regards to inherently governmental or commercial function cases, GAO will evaluate an agency’s compliance with the procedures outlined in Circular A-76 and the procedures set forth in its solicitations.179 However, when GAO decides protests involving inherently governmental functions on their merits, it previously ruled against the party claiming the solicitation called for outsourcing inherently governmental functions.180

While protestors have been unsuccessful at protesting a solicitation to GAO on the grounds of it containing inherently governmental functions, GAO has not shied away from providing advisory opinions to Congress and federal agencies regarding inherently governmental functions.181 These opinions, based on executive policies found in OMB’s Circular A-76, prevent numerous agencies from contracting out inherently governmental functions.182

C.  Judicial Checks Against Outsourcing Inherently Governmental Functions

In contrast to the legislative process, the judiciary’s process for resolving disputes is methodical and offers greater predictability. In many ways, judicial cases concerning inherently governmental functions and federal procurements are similar to procurement protests brought before GAO.183 However, judicial decisions have the authority of law, and agencies can be compelled to follow them, while GAO may issue only recommendations and advisory opinions.184 For federal procurements, in addition to being able to award any appropriate monetary damages, courts have injunctive power that can be used to stop the award of or the performance of a contract being used to perform inherently governmental functions.185 Courts are designed to analyze individual cases and can determine if a statement of work called for (1) the contractor to perform an inherently governmental function, (1)  if the contractor performed an inherently governmental function under its contract, or (3) if the contractor stepped outside of the work described in the contract and performed inherently governmental functions not anticipated by the statement of work.

Despite its apparent fit for challenging the outsourcing of inherently governmental functions, there have been very few judicial cases where a plaintiff challenged a procurement on the basis that it called for contractors to perform inherently governmental functions.186 What has been challenged several times is the federal government’s alleged inappropriate outsourcing under OMB Circular A-76.187 However, the courts turned away many of the plaintiffs challenging the outsourcing because they lacked prudential standing.188

IV.      Previously Proposed Changes

Agencies are always looking for ways to stretch their budgets to get more work for less. With today’s budget and policy issues, many agencies find themselves unable to hire more staff, but the staff they currently have is not always enough to perform the tasks being asked of them.189 Contracting can be an enticing solution to may agencies. However, procurement professionals, such as contracting officers, contract specialists, and contracting officer’s technical representatives — those who must decide, in the first in- stance, whether functions can be contracted out — are often overworked and can barely keep up with the contracts they are already overseeing.190 They complain that the lack of clarity surrounding inherently governmental functions prevented them from creating insourcing guidelines.191 Maintaining the status quo will not alleviate the concerns of these procurement professionals.

More detailed rules regarding what is inherently governmental are not necessarily the answer. Some may argue that more changes to the rules surrounding federal procurements will only add complexity to a contracting officer’s already demanding job — diminishing the quality of contract management. The other side to this argument is that change is necessary to ensure that procurement professionals can manage their workload and protect against “wasted taxpayer resources, poor contract performance, and inadequate accountability for results.”192 The question, then, is what changes should the federal government make as it balances the need to outsource with the legislative, regulatory, and constitutional constraints on outsourcing its work.

A.   Eliminate the Concept of Inherently Governmental Functions

One approach would be to eliminate the concept of inherently governmental functions, despite the concept being ingrained into the federal procurement system for several decades. There are, after all, critics who have argued there is no inherent difference between a state actor performing a function and a contractor performing that same function.193 In 2012, Professor Alexander Volokh attempted to explain that whether the government uses employees or contractors, it is using private parties since employees represent individuals who may have their own agenda and the ability to act contrary to their manager’s desires.194 Volokh argues that government employees and officials are like contractors to the federal government; they just have an employment contract rather than a procurement contract.195 However, Volokh does not adequately acknowledge the purpose of classifying something as inherently governmental — accountability. The government, in general, exercises greater control over functions it performs in-house, and the use of contractors increases the risk of atrocities, such as the Abu Grab incident.196

Volokh argues that if accountability is the problem, greater accountability can be built into the system already using contractors.197 He even argues that outsourcing functions might result in greater accountability because the threat of losing the contract at time of renewal may drive contractors to be more accountable than civil servants.198 While more accountability might be ingrained into the system with proper contract oversight, the reality is that this is unlikely to occur. Professor Schooner and others have noted the lack of personnel and oversight in federal procurements since 2004, but improvements have not happened.199 Even if the capacity for more oversight was built into the acquisition system, the threat of not renewing a contract or more judicial scrutiny will not create the same level of day-to-day accountability that government employees face.200

Eliminating the distinction between inherently governmental functions and commercial functions is not a viable solution. The federal acquisition framework is partially based on the concept of a clear separation between inherently governmental functions and commercial functions.201 Even if increased oversight of contractors successfully eliminated the accountability concerns, any small advantage to eliminating the distinction would not be adequate to justify overhauling the current federal procurement framework.

B.   Expand What Should Not be Outsourced

1.   Stop Outsourcing Closely Associated Functions

The 2011 Policy Letter differentiated among inherently governmental functions, functions closely associated with inherently governmental functions, and critical functions.202 Of these three categories, many agencies are not taking proper steps when it comes to contracting for functions closely associated with inherently governmental functions. Some commentators urge the federal government to abandon the closely associated with inherently governmental function category and declare that none of these functions may be performed by contractors.204 While this might help to simplify the distinctions between inherently governmental functions and those closely associated, it simply cannot be done with today’s federal workforce. Many agencies are already stretched thin in terms of their manpower relative to their mission responsibilities.205 Several functions, currently contracted out, could not be accomplished by current federal employees.206 A slow transition from contracting out these functions closely associated with inherently governmental functions could prevent suddenly overwhelming the federal workforce, but it would have to coincide with large-scale federal hiring and training. Given the government’s inability to hire enough procurement professionals,207 it seems unlikely that such a large-scale federal hiring and training effort would be feasible. As such, hamstringing the federal government by forbidding it to contract out functions closely associated with inherently governmental functions is not a viable option.

2.   Stop Outsourcing High Risk Functions

Another option, in line with not contracting out functions closely associated with inherently governmental functions, is to single out certain critical and closely associated functions that are high risk and block contractors from performing them. An example of this type of high risk function is intelligence work or covert operations. These functions have a high likelihood of influencing government officials who must rely on the information they provide when making policy and strategy decisions. Despite the sensitive nature of the closely associated functions, agencies do not always comply with the rules when contracting out these functions.208

Agencies’ failure to comply with rules surrounding these sensitive functions — closely associated to inherently governmental functions — could be resolved by reserving this work for government employees only. While previous policy letters support this type of “carve-out” of specific, sensitive functions, this approach might be very difficult to enforce or implement.209 Creating caveats where the general rules do not apply would add complexity to the already confusing subject of inherently governmental functions and possibly negate any good done by the 2011 Policy Letter. Even if such a carve-out could be followed, the increased use of contractors in the intelligence community has created a workforce that likely cannot be replaced.210 By 2010, contractors made up more than one in four members of the intelligence community with top-secret clearances.211 The practicalities of the needs on the battlefield — where requirements are often needed in surges — and the large salary discrepancies between public and private sector employees, drawing the best and brightest away from public employment, may always require outsourcing these types of services.212

V.     New Definition

Because more structural reforms are likely not workable as a practical matter, another approach would be to resolve the inherently governmental problem from within by simplifying the definition. This option, and its practical ramifications, is discussed in more detail below.

A. Simplify the Definition

The notion that too many different definitions cause confusion over the meaning of inherently governmental functions shape the argument over the definition of the term.213 However, the differences among the definitions found in Circular A-76, Policy Letter 92-1, the FAR, and the FAIR Act are practically insignificant.214 Instead, the problem with these definitions of inherently governmental functions is their length and excessive use of too many examples and elaborations. Even the 2011 Policy Letter, which attempted to create a single definition of inherently governmental functions, in practice created three definitions of inherently governmental functions.215 Rather than continue to elaborate on the definition of inherently governmental functions, it would be more beneficial to procurement personnel to create a simplified definition.

Any proposed simplified definition for an inherently governmental function must integrate well with the existing regulatory framework; failure to take into account what is currently considered an inherently governmental function will not effectively replace the current definition with a simplified definition. Rather, such a new definition will merely add to the confusion already surrounding the term and require additional carve outs or exceptions. Given the extensive treatment of the subject through OMB circulars, the Policy Letters, guidance and statutes, David Isenberg probably said it best: “Trying to define the term is like trying to nail Jell-O to the wall, only nailing Jell-O is easier.”216

The first step toward a simplified definition is moving away from the vague, unhelpful definition of “so intimately related to the public interest as to mandate performance by [g]overnment employees.”217 While this has been the official definition of inherently governmental functions since 1983,218 it is overbroad without giving any real insight into what it means to be an inherently governmental function other than that it should not be outsourced. It lacks any concrete aspects that program managers or contracting officers can use to determine if a function they need performed fits the definition.

Once the shackles of previous definitions have been removed, the next step is to analyze the purpose of the term. The reason for classifying a function as inherently governmental in the contracting arena is to ensure that the government retains control over the function.219 Applying Professor Christopher Yukins’ agency model, inherently governmental functions should not be contracted out to an agent (contractor) because they are the type of functions for which it is not possible to monitor the agent’s (contractor’s) actions closely enough or evaluate them with enough scrutiny to ensure that the agent (contractor) is acting in the best interest of the principal (government or, more broadly, the people represented by the government) and is not influenced by its own self-interest.220

When examining previous definitions of inherently governmental functions for specific aspects capable of guiding the analysis of a function, one aspect stands out: the use of discretion.221 The more discretion a contractor (an agent) enjoys — that is, the more leeway the contractor has and the more serious the potential impact of contractor’s decisions and actions — the more likely the contractor’s function is “inherently governmental” and should not be out- sourced to a private actor. Indeed, the use of discretion was even the basis for one of the two tests put forward in the 2011 Policy Letter.222 But discretion alone cannot be enough to classify a function as inherently governmental. There must be a link between the use of discretion and the government needing to retain control over that function. Such a link can be found by focusing on the application of that discretion. This Article proposes a new simplified definition of an inherently governmental function as any exercise of discretion that (a) directs, controls, or obligates funds, resources, or employees of the United States; or (b) deprives citizens of rights or liberties. Under such a definition, a function that calls for the exercise of discretion resulting in the control of government funds or possible deprivation of liberty would be inherently governmental.

B.   Testing the Simplified Definition

As noted above, a perfectly simplified definition for inherently governmental functions must fit into the existing understanding of an inherently governmental function. Therefore, any proposed definition should be tested against the functions addressed in the existing regulatory framework for assessing “inherently governmental” work. The FAR, as the ultimate guidance for federal acquisitions, presents itself as an appropriate place to begin. FAR subpart 7.5 contains a list of twenty inherently governmental functions and nineteen functions that are not inherently governmental.223 The nineteen non-inherently governmental functions identified in FAR subpart 7.5 have been described as possibly approaching being inherently governmental functions.224 The 1992 Policy Letter and the 2011 Policy Letter contain similar lists.225 As these lists of functions appear across these seminal documents concerning inherently governmental functions, the proposed simplified definition of inherently governmental functions will be tested against functions derived from these lists.

First, a list of broadly recognized inherently governmental functions will be analyzed to ensure the simplified definition encompasses these functions. Next, a list of commonly accepted non-inherently governmental functions will be analyzed to ensure the simplified definition does not include these functions.226 It should be stressed that these examples are illustrative, not dispositive; they show how important discretion is in understanding what inherently governmental functions are.

1.   Inherently Governmental Functions

a.   “The direct conduct of criminal investigations.”227

This role would meet the proposed definition of an inherently governmental function. The person conducting this function exercises discretion over how to utilize police officers, detectives, and any other person involved in the investigation. The investigation may produce many leads and decisions where discretion must be applied and which may call for the use of force or an invasion of private property. The investigation may transition directly into a prosecution. The control over what leads to follow and how much time to allow for the investigation is a matter of discretion that will direct and control government employees and resources. A private investigator could, in principle, perform many of the same tasks but what sets a criminal investigation apart is the ability to execute warrants and to roll directly into a prosecution, if appropriate. Since one cannot conduct a criminal investigation without exerting discretion over government resources and employees and may involve the invasion of rights and liberties, this function meets the requirements of the simplified definition.

b.   “The control of prosecutions and performance of adjudicatory functions other than those relating to arbitration or other methods of alternative dispute resolution.”228

This second example of archetypically “inherently governmental” work really encompasses two functions: (1) control of prosecutions and (2) adjudicating or judging cases.

With regards to the control of prosecutions, first and foremost comes the decision to bring a case against someone. This involves a substantial amount of discretion to evaluate the evidence and weigh the likelihood of success against the resources available to the prosecution. Deciding to bring a case against someone will require government funds and resources as the attorneys prepare and bring the case to trial. Not all of the specific tasks performed under this function (such as questioning a witness under oath) are considered inherently governmental,229 but the function as a whole —including deciding who to question under oath, what evidence to present, or how many resources to utilize during the trial — would constitute control over the prosecution. These discretionary acts would be directing and controlling government resources and thus satisfy the simplified definition and be classified as an inherently governmental function.

With regards to the adjudicatory function, deciding cases involves a great deal of discretion over the weight of evidence and how to apply the law. However, the growth of private arbitration shows that the decision itself is not the inherently governmental act.230 When issuing a decision, the adjudicator is merely stating an opinion. However, when judges adjudicate a case, they are deciding how government resources will be utilized to enforce the judgment. In criminal adjudications, the judge is directing how government resources will be utilized to incarcerate a defendant sentenced to prison or monitor a defendant placed on probation. In civil litigation, voluntary compliance commonly occurs with judicial decisions, but the judge directs how government resources can be used if voluntary compliance is not forthcoming. The judge is essentially promising that government resources will be available to enforce the ruling if voluntary compliance is not obtained.

These differ from alternative dispute resolutions (ADR) in that ADR opinions are enforceable as a matter of contract, not as a judgment in and of themselves: if voluntary compliance is not forthcoming out of ADR, the party seeking enforcement must still bring an enforcement action to a court to use government resources to enforce the ADR decision.231 Thus, this function also meets the requirements of the simplified definition.

c.  “The determination of agency policy, such as determining the content and applications of regulations.”232

The determination of agency policies and the setting of budget priorities are extremely discretionary acts. An agency must choose various paths to take from a multitude of available options. Agency policies and regulations direct government resources, and the setting and enforcing of policy cannot be monitored, or steered, effectively by those outside government.233 This highly discretionary, and very weighty, decision-making falls fully within the simplified definition of an inherently governmental function.

d.   “The determination of what government property is to be disposed of and on what terms.”234

This control of government resources is inherently governmental only when discretion is used. When discretion would be eliminated by giving contractors ranges to sell the property for and other conditions, the disposition is not an inherently governmental function under the simplified definition. However, a lack of specified ranges presents discretion, this meets the simplified definition of an inherently governmental function.

As these examples show, discretion is the hallmark of inherently governmental functions, especially where that discretion is exercised outside the public eye and can have a significant impact on individual lives and the public’s perception of government. These examples seem to confirm the proposed definition, discussed above. The functions discussed below, which are commonly cited as functions that are close to, but not, inherently governmental functions, seem to confirm the usefulness of the proposed definition — centering on the scope, force, and transparency of the contractor’s discretion.

2.   Closely Associated Functions

As the discussion above reflected, while some functions are commonly recognized as “inherently governmental,” some fall just outside that definition. These are generally defined as “closely associated” functions, and the comments prefacing the 2011 Policy Letter explicitly rejected suggestions that these functions be merged into the “inherently governmental” category.235 As the examples below show, while these functions typically are performed alongside classically inherently governmental functions, they do not fall squarely within the commonly understood categories of inherently governmental functions because critical elements are missing — for example, either the discretion at issue is limited in some important way or the decisions do not control federal funds. As a result, these examples seem to confirm the soundness of the proposed definition that is grounded in discretion.

a.   “Services that involve or relate to budget preparation, including workload modeling, fact finding, efficiency studies, and cost analysis, etc.”236

The discretion involved in these activities is, in practice, actually quite minimal. Experience shows that budget preparation activities are more fact-based and technical in nature.237 Even if these activities involve discretion, they do not ultimately direct or control government funds or resources and are readily monitored by government officials and interested third parties.238 These activities provide information to allow someone else, presumably a government employee or officer, to make a determination. Since these activities could, and most likely will, influence government officials who make the determinations that direct or control federal funds and resources, it is appropriate to classify these activities as closely associated with inherently governmental functions. However, these activities have generally not been defined as inherently governmental functions themselves and would not qualify under the simplified definition.239

b.   “Services that involve or relate to the development of regulations.”240

These services are contrasted against FAR 7.503(c)(5) on the inherently governmental list above.241 These are support services used to assist government officials in making their determinations regarding the content of regulations but do not actually constitute activities involving discretion to control government resources or employees. Therefore, these do not constitute inherently governmental functions under the simplified definition.

c.  “Services that involve or relate to the evaluation of another contractor’s performance.”242

These services are likely to be discretionary, but they do not control or direct government funds. Providing an opinion or compiling facts about another contractor’s performance is not the same as terminating a contract or deciding whether to renew a contract with another entity. The evaluation might result in a government official terminating a contract or another government official ultimately deciding not to select the contractor for a future solicitation, but it does not direct or control government funds or resources. This type of function might create a conflict of interest, so it must be closely monitored, but it does not meet the simplified definition of an inherently governmental function, and these evaluation activities have generally not been classified as inherently governmental functions.243

d.   “Services in support of acquisition planning.”244

Much like the services in support of budget preparation or in support of developing regulations, these services are separate from the determination of whether to contract or what to contract for. These services do not directly obligate federal funds. Some of these services may involve some discretion and may influence a government official, who ultimately decides what to contract for or how to obtain a requirement. This influence does not rise to the level of an inherently governmental function under the simplified definition, but it does require close monitoring to ensure the government official actually makes a choice and is not simply rubber stamping decisions made by the contractor.

e.   “Contractors working in any situation that permits or might permit them to gain access to confidential business information and/or any other sensitive information (other than situations covered by the National Security Program. . . .)”245

Under the simplified definition proposed above, just having access to information is not inherently governmental — the exercise of discretion based on that information is the critical element. As a result, while this function may need appropriate safeguards, such as promises not to misuse the information, this function generally has not been classified as an inherently governmental function.246

f.  “Contractors serving as arbitrators or providing alternative methods of dispute resolution.”247

Arbitrators adjudicate claims between the two parties, but they do not direct federal resources or funds nor do they encroach on liberties or rights of the parties. If one party decides not to comply with the arbitrator’s decision, the prevailing party would still have to bring an action to a federal or state court to enforce the decision under contract provisions.248 The judicial enforcement decision would then direct government funds and resources. Under the simplified definition, this function falls short of being inherently governmental.

g.   “Contractors providing special non-law enforcement, security activities that do not directly involve criminal investigations, such as prisoner detention or transport and non-military national security details.”249

These are actions where any discretion can be mitigated with set guidelines for what to do in most situations. Decisions in these situations may affect government resources, but the discretion over what decision to make under what circumstance can be eliminated. If proper directions and guidelines are not established, this is the type of function that can easily become an inherently governmental function, which is why this function must be closely monitored. The inherent weaknesses in monitoring may explain why functions such as prison management have been controversial when privately performed.250

C.    Problems with the Simplified Definition

As the discussion above shows, traditional definitions of “inherently governmental” and “closely associated” functions tend to support the simplified definition proposed here — a definition grounded in discretion. Applying the simplified definition to established inherently governmental functions reveals that the simplified definition captures many functions traditionally considered to be inherently governmental and correctly excludes “closely associated” functions.251 However, the simplified definition cannot correctly capture all functions previously declared inherently governmental. Functions such as conducting hearings for security clearances252 and the drafting of congressional testimony253 have been deemed to be inherently governmental, but they lack the control and obligation of government funds or resources or restrictions on liberties to be classified as inherently governmental functions under the proposed definition.

These inherently governmental functions that the simplified definition does not capture as inherently governmental have a common trait. They are all functions that implicate the sovereign power of the United States: congressional testimony, for example, can have a profound impact on Congress’s exercise of its sovereign authority, and the sovereign has the power to decide who should have access to information it deems classified.254 The 2011 Policy Letter also identified this exercise of sovereign power under its nature of the function test.255 When the simplified definition is combined with the nature of the function test found in the 2011 Policy Letter, the two should capture inherently governmental functions. However, the addition of a category classifying a function simply by its nature does little to clarify what is an inherently governmental function any better than the existing definition that “a function that is so intimately related to the public interest as to require performance by [f]ederal [g]overnment employees.”256

VI.      Conclusion

Despite outcry over conflicting and confusing definitions of inherently governmental functions, the definition has not changed much over the last three decades.257 What has changed is an increase in the scope of work the government contracts for and a shortage of procurement professionals in the federal government.258 Reforms that do not simplify or speed up the procurement process will be ineffective and largely ignored.259

While the 2011 Policy Letter consolidated previous definitions of inherently governmental functions, it failed to offer a single definition of inherently governmental functions.260 Although the 2011 Policy Letter consolidated the various definitions in one location and called them a single definition, this meant only that the multitude of previous definitions were bunched together, so they could be evaluated at once.261 The 2011 Policy Letter appeared to conclude the understanding of an inherently governmental function has been shaped by so many forces over the last several decades that a unitary definition of an inherently governmental function is not possible.

If OFPP truly wishes to create a single definition of inherently governmental functions, capable of alleviating the confusion that program officials and contracting officers have been complaining about, it will have to accept that not all functions previously classified as inherently governmental could be so. OFPP will have to take an objective approach and be willing to reclassify some previously identified inherently governmental functions. One such approach is the principal/ agent approach proposed here. Under such an approach, OFPP could draw a line in the sand and establish objective factors that prevent any amount of monitoring from being enough and require a function with those factors to be performed by federal employees. It could classify what factors prevent the ability for the principle to adequately control the agent. In the simplified definition proposed in this Article, the line is drawn where the agent uses discretion to obligate or control federal funds or deprive citizens of rights or liberties. OFPP could draw the line somewhere else, but drawing a distinctive line would allow officials to know and test whether a function is inherently governmental or not. If OFPP continues to “define” inherently governmental functions using multiple approaches and various, unrelated examples, there will be confusion over what is an inherently governmental function. The author urges OFPP to actually create a single definition of inherently governmental functions and offers the proposed definition as a starting point, if not the finalized single definition.

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  1. Robert D. McFadden, Frances Oldham Kelsey, Who Saved U.S. Babies from Thalidomide, Dies at 101, N.Y. TIMES (Aug. 7, 2015), http://www.nytimes.com/2015/08/08/science/frances-oldham-kelsey-fda-doctor-who-exposed-danger-of-thalidomide-dies-at-101.html?referrer&_r=0, [https://perma.cc/ZB8F-SX3P].
  2. Id.
  3. Id.
  4. Id.
  5. Id.
  6. See, e.g. Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No.110-417, §§ 101–105, 122 Stat. 4534, 4372–73 (2008); CONG. BUDGET OFFICE, THE BUDGET AND ECONOMIC OUTLOOK: 2016 TO 2026 63 (2016) [hereinafter BUDGET AND ECONOMIC OUTLOOK].
  7. Letter from Douglas W. Elmendorf, Director, Cong. Budget Office, to Rep. Chris Van Hollen (Mar. 11, 2015), available at https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49931-FederalContracts.pdf [https://perma.cc/45RS-WZU4].
  8. McFadden, supra note 1.
  9. See 5 U.S.C. § 3331 (2012) (stating that federal employees must take an oath before they can perform their duties); see also FAR 7.503 (explaining that federal contracts cannot be used to perform inherently governmental functions).
  10. See Christopher R. Yukins, A Versatile Prism: Assessing Procurement Law Through the Principal-Agent Model, 40 PUB. CONT. L.J. 63, 65–67 (2010) (explaining that these types of functions do not allow for sufficient monitoring to ensure that the contractor or agent does not act in its own interest as opposed to the government’s or principal’s interest).
  11. JOHN R. LUCKEY & KATE M. MANUEL, CONG. RESEARCH SERV., R42325, DEFINITIONS OF “INHERENTLY GOVERNMENTAL FUNCTIONS” IN FEDERAL PROCUREMENT LAW AND GUIDANCE (2012).
  12. Charles S. Clark, OMB Announces Final Guidance on Inherently Governmental Functions, GOV’T EXECUTIVE (Sept. 9, 2011), http://www.govexec.com/oversight/2011/09/omb-announces-final-guidance-on-inherently-governmental-functions/34878/ [https://perma.cc/YKN5-DBUT].
  13. See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-10-58R, CIVILIAN AGENCIES’ DEVELOPMENT AND IMPLEMENTATION OF INSOURCING GUIDELINES 3, 6–7 (2009). Section 736 of the Omnibus Appropriations Act of 2009 required agencies to devise and implement insourcing guidelines by July 2009. Id. at 3. GAO found that none of the nine federal agencies it visited had met this requirement by the July 2009 deadline. Id. at 6. The agencies blamed, among other things, the uncertainty of what is meant by “inherently governmental” functions. Id. at 6–7.
  14. Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No.110-417, § 321, 122 Stat. 4534, 4411 (2008).
  15. See Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 9755, 9755–96 (Mar. 4, 2009); see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,227 (Sept. 12, 2011).
  16. See Monica Rheinhardt, Is the Government’s Refusal to Explicitly Classify Functions Closely Related to Governmental Functions as Inherently Governmental a Sign of the Governments Gross Dependency on Government Contractors to Perform This Work? 21–22 (Aug. 31, 2011) (unpublished L.L.M. thesis, The George Washington University Law School) (on file with the George Washington University Library system); see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,229; PROF’L SERV. COUNCIL, THE BALANCING ACT: ACQUISITION IN AN UNABATED CRISIS 21–22 (2012) [hereinafter THE BALANCING ACT], available at https://www.pscouncil.org/c/p/ProcurementPolicySurvey/2012.aspx, [https://perma.cc/A99A-NU44] (explaining that the 2011 Policy Letter is not actually motivating agency decisions because they are overshadowed by demographics and budget issues and efforts to define inherently governmental functions have “been only marginally helpful for agencies to make better resource decisions”).
  17. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,240.
  18. JOHN R. LUCKEY, VALERIE BAILEY GRASSO & KATE M. MANUEL, CONG. RESEARCH SERV., R40641, INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS: BACKGROUND, ISSUES, AND OPTIONS FOR CONGRESS 5 (2009) [hereinafter INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS] (explaining that during the 1980s, Presidents Reagan and Bush sought to privatize functions, and Congress responded with appropriations riders restricting the funds needed to privatize or with legislation declaring the function inherently governmental); see also Nat’l Air Traffic Controllers Ass’n v. Sec’y of the Dep’t of Transp., 654 F.3d 654, 659 (6th Cir. 2011) (holding that Congress declared specific functions at certain air traffic control towers to not be inherently governmental).
  19. See, e.g., Aaron Blake, Gridlock in Congress? It’s Probably Even Worse than You Think, WASH. POST (May 19, 2014), https://www.washingtonpost.com/news/the-fix/wp/2014/05/29/gridlock-in-congress-its-probably-even-worse-than-you-think/?utm_term=.7ad7b7d9693c [https://perma.cc/U6TW-ZLNX].
  20. The report on contractor-supported atrocities at the prison at Abu Grab in Iraq was published in 2004, and the Blackwater travesty at Nisour Square—a mass shooting that resulted in seventeen dead Iraq civilians—took place in September 2007, but it was not until the NDAA of 2009 that major change was seen. See ANTHONY R. JONES, AR 15-6 INVESTIGATION OF THE ABU GHRAIB DETENTION FACILITY AND 205TH MILITARY INTELLIGENCE BRIGADE 52 (2004), available at https://www.thetorturedatabase.org/document/fay-report-investigation-205th-military-intelligence-brigades-activites-abu-ghraib [https://perma.cc/KDJ6-5FC4]; see also Abigail Clark, Reclaiming the Moral High Ground: U.S. Accountability for Contractor Abuses as a Means to Win Back Hearts and Minds, 38 PUB. CONT. L.J. 709, 711–12 (2009); INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 6; Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No.110-417, § 321(a), 122 Stat. 4534, 4411(2008).
  21. See generally Russell Berman, The Donald Trump Cabinet Tracker, ATLANTIC (Mar. 2, 2017), https://www.theatlantic.com/politics/archive/2017/03/trump-cabinet-tracker/510527/ [https://perma.cc/J3MG-B6WM].
  22. See 28 U.S.C. § 1491(b)(1)–(2) (2012).
  23. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 20–22; see, e.g., Arrowhead Metals, Ltd. v. United States, 8 Cl. Ct. 703, 707, 717 (1985).
  24. The Debt to the Penny and Who Holds It, TREASURY DIRECT, http://www.treasurydirect.gov/NP/debt/current [https://perma.cc/77V6-6W64] (last visited Apr. 18, 2017).
  25. BUDGET AND ECONOMIC OUTLOOK, supra note 6, at 11.
  26. Id. at 30.
  27. See PEW RESEARCH CTR., BEYOND DISTRUST: HOW AMERICANS VIEW THEIR GOVERNMENT 44–58, 116–24 (2015) (noting the wide range of responsibilities Americans expect the government to fulfill); see also WASH. POST, KAISER FAMILY FOUND. & HARVARD UNIV., ROLE OF GOVERNMENT SURVEY 7, 12 (2010).
  28. See Keric D. Clanahan, Wielding a “Very Long, People-Intensive Spear”: Inherently Governmental Functions and the Role of Contractors in U.S. Department of Defense Unmanned Aircraft Systems Missions, 70 A.F. L. REV. 119, 141–42, 142 n.86 (2013) (citing William J. Novak, Public-Private Governance: A Historical Introduction, in GOVERNMENT BY CONTRACT 30–31 (Jody Freeman & Martha Minow eds., 2009)). For examples of such services, Novak notes the following:
    Of the 335 chartered corporations formed before 1800, 219 were turnpike, bridge, and canal companies; 67 were banks and insurance companies; and 36 concerned water, fire protection, or harbor facilities. Between 1790 and 1860, 88 percent of Pennsylvania’s 2,333 special charters were granted to transport, infrastructure, utility, and financial corporations (only 8 percent went to manufacturing or general business firms).
    Id. at 142 n.86 (internal quotations omitted).
  29. See Novak, supra note 28, at 32.
  30. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 4 (citing JAMES F. NAGLE, A HISTORY OF GOVERNMENT CONTRACTING 379–444 (2d ed. 1999)).
  31. Lori C. Anderson, The Meaning of Inherently Governmental in OMB Circular A-76 from 1966 to 2003: A Change in Governing Approaches? 20–21 (Dec. 5, 2008) (unpublished Ph.D. Dissertation, Virginia Polytechnic Institute and State University) (citing Daniel Guttman, Inherently Governmental Functions and the New Millennium: The Legacy of Twentieth-Century Reform, in MAKING GOVERNMENT MANAGEABLE: EXECUTIVE ORGANIZATION AND MANAGEMENT IN THE TWENTY-FIRST CENTURY 42–43 (Thomas H. Stanton & Benjamin Ginsberg eds., 2004)), available at https://vtechworks.lib.vt.edu/handle/10919/29962 [https://perma.cc/8UJY-FTQX].
  32. See Mohab Tarek Khattab, Revised Circular A-76: Embracing Flawed Methodologies, 34 PUB. CONT. L.J. 469, 472 (2005) (citing Daniel Guttman, Public Purpose and Private Service: The Twentieth Century Culture of Contracting Out and the Evolving Law of Diffused Sovereignty, 52 ADMIN. L. REV. 859, 864 (2000)).
  33. See Anderson, supra note 31, at 22.
  34. BUREAU OF THE BUDGET, EXEC. OFFICE OF THE PRESIDENT, BUDGET BULL. NO. 55-4, COMMERCIAL-INDUSTRIAL ACTIVITIES OF THE GOVERNMENT PROVIDING PRODUCTS OR SERVICES FOR GOVERNMENTAL USE 1 (1955) (“[T]he [f]ederal [g]overnment will not start or carry on any commercial activity to provide a service or product for its own use if such product or service can be procured from private enterprise through ordinary business channels.”).
  35. See generally Anderson, supra note 31, at 22, 24.
  36. See Anderson, supra note 31, at 23–24 (noting that “contracting for military research and development [became] an accepted part of the U.S. federal political landscape,” with “nonfederal institutions conduct[ing] over 80 percent of federally funded and development” by the 1960s) (citing Guttman supra note 31, at 43); see also S. Doc. No. 87-94, at 12 (1962); KEVIN R. KOSAR, CONG. RESEARCH SERV., RL33777, PRIVATIZATION AND THE FEDERAL GOVERNMENT: AN INTRODUCTION 6 (2006) (explaining that advocates for privatization touted that private firms could provide goods and services “better, faster, and cheaper” than the government). But see Michael K. Grimaldi, Abolishing the Prohibition on Personal Service Contracts, 38 J.LEGIS. 71, 100 (2012) (citing Robert O’Harrow Jr., Contractors Augment Intelligence Agencies, WASH. POST (Aug. 28, 2008), www.washingtonpost.com/wp-dyn/content/article/2008/08/27/AR2008082703142.html [https://perma.cc/3VPZ-7CF4]) (reporting that the average intelligence contract worker costs the government about $207,000 annually, compared with about $125,000 for a government employee).
  37. BUREAU OF BUDGET, EXEC. OFFICE OF THE PRESIDENT, CIRCULAR NO. A-76, POLICIES FOR ACQUIRING COMMERCIAL OR INDUSTRIAL PRODUCTS AND SERVICES FOR GOVERNMENT USE 1 (1966) [hereinafter CIRCULAR NO. A-76]; see also, Anderson, supra note 31, at 26–27 (citing Larkin Dudley, Fencing in the Inherently Governmental Debate, in REFOUNDING DEMOCRATIC PUBLIC ADMINISTRATION: MODERN PARADOXES POSTMODERN CHALLENGES 74 (Gary L. Walmsley & James F. Wolf eds., 1996)).
  38. CIRCULAR NO. A-76, supra note 37, at 2–3.
  39. Anderson, supra note 31, at 27 (citing Dudley, supra note 37, at 74).
  40. Id. at 24 (citing Guttman, supra note 31, at 49).
  41. Id. (citing Guttman, supra note 31, at 49).
  42. Id. (citing Guttman, supra note 31, at 49).
  43. AL GORE, CREATING A GOVERNMENT THAT WORKS BETTER & COSTS LESS: REPORT OF THE NATIONAL PERFORMANCE REVIEW (1993), available at http://pdf.usaid.gov/pdf_docs/PCAAA544.pdf [https://perma.cc/P7HQ-GNLP].
  44. Shelley Roberts Econom, Confronting the Looming Crisis in the Federal Acquisition Workforce, 35 PUB. CONT. L.J. 171, 178 (2006) (citing DONALD F. KETTL, THE BROOKINGS INST., REINVENTING GOVERNMENT: A FIFTH-YEAR REPORT CARD 3 (1998)).
  45. GORE, supra note 43, at 13.
  46. See Steven L. Schooner & Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance, J.CONT. MGMT., Summer 2008, at 9, 10, 15, 24 n.100 (2008) (quoting COMM’N ON ARMY ACQUISITION & PROGRAMMGMT. IN EXPEDITIONARY OPERATIONS, URGENT REFORM REQUIRED: ARMY EXPEDITIONARY CONTRACTING 29 (2007), available at http://www.acq.osd.mil/dpap/contingency/reports/docs/gansler_commission_report_final_report_20071031.pdf [https://perma.cc/BEL9-UWMP] (explaining that from the years 1990–2006 “Congress embarked upon an ill-conceived gutting of the acquisition workforce”)).
  47. See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-12-1007, CIVILIAN SERVICE CONTRACT INVENTORIES: OPPORTUNITIES EXIST TO IMPROVE AGENCY REPORTING AND REVIEW EFFORTS (2012) (reporting that in fiscal year 2011, federal civilian agencies spent $126 billion on contracts for services, almost eighty percent of their total contract obligations for that year).
  48. See Steven L. Schooner, Contractor Atrocities at Abu Ghraib: Compromised Accountability in a Streamlined, Outsourced Government, 16 STAN. L. & POL’Y REV. 549, 558–59 (2005).
  49. See Collin D. Swan, Note, Dead Letter Prohibitions and Policy Failures: Applying Government Ethics Standards to Personal Services Contractors, 80 GEO. WASH. L. REV. 668, 682–83 (2012).
  50. NCMA & BLOOMBERG GOV’T, ANNUAL REVIEW OF GOVERNMENT CONTRACTING 5 (2015), available at http://www.ncmahq.org/docs/default-source/default-document-library/pdfs/exec15—ncma-annual-review-of-government-contracting-2015-edition [https://perma.cc/H6T4-DTB6].
  51. National Defense Authorization Act of Fiscal Year 2008, Pub. L. No. 110-181, § 324, 122 Stat. 3, 60.
  52. See Clanahan, supra note 28, at 149 & n.124 (citing Sandra I. Erwin, Pentagon Insourcing Fueling Contractor Anxiety, NAT’L DEF., Apr. 2011, at 18, 18 (writing that “[b]oth Congress and the administration concluded that the [outsourcing] pendulum had swung too far”)); E. Sanderson Hoe & Phillip Carter, Feature Comment: OFPP Issues Proposed New Definition of ‘Inherently Governmental’, 52 GOV’T CONTRACTOR ¶ 139, Apr. 21, 2010, at 3 (stating that the 2011 OFPP Policy Letter 11-01 expresses “the Obama administration’s policy preference for Government employees over contractors”); see also INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 6 (citing Defense Budget Recommendation Statement, U.S. DEP’T DEF. (Apr. 6, 2009), http://archive.defense.gov/speeches/speech.aspx?speechid=1341 [https://perma.cc/FPA2-66GS] (testimony of Sec’y of Def. Robert M. Gates) (stating that DoD would reduce the number of service contractors from thirty-nine percent of the workforce to the pre-2001 level of twenty-six percent and would be hiring up to 30,000 new civil servants in the next five years)).
  53. Omnibus Appropriations Act, 2009, Pub. L. No. 111-8, § 737, 123 Stat. 524, 691.
  54. See Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 9755, 9755–96 (Mar. 4, 2009).
  55. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,227 (Sept. 12, 2011).
  56. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 537 (1935) (declaring private delegation legislation unconstitutional because it would have allowed industry and trade associations to create “codes of fair competition” to be applied to the industry); Carter v. Carter Coal Co., 298 U.S. 238, 311 (1936) (declaring the power to regulate is a governmental function and struck down the statute delegating regulatory power to industry because it placed legislative power in the hands of a majority that might have adverse interests from an unwilling minority).
  57. See A.L.A. Schechter Poultry Corp., 295 U.S. at 537; Carter Coal Co., 298 U.S. at 311. Cases since A.L.A. Schechter Poultry Corp. and Carter Coal Co. have allowed delegation of some legislative powers to other government agencies and commissions. See generally Loving v. United States, 517 U.S. 748, 758–69 (1996). However, delegation to private industry has not been allowed. Cf. id.
  58. Anderson, supra note 31, at 23 (quoting S. Doc. No. 87-94, at 12 (1962)).
  59. Id. (citing S. Doc. No. 87-94, at 12 (1962)).
  60. Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979).
  61. Originally published under Bureau of the Budget Circular A-76, it went through several revisions, including those in 1967, 1979, 1983, 1991, 1999, and 2003. VALERIE ANN BAILEY GRASSO, CONG. RESEARCH SERV., R40854, CIRCULAR A-76 AND THE MORATORIUM ON DOD COMPETITIONS: BACKGROUND AND ISSUES FOR CONGRESS 1 (Jan. 16, 2013). In 1970, the Bureau of the Budget changed its name to the Office of Management and Budget. Exec. Order No. 11,541, 35 Fed. Reg. 10,737 (July 2, 1970).
  62. Anderson, supra note 31, at 121–22.
  63. Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979).
  64. Id.
  65. Id.
  66. The Circular’s three categories on governmental functions included the following examples:
    (1) Discretionary application of Government authority, as in investigations, prosecutions and other judicial functions; in management of Government programs requiring value judgments, as in directing the national defense; management and direction of the Armed Services; conduct of foreign relations; selection of program priorities; direction of Federal employees; regulation of the use of space, oceans, navigable rivers and other natural resources; direction of intelligence and counter-intelligence operations; and regulation of industry and commerce, including food and drugs.
    (2) Monetary transactions and entitlements, as in Government benefit programs; tax collection and revenue disbursements by the Government; control of the public treasury, accounts, and money supply; and the administration of public trusts.
    (3) In-house core capabilities in the area of research, development, and testing, needed for technical analysis and evaluation and technology base management and maintenance. However, requirements for such services beyond the core capability that has been established and justified by the agency are not considered governmental functions.
    Id. (emphasis omitted).
  67. Id. at 20,556.
  68. Id. at 20,561–62 (noting that the list of commercial activities included over ninety activities divided into fifteen categories).
  69. Id. at 20,558.
  70. Id.
  71. Id.
  72. Id. at 20,564.
  73. See Diebold v. United States, 947 F.2d 787, 800 (6th Cir. 1991).
  74. Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,110 (Aug. 16, 1983).
  75. Id. at 37,114
  76. Id.
  77. See Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,558.
  78. Compare Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114, with Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,558.
  79. Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114.
  80. Compare id. at 37,114, with Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,556. The only significant difference between these examples is that the 1983 version included, as inherently governmental, “activities performed exclusively by military personnel who are subject to deployment in a combat, combat support or combat service support role.” Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114.
  81. Compare Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114, with Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,556.
  82. Compare Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,115–16, with Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,556, 20,561–62. The Research and Development category was removed because the A-76 Task Group exempted research and development from the circular’s application, see Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,111, but two new categories were added, Management Support Services and Special Studies and Analyses. Id. at 37,115–16.
  83. Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114.
  84. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,096 (Sept. 30, 1992).
  85. Id.
  86. Id.
  87. Id. at 45,100.
  88. Compare Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114, with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100 (“An ‘inherently governmental function’ is a function that is so intimately related to the public interest as to mandate performance by Government employees. These functions include those activities that require either the exercise of discretion in applying Government authority or the [making/use] of value judgments in making decisions for the Government.”).
  89. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100.
  90. Id. at 45,101. The Policy Letter laid out the six factors to determine if a function is inherently governmental:
    (1) Congressional legislative restrictions or authorizations.
    (2) The degree to which official discretion is or would be limited, i.e., whether the contractor’s involvement in agency functions is or would be so extensive or his or her work product is so far advanced toward completion that the agency’s ability to develop and consider options other than those provided by the contractor is restricted.
    (3) In claims adjudication and related services.
    i. The finality of any contractor’s action affecting individual claimants or applicants, and whether or not review of the contractor’s action is de novo (i.e., to be effected without appellate body’s being bound by prior legal rulings or factual determinations) on appeal of his or her decision to an agency official;
    ii. The degree to which contractor activities may involve wide ranging interpretations of complex, ambiguous case law and other legal authorities, as opposed to being circumscribed by detailed laws, regulations, and procedures;
    iii. The degree to which matters for decision by the contractor involved recurring fact patterns or unique fact patterns; and
    iv. The contractor’s discretion to determine an appropriate award or penalty.
    (4) The contractor’s ability to take action that will significantly and directly affect the life, liberty, or property of individual members of the public, including the likelihood of the contractor’s need to resort to force in support of a police or judicial function; whether force, especially deadly force, is more likely to be initiated by the contractor or by some other person; and the degree to which force may have to be exercised in public or relatively uncontrolled areas. (Note that contracting for guard, convoy security, and plant protection services, armed or unarmed, is not proscribed by these policies.)
    (5) The availability of the special agency authorities and the appropriateness of their application to the situation at hand, such as the power to deputize private persons.
    (6) Whether the function in question is already being performed by private persons, and the circumstances under which it is being performed by them.
    Id.
  91. Id. at 45,102–03. Appendix A listed nineteen inherently governmental functions. Id. Appendix B listed nineteen functions that are almost inherently governmental and need close observation in order to prevent them from becoming inherently governmental. Id. at 45,103. Many of the examples on this list were taken directly from GAO opinions. See Mgmt. of Young Adult Conservation Corps, B-192518, 1979 WL 12192, at *3 (Comp. Gen. Aug. 9, 1979) (determining that accepting or rejecting an applicant to a government program is an inherently governmental function); see also Collection of Recreation User Fees by National Forests Volunteers, 62 Comp. Gen. 339, at 339 (1983) (the collection of established fees is an inherently governmental function); General Services Administration—Sale of Used Government Vehicles by Private Sector Auction Houses, 64 Comp. Gen. 149, at 149 (1984) (selling used government property above a minimum set price is not an inherently governmental function).
  92. Anderson, supra note 31, at 23 (citing S. DOC. NO. 87-94, at 12 (1962)).
  93. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,101.
  94. Id.
  95. Compare Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983), with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100.
  96. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,101 (emphasis added).
  97. Id.
  98. Id.
  99. Id. at 45,102.
  100. Federal Acquisition Regulation; Inherently Governmental Functions, 61 Fed. Reg. 2627, 2627 ( Jan. 26, 1996).
  101. Id. at 2627–29.
  102. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100 (“[A] function that is so intimately related to the public interest as to mandate performance by [g]overnment employees. These functions include those activities that require either the exercise of discretion in applying [g]overnment authority or the making of value judgments in making decisions for the [g]overnment.”), with FAR 7.501 (1996) (“[A] function that is so intimately related to the public interest as to mandate performance by [g]overnment employees. This definition is a policy definition, not a legal determination. An inherently governmental function includes those activities that require either the exercise of discretion in applying [g]overnment authority or the making of value judgments in making decisions for the [g]overnment.”).
  103. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,102, 45,103, with FAR 7.503 (1996).
  104. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100, with FAR 7.503(c)(20) (1996).
  105. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,101.
  106. FAR 7.503(c)(20) (1996).
  107. See FAR 2.101.
  108. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100, with FAR 2.101.
  109. The Federal Activities Inventory Reform Act of 1998, Pub. L. No. 105-270, 112 Stat. 2382 (codified at 31 U.S.C. § 501 (2012)).
  110. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 8; Federal Activities Inventory Reform Act: Hearing on H.R. 4244 Before the Subcomm. on Gov’t Mgmt., Info., & Tech. of the Comm. on Gov’t Reform & Oversight, 105th Cong. 1–2 (1998) [hereinafter Federal Activities Inventory Reform Act] (statement of John J. Duncan, Jr., Rep. from Tennessee). As originally introduced, the Freedom from Government Competition Act would have prohibited agencies from beginning or carrying out any activity whose products or services could be provided by the private sector. Id.
  111. Federal Activities Inventory Reform Act § 2(a)–(c)(1), 112 Stat. 2382.
  112. Compare FAR 2.101 (“ ‘Inherently governmental function’ means, as a matter of policy, a function that is so intimately related to the public interest as to mandate performance by [g]overnment employees.”), and Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100 (“As a matter of policy, an ‘inherently governmental function’ is a function that is so intimately related to the public interest as to mandate performance by [g]overnment employees.”), with Federal Activities Inventory Reform Act § 5(2)(A), 112 Stat. at 2384 (“The term ‘inherently governmental function’ means a function that is so intimately related to the public interest as to require performance by [f]ederal [g]overnment employees.”).
  113. Compare FAR 2.101, and Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100, with Federal Activities Inventory Reform Act § 5(2)(A)–(B), 112 Stat. 2384–85. Section 5(2)(A) of the FAIR Act of 1998 contained the simple definition of an inherently governmental function while Section 5(2)(B) and 5(2)(C) contained the elaboration on what activities were included in inherently governmental functions:
    (A) DEFINITION.—The term “inherently governmental function” means a function that is so intimately related to the public interest as to require performance by [f]ederal [g]overnment employees.
    (B) FUNCTIONS INCLUDED.—The term includes activities that require either the exercise of discretion in applying [f[ederal [g]overnment authority or the making of value judgments in making decisions for the [f]ederal [g]overnment, including judgments relating to monetary transactions and entitlements. An inherently governmental function involves, among other things, the interpretation and execution of the laws of the United States so as—(i) to bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise; (ii) todetermine, 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; (iii) to significantly affect the life, liberty, or property of private persons; (iv) to commission, appoint, direct, or control officers or employees of the United States; or (v) 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 appropriated and other [f]ederal funds.
    (C) FUNCTIONS EXCLUDED.—The term does not normally include— (i) gathering information for or providing advice, opinions, recommendations, or ideas to [f]ederal [g]overnment officials; or (ii) any function that is primarily ministerial and internal in nature (such as building security, mail operations, operation of cafeterias, housekeeping, facilities operations an maintenance, warehouse operations, motor vehicle fleet management operations, or other routine electrical or mechanical services).
    Federal Activities Inventory Reform Act § 5(2)(A)–(B), 112 Stat. 2384–85 (emphasis added to show where all three definitions are identical).
  114. Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. 33,927, 33,927, 33,931 ( June 24, 1999).
  115. Compare id. at 33,931, with Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983).
  116. See generally Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. at 33,931.
  117. OFFICE OF MGMT. & BUDGET, Exec. Office of the President, CIRCULAR NO. A-76 (REVISED), PERFORMANCE OF COMMERCIAL ACTIVITIES (2003) [hereinafter OMB CIRCULAR A-76 (2003)], available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A76/a76_incl_tech_correction.pdf [https://perma.cc/F68P-MTW7].
  118. Id.
  119. Id.
  120. Id.
  121. Id. at A-1.
  122. Compare id. at A-2, with Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. 33,927, 33,931 ( June 24, 1999).
  123. Compare OMB CIRCULAR A-76 (2003), supra note 117, at A-2 (stating that inherently governmental “activities require the exercise of substantial discretion in applying government authority and/or in making decisions for the government”), with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,101 (Sept. 30, 1992) (“While inherently governmental functions necessarily involve the exercise of substantial discretion, not every exercise of discretion is evidence that such a function is involved.”).
  124. Compare Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. at 33,931 (“[T]hese functions include those activities which require either the exercise of discretion in applying [g]overnment authority or the use of value judgement in making decisions for the [g]overnment.”), with OMB CIRCULAR A-76 (2003), supra note 117, at A-2 (“[T]hese activities require the exercise of substantial discretion in applying government authority and/or in making decisions for the government.”).
  125. Inherently governmental activities involve:
    (1) Binding the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise; (2) Determining, protecting, and advancing economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise; (3) Significantly affecting the life, liberty, or property of private persons; or (4) Exerting ultimate control over the acquisition, use, or disposition of United States property (real or personal, tangible or intangible), including establishing policies or procedures for the collection, control, or disbursement of appropriated and other federal funds.
    OMB CIRCULAR A-76 (2003), supra note 117, at A-2.
  126. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,100, with OMB CIRCULAR A-76 (2003), supra note 117, at A-2.
  127. Compare OMB CIRCULAR A-76 (2003), supra note 117, at A-2, A-3, with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,101.
  128. Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No.110-417, § 321, 122 Stat. 4534, 4411 (2008).
  129. Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 9755, 9755 (Mar. 4, 2009).
  130. Id. at 9756.
  131. Id.
  132. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,227 (Sept. 12, 2011).
  133. Compare id. at 56,236, with OMB Circular A-76 (2003), supra note 117, at A-2.
  134. Compare Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,236, and Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983), with with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,100 (Sept. 30, 1992) (showing that minor changes were made such as putting the word “Federal” in front of government and changing “as to mandate performance” to “as to require performance”).
  135. See Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,234.
  136. Compare Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,102–03, with Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,231, 56,240–41. For example, inherently governmental function examples such as Combat and Security were added. Id. at 56,231. This may have been in response to the Blackwater scandals. Id. at 56,229. The closely associated function example of acquisition planning was given subsections. Id. at 56,234. This may have been due to the fact that many agencies lacked the appropriate personnel to fully staff their acquisition needs with government employees and were relying on contractors to perform many acquisition support functions. Id.
  137. Compare id. at 56,236, with Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979).
  138. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,238.
  139. See id. at 56,238.
  140. Id. at 56,237.
  141. Id.
  142. Id.
  143. Id.
  144. Id.
  145. Id. at 56,238.
  146. Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979).
  147. Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983); Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,102 (Sept. 30, 1992); Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. 33,927, 33,932 ( June 24, 1999); OMB CIRCULAR A-76 (2003), supra note 117; Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,240.
  148. See, e.g., Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,561; OFFICE OF MGMT. & BUDGET, Exec. Office of the President, CIRCULAR NO. A-76, PERFORMANCE OF COMMERCIAL ACTIVITIES iii (1996) [hereinafter Circular A-76 PERFORMANCE OF COMMERCIAL ACTIVITIES], available at https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/agencyinformation_circulars_procurement_pdf/a076supp.pdf [https://perma.cc/7MFG-X6Q5].
  149. Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. at 20,561.
  150. Id.
  151. Id.
  152. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,101.
  153. Federal Activities Inventory Reform Act of 1998, Pub. L. No. 105-270, § 2(a), 112 Stat. 2382, 2382 (codified at (b) 31 U.S.C. § 501 (2012)).
  154. Id. § 3(a), 112 Stat. at 2383. Section 3(b) of the FAIR Act of 1998 defined an interested party as:
    (1) A private sector source that—(A) is an actual or prospective offeror for any contract, or other form of agreement, to perform the activity; and (B) has a direct economic interest in performing the activity that would be adversely affected by a determination not to procure the performance of the activity from a private sector source. (2) A representative of any business or professional association that includes within its membership private sector sources referred to in paragraph (1). (3) An officer or employee of an organization within an executive agency that is an actual or prospective offeror to perform the activity. (4) The head of any labor organization referred to in section 7103(a)(4) of title 5, United States Code, that includes within its membership officers or employees of an organization referred to in paragraph (3).
  155. Id. § 3(c), (d), 112 Stat. at 2383–84.
  156. Id. § 3(e), 112 Stat. at 2384.
  157. Id. §3(d), (e), 112 Stat. at 2384. It is possible that such determinations by heads of agencies could be seen as final agency actions, thus triggering the applicability of the Administrative Procedures Act. See 5 U.S.C. § 704 (2012).
  158. Circular A-76 PERFORMANCE OF COMMERCIAL ACTIVITIES, supra note 148, at 13.
  159. Id. (defining an eligible appellant as “a. Federal employees (or their representatives) and existing Federal contractors affected by a tentative decision to waive a cost comparison; b. Federal employees (or their representatives) and contractors that have submitted formal bids or offers who would be affected by a tentative decision to convert to or from in-house, contract or ISSA performance as a result of a cost comparison; or c. agencies that have submitted formal offers to compete for the right to provide services through ISSAs”).
  160. Circular A-76 PERFORMANCE OF COMMERCIAL ACTIVITIES, supra note 148, at 39.
  161. Implementation of the Federal Activities Reform Act of 1998, 64 Fed. Reg. 33,927, 33,931 (June 24, 1999) (using the same definition as found in the Federal Activities Inventory Reform Act of 1998 § 3(b), 112 Stat. at 2382); Circular A-76 PERFORMANCE OF COMMERCIAL ACTIVITIES, supra note 148, at 39–40.
  162. OMB CIRCULAR A-76 (2003), supra note 117, at A-1.
  163. Id.
  164. Id. at A-4.
  165. Id.
  166. See INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 5 (explaining that during the 1980s, Presidents Reagan and Bush would seek to privatize a function only to have Congress respond with an appropriations rider restricting the funds needed to privatize the function or with legislation declaring the function inherently governmental); see also Nat’l Air Traffic Controllers Ass’n v. Sec’y of Dep’t of Transp., 654 F.3d 654, 659 (6th Cir. 2011) (noting that Congress declared specific functions at certain control towers to be not inherently governmental); see also Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No.110-417, § 832, 122 Stat. 4534, 4535 (2008).
  167. See Timothy T. Mastrogiacomo, Note, Showdown in the Rose Garden: Congressional Contempt, Executive Privilege, and the Role of the Courts, 99 GEO. L.J. 163, 187–88 (2010).
  168. The exception to this rule being when Congress prohibited contractors from performing combat-related security functions. Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 § 832, 122 Stat. at 4535.
  169. See Bowsher v. Merck & Co., Inc., 460 U.S. 824, 844 (1983).
  170. 31 U.S.C. § 3552(a) (2012).
  171. KATE M. MANUEL, CONG. RESEARCH SERV., R42325, DEFINITIONS OF “INHERENTLY GOVERNMENTAL FUNCTION” IN FEDERAL PROCUREMENT LAW AND GUIDANCE 15 (2014), available at https://www.fas.org/sgp/crs/misc/R42325.pdf [https://perma.cc/C3SG-XYG5].
  172. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 19.
  173. Id.
  174. Id. at 19 n.109 (citing 31 U.S.C. § 3554(b)(3) (2012)).
  175. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 19 (citing Gerald P. Carmen, B-198137(1) (Comp. Gen. June 3, 1982) and 2B Brokers, B-298651, 2006 CPD ¶ 178, at 16 (Comp. Gen. Nov. 27, 2006)).
  176. 31 U.S.C. § 3551(2) (2012) (stating that an interested party includes “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract”).
  177. Bernard Humbles-Designated Emp. Agent, B-401349, 2009 CPD ¶ 125, at 3–4 (Comp. Gen. June 8, 2009).
  178. Aleut Facilities Support Servs., LLC, B-401925, 2009 CPD ¶ 202, at 1, 3 (Comp. Gen. Oct. 13, 2009).
  179. New Dynamics Corp., B-401272, 2009 CPD ¶ 150, at 8 (Comp. Gen. July 8, 2009).
  180. See, e.g., 2B Brokers, 2006 CPD ¶ 178, at 16 (holding that third party logistics integration and transportation service are commercial, and not inherently governmental); see also JL Assocs., Inc., B-218137, 85-1 CPD ¶ 501, at 4 (Comp. Gen. May 6, 1985) (losing bidder cannot claim that it thought it had to perform what would be inherently governmental functions, if the solicitation said it did not have to).
  181. See David Pryor, B-237356, 1989 WL 451879, at *2–3 (Comp. Gen. Dec. 29, 1989).
  182. See, e.g., id. (acting as a hearing officer is an inherently governmental decision because considering and ruling on evidence, making specific finding, and ruling whether a security clearance should be granted, denied, or revoked are examples of judicial functions that may not be contracted out; additionally, preparing testimony before Congress is an inherently governmental function because it involves discretion and making value judgments for the government); Mgmt. of Young Adult Conservation Corps, B-192518, 1979 WL 12192, at *3 (Comp. Gen. Aug. 9, 1979) (determining that “the decision to accept or reject a particular candidate [for participation in a government program] and thus confer or deny a valuable federal benefit is a sensitive matter which it does not seem appropriate to delegate outside the [g]overnment”).
  183. INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 20, 21.
  184. Id. at 19 n.109 (citing 31 U.S.C. § 3554(b)(3) (2012)), 22.
  185. FED. R. CIV. P. 65.
  186. See Nat’l Air Traffic Controllers Ass’n v. Pen˜ a, 1996 WL 102421 (6th Cir. Mar. 7, 1996), at *4 (holding that the employee union’s interest included “ensuring that the FAA does not privatize inherently governmental functions[]”); see also Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1344 (held that the Tucker Act granted standing to a contractor that objected to an award based upon the notion that the government had contracted out an inherently governmental function).
  187. See, e.g., Nat’l Fed’n of Fed. Emps. v. Cheney, 883 F.2d 1038, 1041 (D.C. Cir. 1989) (federal employee union sued the Army for violating parts of OMB Circular A-76); Diebold v. United States, 947 F.2d 787, 789–92 (6th Cir. 1991) (federal employees sued the army for miscalculating costs under OMB Circular A-76); Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d 1294, 1297 (Fed. Cir. 2001) (federal employees and their union sued the Defense Logistics Agency for failing to conduct a proper price comparison in accordance with OMB Circular A-76); Courtney v. Smith, 297 F.3d 455, 458 (6th Cir. 2002) (federal employees sued the Air Force for improperly outsourcing under OMB Circular A-76).
  188. See, e.g., Nat’l Fed’n of Fed. Emps., 883 F.2d at 1043–54 (federal employee unions did not have prudential standing to sue under OMB Circular A-76 because the federal employees were not in the zone of interest of the Circular or other federal procurement statutes); Am. Fed’n of Gov’t Emps., 258 F.3d at 1302 (federal employees and their union did not have standing to sue under OMB Circular A-76); Courtney, 297 F.3d at 463 (federal employees who sued the Air Force for improperly outsourcing jobs they performed lacked standing because they did not fall within the “zone of interest” of any of the procurement statutes they cited the Air Force for violating).
  189. Katherine Calogero, Become a Fan of Government Procurement on Facebook: How the Federal Government’s Acquisition Workforce Can Use Social Networking Websites to Recruit New Employees, 40 PUB. CONT. L.J. 807, 810–11 (2011).
  190. Id.
  191. U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-10-58R, CIVILIAN AGENCIES’ DEVELOPMENT AND IMPLEMENTATION OF INSOURCING GUIDELINES 7 (2009).
  192. Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 9755, 9755 (Mar. 4, 2009).
  193. Alexander Volokh, Privatization and the Elusive Employee-Contractor Distinction, 46 U.C. Davis L. Rev. 133, 145–46 (2012).
  194. Id.
  195. Id. at 139–40.
  196. See Schooner, surpa note 48, at 570.
  197. Volokh, supra note 193, at 149.
  198. Id. at 150.
  199. See, e.g. Steven L. Schooner, Competitive Sourcing Policy: More Sail Than Rudder?, 33 Pub. Cont. L.J. 263, 266, 284 (2004); see also Daniel J. Watson, How the Lead Systems Integrator Experience Should Enhance Efforts to Rebuild the Defense Acquisition Workforce, 68 A.F. L. Rev. 73, 104 (2012) (noting that the personnel crisis in federal acquisition was still a problem in 2009); PSC & GRANT THORNTON, ALIGNING FOR ACQUISITION SUCCESS: OVERCOMING OBSTACLES TO RESULTS 1 (2016), available at https://www.govexec.com/media/gbc/docs/pdfs_edit/061016cc1.pdf [https://perma.cc/NCR8-2M3D] (noting that senior acquisition personnel “expressed concern about a capacity gap, wherein the existing workforce, however skilled it may be, simply does not have the time and resources to keep up with demand).
  200. Kimberly N. Brown, “We the People,” Constitutional Accountability, and Outsourcing Government, 88 Ind. L.J. 1347, 1352 (2013).
  201. Shelley Roberts Econom, Confronting the Looming Crisis in the Federal Acquisition Workforce, 35 Pub. Cont. L.J. 171, 197–98 (2006).
  202. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236, 56,238 (Sept. 12, 2011).
  203. See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-12-87, MANAGING SERVICE CONTRACTS: RECENT EFFORTS TO ADDRESS ASSOCIATED RISKS CAN BE FURTHER ENHANCED (2011).
  204. See Rheinhardt, supra note 16, at 24; see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,232 (noting that the comments prior to the Policy Letter explained that a number of commentators to the policy letter recommended that closely associated functions be incorporated into inherently governmental functions).
  205. See Rheinhardt, supra note 16, at 29–30.
  206. See id.
  207. See Watson, supra note 199, at 104–05.
  208. See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-14-204, CIVILIAN INTELLIGENCE COMMUNITY: ADDITIONAL ACTIONS NEEDED TO IMPROVE REPORTING ON AND PLANNING FOR THE USE OF CONTRACT PERSONNEL (2014) (finding “core contract personnel typically work alongside government personnel, augment the government workforce, and perform staff-like work” and critical functions and functions closely associate with inherently governmental functions are not properly identified and tracked).
  209. The 1992 Policy Letter explained that drafting congressional testimony, responses to congressional correspondence, or responses to audits reports are not inherently governmental, but because of the appearance of private influence and the particular sensitivity of these functions, they should be treated as inherently governmental functions. Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,101 (Sept. 30, 1992). However, rather than extend this nuanced approach, FAR subpart 7.5 and the 2011 Policy Letter simply categorized these functions as inherently governmental, without explanation for the change. See FAR 7.503(c)(20) (1996); Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,241.
  210. Evan Sills, Mission “Critical Function”: Improving Outsourcing Decisions Within the Intelligence Community, 41 PUB. CONT. L.J. 1007, 1008 (2012).
  211. Id.
  212. Id. at 1015–16. But see id. at 1024.
  213. See Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 9755, 9756 (Mar. 4, 2009); see also INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 26.
  214. See INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 26–27; see also Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979); Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983); Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,100 (Sept. 30, 1992); Federal Activities Inventory Reform Act of 1998, Pub. L. No. 105-270, § 5(2)(A), 112 Stat. 2382, 2384 (codified at 31 U.S.C. § 501 (2012)); FAR 2.101.
  215. See Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236 (Sept. 12, 2011). The official definition of an “inherently governmental function” is, first, a function that is “so intimately related to the public interest as to require performance by [f]ederal [g]overnment employees.” The definition looks, second, to a function that requires “the exercise of discretion in applying [f]ederal [g]overnment authority or making of value judgments in making decisions for the [f]ederal [g]overnment.” The third element asks whether the function involves “the interpretation and execution of the laws of the United States so as (1) to bind the United States to take or not take some action; (2) to determine, protect, and advance United States economic, political, territorial, property, or other interests; (3) to significantly affect the life liberty, or property of private persons; (4) 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 of the United States. . . .” Id.
  216. David Isenberg, To Be, or Not to Be, Inherent: That Is the Question, HUFFINGTON POST: BLOG ( June 15, 2010, 5:12 AM), http://www.huffingtonpost.com/davidisenberg/to-be-or-not-to-be-inhere_b_539933.html [https://perma.cc/2KHS-P4QZ].
  217. Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. at 37,114.
  218. Id.
  219. Id.
  220. See Yukins, supra note 10, at 63–65. Like Professor Yukins, others have stressed the principal-agent (agency) issues at the core of procurement law and policy and have noted that the agency problem affects first the contracting officials themselves (as agents) and then in turn the contractors they oversee (the subagents). See, e.g., John Linarelli, The WTO Agreement on Government Procurement and the UNCITRAL Model Procurement Law: A View from Outside the Region, 1 ASIAN J. WTO & INT’L HEALTH L. & POL’Y 317, 324 (2006); James Jurich, International Approaches to Conflicts of Interest in Public Procurement: A Comparative Review, 7 EUR. PROCUREMENT & PUB. PRIV. PARTNERSHIP L. REV. 242 (2012) (suggesting that a principal-agent model may be a useful tool for thinking about conflicts of interest and formulating policies capable of mitigating the risks posed by them to the integrity and legitimacy of public procurement); William E. Kovacic, Procurement Reform and the Choice of Forum in Bid Protest Disputes, 9 ADMIN. L.J. 461, 486–87 (1995) (“In terms commonly used in modern academic commentary about protests, a robust protest system helps cure principal-agent problems that arise in the public procurement system. The protest mechanism helps cure principal-agent problems by increasing the likelihood that deviations by the agent (the purchasing agency) from the guidance of the principal (Congress) will be detected and corrected.” (footnotes omitted)); Steven Kelman, Remaking Federal Procurement, 31 PUB. CONT. L.J. 581, 589 (2002); Robert C. Marshall et al., The Private Attorney General Meets Public Contract Law: Procurement Oversight by Protest, 20 HOFSTRA L. REV. 1, 11 (1991) (“Oversight of the procurement process is needed because, for various reasons, the government’s objectives are not shared by the procuring agency or the procurement personnel who administer the process. In the vernacular of economics, there is a ‘principalagent’ problem. The government (the principal) wants the procurement official (its agent) to undertake a task on its behalf. The problem stems from the fact that the agent does not have the same objectives as the principal, and some aspects of the agent’s behavior cannot be monitored.” (footnotes omitted)); Omer Dekel, The Legal Theory of Competitive Bidding for Government Contracts, 37 PUB. CONT. L.J. 237, 241 (2008) (“One of the objectives of the public tender mechanism is to reduce the possibility of favoritism and corruption playing a part in this decisionmaking process and to maintain integrity in the [g]overnment’s transactions with private players. This objective also may be defined as the minimization of the ‘principal-agent problem,’ which arises when an official is given authority to contract on behalf of the [g]overnment.” (footnotes omitted)); Gabriella M. Racca, Roberto Cavallo Perin & Gian Luigi Albano, Competition in the Execution Phase of Public Procurement, 41 PUB. CONT. L.J. 89, 91 (2011); Robert M. Hansen, Comment, CICA Without Enforcement: How Procurement Officials and Federal Court Decisions Are Undercutting Enforcement Provisions of the Competition in Contracting Act, 6 GEO. MASON L. REV. 131, 140–41 (1997); Robyn A. Littman, Note, Lessons from the Procurement World: Understanding Why the Government Denies Its Employees Recovery After Infringing Their Copyrighted Works, 39 PUB. CONT. L.J. 879, 885 (2010); John Bryan Warnock, Principled or Practical Responsibility: Sixty Years of Discussion, 41 PUB. CONT. L.J. 881, 914 (2012); Garrett Jonathan Bruening, Non-Governmental Employees’ Personal Conflicts of Interest in Public Acquisition: A Case for Greater Harmonization, 71 A.F. L. REV. 163, 165–68 (2014); Janine R. Wedel, Rethinking Corruption in an Age of Ambiguity, 8 ANN. REV. L. & SOC. SCI. 453, 456 (2012). The principal-agent model has been applied specifically to government outsourcing issues and the potentially “excessive delegation of sovereign authority paving the way for private contractors to abuse their discretion, evade oversight, and generate unanticipated cost overruns.” Jon D. Michaels, Privatization’s Pretensions, 77 U. CHI. L. REV. 717, 718, 731–32 (2010) (footnote omitted). Notably, the OFPP Policy Letter itself cited principal-agent theory as a possible means of assessing inherently governmental work, but stopped short of applying the theory rigorously. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,231 (Sept. 12, 2011).
  221. Acquiring of Commercial of Industrial Products and Services Needed by the Government, 44 Fed. Reg. 20,556, 20,558 (Apr. 5, 1979) (the first categorization of a governmental function is “discretionary application of [g]overnment authority”); Issuance of OMB Circular No. A-76 (Revised) “Performance of Commercial Activities,” 48 Fed. Reg. 37,110, 37,114 (Aug. 16, 1983) (describes government functions as activities which require “either the exercise of discretion in applying [g]overnment authority or the use of value judgment in making decisions for the [g]overnment”); Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. 45,096, 45,100 (Sept. 30, 1992) (describing government functions as activities which require “either the exercise of discretion in applying [g]overnment authority or the making of value judgments in making decisions for the [g]overnment”); FAR 2.101.
  222. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,237.
  223. FAR 7.503(c)–(d).
  224. FAR 7.503(d). The more common term for these types of functions is “functions closely associated with inherently governmental functions.” Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,227-28.
  225. Compare FAR 7.503, with Policy Letter on Inherently Governmental Functions, 57 Fed. Reg. at 45,102–03, and Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,240-41.
  226. Functions closely associated with inherently governmental functions are most likely to be confused with actual inherently governmental functions. See FAR 7.503. Any definition that can accurately parse between these two categories would be helpful in categorizing all functions.
  227. FAR 7.503(c)(1).
  228. FAR 7.503(c)(2).
  229. United States v. Microsoft Corp., 154 F. Supp. 3d 1134, 1143 (W.D. Wash. 2015) (holding an independent legal firm hired by the IRS to assist with an audit can ask questions during an interview under oath).
  230. Robert Gebeloff & Karl Russell, Removing the Ability to Sue, N.Y. TIMES (Oct. 31, 2015), https://www.nytimes.com/interactive/2015/10/30/business/dealbook/arbitration-trends.html [https://perma.cc/2YQM-NBUV].
  231. 9 U.S.C. § 13 (2012).
  232. FAR 7.503(c)(5).
  233. See Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,240 (Sept. 12, 2011).
  234. FAR 7.503(c)(11).
  235. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,232.
  236. FAR 7.503(d)(1).
  237. See Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,234.
  238. See id.
  239. See FAR 7.503(d); see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,241.
  240. FAR 7.503(d)(4).
  241. FAR 7.503(c)(5).
  242. FAR 7.503(d)(5).
  243. Id.; see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,241.
  244. FAR 7.503(d)(6).
  245. FAR 7.503(d)(11).
  246. See id.; see also Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,241.
  247. FAR 7.503(d)(15).
  248. See 9 U.S.C. § 9 (2012).
  249. FAR 7.503(d)(19).
  250. See Memorandum from Sally Q. Yates, Deputy Attorney General, for the Acting Director Federal Bureau of Prisons (Aug. 18, 2016), available at https://www.justice.gov/opa/file/886311/download [https://perma.cc/KD3J-67JW].
  251. See supra Part V. B.
  252. FAR 7.503(c)(14). These hearings require discretion, but do not always involve the directing or controlling of federal funds or resources. The granting or denial of a security clearance does not obligate funds in any manner. Rather it serves as a gatekeeper as to what level of access someone has to classified information, vital to the safety and stability of the country. This function does not meet he simplified definition of inherently governmental function, but is the type of function that by its nature should probably be labeled inherently governmental because it is so vital to the safety and security of the nation.
  253. FAR 7.503(c)(20). While these functions are highly discretionary, they do not direct or control federal funds or resources. They may influence officials who perform inherently governmental functions, but because they do not direct government funds, these functions do not meet the simplified definition of an inherently governmental function.
  254. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,241 (Sept. 12, 2011).
  255. Id. at 56,237.
  256. Id. at 56,236.
  257. See INHERENTLY GOVERNMENTAL FUNCTIONS AND DEPARTMENT OF DEFENSE OPERATIONS, supra note 18, at 30.
  258. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,230.
  259. See THE BALANCING ACT, supra note 16, at 21.
  260. Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. at 56,236.
  261. Id.