	Introduction

An "inherently governmental function" is one that, as a matter of law and policy, must be performed by federal government employees and cannot be contracted out because it is "intimately related to the public interest." Concerned that the existence of multiple and/or inconsistent definitions of "inherently governmental functions" might be partly responsible for the alleged contracting out of inherently governmental functions by the Department of Defense (DOD) and other agencies, the 110 th Congress enacted legislation ( P.L. 110-417 ) requiring the Office of Management and Budget (OMB) to develop a "single consistent definition" of "inherently governmental functions." This definition is to "ensure that the head of each ... agency is able to identify each position within that department or agency that exercises an inherently governmental function." In response, on March 31, 2010, OMB, through the Office of Federal Procurement Policy, issued a proposed policy letter which would adopt the FAIR Act definition as the single definition. Background

The current debate over which functions are inherently governmental is part of a larger debate about the proper role of the federal government vis-à-vis the private sector that is as old as the Republic itself. One key test focuses upon functions "affected with the public interest." The Public/Private Debate Surrounding Federal Contracting

Since World War I, one of the primary arenas for the public/private debate and the definition of inherently governmental functions has been federal contracting. These statutes greatly changed the federal procurement landscape, although they did not directly address which functions the government must perform (i.e., what is inherently governmental). Current Definitions of "Inherently Governmental Functions"

Two main definitions of inherently governmental functions currently exist within federal law and policy. One is a statutory definition, enacted as part of the Federal Activities Inventory Reform (FAIR) Act of 1998. The other is a policy-oriented definition contained in Office of Management and Budget (OMB) Circular A-76. Other statutes and regulations that define inherently governmental functions do so either by reproducing the language of the FAIR Act or OMB Circular A-76, or by incorporating the definitions of the FAIR Act or OMB Circular A-76 by reference. Other enacted legislation
requires the Secretary of Defense to include in the Annual Defense Manpower Requirements Report a "summary of the replacement during the preceding fiscal year of contract workyears providing support to major Department of Defense headquarters activities with military end strength or civilian full-time equivalents, including an estimate of the number of contract workyears associated with the replacement of contracts performing inherently governmental or exempt functions"; grants the Department of Defense authority to use appropriated funds available for the purchase of contract services that meet requirements anticipated to continue for five or more years to compensate civilian employees for performing the same requirements and calls for the promulgation of regulations ensuring that the department uses this authority to "build government capabilities that are needed to perform inherently governmental functions, functions closely associated with inherently governmental functions, and other critical functions"; classifies specific functions as inherently governmental; requires the Secretary of Defense to develop guidance related to personal service contracts establishing clear distinctions between DOD employees and the employees of DOD contractors; expresses the sense of Congress that 
security operations for the protection of resources (including people, information, equipment, and supplies) in uncontrolled or unpredictable high-threat environments should ordinarily be performed by members of the Armed Forces if they will be performed in highly hazardous public areas where the risks are uncertain and could reasonably be expected to require deadly force
and requires that regulations to be issued under Section 862(a) of the National Defense Authorization Act for FY2008 ensure that private security contractors are not authorized to perform inherently governmental functions in areas of combat operations; requires the Administrator for Federal Procurement Policy to develop and issue a standard policy to prevent personal conflicts of interest by contractor employees performing acquisitions functions closely associated with inherently governmental functions; expresses Congress's sense that interrogation of enemy prisoners of war, civilian internees, retained persons, other detainees, terrorists, or criminals captured, confined, or detained during or in the aftermath of hostilities is an inherently governmental function and cannot appropriately be transferred to private sector contractors; requires DOD to develop guidelines and procedures to ensure that DOD considers using DOD civilian employees to perform new or currently contracted-out functions that are closely associated with the performance of inherently governmental functions, among other things; requires DOD to ensure that DOD's acquisition workforce is of the appropriate size and skill level to accomplish inherently governmental functions related to the acquisition of major systems and defines a "lead system integrator" as "a prime contractor under a contract for the procurement of services the primary purpose of which is to perform acquisition functions closely associated with inherently governmental functions with respect to the development or production of a major system"; requires the Commission on Wartime Contracting to make specific recommendations regarding, among other things, the process for determining which functions are inherently governmental in contingency operations, including whether providing security in an area of combat operations is inherently governmental; and requires OMB to develop an inventory to track contracts that, among other things, involve inherently governmental functions. The FAIR Act defines an inherently governmental function as "a function that is so intimately related to the public interest as to require performance by Federal Government employees," while OMB Circular A-76 defines an inherently governmental activity as an "activity that is so intimately related to the public interest as to mandate performance by government personnel." to questions of policy (i.e., which of the functions that may lawfully be contracted out should be contracted out?). More Effective Oversight of Executive Branch Contracting Decisions

Congress receives some information about agencies' contracting decisions under the FAIR Act, but this information may be insufficient to enable Congress to adequately ascertain which functions agencies may be improperly contracting out.
An "inherently governmental function" is one that, as a matter of law and policy, must be performed by federal government employees and cannot be contracted out because it is "intimately related to the public interest." Two main definitions of "inherently governmental functions" currently exist within federal law and policy. One is a statutory definition, enacted as part of the Federal Activities Inventory Reform (FAIR) Act of 1998. This definition states that an inherently governmental function is "a function so intimately related to the public interest as to require performance by Federal Government employees." The other is a policy-oriented definition contained in OMB Circular A-76. This definition states that an inherently governmental activity is "an activity that is so intimately related to the public interest as to mandate performance by government personnel." Other statutes and regulations that define inherently governmental functions do so either by reproducing the language of the FAIR Act or OMB Circular A-76, or by incorporating one of these definitions by reference.
Concerned that the existence of multiple or inconsistent definitions of "inherently governmental functions" might be partly responsible for the alleged contracting out of inherently governmental functions by the Department of Defense (DOD) and other agencies, the 110th Congress enacted legislation (P.L. 110-417) requiring the Office of Management and Budget (OMB) to develop a "single consistent definition" of "inherently governmental functions." This definition is to "ensure that the head of each ... agency is able to identify each position … that exercises an inherently governmental function." In response, on March 31, 2010, OMB, through the Office of Federal Procurement Policy, issued a proposed policy letter which would adopt the FAIR Act definition as the single definition.
The current debate over which functions are inherently governmental is part of a larger debate about the proper role of the federal government vis-à-vis the private sector. This debate is as old as the Constitution, which prohibits privatization of certain functions (e.g., Congress's legislative function), a prohibition courts enforce under various judicial tests (e.g., nondelegation, functions "affected with the public interest," etc.). Since the 1920s, federal contracting has been a primary arena for the public/private debate, with the executive and legislative branches contesting (1) which functions the government must perform because they are inherently governmental; (2) which functions the government should perform because they are closely related to inherently governmental functions or for some policy reason; and (3) which functions should be left to the private sector.
Congress has several options if it is concerned that deficiencies in the existing definitions of inherently governmental functions may lead agencies to improperly contract out such functions. Options include (1) relying upon recent statutory changes and/or the policies of the Obama Administration, which proposes to limit contracting out generally, to effect desired changes in agency contracting; (2) changing the existing definition of "inherently governmental functions"; (3) placing limits on contracting out or use of appropriated funds; (4) addressing structural factors potentially prompting agencies to rely on contractors; (5) providing for more effective oversight of executive branch contracting decisions; and (6) focusing more on questions of contracting policy (i.e., what functions should the government perform?) than on contracting law (i.e., what functions must the government perform?). The 111th Congress has enacted or is considering several bills addressing inherently governmental functions, including P.L. 111-8, P.L. 111-84, P.L. 111-117, H.R. 1436, H.R. 2142, H.R. 2177, H.R. 2682, H.R. 2736, H.R. 2868, and S. 924.