Definition of 'inherently governmental' could change

A high-level panel reviewing federal outsourcing policy is working to better define when and why federal jobs can be considered inherently governmental, Comptroller General David Walker said this week. Walker is chair of the Commercial Activities Panel, a 12-member working group that is reviewing federal outsourcing issues. In an interview with, he addressed one of the most difficult aspects of outsourcing decisions: how to determine what functions must remain in-house to provide effective government. Current guidance on the definition of the term "inherently governmental" is included in the Federal Acquisition Regulation, Office of Federal Procurement Policy Letter 92-1 and the 1998 Federal Activities Inventory Reform (FAIR) Act. The FAIR Act defines an inherently governmental job as a "function that is so intimately related to the public interest as to require performance by federal government employees." The Commercial Activities Panel is revisiting this definition, Walker said.

"One question that has to be on the table is what is a reasonable way to go about defining inherently governmental," he said. "It's not well-defined today, and arguably not being consistently applied [by agencies] today." Walker offered suggestions for how agencies could do a better job of defining inherently governmental within current guidance. In his view, agencies should ask two questions to determine which jobs must, by law, be performed by federal employees: Which activities are inherently governmental, and what core functions are necessary to carry out those activities.

"If you have an inherently governmental activity, that's one dimension. Then you have to ask what kinds of functions need to be discharged to support that activity," said Walker. "You ought to consider both to determine what is a possible candidate for outsourcing." Walker cited national defense and law enforcement as examples of inherently governmental activities. While soldiers perform a core function that is necessary to national defense--fighting wars--workers who provide support services to soldiers are "non-core" and could be candidates for outsourcing, he said. "We're not going to contract out for mercenaries," he said. "On the other hand, there are a lot of support services that have to be provided, some of which may be core, and some of which may not be…government doesn't necessarily have to provide all support services tied to an inherently governmental activity." Under Walker's approach, the concept of core functions would play a central role in defining what federal jobs are inherently governmental. Functions that are directly engaged in performing an inherently governmental activity are core, while functions that support an inherently governmental function could be non-core and eligible for contracting out. Walker said agencies should keep such considerations in mind as they construct lists of inherently governmental positions for review by the Office of Management and Budget. OMB has asked for the lists by June 30 so it can evaluate which functions are commercial in nature and could be performed by contractors. "As agencies are trying to come up with inherently governmental lists, they should be considering not just the type of activities that would be involved, but the type of functions that need to be performed in order to discharge those activities," said Walker. But not all positions left off inherently governmental lists should necessarily be outsourced, Walker said. Agencies should consider cost and performance when making outsourcing decisions, he said. Conversely, Walker added that agencies might be forced to outsource inherently governmental functions if they cannot attract qualified workers to perform them.

"Even if you'd like to be able to do it inside government, you have to ask, can government attract and motivate an adequate number of workers to get the job done?" he said. "If the answer is no, you may not have a choice but to contract out the function."

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